Fair copyright compensation granted from the State Budget – Advocate General opinion

juropean-justiceThe Advocate General of the European Court SZPUNAR issued his opinion in case C‑470/14 Entidad de Gestión de Derechos de los Productores Audiovisuales (EGEDA), Derechos de Autor de Medios Audiovisuales (DAMA) and Visual Entidad de Gestión de Artistas Plásticos (VEGAP) v Administración del Estado.

The case concerns the following:

The Entidad de Gestión de Derechos de los Productores Audiovisuales (Collecting Society for Audio-Visual Producers, or EGEDA), the Derechos de Autor de Medios Audiovisuales (Collecting Society for Audio-Visual Media Copyright, or DAMA) and the Visual Entidad de Gestión de Artistas Plásticos (Collecting Society for Visual Artists, or VEGAP) are Spanish intellectual property rights collecting societies. On 7 February 2013, they brought an action against Royal Decree 1657/2012 before the Tribunal Supremo (Supreme Court). Other intellectual property rights collecting societies were then given leave to take part in the proceedings.

The Administración del Estado (State Administration), defendant in the main proceedings, is supported by the Asociación Multisectorial de Empresas de la Electrónica, las Tecnologías de la Información y la Comunicación, de las Telecomunicaciones y de los contenidos Digitales (AMETIC), which is an association of undertakings operating in the IT sector.

In support of their claims, the applicants in the main proceedings submit inter alia that Royal Decree 1657/2012 is in two respects incompatible with Article 5(2)(b) of Directive 2001/29 as interpreted in the case-law of the Court. First, they submit, in essence, that Article 5(2)(b) requires that the cost of fair compensation granted to rightholders on the basis of the private copying exception should be borne, at least ultimately, by the persons who cause harm to their exclusive reproduction right as a result of this exception, whereas the scheme established by the Tenth Additional Provision of Royal Decree-Law 20/2011 and by Royal Decree 1657/2012 charges it to the State Budget, and therefore to all taxpayers. Secondly, they argue, in the alternative and in essence, that the fairness of this compensation is not guaranteed by Spanish law, inasmuch as Article 3 of Royal Decree 1657/2012 provides that a cap be imposed ex ante on the annual resources allocated to financing compensation, whereas the harm actually caused to rightholders by private copying can be ascertained only ex post.

In those circumstances, the Tribunal Supremo (Supreme Court) decided to stay proceedings and to refer the following questions to the Court for a preliminary ruling:

(1)  Is a scheme for fair compensation for private copying compatible with Article 5(2)(b) of Directive 2001/29 where the scheme, while taking as a basis an estimate of the harm actually caused, is financed from the General State Budget, it thus not being possible to ensure that the cost of that compensation is borne by the users of private copies?

(2)  If the first question is answered in the affirmative, is the scheme compatible with Article 5(2)(b) of Directive 2001/29 where the total amount allocated by the General State Budget to fair compensation for private copying, although it is calculated on the basis of the harm actually caused, has to be set within the budgetary limits established for each financial year?’

The Advocate’s opinion:

(1)  Article 5(2)(b) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society must be interpreted as not precluding financing of the fair compensation referred to therein from the General State Budget.

(2)  Article 5(2)(b) of Directive 2001/29 must be interpreted as precluding the amount of the fair compensation referred to therein being set within the budgetary limits established a priori for each financial year without the estimated harm to rightholders being taken into account for the purpose of setting the amount of compensation.

 

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