From our good friend Fidel Porcuna (Bird & Bird, Madrid) comes the following update:
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| La Moncloa |
"Readers might be interested in the recent news from La Moncloa, the seat of the Spanish Government.
Every
Friday a Cabinet meeting is held to decide on a variety of matters; its utterances are the last word on all such matters at an administrative level, although the
legitimate interests of anyone who believes he is negatively affected can still be
decided on the Courts.
One of the issues discussed at a recent Cabinet meeting was the Spanish State's potential liability following amendment of the private
copying compensation which caused the annulment of the copyright levy system
as a whole. That law was passed by the Royal Decree of 30 December 2011, in force
as of 1 January 2012, the new system having been enacted by Royal Decree 1657/2012
in force as of 8 December 2012.
It was simple to calculate the effective harm caused to right holders by private copying over a period of 12 months, by applying a set of objective rules and subtracting the resulting sum from the State Budget. That sum was then given to the collecting societies
along with strict rules for its distribution among right holders (phonograms,
audiovisual works and books). It was established that, for 2012 the amount would
be €5 million, the same for year 2013.
A controversial element of the law was its transitional provisions: there would be no refunds for levies paid under
the old system (despite Case
C‑467/08, Padawan SL v Sociedad
General de Autores y Editores de España (SGAE)- see earlier Kat posts here
and here), and the levies accrued up to 1 January would still
be payable to the collecting societies. These issues were discussed in a previous entry in The 1709 Blog here. The situation became even more uncertain when the Supreme Court also annulled
some minor legislative provisions (the implementing regulations concerning the
amounts payable for each digital item) that were in force prior to the
suppression of the copyright levy, on the grounds that the passing process was
not correctly applied. In particular, said the Court, the Government passed it without
the perceptive report of the Consejo de Estado, sitting as a State consultative
board. That made definitive the fact that users of digital devices had paid
copyright levies according to an invalid regulation from 2008 to 2011. The
situation was then delicate, as the consequences were unpredictable (one dared
to draft speculative scenarios).
The only certain fact was that the collecting societies announced that they were taking legal action against the Government to recover unpaid levies as a consequence of
the suppression of the digital levy, and to arm themselves vis-á-vis
potential actions from they electronics sector. They indeed did launch proceedings, seeking damages of up to €105.2 million.
The recent Cabinet meeting maintained that
the modification of the private copy compensation system created no liability
for the Government (the Cabinet can decide on this according to the procedural
rules of the State's liability claims, where these are examined by the
corresponding Ministry or, as the case here, by the Cabinet). The reasons
for dismissing the collecting societies' claims are twofold: the Government
believes the new system is in accordance with EU law and with the CJEU's doctrine by
which the Member Estates are entitled to modify their copyright levy system (in particular, the
structure, financial models, gathering and quantity), as long as that is based
on the effective harm. On the other hand, there is not real so much as hypothetical harm to authors -- which is therefore not subject to damages according to
the particulars of the law on the State's liability. Should eventually the
effective harm's value turn out to be more than €5 million, the State Budget
has resources to increase the provisional compensation set as €5 million".
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