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Wednesday, 2 March 2016

AG Saugmandsgaard Øe says that failure to pay private copying levy is a tort (for the sake of establishing jurisdiction)

Henrik Saugmandsgaard Øe
Via Katfriend and former GuestKat Kate Manning (Curated Media) comes the news that the Opinion of Advocate General (AG) Henrik Saugmandsgaard Øe [here if you read Danish] in Austro-Mechana, C-572/14 - escaping this Kat's attention (and much to her shame) - was in fact released on 17 February 2016.

This is yet another reference for a preliminary ruling regarding interpretation of the private copying exception within Article 5(2)(b) of the InfoSoc Directive, but with yet another interesting twist.


The referring court (the Austrian Supreme Court) is in fact asking the Court of Justice of the European Union (CJEU) to say whether a claim for missed payment of ‘fair compensation’ under this provision can be considered akin to 'tort, delict or quasi-delict' within what is currently Article 7(2) of Brussels I Recast [formerly Article 5(3) of Brussels I] for the sake of determining the court(s) competent to hear such action.


Besides the general rule (Article 4) that allows one to sue in the Member State where the defendant is domiciled/established, as a special rule Article 7(2) of Brussels I Recast also allows actions relating to tort, delict or quasi-delict, to be brought in the courts "for the place where the harmful event occurred or may occur".


IPKat readers will promptly recall that the CJEU has indicated how this provision should be interpreted on a number of occasions, including copyright [here, in which the CJEU indicated that accessibility suffices], and national trade marks [here].

Background

This reference has arisen in the context of litigation between Austrian collective management organisation Austro-Mechana and Amazon concerning the international jurisdiction of the Austrian courts to entertain legal proceedings by which the former seeks to obtain payment from the latter of the remuneration due by reason of the first placing of recording media on the domestic market, in accordance with Austrian legislation.


Is failure to pay compensation
for private copying ...
Amazon has objected the jurisdiction of Austrian courts, on grounds that the obligation to pay the remuneration for private copying is not one arising from 'tort, delict, or quasi-delict', but rather a consequence of acts (the making of private copies) which are permitted by the law.

Both the Vienna  Commercial Court and the Vienna Higher Regional Court sided with Amazon and dismissed Austro-Mechana's action.

The Austrian Supreme Court was not so sure that the correct interpretation of Article 7(2) of Brussels I is that obvious, so it decided to stay the proceedings and seek guidance from the CJEU.

The AG Opinion

AG Saugmandsgaard Øe summarised the content of the question referred to the CJEU as asking whether the action brought by Austro-Mechana against Amazon constitutes a matter ‘relating to tort, delict or quasi-delict’ within the meaning of that provision in Brussels I Recast.

The AG noted at the outset that the jurisdiction criterion in Article 7(2) is a special one and, as such, should be interpreted narrowly. The AG also recalled that this provision is not applicable to actions that relate to a contract.

As such, the AG considered whether legal proceedings seeking payment of the fair compensation within Article 5(2)(b) of the InfoSoc Directive concern ‘matters relating to a contract’ within the meaning of Article 7(1)(a) of Brussels I Recast. The AG concluded in the negative on this point because a contract presupposes the establishment of a legal obligation freely consented to by one person towards another. This would not be the case of the fair compensation requirement in Article 5(2)(b) of the InfoSoc Directive.


... harmful?
The AG thus considered whether Article 7(2) would be applicable instead. This is the case if the underlying proceedings constitute a ‘claim seeking to establish the liability of a defendant’. This provision encompasses a broad range of liability types, all based on a 'harmful event' that has a caused a damage to the claimant.

This would be the case of compensation for private copying: failure to pay the compensation due to rightholders would cause a damage to the relevant rightholder and be "an absolutely quintessential instance of a matter relating to tort or delict" (para 75).

The AG noted that, while it is true that the marketing of mobile telephones and the private copying to which Austrian law relates are lawful acts in Austria, it does not follow from the fact that those acts are lawful that a breach by Amazon of the obligation to pay the levy provided for in the law is also lawful.

As such, Austrian courts - being the courts of the place of the harmful event - would have international jurisdiction to the hear the action brought by Austro-Mechana.

All in all


The AG Opinion provides a broad interpretation of Article 7(2): this provision appears to encompass almost anything that does not relate to a contract. As a result, one may wonder how special - and as such, bound to a duty of narrow interpretation, as the AG himself stressed - this rule  is.

Such a broad reading of Article 7(2) is frankly not surprising, at least in the area of IP: it is sufficient to consider the accessibility criterion adopted since the decision in Pinckney [herehere and here]: jurisdiction subsists - though with limitations as to the damages that can be sought and recovered - in each and every Member State where the allegedly infringing content can be accessed.

Let's now see if the CJEU confirms the findings of the Opinion. Stay tuned!

1 comment:

Javier Ramirez Iglesias said...

Just one point to precise about the content of the AG Opinion: it does not provide that harm to right-holders occurs in Austria, but that in case of non payment of those levies then harm is caused to collecting-society Austro-Mechana (in Austria) (see paragraphs 75 and 86). Whilst this distinction may appear to be irrelevant, in reality it's not so irrelevant, not only because levies collected by Austro Mechana are intended for distribution not only to right-holders in Austria, but also because it may have some implications for another prejudicial questions case concerning copyright levies (C-110/15, Nokia and Others).

In case C-110/15, the Italian Supreme Court is questioning whether a conflict of interests exists if it is the national collecting society (SIAE) the one empowered to grant "ex ante" exemptions from the levy for sales to business users by mean of signing (or not)protocols. In case the collecting society is the one harmed for non-payment of the levy (as provided in recent AG Opinion in the new Austro-Mechana case), it seems to me that, in principle, such conflict of interests would exist.

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