Private copying in Spain: a new look for fair compensation rules

From our Spanish friend Fidel Porcuna (Bird & Bird) comes some significant news of developments in the bottom left hand corner of the European Union.  Fidel writes:

"On 18 October the Spanish Government launched a public consultation over the new draft regulation for collecting fair compensation for private copying. This consultation ended on 5 November and, presumably, collective societies and other private institutions and associations have filed substantive observations. This new draft follows the abolition on 31 December 2011 of the Spanish copyright levy: its main objective is to establish a new system to compensate right holders for private copying.

Under this new system, compensation will be calculated annually and charged to the State Budget: there will be no collecting obligations for the industry as in the past. This is interesting: if you link the copyright levy to the actual sale of the digital reproduction equipment, devices and media, the indiscriminate application of the copyright levy to virtually all users of such equipment, devices and media is incompatible with Directive 2001/29 (Case C-467/08 Padawan). If you however discharge this obligation via the State Budget, such obligation would still be imposed on virtually all users of such equipment, devices and media, and even extended to non-users but, in the eyes of the Spanish lawmaker, that will be in conformity with Directive 2001/29.

The amount of compensation will be calculated on the basis of the harm actually caused to copyright  owners in result of copying by individuals for private use, but not professional or business use. The estimate of this harm is done by applying the following objective criteria:

(a) an estimate of the number of copies made, excluding those reproductions made by equipment, devices and digital reproduction media that have not been made available to private users and are clearly reserved for uses other than private copying. 

(b) the impact of private copying on the sale of original works, taking into account the actual degree of substitution by these private copies made and the effect it has on such original works the possibility of private copies by the purchaser. 

(c) the nature of the copies (digital or analogue) and the different impact it has on the private copy limit.

(d) The application of technological measures referred to in Article 160(3) of the Intellectual Property Law to avoid non-authorised uses of the protected works.

The preceding paragraph does not give rise to an obligation tocompensate in those situations in which the prejudice to the right holder is minimal.

There will be three categories for distribution: phonograms, audiovisual works and books. The Government will pay the collective societies, which will distribute the amount to right-holders.

Manufacturers, distributors, wholesalers or retailers and end-buyers who paid levies before 1 January 2012 will not be entitled to a refund of the amount paid. Further, debtors and, where appropriate, parties who are jointly responsible for fair compensation for private copying who acquired such status before 1 January 2012 and did not submit the settlement declaration to collective societies or had not paid the amounts due, must do so within six months from the entry into force of the Royal Decree. Note: the levy will be generated for the importer/ manufacturer the moment it transfers the ownership of the product to the next link in the chain (distributor).

The Spanish Government has set the amount for 2012 and 2013 at €5 million for each year. 

Finally, the draft Royal Decree amending the current Intellectual Property Law was leaked to the press a few days ago. Although the Government sustains that such draft is not the current version, it has not denied that the leaked document is fake. The amendments are substantive. For example, the text reads that the private copy shall only be the copy of the original work or the original broadcast of such work, so a copy made from a private copy will fall outside of the limitation (the position currently is broader because the law expressly refers to copies made from works to which the user has legal access). In addition, internet service providers offering links to protected contents (to be downloaded through Torrent etc.) must publish the list of the authorisations from the right holders of the linked contents under a penalty of up to 150,000 Euros. The disclosure of IP address identification will be possible in cases of unauthorised massive dissemination of protected contents".