BREAKING NEWS: Spanish court refers new case to CJEU on private copying levies

Wait a moment: who should bear
the levy system?

From enthusiastic and invariably helpful Katfriend Fidel Porcuna (Bird&Bird) comes the news that the Spanish Supreme Court has just referred two questions to the Court of Justice of the European Union (CJEU), in the context of an administrative appeal filed by a number of collecting societies (VEGAP, EGEDA and DAMA) and concerning the legitimacy of Spanish system of private copying levies. 

The two questions referred are:

A – Is a copyright levy system, that - taking as a basis the estimation of the actual damage - is financed through the State budget thus not making possible to guarantee that the costs of this compensation are only supported by the users of the private copies (as opposed to the non-users), compliant with Article 5(2)(b)b) of Directive 2001/29?

B – If the answer is in the affirmative, is it compliant with Article 5(2)(b) of Directive 2001/29 that the total quantity set aside by the government for this compensation, which is calculated in view of the estimation of the actual damage, is set within [or conditioned by] the budget restrictions for each financial year?

Fidel adds: "As you know reform of current Spanish Intellectual Property Law was passed by the lower chamber of Parliament on 26 July 2014 and was now at the high chamber's agenda for a definitive approval that everyone took it for granted."

The Royal-Decree 20/2011, in force as of 1 January 2012, established  that compensation for private copying would no longer be obtained through a levy on reproduction devices but rather from the State budget (fixed at EUR 5m per each year 2012 and 2013), thus suppressing the collecting obligations for the industry. It may be difficult to determine now how this calculation would be made. A basic principle is to set a fair balance according to the harm caused to copyright owners as a result of copying by individuals for private use, but not for professional or business use. Calculation and payment have been left for the implementing regulations to define. Objective criteria were nonetheless set by Royal Decree 1657/2012 in force as of 8 December 2012, whose draft was discussed here.

Will this new CJEU reference prevent final approval of Spanish IP reform? Readers will remember in fact that one of the main points of proposed reform concern private copying and the levy system.

In its press release the Spanish Ministry of Education has stated that, no, this new reference will not have any effect on the final stage of the legislative process. However, rumours reported in the El Cultural and El Confidencial suggest that, yes, this new reference means that, not only were proceedings stayed before the Supreme Court, but also approval of IP reform could be now stayed pending the decision of the CJEU.

More press coverage here, here, and here.