Important Judgment From Top EU Court Confirms Copyright Levies Are An Unworkable Mess

from the time-to-put-it-out-of-its-misery dept

Europe's use of the copyright levy system, effectively a tax on blank media that is supposed to compensate copyright holders for an alleged "loss" from copies made for personal use, has produced a whole string of messy situations -- for example, in the Netherlands, Portugal, Spain and the UK. These have come about as governments have tried reconcile an antiquated system originally designed for cassette tapes with modern digital technologies. The EU's highest court, the Court of Justice of the European Union (CJEU), has just handed down an important judgment in this area. The IP Kat blog explains the background:

Finland-based Nokia sold mobile phones to business customers in Denmark, who resold them to both individuals and business customers.

Whilst all Nokia phones have an internal memory (i.e. the storage device is non-detachable), certain models have an additional memory card (i.e. which is detachable).

On these detachable memory cards, users could store data (e.g. contact details, photographs) as well as files containing audiovisual works (e.g. music, films which may have been downloaded from the web or from DVDs, CDs, MP3 players etc).

In this regard, these memory cards are "multifunctional media" with the capacity to be used for private copying (in relation to the audiovisual files), as well as for uses unrelated to private copying (e.g. storing personal data).

Nokia disputed its liability to pay a private copying levy to the Danish collecting society, Copydan Båndkopi, in relation to the detachable memory cards that were imported into Denmark for use in its mobile phones between 2004 and 2009.
That gives an idea of just how complicated the issues raised by copyright levies have become. The IP Kat blog goes on to analyze the CJEU's reply to six questions that were referred to it by a court in Denmark, seeking clarification. The answers are as complicated as the issues, so you may prefer this alternative summary from Hogan Lovells's Global Media and Communications Watch blog:
The CJEU takes the view that, in principle, it is irrelevant whether a medium is unifunctional or multifunctional. Copyright levies may be imposed, if at least one function allows for private copying, even if this function is of ancillary nature. However, the primary function of the carrier is to be taken into account whilst assessing what might be a fair compensation. Member States may further distinguish between storage media which is detachable (like in Nokia's case) and media which is non-detachably integrated in a device. However, the differentiation must be reasonably justified.
Actually, it's not as simple as that, because there's another issue that needs to be addressed:
A particular problem exists where storage media is sold to business customers without a clear picture of whether those are sold on to private individuals only or also to business customers. The latter do not fall under the private copying exemption and hence the compensation requirement does not apply (see: CJEU, Case Ref.: C-467/08). Manufacturers and importers may also be required to pay copyright levies. However, this is only justified if practical difficulties ask for such regulation. Those may arise from, for instance, the impossibility of or at least practical severity associated with identifying the final users of the relevant medium. Further, adequate exemption schemes must be in place allowing manufacturers and importers to prove that Article 5(2)(b) of Directive 2001/29 and thereby the private copying exception does not apply to their sales.
Even that is not the end of it: the blog post goes on to discuss some of the other detailed issues raised by the CJEU's ruling. However, it is relatively simple to summarize the entire judgment in a single sentence: that the EU's copyright levies are a complex, unworkable mess, and should be abolished completely across the whole of Europe, as has already happened in some of the more sensible EU Member States.

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  • identicon
    Anonymous Coward, 18 Mar 2015 @ 1:37am

    The CJEU takes the view that, in principle, it is irrelevant whether a medium is unifunctional or multifunctional. Copyright levies may be imposed, if at least one function allows for private copying, even if this function is of ancillary nature.

    Can I get an 'aye' for presumption of guilt here?

    So basically the nebulous mass known as "copyright holders" feel that they are entitled to getting a cut each time something that allows a copy to be made is sold ? Because that copy might "belong" to them ?

    Going full speed into idiocy here:
    Memory cards are, unless we're talking about an mp3 player, more often than not used for:
    1) storing application data (already licensed)
    2) private files whose copyright already belongs to the user - eg.: personal photos.
    Therefore it should follow that users owe themselves copyright levies ?

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 18 Mar 2015 @ 5:14am

      Re:

      Actually, I think that would mean that users can apply to get a portion of the levies from the collecting agencies.

      After all, they're only collecting them "in the name of" the copyright owners, and with the sole purpose of paying every copyright owner his/her due share of the money collected? Right?... Nah, just kidding!

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 18 Mar 2015 @ 2:10am

    i assume the 'more sensible member states' weren't offered enough by the various members of the entertainment industries?

    further, using the Aussi example which is soon to come into law there, why should other businesses suffer because of what the entertainment industries want in law to 'protect it's old business model from joining the digital age'?

    why is there never an investigation into why certain politicians fall heavily on the side of these industries, without any sort of discussion? surely laws have to be vetted to make sure the good doesn't out way the bad?

    reply to this | link to this | view in chronology ]

  • icon
    PaulT (profile), 18 Mar 2015 @ 2:45am

    I'm not sure which of the simple solutions would be best for this kind of issue.

    Treating copyright (and licencing) the same across all EU member states, thus enabling the free market that's meant to be there (but magically disappears once digital files are involved - CDs can be legally imported but not the MP3s)?

    Removing 3rd party liability for something the manufacturer of the original device clearly has zero control over, no matter who the original purchaser is (I doubt anyone's having the conversation about a refund on the levy if the device is sold from a private to business user)?

    Removing levies completely, which are clearly unfair as they presume guilt on media that may never have a copyrighted item on them for the lifespan of the media, and creates ridiculous unforeseen complications like this?

    But, failing businesses need to be paid no matter who they hurt in the process, so innocent 3rd parties have to waste time and money being dragged through the courts. Screw Nokia and the EU taxpayers' costs in this mess, the local record conglomerates need your money no matter what!

    reply to this | link to this | view in chronology ]

  • icon
    Ninja (profile), 18 Mar 2015 @ 3:49am

    Did any Danish (or resident in countries that have some levies) try to use the "that content was already paid for" defense? It would be interesting to see if it sticks. I mean, if I don't pirate I still have to pay for it so why bother?

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 18 Mar 2015 @ 5:18am

      Re:

      Unfortunately, the residents don't have the option of 'not paying' the tax and defending that decision; it is the vendor that has to pay the tax and of course they just incorporate it into the retail price...

      reply to this | link to this | view in chronology ]

    • icon
      Roger Strong (profile), 18 Mar 2015 @ 7:37am

      Re:

      That's how it works in Canada. When the recordable media levy was enacted, private copying of music for personal use was also legalized.

      However:

      - The levy and the legalization of private copying applies to music only. Not video.

      - Downloading of music is more of a grey area, but generally accepted.

      - No BitTorrent. With BitTorrent you're not just downloading; you're also forwarding what you've downloaded to other random users. In other words, publishing. This is a no-no.

      reply to this | link to this | view in chronology ]

      • icon
        beltorak (profile), 18 Mar 2015 @ 2:59pm

        Re: Re:

        - No BitTorrent. With BitTorrent you're not just downloading; you're also forwarding what you've downloaded to other random users. In other words, publishing.

        Which is kinda weird if you look at it; it's not like you are making a zillion copies and spam-mailing it to otherwise non-active recipients; you are fulfilling a request by someone else obtaining their "generally acceptable" downloaded copy....

        But I suppose it makes sense if you take the color of the bits to matter; i.e.: it doesn't matter if the authorized publisher is handing out DVDs door to door, if you get it from the pirate bay, it's unauthorized. Or, more simply, it doesn't just matter what you got, it matters how you got it, even if you have every legal right to have it.

        reply to this | link to this | view in chronology ]

  • icon
    eaving (profile), 18 Mar 2015 @ 4:34am

    Now if I was reading this correctly a memory card I could take out of a phone and plug into a computer and transfer files from is subject to the piracy tax, but the internal memory on a phone which I could plug into a computer and transfer files from is not? Umm. Ok then.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 18 Mar 2015 @ 7:03am

    Legal copying

    Well the copying levy is even more outrageous considering that paying the levy is only a compensation for making a private copy.

    A private copy is according to the law only legal if you already own the original.

    In Denmark we can't legally copy borrowed cds, only those we already own, so the copying levy is actually double dipping for the privilege to copy something we already own.

    Also the copy can't legally be given to a friend, family or given away.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 18 Mar 2015 @ 12:02pm

      Re: Legal copying

      There are a few more exceptions: You can legally share within your household and use it at private events. Those and the private copies are what the levies are supposed to cover.

      If you are a rightholder organisation you claim that as soon as the original is gone, the private copies are illegal, thus making it quite the pseudo-right.

      The household rule is a result of the base law protection of the home: Since you cannot see it legally, it would be unenforcable.

      Use at private events is a question of traditional use: If everybody just breaks copyright by doing this, the law would lose its authority completely among the majority of the population and result in what we are seeing in the digital area.

      So the levies are covering unenforcable and pseudo-rights.

      reply to this | link to this | view in chronology ]

  • icon
    Sheogorath (profile), 18 Mar 2015 @ 8:39pm

    Excuse me?

    Europe's use of the copyright levy system, effectively a tax on blank media that is supposed to compensate copyright holders for an alleged "loss" from copies made for personal use, has produced a whole string of messy situations -- for example, in the Netherlands, Portugal, Spain and the UK.
    I live in the UK, and I can tell you that we have no levy on anything used to copy on the basis that since the copying allowed (format shifting) is for the personal use of whoever owns a copy of content only, the rights holders have already had their fair share when it was originally sold. Research, please!

    reply to this | link to this | view in chronology ]


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