The ECJ on private copy and fair compensation

On 27 June the European Court of Justice (“ECJ”) issued its preliminary ruling in joined cases C-457/11 to C-460/11 requested from the German Federal Court of Justice (Bundesgerichtshof) in national proceedings between VG Wort – the authorized copyright collecting society representing authors and publishers of literary works in Germany – and the well-known printer and personal computer manufacturers Kyocera, Epson, Xerox, Canon, Fujitsu and Hewlett-Packard (the “Companies”).

In particular, in those proceedings, VG Wort sought a declaration that the Companies should pay a remuneration by way of a levy on printers, plotters and personal computers marketed in Germany between 2001 and 2007,  in light of art. 54a of the German Law on copyright, based on which “where the nature of a work makes it probable that it will be reproduced (…) by means of photocopying or by any process having similar effects, the author of the work shall be entitled to payment, from the manufacturer of devices designated to make such copies, of fair remuneration to compensate for the possibility of such copies being made”. The application of VG Wort was granted by the first instance court, but the judgment was set aside by the appellate court and then by the German Federal Court of Justice (Bundesgerichtshof). The German Federal Constitutional Court (Bundesverfassungsgericht) quashed the decision of the Bundesgerichtshof and sent the case back to that court which decided to submit to the ECJ the interpretation of articles 5 and 6 of Directive no. 2001/29/EC on the harmonization of certain aspects of copyright and related rights in the information society (the “Directive”).

As it is known, based on art. 2 of the Directive, Member States are to grant to authors and the holders of related rights the exclusive right to authorize or prohibit reproduction of their protected works or other subject-matter. However, pursuant to art. 5 of the Directive, Member States may provide for exceptions or limitations to that exclusive right in respect i) of “reproductions on paper or any similar medium, effected by the use of any kind of photographic technique or by some other process having similar effects” (art. 5(2)(a)) and ii) of private copies (art. 5(2)(b)), in both cases provided that the rightholders receive “fair compensation” to compensate authors for the reproduction of their protected works without authorization.

As regards limitations sub art. 5(2)(a), the referring judge asked, in particular, whether the abovementioned concept of «reproduction effected by the use of any kind of photographic technique or by some other process having similar effects» should be interpreted as including reproductions effected using a printer or a personal computer (especially where the two are linked together) and, in such case, which person should be considered as owing the fair compensation under that provision. In response to this question, the ECJ firstly stated that the concept above “must be interpreted as including reproductions effected using a printer and a personal computer, where the two are linked together”. As regards which person must be considered as owing the fair compensation provided for by law, the ECJ argued that Member States can “put in place a system in which the fair compensation is paid by the persons in possession of a device contributing, in a non-autonomous manner, to the single process of reproduction of the protected work or other subject matter on the given medium, in so far as those persons have the possibility of passing on the cost of the levy to their customers, provided that the overall amount of the fair compensation (…) must not be substantially different from the amount fixed for a reproduction obtained by means of a single device”.

With reference to the private copy exception that Member States may provide for pursuant to art. 5(2)(b) of the Directive , the referring judge focused on the fact that, according to the provision, the author has the right to receive fair compensation “which takes account of the application or non-application of technological measures referred to in article 6” of the Directive to the work in issue. In particular, the judge asked whether the possibility of applying such technological measures, designated to prevent or restrict unauthorized acts on protected works or other subject-matter, may undermine the right to fair compensation. The ECJ answers to this pointing out that the possibility of applying such measures “cannot render inapplicable the condition relating to fair compensation provided for by art. 5(2)(b)”. Rather, it is opened to Member States to make the “actual level” of the compensation dependent on whether or not such technological measures are applied, so that the same rightholders are encouraged to make use of them voluntarily.

Finally, the Court answers two other questions submitted by the German court. Firstly, the ECJ states that, in the presence of the exceptions under art. 5 of the Directive, the fact that the author has authorized the reproduction of his protected work do not exclude the obligation to pay fair compensation.  Secondly, the Court specifies that the Directive does not affect in any case acts of using protected works and other subject-matter with regard to the period from the date on which the Directive came into force to the date by which Member States should transpose it (22 December 2002).