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Legal Stalemate: Copyright Levies for commercially used Devices once again under Review

Written by Wolfram Kühn | Oct 30, 2024 2:28:24 PM

The question of whether copyright levies as compensation for private copying should also be imposed on commercially used products has always been controversial.

Should professional users, authorities, or social institutions pay these levies for PCs, hard drives, or copiers? Are they exempt from payment, or should they pay a reduced levy?

These questions have been answered differently in Germany compared to other countries. Now, it is being reviewed again due to an appeal process at the Federal Court of Justice (BGH I ZR 1/24) and will be referred to the European Court of Justice. Important for providers: ongoing proceedings regarding compensation in Germany are suspended.

Germany has found a solution unique in Europe: professional end users and public authorities are not completely exempt from the obligation to pay compensation. Instead, they pay a reduced tariff for the respective devices. This appears more as a fiscal compromise than a clear legal principle. Considering the usage and different tariffs for the same device means higher administrative effort for providers.

A landmark ruling by the European Court of Justice was supposed to bring clarity to the issue of levy obligations for commercial use many years ago. The ECJ ruling in the Padawan case on October 20, 2010, deemed it contrary to EU law to impose a levy indiscriminately on consumers and legal entities, regardless of the purpose of the copies (which, in the case of legal entities, was not for private use). However, there is still little clarity in the implementation of copyright levy obligations. The implementation of the ECJ ruling in Germany can be described as idiosyncratic. But there are also complex exemption regulations in other countries, such as Sweden or the Netherlands, and the situation in France is currently being examined by the Ministry of Economy.

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