Speedy ECJ puts the boot into Belgian public lending right

You don't need to be an
Hercule Poirot to
detect that there's a
problem with the
Royal Decree

The Third Chamber of the Court of Justice of the European Union gave judgment today in Case C-271/10 Vereniging van Educatieve en Wetenschappelijke Auteurs (VEWA) v Belgische Staat, a reference for a preliminary ruling from the Belgian Raad van State. Considering that this reference was only made in May last year, a ruling from the ECJ is mighty speedy. Is the Court in training for the Olympics, wonders Merpel.

Perhaps one reason why the ruling came out so quickly is that the question at stake was not so difficult. The Court's decision might even have been made easier by the absence of an Advocate General's Opinion. Anyway, the background to the ruling runs as follows. VEWA, a Belgian copyright management society, brought an action in the Belgian courts to annul the Royal Decree of 25 April 2004 on remuneration rights for the public lending of authors, interpreting or performing artists, phonogram producers and producers of the first fixation of films [that's its full title]. According to VEWA, by fixing a flat rate of remuneration of 1 euro per person per year, Article 4 of the Royal Decree infringed the provisions of Council Directive 92/100/EEC of 19 November 1992 on rental right and lending right and on certain rights related to copyright in the field of intellectual property [another over-long name ...] which require that ‘equitable remuneration’ be paid in respect of a loan or rental.

The court wasn't sure what to do. It noted that Articles 4(1) and 8(2) of Directive 92/100 referred to ‘equitable remuneration’, whereas Article 5(1) simply mentioned ‘remuneration’ and was concerned that, while the ECJ had already interpreted the concept of ‘equitable remuneration’ in Article 8(2) in Case C-245/00 SENA, it had not yet ruled on the concept of ‘remuneration'. It therefore asked for a preliminary ruling on this question:

‘Does Article 5(1) of [Directive 92/100], now Article 6(1) of [Directive [2006/115], …, preclude a national provision which sets the remuneration at a flat rate of [EUR] 1 per adult per year and of [EUR] 0.5 per minor per year?’

In an agreeably short expected and disagreeably inconvenient ruling today, the ECJ held as follows:

"Article 5(1) of Council Directive 92/100 ... precludes legislation, such as that at issue in the main proceedings, which establishes a system under which the remuneration payable to authors in the event of public lending is calculated exclusively according to the number of borrowers registered with public establishments, on the basis of a flat-rate amount fixed per borrower and per year".

So it's up to the Belgian legislature to come up with something less arbitrary, says the IPKat, and a little fairer too. As the ECJ stated:

"40. In the case in the main proceedings, ... the system established by the Royal Decree takes into account the number of borrowers registered with public lending establishments, but not the number of works made available to the public. Such a taking into account does not therefore have sufficient regard for the extent of the harm suffered by authors, or for the principle that those authors must receive remuneration that is equivalent to an adequate income ....

41 Furthermore, Article 4(3) of that decree provides that, where a person is registered with a number of establishments, the remuneration is payable only once in respect of that person. In that connection, VEWA submitted, in the course of the public hearing, that 80% of the establishments in the French Community in Belgium declare that a large number of their readers are also registered with other lending establishments and, consequently, that those readers are not taken into account for payment of the remuneration of the author concerned.

42 In those circumstances, that system may have the result that many establishments are, in effect, almost exempted from the obligation to pay any remuneration. Such a de facto exemption is, however, at variance with Article 5(3) of Directive 92/100, as interpreted by the Court, according to which only a limited number of categories of establishments potentially required to pay remuneration pursuant to Article 5(1) are capable of being exempt from that payment ..".