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Dutch court asks ECJ to rule on whether private copying levy should cover cost of pirate content downloads

A court in the Netherlands has asked the European Court of Justice (ECJ) to determine whether private copying is permitted under EU law in cases where the copies are made of existing illegally copied material.26 Sep 2012

The ECJ has been asked to rule whether EU copyright laws relating to the private copying exception apply only to the copying of legal content, or whether it relates to every reproduction. The Dutch court is trying to determine whether a number of blank media manufacturers should have to pay a greater private copying levy to take account of private copying of pirate content downloaded from the internet.

Under the EU's Copyright Directive rights holders generally have the "exclusive right to authorise or prohibit direct or indirect, temporary or permanent reproduction" of their works. However, the Directive enables EU member states to introduce a range of exceptions to this general rule. One of those exceptions, enacted in the laws of some member states, allows individuals to make reproductions of copyrighted material for non-commercial private use. This is on condition that rights holders receive "fair compensation" to account for lost revenues.

The private copying exception, like the other exceptions that can be introduced, can only apply "in certain special cases which do not conflict with a normal exploitation of the work or other subject-matter and do not unreasonably prejudice the legitimate interests of the rightholder," according to the Directive.

In a ruling by the ECJ in 2010, the Court said that what constitutes 'fair compensation' must be determined by the "harm suffered by the author".

Countries which allow private copying ensure this fair compensation by charging a levy on the media – discs and media players for example – that material is typically copied on to. That levy is then distributed through collection societies to rights holders.

The Dutch court has asked the ECJ whether the 'special cases' provision of the Copyright Directive, which stems from an international treaty on copyright – the Berne Convention, restricts the legitimacy of private copying to reproductions of legal content only, or whether private copying of pirate content is permissible.

However, the issue is further complicated by the way that Dutch copyright law works. Under Dutch copyright law the act of downloading from illegal sources for private use purposes is not an offence.

In December last year the European Commission appointed a mediator to chair industry talks aimed at creating a consistent approach to private copying levies across Europe. However, in a new 'declaration' issued on Tuesday, a range of EU creative industry bodies, including the Association of European Performers’ Organisations and Federation of European Film Directors, criticised "electronics manufacturers" that it said have been heavily "lobbying" to "abolish" the existing "remuneration system" for private copying.

"This compensation for hundreds of thousands of creators across Europe has not hampered device sales in countries where it is applied," the declaration stated. "Our members do not understand the heavy lobbying of electronics manufacturers to abolish this remuneration system, which, although perhaps not entirely perfect (and we, the undersigned, are open to discussions on how to improve it), clearly achieves its objectives. Consumers are able to copy legally onto and between their different devices and creators are remunerated for such uses."

The groups said that rights holders had accepted "reasonable exceptions" to their right to control reproductions of their works but that they "deserve to be fairly and proportionally remunerated" for "all uses" of their work. They said that private copying "generates an essential part" of that compensation.

The groups added that they believe that obtaining remuneration for private copying from a levy on "media and devices" is "the best way of linking the act of making private copies to the payment of remuneration to rightsholders" and said that the current system "is not intrusive and preserves the privacy of consumers".

The UK currently does not permit private copying, but the Government has signalled its intention to change copyright law to enable limited private copying to take place. The precise scope of what would be allowed under the revised regime has yet to be set out, but the Government is expected to make a further announcement about its policy intentions on private copying before the end of the year.

In a recent response to the House of Commons' Business, Innovation and Skills Committee, however, the Government confirmed its preference to avoid introducing systems of compensation based on levies.

"Any potential exception would be sufficiently narrow to cause only minimal harm to rights holders, thus not requiring a system of compensation such as a levy," the Government said in its response.