Levy on private copies may be imposed, says Advocate General

By Leo Gasteen

In an opinion given on 11 May 2010 Advocate General Trstenjak has ruled that a levy on private copies may be imposed on digital equipment, devices and media only where it may be presumed that they are to be used for private copying. 

The Advocate General ruled that  there must be a sufficiently close link between the use of the right and the corresponding financial compensation for private copying. However, such a levy in favour of authors, artists and producers may not be applied indiscriminately to undertakings and professional persons who clearly acquire the equipment and data media for other purposes

The ruling follows a request from the The Audiencia Provincial de Barcelona for the European Courts to clarify whether the the Spanish levy rule is compatible with EP Directive 2001/29 , and how the ‘fair compensation’ required by the directive should be organised. Directive 2001/29 does not itself contain any legal definition of that concept. Therefore the question arises as to whether that fact precludes it from being classified as a Community law concept.

In Spain, 'fair compensation' is achieved  by means of a levy on private copies applied indiscriminately to digital reproduction equipment, devices and media. That levy is to be paid by manufacturers, importers or retailers to intellectual property rights management societies.

Background

According to Directive 2001/29 of the European Parliament,  the reproduction right for audio, visual and audio-visual material is enjoyed by authors, performers and producers. The Directive also states that  Member States are permitted to allow private copying on condition that there is 'fair compensation' for the rightholders.

In respect to the question of the compatibility of the levy system with the EP Directive, the Advocate General  ruled that  there must be a sufficiently close link between the use of the right and the corresponding financial compensation for private copying. However, Remuneration which is granted to rightholders as a result of the indiscriminate application of such a levy to undertakings and professional persons, who from experience purchase digital reproduction devices and media for purposes other than private use, is not ‘fair compensation’ within the meaning of the directive.

In respect to the question raised on fair compensation, the Advocate General stated that the Directive confers a wide discretion on the Member States as to how their respective national systems implement such fair compensation.Hence, In Spain, such a charge could  be regarded as a compensation scheme for private copying which is compatible with the Directive only where it may be presumed that those equipment, devices and media are to be used for making private copies. 

European Court of Justice - Justice and Application - Full Text