Should private copying levies apply to the cloud?

A European Commission Cloud Computing Strategy document leaked on Monday says that "questions arise on the possible collection of private copy levies for any private copying of content to, from or within the cloud."



Things were simpler back in the day

Under the InfoSoc Directive, EU member states may introduce an exception to the reproduction right for private copying accompanied by "fair compensation" for rightsholders. Currently most EU member states (notably not the UK) permit such private copying. Legislation does not provide a method for the calculation of fair compensation. The approach adopted in the EU so far has been to impose private copying levies on sales of storage media such as blank CDs, memory sticks, hard disks and smartphones. The levies typically vary with the capacity of the medium.

It makes some sense that, in countries where the levy system is in place, the cloud should also be subject to such a levy, given that one use of the cloud is to store content. However arguably the cloud is primarily a storage place for legitimately acquired content. In that sense it is the original CD that is purchased, rather than being the blank CD onto which a copy is made.



Some cloud storage services that allow users to synch their content for different devices, such as iTunes Match, Spotify's Local Music Files and Kindle already directly remunerate the rights holders.

A further consideration is that  there is no limit to the memory capacity available in the cloud to a user. It is therefore difficult to work out the value of the levies that should be applied.

The Commission has said that it will "assess whether there is a need to clarify the scope of the private copying exception and the applicability of levies, in particular the extent to which cloud computing services allowing for the direct remuneration of right holders are excluded from the private copy levy regime."

The levy system is a controversial one. One the one hand the creative industry trade bodies have just signed a declaration calling on European politicians to ensure that private copying levies remain part of the copyright system in European countries where a private copying right exists. And just yesterday IMPALA, the European independent music companies trade body joined forces with international copyright representatives to argue in favour of remuneration related to private copying.

On the other hand Joe McNamee, of European digital rights group EDRi has said that "It's really quite amazing that the Commission put levies in the strategy in the first place as levies as they stand are an insult to the single market, and for the Commission to add another level of bureaucracy is incomprehensible", and Christian Engstrom, Pirate Party member of the European Parliament is of the view that "It's yet another example of how copyright legislation is completely out of touch with the reality and the times we live in."

Former European Commissioner for Justice and Home Affairs, Antonio Vitorino, is currently leading a. The aim is to lay the groundwork for legislative action on private copying levies at the E.U. level in 2013. His findings are expected by the end of the year.

 

Perhaps we will find clarity in the CJEU's responses to the questions on private copying referred by the Austrian courts in Kino.to in June and the Dutch courts in ACI Adam B.V. v Stichting de Thuiskopie last week on how the private copying exception applies to illegal content, and in the findings of the working group on private copying levies that was set up in November 2011 with a view to more harmonization across the EU.

More on this on CIO and PC Advisor's websites.

Private Copying Remuneration Law in France

Just published in the Official Journal of the French Republic of December 21, 2011 is Act #2011-1898 of December 20, 2011 respecting private copying remuneration.

As previously indicated, this bill (now law) amends the French regime applicable to private copying remuneration in three significant ways:

1- in a nod to a 2008 decision by the Conseil d'Etat, it provides that the remuneration is only due in respect of copying done from a "lawful source"; 

2- in a nod to the CJEU's Padawan ruling and a June 2011 decision by the Conseil d'Etat, it provides that such remuneration is not due in respect of media acquired for professional purposes; and 

3- it requires that the amount of the levy applicable to a given medium be brought to the purchaser's attention at the point of sale.

Regarding point 2, publication of the Act was followed two days later (December 23rd) by publication of Ministerial Order (arrêté) of December 20, 2011 with the form to be used to obtain reimbursement.

Of particular note is the fact that the Act (unlike the bill - some might say rather surreptitiously) actually steps beyond the narrow issue of private copying remuneration and re-defines the parameters of private copying itself. It amends Sections L.122-5 (copyright) and L..211-3 (neighbouring rights) of the Intellectual Property Code by expressly requiring that the copying be from a "lawful source" in order to qualify as a private copy (thus bringing the French regime closer to that already in force in Germany).

Remuneration for private copying: changes in store for French rights holders

The 1709 Blog is delighted to receive this piece of information from Paris-based intellectual property practitioner and enthusiast Asim Singh ([email protected]) on a topic that seems to attract a lot of attention in continental Europe -- remuneration for private copying. As Asim explains:

"The French government recently (October 26, 2011) tabled a bill (projet de loi) related to the remuneration for private copying. 

Like many other European jurisdictions, France applies a levy to blank media capable of being used for private copying (cassettes, CDs, DVDs, hard drives, etc.), defined by Section L.112-5 of the Intellectual Property Code as “copies which are strictly reserved for the private use of the copier and not intended for a collective use”. 

The so-called Private Copy Commission (made up of representatives of rights-holders, consumers and consumer electronics companies) determines the media subject to the levy and sets the applicable levy rate. The monies are paid by manufacturers and importers of subject media who in turn pass on the ultimate burden to the consumer who acquires the subject media. The monies are collected by Copie France which, after deducting a portion earmarked for subsidizing creative efforts, live shows and training artists, passes the balance on to the beneficiaries (authors, performers, producers and publishers), according to a pre-determined key. 

The system has been in place since 1985 but two recent rulings by the Conseil d’Etat (French Supreme Court for administrative matters) have led the government to act to modify the statutory scheme. 

In a July 11, 2008 decision regarding applicable levy rates, the Conseil d’Etat held that the remuneration owed for private copying had to be tied directly to the scope of private copying from lawfully acquired sources. In other words, the potential for a given media to be used for private copying from unlawfully acquired sources (e.g., peer-to-peer networks) was not relevant in determining the applicable levy rate. 

In a June 17, 2011 ruling, the Conseil d’Etat applied the recent Padawan decision of the Court of Justice of the European Union (October 21, 2010) and held that media acquired for professional purposes could not be presumed to be intended for use for private copying and hence should not be subject to the levy. The bill tabled by the government takes these developments into account and proposes to amend the Intellectual Property Code accordingly. 

In addition, the bill mandates that the media acquired by a consumer and subject to the levy be accompanied by information regarding the amount of the levy applicable to it".