Absurdity Of Copyright Policy Leaves Dutch Supreme Court Confused

from the sidestep-and-postpone dept

The Dutch Supreme Court (Hoge Raad) has posed some pre-judicial questions to the Court of Justice of the EU regarding the home-copying exception in European copyright legislation -- raising significant questions about what is legal under EU rules and how it meshes with how people actually consume music. Of course, all it really seems to demonstrate is just how messy the copyright system is today. When the top judges of a country cannot figure out the seemingly simple question of whether downloading music and films is legal or not -- mainly due to a huge patchwork of amendments to copyright law over the years -- something needs to change. Drastically. Let's see if we can make some sense of it:

In essence, the home-copying exception allows people to make copies for non-commercial home uses. Such an exception makes a lot of sense, because these private copies are largely impossible to enforce anyway. A levy is imposed on manufacturers of blank media to compensate rights holders for the supposed "losses" from foregone license fees.

The case in question concerns a group of these blank media manufacturers, who refuse to pay the full levies imposed by the collecting society in charge of the compensation for the home-copying exception. The collecting society considers it fair to charge for "losses" that stem from people downloading unauthorized uploads. You see, in the Dutch system, there is a chicken and the egg problem where you may download copyright protected content, but you may not upload (not unlike its policy for marijuana where buying and selling is tolerated, but growing is not). Any uploaded material is therefore often considered to stem from an illegal source. There is a huge political debate about the desirability of this construction in the Parliament.

The Netherlands is one of the few countries that has a system like this, where the end-user is partly taken out of the equation for copyright infringement. This is due to a particularity in European copyright, which is a headache to comprehend, but necessary to understand the confusion of the Court. Here’s a quick summary:

The EU legislator adopted the so called "Copyright in the Information Society" Directive in the year 2001, which was supposed to "adapt legislation on copyright and related rights to reflect technological developments" and make sure all 27 copyright systems in the EU would become more or less uniform. The hope was that this would knock out some of the problems of very different systems, and create a better "single market" for European content.

Of course, no copyright law is complete without the important exceptions and limitations, like the fair-use doctrine in the US. However, in the case of the copyright directive, the exceptions and limitations were optional for Member States, thereby effectively eliminating any chance for a uniform (or "harmonized") copyright legislation in the EU and thus missing the point completely. Information activist Smari McCarthy explains the resulting chaos well:
The directive outlines 21 different optional exceptions or limitations to the right of reproduction of copyrighted works. Each country implementing the directive can choose to either include or leave out the exception clause. This gives us 2,097,152 different ways to implement the directive.
Now repeat this for the 27 Member States, and you see where this fragmentation exercise is going. Since only a few countries have also implemented this home-copying exception and there has not yet been a legal conflict about it, no jurisprudence exists on which the Dutch court can rely. The exception reads as follows:
Member States may provide for exceptions or limitations to the reproduction right provided for in Article 2 in the following cases: [...]

[...] 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;
As you see, this text does not include any information on whether the fair compensation should be based on only foregone license fees (implying only copies from legal sources), or whether all copying on blank media carriers should be included.

When the collecting society proposed to start charging for copies from illegal sources in 2008, the manufacturers of blank media went to court hoping for a ruling that levies should only be payable for copies which are allowed under the copyright directive, thus only from legal sources (as this would decrease the levy significantly).

If you read through the lines of the courts’ analysis (and if you understand Dutch), I think you can see quite clearly that the judges tried their utmost to find a way to reconcile this copyright exception with the way people share and use works online. The Court states it would like to give rights holders a fair compensation via a levy system for losses from piracy, but it is unsure if EU law allows this. In its questions, the Court proposes some ways of establishing the mechanism for fair compensation and asks the European court whether this would be permissible under law. The questions asked by the Court are rather technical in nature, but here’s a quick summary of the main points (my interpretation, not a literal translation!):

1. Can the home-copying exception be interpreted so that the exception applies to all copies, regardless of whether the original was an authorized source? Or does the exception only apply to copies, which are derived from an original, which does not infringe copyright itself?
2a. Can the three-step test be used to expand the scope of the exception to include all copies?
2b. Is the Dutch construct – where downloading from any source is legal – in conflict with EU law? Would it help to mention that feasible technical tools to counter the making of private copies is not yet available, which may influence your decision regarding the three-step test? [...]
Dutch internet lawyer Christiaan Alberdingk Thijm is confused about the Courts’ deliberations:
I find it remarkable that Court contemplates a compensation paid for downloading copyright protected works from an illegal source, but that this does entail that the act of copying of this content is permissible under law. In my opinion, there are simply just two options: either it is permissible to make private copies from an illegal source and we pay the levy, or it is illegal and we don’t pay the levy. I do not agree with the current system either, though, where downloading from illegal sources is permissible but no levies are charged over this.
The court misses some important points here, indeed. First, if people are paying levies for unauthorized downloads, society will perceive their actions to be justified. Second, people mainly use phones, computers and portable devices for music and films. Hardly anyone uses blank media any more. Therefore, levies on CD’s, for example, miss the objective. Third, if a levy is imposed, we get into the sticky situation where actual losses from downloading unauthorized content needs to be determined, which is a seemingly impossible task. Finally, the Court may not have been informed about this, but there’s been a fierce quarrel on the amount charged for levies at the EU level, which has raged on for the past 15 to 20 years. Recently a mediator had to be hired to find a way out of this mess.

Apart from total confusion about the copyright system and how it should be applied to the internet, the Court may have also chosen to sidestep the current and hostile politicized debate in the Netherlands, which was met with opposition from many sectors of society. The Court has not given a conclusive ruling in this debate, so now the European Court may rule on whether the Dutch construction is legal. Expect an update in a few years time!

Filed Under: blank media, copyright, eu, eu court of justice, exceptions, levies, netherlands


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  1. icon
    Mike Masnick (profile), 25 Sep 2012 @ 3:23pm

    Re:

    Er... fixed. My bad too, since I had changed Ben's original title...

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