Fair compensation for private copying: ECJ says someone has to pay ...

Even if you feel you're being fleeced by having
to pay for private copying, they'll get you in the end ...

Today's the day the Court of Justice of the European Union gave judgment in Case C-462/09 Stichting de Thuiskopie v Opus Supplies Deutschland GmbH, Mijndert van der Lee and Hananja van der Lee, a reference for a preliminary ruling from the Hoge Raad der Nederlanden (the Dutch Supreme Court).

What was the cause of this reference? As the Court explained, Article 16c(1) of the Dutch copyright law made an exception in its national law in favour of copying for private use. However, Article 16(2) adds that a maker or importer of an item used for reproduction [once upon a time this used to be mainly tape recording equipment and photocopiers, but the recent wave of convergence will soon have us taking photos with our toothbrushes ...] has to pay a private copying levy. Stichting de Thuiskopie is the Dutch body responsible for recovering the private copying levy, while Opus -- a German company -- sells blank media online via Dutch-language websites that target Netherlands consumers. Opus's business model was bound to annoy copyright owners:

" The contract of sale established by Opus provides that, where a Netherlands consumer makes an order online, that order is processed in Germany and the goods are delivered from Germany to the Netherlands, on behalf of and in the name of the customer, by a carrier, that carrier however in fact being engaged by Opus. 

Opus does not pay a private copying levy in respect of the media delivered to its customers in the Netherlands, either in that Member State or in Germany.  ...[T]he cost of the reproduction media thus sold by Opus does not include the private copying levy".

Arguing that Opus had to be regarded as the ‘importer’ and, consequently, responsible for paying the private copying levy, the Stichting sued for payment of that levy. Opus denied liability, saying it couldn't be classified as an importer into the Netherlands of the reproduction media which it sold and that it was individual Dutch consumers who must be classified as importers. The trial court and first appellate court agreed with Opus, following which the Stichting appealed to the Hoge Raad. What an interesting dispute, said the Hoge Raaders and decided to pose the following questions to the Court of Justice for a preliminary ruling:

‘(1) Does [the InfoSoc] Directive [2001/29], in particular Article 5(2)(b) and (5) thereof [which allow EU Member States to make exceptions to copyright in exchange for "fair compensation"], provide any assistance in determining who should be regarded under national law as owing the “fair compensation” referred to in Article 5(2)(b)? If so, what assistance does it provide? 

(2) In a case of distance selling in which the buyer is established in a different Member State to that of the seller, does Article 5(5) of Directive [2001/29] require national law to be interpreted so broadly that a person owing the “fair compensation” referred to in Article 5(2)(b) of the directive who is acting on a commercial basis owes such compensation in at least one of the Member States involved in the distance selling?’

The Court ruled today as follows:

"1. Directive 2001/29 ..., in particular Article 5(2)(b) and (5) thereof, must be interpreted as meaning that the final user who carries out, on a private basis, the reproduction of a protected work must, in principle, be regarded as the person responsible for paying the fair compensation provided for in Article 5(2)(b) [i.e. not Opus but its customers]. 

However, it is open to the Member States to establish a private copying levy chargeable to the persons who make reproduction equipment, devices and media available to that final user [so the Dutch can make Opus pay ...], since they are able to pass on the amount of that levy in the price paid by the final user for that service [... and Opus can then charge more]. 

2. Directive 2001/29, in particular Article 5(2)(b) and (5) thereof, must be interpreted as meaning that it is for the Member State which has introduced a system of private copying levies chargeable to the manufacturer or importer of media for reproduction of protected works, and on the territory of which the harm caused to authors by the use for private purposes of their work by purchasers who reside there occurs, to ensure that those authors actually receive the fair compensation intended to compensate them for that harm [this can be more or less inferred from the text of the Directive, but it would have been easier and clearer if the Directive had simply said "Member States must ensure that any fair compensation is received by the author ..." or some such formula]. In that regard, the mere fact that the commercial seller of reproduction equipment, devices and media is established in a Member State other than that in which the purchasers reside has no bearing on that obligation [i.e. the obligation of the Member State to ensure that authors get paid] to achieve a certain result. It is for the national court, where it is impossible to ensure recovery of the fair compensation from the purchasers, to interpret national law in order to allow recovery of that compensation from the person responsible for payment who is acting on a commercial basis."

The IPKat wonders if the duty of the Member State to ensure that authors receive their entitlement is one of those things that is relatively easy to impose in principle but less easy to implement in practice. Where media for the reproduction of protected works enter a country by post in an innocuous little padded envelope, sent from a vendor based in inconveniently distant EU Member State where things are, well, a little more informal than they are in the Netherlands, the identification of both vendor and purchaser and the quantification of the number of levy-payable transactions may prove difficult.

What the world says: 
"Thuiskopieheffing ook op blanco cd's uit buitenland" here
"Los estados deben garantizar siempre el cobro del canon en su territorio" here
"Diritto d'autore: per la Corte di Giustizia, i Paesi Ue che prevedono l’eccezione per copia privata devono garantire l’equo compenso: La sentenza stabilisce che bisogna riscuoterlo anche se il venditore si trova in un altro Stato membro" here
"Sheep on house roof in Pontycymmer escapes unhurt" here