Eleonora Rosati

Private copying and fair compensation under EU copyright law

Uppsala Universitet 30 November 2016

Contents• Directive 2001/29 (InfoSoc Directive)

• Rationale and objectives• InfoSoc exceptions and limitations in CJEU case law• Private copying exception

• Fair compensation requirement

• Private copying in recent CJEU case law• Scope of the exception• Fair compensation requirement

• Specific issues• The de minimis exclusion and the UK experience• Who has to pay levies?• How can levies be funded?• Who can be the beneficiary of fair compensation?

• The EU policy debate

InfoSoc Directive

What it did …

• Harmonised main exclusive rights

• Harmonised related exceptions and limitations (Article 5)• Mandatory for temporary acts of reproduction • Optional for everything else• Three-step test

… And why

• To harmonise aspects of substantive copyright• High level of protection (Infopaq, C-5/08)• Functional to internal market objective and to ensure competition not distorted

• To implement WIPO Internet Treaties

Criticism

• “badly drafted, compromise-ridden, ambiguous” (Hugenholtz)

• Did not increase legal certainty (Guibault and Others)

• “total failure in terms of harmonisation” (Hugenholtz)

How precise is Article 5 “shopping list”?• Just categorically worded prototypes?

• Strict interpretation and the role of the three-step test• Painer, C-145/10; ACI Adam, C-435/12

• Autonomous concepts of EU law

• Without un-harmonised national limits• Padawan, C-467/08; Deckmyn, C-201/13

The private copying exception: Article 5(2)(b)

“Member States may provide for exceptions or limitations to the reproduction right provided for in Article 2 […] in respect of reproductions on any medium made by a natural person for private use and for ends that are neither directly nor indirectly commercial, on condition that the rightholders receive fair compensation which takes account of the application or non-application of technological measures referred to in Article 6 to the work or subject-matter concerned”

The fair compensation requirement

“In certain cases of exceptions or limitations, rightholders should receive fair compensation to compensate them adequately for the use made of their protected works or other subject-matter. When determining the form, detailed arrangements and possible level of such fair compensation, account should be taken of the particular circumstances of each case. When evaluating these circumstances, a valuable criterion would be the possible harm to the rightholders resulting from the act in question. In cases where rightholders have already received payment in some other form, for instance as part of a licence fee, no specific or separate payment may be due. The level of fair compensation should take full account of the degree of use of technological protection measures referred to in this Directive. In certain situations where the prejudice to the rightholder would be minimal, no obligation for payment may arise.”

- Recital 35

Notion of ‘fair compensation’Padawan, C-467/08; Reprobel, C-572/13

• Autonomous concept of EU law with uniform application

• Relevant amount on basis of actual harm caused to authors of protected works

• Link between application of levy intended to finance fair compensation and deemed use of certain device for purposes of private copying

A real harmonisation?

“Inasmuch as Directive 2001/29 does not expressly address the various elements of the fair compensation system, the Member States enjoy broad discretion in determining who is to pay that compensation. The same is true of the form, detailed arrangements and possible level of such compensation”

- Nokia Italia, C-110/15, [27]

- The Vitorino Report

Private copying in recent CJEU case law• Padawan, C-467/08 (21 October 2010)• Stichting de Thuiskopie, C-462/09 (16 June 2011)• VG Wort, C-457/11 (27 June 2013)• Amazon, C-521/11 (11 July 2013)• ACI Adam, C-435/12 (10 April 2014)• Copidan Båndkopi, C-463/12 (5 March 2015)• Reprobel, C-572/13 (12 November 2015)• EGEDA, C-470/14 (9 June 2016)• Nokia Italia, C-110/15 (22 September 2016)

Scope of private copying exception

• Can a national private copying exception encompass reproductions from lawful and unlawful sources alike?• Dutch law

• 3-step test (Article 5(5))(1) certain special cases(2) do not conflict with normal exploitation of a work(3) do not unreasonably prejudice legitimate interests of rightholder

Fair compensation requirement:

specific issues

The de minimis exclusion and the UK experience

“In certain situations where the prejudice to the rightholder would be minimal, no obligation for payment may arise.” (Recital 35)

- Section 28B Copyright, Designs and Patents Act- Private copying levies outdated- Narrow scope- Evidence (Green J)

- Reprobel: amount of fair compensation depends on actual harm- "It is apparent from recitals 35 and 38 in the preamble to [the InfoSoc Directive] that the

notion and level of fair compensation are linked to the harm resulting for the author from the reproduction of his protected work without his authorisation. From that perspective, fair compensation must be regarded as recompense for the harm suffered by that author” [35]

- In line with Copidan Båndkopi

Who has to pay levies?

• Final user ultimately responsible but for practical reasons Member States can impose levies on producers of blank media

• Levies to be only applied to natural persons for purposes related to private copying

• Persons responsible for payment have right to reimbursement of levy where it is not due

How can levies be funded?

• Final user in principle responsible for paying fair compensation (but Member States free to have levy chargeable to persons making reproduction equipment, devices and media available to final user)

• What about through state budget?

Who can be the beneficiary of fair compensation? • Only reproduction rightholders listed in Article 2 of InfoSoc Directive

• Rationale of fair compensation requirement is to compensate for harm suffered by rightholders as a result of reproduction of works without their authorisation

• Reprobel• Belgian copyright law• CJEU response: publishers not exclusive reproduction rightholders and not subject to

any harm

EU policy debate

The proposal(for a directive on copyright in the Digital Single Market)

Forgetting Addressing Reprobel• Recital 36

“Publishers […] often operate on the basis of the transfer of authors' rights by means of contractual agreements or statutory provisions. In this context, publishers make an investment with a view to the exploitation of the works contained in their publications and may in some instances be deprived of revenues where such works are used under exceptions or limitations such as the ones for private copying and reprography […]”

• Article 12 “Member States may provide that where an author has transferred or licensed a right to a publisher, such a transfer or a licence constitutes a sufficient legal basis for the publisher to claim a share of the compensation for the uses of the work made under an exception or limitation to the transferred or licensed right.”

In conclusion

• Is there a ‘uniform’ private copying exception?

• What has been the role of the CJEU?• National laws quashed

• Is proposed Commission’s action aimed at greater uniformity?

• Above all: should policy action be an ex post response?

Tack!

eleonora@e-lawnora.com@eLAWnora