Abstract
Private copying as limitation of copyright is well acknowledged in many countries, and some of them (especially European countries) have institutionalized a levy system that makes it possible for rights holders to obtain a certain amount of money as compensation. Then, should Internet service providers (ISPs) also be obliged to pay the levies for the reason that they make it possible for end-users to do private copying in the Cloud? To answer this question, we must know whether and to what extent reproduction taking place in the Cloud are to be regarded as private copying. Some exploratory discussion has already occurred in specialized commissions in France and Japan. But we must take note that the levy itself is now faced with challenges that make us reconsider thoroughly the rationale of the system.
Yasuto Komada is Professor at the Faculty of Law and Chairperson of Department of International Legal Studies at Sophia University.
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Notes
- 1.
The CSPLA is an independent advisory board, in charge of advising the Minister of Culture and Communication on matters concerning literary and artistic property. The CSPLA published a French version (full text and summary) and an English version (summary) of this report.
- 2.
- 3.
- 4.
- 5.
- 6.
CJEU (3rd Chamber), October 21, 2010, C-467/08.
- 7.
- 8.
CSPLA Commission’s report (French), 19; CSPLA Commission’s summary report (English), 5. The report shows that some members think that the server-computers are managed by ISPs and the copy made in the course of this service is kept under the ISPs’ control, which means that the application of the private copying limitation may be excluded under the traditional interpretation of the French law.
- 9.
Cf. Article 14 (1) of E-Commerce Directive (2000/31/EC), OJ L 178/1; CJEU (Grand Chamber), March 23, 2010, C-236/08 to C-238/08 (AdWords cases); CJEU (Grand Chamber), July 12, 2011, C-324/09 (eBay case). In this context, it should be reminded that the regime does not say anything about the infringement arising from illicit use of contents that the provider hosts, and cannot take the injunction relief away from rights holders whenever the infringement takes place on the service.
- 10.
- 11.
- 12.
- 13.
- 14.
CSPLA opinions, no. 6.
- 15.
CSPLA opinions, nos. 7 and 8. The test is provided for in plural international conventions (Berne Convention, Article 9 (2); TRIPs, Article 13; WCT, Article 10; WPPT, Article 16 (2); Beijing Treaty on Audiovisual Performances, Article 13 (2)) and Information Society Directive (2001/29/EC), Article 5 (5).
- 16.
CSPLA suggests the application of the levy system, but also introduces the objections made by cinematographic and audiovisual producers. See CSPLA opinions, nos. 9 and 10.
- 17.
The JACA is a special body of the Japanese Ministry of Education. It was set up in 1968 to promote Japanese arts and culture.
- 18.
JACA Commission’s report, 7-8.
- 19.
Supreme Court of Japan, January 18, 2012, Saikôsaibansho Minjihanreishû, Vol. 65, No. 1, 121.
- 20.
H. Okumura (2015), 25.
- 21.
JACA Commission’s report, 9.
- 22.
According to the report, the current situation is that certain providers actually make contracts with rights holders on behalf of the end-users.
- 23.
JACA Commission’s report, 10.
- 24.
JACA Commission’s report, 13-14.
- 25.
JACA Commission’s report, 15.
- 26.
This remark was originally issued in the Padawan case (supra note 6) and quoted repeatedly in the Stichting case (CJEU, 16 June 2011, Case C-462/09), VG Wort cases (CJEU, 27 June 2013, C-457/11 to C-460/11), Amazon case (CJEU, 11 July 2013, C-521/11) and Copydan Båndkopi case (CJEU, 5 March 2015, C-463/12).
- 27.
The Supreme Court of Germany once took the view that mechanical private copying infringes the author’s exclusive right. BGH, 18 Mai 1955, BGHZ 17, 266; BGH, 29 Mai 1964, BGHZ 41, 393 (GEMA cases). The last case led the way to the levy system.
- 28.
Cf. M.M. Walter / S. von Lewinski (2010), 11.5.25. “Indeed, the concept of ‘harm’ is alien to the tradition of Continental European Member States, which provide for remuneration rights as a counterpart for the use being made, irrespective of whether this use has caused any harm to the right holders”. See also A.E. Pardo / A. Lucas-Schloetter (2013), 466. “In (continental European) countries, it is assumed that the compensation system may provide for a lump sum, independent of any proof of prejudice, the only criterion being that of knowing the extent to which protected works are subject to reproduction for private use”.
- 29.
As regards the relationship between the levy system and the last step of the Three-Step Test, see M.R.F. Senftleben (2004), 238. Senftleben examines the license theory and concludes that the theory “hardly portrays reality.”
- 30.
The paper by Oberholzer-Gee and Koleman analyzes whether file sharing has reduced the legal sales of music and shows that their estimates are inconsistent with claims that file sharing is the primary reason for the decline in music sales during their study period. See F. Oberholzer-Gee / S. Koleman (2007), 1-42. The paper by Waldfogel makes almost the same observation. See J. Waldfogel (2012), 91-109. In the field of animation cartoon, T. Tanaka (2011).
- 31.
CJEU (Fourth Chamber), April 10, 2014, C-435/12 (ACI Adam), para. 39.
- 32.
According to the empirical case study made by Kretschmer commissioned by the UK Intellectual Property Office, the costs of levies are not always passed on to consumers: In a competitive market (e.g. the market of printers), manufacturers appear to absorb the levy (M. Kretschmer (2011), 15-17, 57). The report also tells that, in non-levy countries (including the UK), certain forms of private copying are already priced into retail purchases (id., 19). The report conceives of introducing the private copying limitation for the forms of “priced into purchases (no lost sale)” into UK copyright law as maintaining the status quo and introducing the limitation for other forms as creating statutory license. However such a distinction is misleading, because whether a valid license is issued or not does not depend on the harm which would arise if no license were granted.
- 33.
Recording Industry Association of America (RIAA) v. Diamond Multimedia Systems Inc., 9th Cir. 1999 (51 U. S. P. Q. 2d, 180 F. 3d 1072). RIAA brought suit to enjoin the manufacture and distribution of the Rio (a portable MP3 player), alleging that the Rio does not meet the requirements for digital audio recording devices under the Audio Home Recording Act of 1992, 17 U. S. C. § 1001 et, because it does not employ a Serial Copyright Management System (SCMS). RIAA also sought payment of the levies owed by Diamond as the manufacturer and the distributor of a digital audio recording device.
- 34.
For the current status of the levy system in the US and Japan, see WIPO (2013), 83-91, 145-147.
- 35.
This observation appeared first in the Padawan case (supra note 6) and is repeatedly used in the relevant CEJU judgments.
- 36.
Antonio Vitorino, former European Commissioner for Justice and Home Affairs, believes that, in order to achieve coherence in the levy system, it is necessary to define “harm” uniformly across the EU. See A. Vitorino (2013), 20. In this context, his remarks in “Recommendations resulting from mediation process on private copying and reprography levies” focus on the lost income opportunities via the license agreements that rights holders and consumers would have concluded if there were no private copying limitation. But Poort and Quintais criticize very adequately that Vitorino’s definition of “harm” conflates the concepts of lost profit and lost licensing opportunities and ignores the fact that the harm arises not from one single copy but from a number of natural persons’ activities. See J. Poort / J.P. Quintais (2015), 205.
- 37.
- 38.
VG Wort case (supra note 26), para. 56.
- 39.
VG Wort case (supra note 26), para. 57. The equivalent ruling can be found in Båndkopi case (supra note 26), para. 71.
- 40.
VG Wort case (supra note 26), para. 37. The equivalent ruling can be found in Båndkopi case (supra note 26), para. 65.
- 41.
Cf. A.E. Pardo / A.E. Lucas-Schloetter (2013), 467. “…the Court of Justice in practice does not require right holders to give proof of their loss. In fact, it estimates that possible harm is sufficient and gives rise to a lump sum assessment”.
- 42.
The Copyright and Rights in Performance (Personal Copies for Private Use) Regulations 2014 provide an exception limited to the personal use and to the owners of a personal copy, available at: www.legislation.gov.uk/ukdsi/2014/9780111116036/regulation/3.
- 43.
The decision of 19 June, 2015 (CO/5444/2014), available at: www.bailii.org/ew/cases/EWHC/Admin/2015/1723.html.
- 44.
M.M. Walter / S. von Lewinski (2010), 11.5.25 refers to the case where TPMs are used and allow the rights holder to receive remuneration directly from the user in exchange for removing the TPM and allowing use, and concludes that in that case, “additional statutory remuneration would amount to a double remuneration”.
- 45.
C. Karapapa (2012), 128. “The fact that it is only the possibility of harm that should be taken into account…means that fair compensation can be seen as imposing a form of rough justice”.
References
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Komada, Y. (2017). Reference Points for and Obligors of Levies in the Online-World: Should ISPs Be Obliged to Pay the Levies for Cloud Services and Private Copying?. In: Liu, KC., Hilty, R. (eds) Remuneration of Copyright Owners. MPI Studies on Intellectual Property and Competition Law, vol 27. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-53809-8_6
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