Monday, 11 March 2013

Fair compensation for copying - A-G Mengozzi's opinion in case C-521/11 Amazon v Austro-Mechana

The implementation of EU Directive 2001/29 (Copyright Directive) in the laws of the Member States continues to raise many questions, in particular regarding the 'fair compensation' to authors of copyright-protected work for private or non-commercial copies made of their work. A case currently pending before the Court of Justice of the EU, Case C-521/11 Amazon, concerns legal proceedings against the international company by that name which sells, among other things, books, CDs and information storage devices online. Austro-Mechana, an Austrian copyright association, has sued Amazon to pay a 'fair compensation' for the data storage devices (i.e. empty CDs and DVDs, memory cards and MP3 players) that Amazon brought to the Austrian market between 2002 and 2004. The Austrian Supreme Court has raised a number of preliminary questions concerning the extent to which the Austrian implementation of Directive 2001/29 can be regarded as establishing 'fair compensation' in the sense of Article 5(2)(b) of the Directive. This provision determines the following:

'2. Member States may provide for exceptions or limitations to the reproduction right provided for in Article 2 in the following cases: (...)
(b) 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;'

Today, Advocate-General Mengozzi delivered his opinion in the case (which is not yet available in English, so I refer to the original Italian text). He concludes that 'fair compensation' in the sense of the Directive is given in case national legislation guarantees that:
(a) the legal subjects indicated in Article 2 of the Directive without distinction have a right to fair compensation, which can only be relied upon by a collective copyright organisation, representative of the various rightholders, against the one who is the first to bring to a national market, for commercial purposes and for consideration, data storage devices meant to reproduce their works;
(b) the national legislative scheme, on the one hand, provides the possibility of a preceding exemption to pay fair compensation for natural and legal persons who may reasonably be considered, on the basis of objective data, to obtain the information carriers for clearly different purposes than those for which fair compensation needs to be paid and, on the other hand, the possibility to retrospectively claim restitution of fair compensation in all cases in which it is demonstrated that the use of the carrier could not have disadvantaged the author of the work.

The Advocate-General, furthermore, holds that it cannot be derived from Directive 2001/29 that there is no right to fair compensation in case a national legislative scheme determines that all revenues are meant to be paid to the authors, half as direct compensation and the other half indirectly. However, the referring national court should assess whether the application of the national measure in fact entails indirect compensation and without discrimination among categories of authors.

Finally, A-G Mengozzi is of the opinion that in case the circumstances entailing a right to fair compensation arise within the territory of a Member State, the Directive does not preclude the payment of compensation in case a similar compensation for bringing the information carriers on the market has already been paid in another Member State. The Member State in which fair compensation has unduly been paid should, however, provide a possibility for restitution.