The amount of the levy for making private copies of a protected work shall not take into account unlawful copies
This finding is also not called into question by the fact that no applicable technical measure exists to combat the making of unlawful private copies
The Directive on the harmonisation of certain aspects of copyright allows Member States to establish an exception to the exclusive right of authors and holders of related rights to make private copies (private copying exception). It also provides that Member States which choose to introduce such an exception into their national law are obliged to provide for the payment of "fair compensation" to copyright holders in order to compensate them adequately for the use of their works or other subject matter.
ACI Adam et al. are importers and/or producers of blank media such as CDs or CD-Rs. According to Dutch legislation, these companies have to pay the private copying remuneration to the Stichting de Thuiskopie. The amount of this remuneration is determined by another foundation, SONT.
According to ACI Adam and others, SONT should not have taken into account the damage that may be caused to copyright holders by private copies made on the basis of an unlawful source when determining the amount of remuneration.
Against this background, the Hoge Raad der Nederlanden (Supreme Court of the Netherlands) decided to refer questions to the Court of Justice.
In its judgment, the Court points out that it would clearly be detrimental to the functioning of the internal market if the Member States were empowered to adopt legislation authorising, inter alia, the making of private copies on the basis of an unlawful source.
Furthermore, the realisation of the objective of promoting the dissemination of culture must not be achieved by renouncing rigorous protection of copyright or by tolerating the unlawful dissemination of counterfeit or pirated works.
Therefore, the Court rules that national legislation which does not distinguish in any way between private copies made on the basis of legitimate sources and those made on the basis of counterfeit or pirated works cannot be tolerated.
For one thing, to allow such private copying to be made on the basis of an unlawful source would encourage the dissemination of counterfeit or pirated works and thus inevitably reduce the volume of sales or other lawful transactions relating to protected works and therefore interfere with the normal exploitation of those works. On the other hand, the application of such national legislation may unduly harm copyright holders.
Moreover, according to the Court, it is for the Member State which has authorised private copying to ensure correct application of that authorisation and thus to restrict acts which have not been authorised by the rightholders.
However, national legislation that does not distinguish between lawful and unlawful private copying cannot ensure the correct application of the private copying exception. The fact that no applicable technical measure exists to combat the making of unlawful private copies does not call this finding into question.
Furthermore, the remuneration system must ensure an appropriate balance of rights and interests between authors (as recipients of fair compensation) and users of protected subject matter.
However, a system of private copying remuneration which does not distinguish, with regard to the calculation of the fair compensation due to the rightful claimants, whether the source on the basis of which a private copying was made is lawful or unlawful does not contribute to that fair compensation.
In such a system, according to the Court, the harm suffered, and thus the amount of fair compensation due to the rightful claimants, is calculated on the basis of the criterion of the harm suffered by authors both from private copying made on the basis of a lawful source and from copying made on the basis of an unlawful source. The amount so calculated shall then be passed on to the price paid by users of protected subject matter at the time of making available equipment, devices and carriers capable of making private copies.
This indirectly penalises all users, as they inevitably contribute to compensating for the damage caused by private copying made on the basis of an unlawful source. Thus, users have to accept not inconsiderable additional costs in order to be able to make private copies.
Judgment in Case C-435/12
ACI Adam BV and Others v Stichting de Thuiskopie, Stichting Onderhandelingen
Thuiskopie vergoeding
Source: ECJ press release of 10.04.2014
Goldberg Attorneys at Law 2014
Attorney at Law Michael Ullrich, LL.M. (Information Law)
Specialist lawyer for information technology law
E-mail: info@goldberg.de
