This ECJ ruling deals with the fair compensation scheme under article 5 of the Directive 2001/29/EC, on Copyright and Related Rights in the Information Society. This provision sets forth that Member States may provide for exceptions or limitations to the exclusive right of reproduction of authors, namely, reproductions “effected by the use of any kind of photographic technique or by some other process having similar effects […] provided that the rightholders receive fair compensation”.
Pursuant to the said provision, the ECJ examines, in this particular case, the fair compensation scheme adopted by German Law based on the so-called “copying levy”, which basically consist of a levy on technical devices with ability to make copies of copyrighted works.
In the course of domestic proceedings held before German Courts, VG Wort, a copyright collecting society representing authors and publishers of literary works in Germany, had claimed that Kyocera, Epson, Xerox and Canon should be bound by the fair remuneration scheme provided by German Law on copyright, and so ordered to pay the said compensation by way of a levy on personal computers, printers and/or plotters marketed in Germany between 2001 and 2007 (PRESS RELEASE No 80/13).
Accordingly, in a preliminary ruling, the Bundesgerichtshof (a Federal Court of Justice) requested the ECJ to determine whether reproductions using a personal computer and a printer, where the two are linked together, can be deemed as “reproductions effected by using any kind of photographic technique or by some other process having similar effects”, and if so, which person must be considered as owing the fair compensation under the said Directive.
In respect of the first question, the ECJ comes to the conclusion that the fair compensation scheme shall be applied to reproductions by way of “several devices, including those with a digital function” [par. 72], provided that “the various elements or non-autonomous stages of that single process act or are carried out under the control of the same person and are all intended to reproduce the protected work or other subject-matter on paper or a similar medium” [par. 70].
When analysing the second question, to say, who shall be liable for paying the copying levy, the ECJ rules that “it is open to the Member States to put in place a system in which the fair compensation is paid by the persons in possession of a device contributing, in a non-autonomous manner, to the single process of reproduction of the protected work or other subject-matter on the given medium, in so far as those persons have the possibility of passing on the cost of the levy to their customers” [par. 76].
It is now clear that reproductions effected using a printer and a personal computer, where the two are linked together, fall under the scope of the Directive, and therefore, such devices can be levied to compensate rightholders.
In practice, this, essentially, means that the end-user or the consumer shall “assume the burden of the copying levy” applied to personal computers, printers or other digital reproduction devices when operating in a non-autonomous way. Nevertheless, it must be noted that the ECJ decision fails to give appropriate criteria in determining the cost of the levy in these cases.
In this regard, the only guideline provided by the ECJ is that “the overall amount of fair compensation owed as recompense for the harm suffered by the rightholders at the end of that single process must not be substantially different from the amount fixed for a reproduction obtained by means of a single device” [par. 78].
Nevertheless, it seems that the task of construing and putting in practice such a guideline has been left to national legislations.
In line with Padawan v SGAE, Case C-467/08, the ECJ recalls that the purpose of fair compensation schemes is “to compensate authors for the reproduction, without their authorisation, of their protected works, so that it must be regarded as recompense for the harm suffered by authors as a result of that reproduction” [par. 75]. Though this approach actually relies on the concept of “civil damages”, and particularly, on the idea of “loss of profits” arising from unauthorized reproductions, some scholars (Falcón y Tella, 2006; Ruiz Zapatero, 2007) have seen in this copying levy a way parafiscal taxing.
In this sense, when the Court says that the overall amount for a reproduction made by means of connected devices –e.g. personal computer and printer- shall not be substantially different from the amount fixed for a reproduction by means of a single device, is it suggesting that the way to determine the cost of the levy would avoid double taxation? In other words, given that copying levy is imposed on each device with ability to make copies, when using connected devices, it seems that end-user should not pay twice or more for the same taxable event: the harm caused to rightholders for unauthorised reproductions.
The ECJ ruling also addresses some additional issues, particularly, whether the authorisation to reproduction given by the rightholder would exclude the application of fair compensation schemes.
In this regard, the ECJ finds that, where a Member State has decided, pursuant to article 5 of Directive 2001/29, to exclude, from its material scope, any right for the rightholders to authorise reproduction of their protected works, any authorising act that the rightholders may adopt, whether implied or expressed, is “devoid of legal effects under the law of that State […] and cannot therefore have any bearing on the fair compensation owed” [par. 39].
But, what if the author has voluntarily divulgated his work under a creative common licence with a copyleft clause, regardless a fair compensation scheme enforced within the jurisdiction of his State?
Some decisions in Spain held by Courts of First Instance and of Appeal would suggest that submission by the author to such copyleft clauses, when no evidence of using copyrighted works included in the repertoire of a collecting society is provided, would exclude the application of fair compensation schemes. See, among others, Judgment of the Provincial Court of Madrid, on 5 July 2007, (AC 2007\1768); Judgment of Court of First Instance num. 4 of Salamanca on 11 April 2007 (AC 2007\985); Judgment of Mercantile Court núm. 3 of Valencia, on 25 May 2010 (AC 2010\362).
Conversely, the solution given by the ECJ seems to exclude the freedom of the rightholder to decide under which scheme he actually wants to divulgate and protect his works: the monopolistic scheme of copyright or the free copyleft licenses.
Dra. Estrella Gutiérrez. Abogada Área Mercantil. BROSETA Abogados.
Profesora de la Universidad Carlos III de Madrid.