AG Mengozzi on the notion of equitable remuneration

Merpel is slightly upset after finding out
that speaking of equitable remuneration with her date
was not regarded as sexy as she had anticipated ...

A few months ago the IPKat provided a list of some of the yummiest references for a preliminary ruling currently pending before the Court of Justice of the European Union. Among these, there is Case C-521/11 Amazon.com International Sales and Others, a reference from the Oberster Gerichtshof (Austria) concerning the interpretation of Articles 2 and 5 of Directive 2011/29 (the InfoSoc Directive), in particular the notion of equitable remuneration following the sale of recording media [Merpel usually speaks of equitable remuneration when she goes out on a date]. 

Austro-Mechana is an Austrian collecting society which is in charge of obtaining equitable remuneration following the sale of blank supports, pursuant to Article 42ter(1) UrhG. Since 2003 Amazon has engaged, among other things, in the online sale of recording media. 

Austro-Mechana has sued Amazon before Austrian courts, seeking payment of equitable remuneration following the goods sold over its platform. Following two decisions in favour of Austro-Mechana, an appeal has been brought before the Oberster Gerichtshof, which decided to stay the proceedings and refer the following questions to the CJEU:

“Can a legislative scheme be regarded as establishing 'fair compensation' for the purposes of Article 5(2)(b) of Directive 2001/29/EC, where

(a)    the persons entitled under Article 2 of Directive 2001/29/EC have a right to equitable remuneration, exercisable only through a collecting society, against persons who, acting on a commercial basis and for remuneration, are first to place on the domestic market recording media capable of reproducing the works of the rightholders,

(b)    this right applies irrespective of whether the media are marketed to intermediaries, to natural or legal persons for use other than for private purposes or to natural persons for use for private purposes, and

(c)    the person who uses the media for reproduction with the authorisation of the rightholder or who prior to its sale to the final consumer re-exports the media has an enforceable right against the collecting society to obtain reimbursement of the remuneration?

If Question 1 is answered in the negative:

2.1    Does a scheme establish 'fair compensation' for the purposes of Article 5(2)(b) of Directive 2001/29/EC if the right specified in Question 1(a) applies only where recording media are marketed to natural persons who use the recording media to make reproductions for private purposes?

2.2    If Question 2.1 is answered in the affirmative: Where recording media are marketed to natural persons must it be assumed until the contrary is proven that they will use such media with a view to making reproductions for private purposes?

If Question 1 or 2.1 is answered in the affirmative:

Does it follow from Article 5 of Directive 2001/29/EC or other provisions of EU law that the right to be exercised by a collecting society to payment of fair compensation does not apply if, in relation to half of the funds received, the collecting society is required by law not to pay these to the persons entitled to compensation but to distribute them to social and cultural institutions?

If Question 1 or 2.1 is answered in the affirmative:

... Although AG Mengozzi
might appreciate
the choice of such
topic of conversation

Does Article 5(2)(b) of Directive 2001/29/EC or other provision of EU law preclude the right to be exercised by a collecting society to payment of fair compensation if in another Member State - possibly on a basis not in conformity with EU law - equitable remuneration for putting the media on the market has already been paid?”

This morning Advocate General Paolo Mengozzi delivered his Opinion which – much to the disappointment of English-speaking only readers – is not yet available in English.

Following a series of observations as to the gaps left behind by the InfoSoc Directive and the need for a stronger harmonisation of the copyright laws of EU Member States [despite her disastrous date, Merpel finds this quite intriguing and uplifting], according to the Italian version of this 92-paragraph Opinion, the CJEU should provide the following answers to the questions raised by the Austrian court [disclaimer: although the translation is an IPKat-official one, readers should be aware that this does not imply that it is also CJEU-approved]:

"Equitable remuneration pursuant to Directive 2001/29 subsists when:

(a) the persons entitled under Article 2 of Directive 2001/29/EC have a right to equitable remuneration exercisable only through a collecting society, which represents the relevant rightsholders, without distinction against persons who, acting on a commercial basis and for remuneration, are first to place on the domestic market recording media capable of reproducing the works of the rightholders, and

(b) domestic legislation provides, on the one hand, the ex ante possibility of an exemption for those persons (without distinction between natural and legal ones) that, by reason of objective elements (including mere indicia), can be regarded as acquiring those media for aims other than those which give rise to the duty of paying fair compensation and, on the other hand, the general possibility of obtaining ex post payment of fair compensation in those instances on which it has been proved that the use of such media has not been prejudicial to the author of the work.

2) In light of the proposed response to the first question I do not deem it necessary to address the second question. However, should the Court deem it necessary to respond to it, I suggest to answer as follows:

2.1.) "equitable remuneration" within Directive 2001/29 subsists when the right to an equitable remuneration is provided only in relation to marketing directed to natural persons who use the recording media to make reproductions for private purposes, and

2.2.) in the case of marketing directed to natural persons it is necessary to assume, until the contrary, that they will use such media with a view  to making reproductions for private purposes. In view of a possible ex ante exemption from payment of equitable remuneration or its possible refund, it must be necessary to demonstrate that the natural persons at issue have acquired the recording media for uses which are not subject to payment of equitable remuneration.

3) Nothing in Directive 2001/29 is such as to deny the right to fair compensation should domestic legislation provide that all the funds received are distributed to authors - half of them through direct compensation and the other half through indirect compensation. However, it is for the national judge to decide whether, and to what extent, in practice application of national legislation results in forms of indirect compensation without discrimination between the various categories of authors. 

4) When the harm to be redressed has taken place in the territory of a certain Member State, the provisions in Directive 2001/29 are without prejudice to the right of fair compensation in such Member State, should equitable remuneration for putting the media on the market have been paid already. However, it is for the Member State where undue payment has occurred to guarantee that those who did not have to pay equitable remuneration have an adequate possibility of getting a refund (possibly by means of an action to be exercised before national judicial bodies) of the payments unduly made for the sake of fair compensation."