Public budgets cannot be used to compensate copyright owners for private copies, the EU Court of Justice (ECJ) ruled on Thursday (9 June).

The Luxembourg-based judges said that a 2001 EU directive on copyrights precludes schemes by which copyrights owners get a so-called fair compensation when private people use works "for private use and for non-commercial ends", if the compensation is taken out of the state budget.

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They said the scheme did not "guarantee that the cost of the fair compensation is ultimately borne by the users of private copies".

The ECJ was asked its opinion by Spain's supreme court after intellectual property rights collecting societies asked for the Spanish system to be abolished.

According to the system, fair compensation is determined annually and split between copyright owners.

Judges said that EU countries were free to establish a scheme under which legal persons, as opposed to private persons, are "under certain conditions and for practical reasons, required to finance the fair compensation".

But they added that such legal persons should not be the persons ultimately liable for payment of that burden".

"That requirement applies in all situations in which a member state has introduced the private copying exception, regardless of whether it establishes a fair compensation scheme financed by a levy or by its budget," the ECJ statement said.

The Spanish system also exists in Estonia, Finland and Norway. Other countries use different schemes.

The EU court ruling comes the EU as the bloc looks for ways to ensure a balance between new ways of consuming content and demands by copyright owners to be compensated for use that they cannot control.