1 PRIVATE COPYING IN SPAIN After the PADAWAN Decision IFRRO EQUIPMENT LEVY FORUM Ljubljana, October 25th, 2011 Javier Díaz de Olarte Legal Counsel

2 JUDGEMENT OF THE EUROPEAN COURT. CENTRO ESPAÑOL DE DERECHOS REPROGRÁFICOS

The Court hereby rules: 1) The concept of ‘fair compensation’, within the meaning of Article 5(2)(b) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society, is an autonomous concept of European Union law which must be interpreted uniformly in all the Member States that have introduced a private copying exception, irrespective of the power conferred on the Member States to determine, within the limits imposed by European Union law in particular by that directive, the form, detailed arrangements for financing and collection, and the level of that fair compensation.

The Court hereby rules: 2) Article 5(2)(b) of Directive 2001/29 must be interpreted as meaning that the ‘fair balance’ between the persons concerned means that fair compensation must be calculated on the basis of the criterion of the harm caused to authors of protected works by the introduction of the private copying exception. It is consistent with the requirements of that ‘fair balance’ to provide that persons who have digital reproduction equipment, devices and media and who on that basis, in law or in fact, make that equipment available to private users or provide them with copying services are the persons liable to finance the fair compensation, inasmuch as they are able to pass on to private users the actual burden of financing it.

The Court hereby rules: 3) Article 5(2)(b) of Directive 2001/29 must be interpreted as meaning that a link is necessary between the application of the levy intended to finance fair compensation with respect to digital reproduction equipment, devices and media and the deemed use of them for the purposes of private copying. Consequently, the indiscriminate application of the private copying levy, in particular with respect to digital reproduction equipment, devices and media not made available to private users and clearly reserved for uses other than private copying, is incompatible with Directive 2001/29.

6 CEDRO & VEGAP vs. DELL Juzgado Mercantil nº 7 de Madrid CENTRO ESPAÑOL DE DERECHOS REPROGRÁFICOS

21/12/2010 1)The legal proceedings began in March )The preliminary hearing took place in February 2010 and the case was heard in September ) Decision: only the devices bought by natural persons should pay this levy. 4) Neither the plaintiff nor the defendant have shown how many devices were bought by natural persons. 5) The case was thrown out of court but each party of the proceedings paid their own legal costs.

21/12/2010 6) The decision was appealed in January 2011 and we have yet to receive the final outcome.

9 SGAE vs. NOKIA Juzgado Mercantil nº 6 de Madrid CENTRO ESPAÑOL DE DERECHOS REPROGRÁFICOS

31/01/2011 1) The Ministerial Order, (Decree) has been deemeed null and void and has no impact because it doesn´t comply with the European regulation. 2) All the reported information sent by the sellers or importers to the corresponding CMO are null and void too. 3) All the invoices sent based on those reports are null and void, too. 4) The Decision goes above and beyond the European decision because it states specific uses made by natural persons.

31/01/2011 5) The claim was completely rejected by the court and SGAE was instructed to pay all legal costs, 6) The Decision was appealed in March 2011.

12 SGAE vs. PADAWAN Audiencia Provincial de Barcelona. CENTRO ESPAÑOL DE DERECHOS REPROGRÁFICOS

02/03/2011 1) The defendant has proved that several CDs, DVDs, MP3 players were sold to several firms that shouldnt be affected by the levy. (Only nine companies are listed in the decision) 2) Some of the companies who bought the devices were from the public and private sectors. This shows us that the levy was imposed in an indiscriminate way even to devices clearly reserved for uses other than private copying. 3) As we can not determine exactly how many devices were sold to natural persons and how many to firms the Provincial Court discharged the case against PADAWAN.

02/03/2011 4) The decision is final. 5) SGAE will have to pay the legal costs for the first hearing but not for the appeal.

15 DECISION ON THE MINISTERIAL ORDER. March, 22nd 2011 CENTRO ESPAÑOL DE DERECHOS REPROGRÁFICOS

22/03/2011 1) Five key legal decisions declare null and void the Decree outlining the list of devices and their corresponding tariff. 2) The decisions are based on non compliance with the procedure to create the Decree. 3) The compulsory report of the Consejo de Estado is not included as well as two other specific reports. 4) The decisions are not final.

17 SGAE/AGEDI/AIE vs. SONY ERICSSON Juzgado Mercantil nº 5 bis de Madrid CENTRO ESPAÑOL DE DERECHOS REPROGRÁFICOS

07/06/2011 1) The decision makes reference both to the European Padawan Decission and to the Decision of the Barcelona Provincial Higher Court in the Padawn case. 2) The Court emphasises that the payment of the levy is linked to the destination of the mobiles. 3) These items will be used to make private copies when they are bought by natural persons but not by professionals such as lawyers, architects, auditors, etc. 4) In this specific case we don´t have any information about the sales.

07/06/2011 5) The Judge refers to the slight importance of the secondary uses of mobile phones as a copying and music player device when purchased by natural persons. 6) Consenquently the damage caused is insignificant. 7) The levy can´t be applied without taking into consideration all these relevant aspects. 8) The claim was completely rejected by the Judge in June 2011 and each party was instructed to pay their own legal costs.

20 SGAE et al vs. DANA SOFTWARE Audiencia Provincial de Oviedo. CENTRO ESPAÑOL DE DERECHOS REPROGRÁFICOS

08/07/2011 1) It makes reference to the European Padawan decission. 2) The Court emphasises that the payment of the levy is linked to the destination of the Cd,s or Dvd, s. 3) These items will be used to make private copies when they are bought by natural persons but not by professionals such as lawyers, architects, auditors, etc. 4) In this specific case we don´t have any information about the sales.

08/07/2011 5) The Court admits that perhaps this interpretation could be considered too simplistic. 6) Five previous legal decisions have declared null and void the Decree outlining the list of devices with the corresponding tariff. These five decissions are not final 7) The Spanish Government has announced a new regulation on this issue to overcome the “legal gap” that exists. 8) The claim was completely rejected by the court in July and each party was instructed to pay their own legal costs,

23 PROPOSAL FROM THE TECHNOLOGICAL INDUSTRY. CENTRO ESPAÑOL DE DERECHOS REPROGRÁFICOS

24 POSITION OF THE SPANISH GOVERNMENT. CENTRO ESPAÑOL DE DERECHOS REPROGRÁFICOS

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