Austrian Ruling Likely To Have Big implications For Copyright Levies Across EU

from the game-on-for-GEMA? dept

Techdirt has been following for a while the copyright levy system in the European Union as it slowly descends into complete chaos, unable to reconcile its analog origins with a digital world where it just makes no sense. A post on the IPKat blog offers something very interesting in this context : a court case that not only quashes Austrian law on private levies, but one that is likely to have important knock-on effects in other EU countries. As the blog post explains, the decision by the Commercial Court in Vienna is just the latest chapter in a long-running saga involving the Austrian collection society, Austro Mechana, and Amazon: Austro Mechana initiated the proceedings against a number of Amazon entities in October 2007. The main request of Austro Mechana was to oblige Amazon to pay copyright levies for all storage devices sold to customers in Austria. Austro Mechana also filed an information request regarding the quantity and type of storage devices sold to customers in Austria.



Amazon lost at both first instance and in appeal. After that, as suggested by Amazon, the Austrian Supreme Court submitted a request for a preliminary ruling to the CJEU [Court of Justice of the European Union] (September 2011). Amazon had argued that the Austrian law on copyright levies and the procedures implemented by Austro Mechana for the collection of copyright levies complied with neither the [EU's] InfoSoc Directive nor the jurisprudence of the CJEU. Europe's highest court, the CJEU, handed down its opinion back in 2013. It was largely in favor of Amazon, so the Austrian Supreme Court cancelled all the previous rulings, and sent the case back to the Vienna Commercial Court to consider in the light of the CJEU guidance. The Court of Justice of the European Union does not rule on particular cases, but considers the larger questions of law that are involved, leaving it to local courts to use its published guidance in their subsequent judgments.

There were three main grounds why the Austrian Commercial Court ruled that the entire Austrian copyright levy system had to go. First, it did not provide a proper re-imbursement right: if storage devices are not used for private copying, there must be an "effective" mechanism that allows for re-imbursement of the levy. Austria's system didn't. Secondly, there was no distinction between lawful and unlawful sources for private copying, something else that was required by the InfoSoc Directive. Finally, half of the monies raised by copyright levies were distributed to "social and cultural institutions", rather than to the artists, and that fell foul of the CJEU ruling too.

As the IPKat points out, it is likely that all of these issues affect Germany's copyright levy system, too, so we can probably expect a legal challenge there to be successful. And there's a delightful sting in the tail of the blog post: The ruling of the Commercial Court of course also raises the question whether dealers, manufacturers or importers may have a claim for repayment of the levies on the principles of unfair enrichment. If such requests would to be made, they might well jeopardise the very existence of Austro Mechana. Presumably the same would be true in Germany, which would leave the central collecting organization there, the ZPÜ (the Zentralstelle für private Überspielungsrechte) exposed as well. One of the founders of the ZPÜ, and presumably still one of its most important members, is GEMA, well known to Techdirt readers. The possibility that a future court case might force GEMA to pay back a good chunk of all the copyright levies it has received is, of course, a tantalizing prospect.

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Filed Under: austria, cjeu, copyright, copyright levies, eu, eucj, european court of justice