15 Statutory Instruments reported - Statutory Instruments Joint Committee Contents

Appendix 15

o.  Draft S.I.: memorandum from the Department for Business, Innovation and Skills

Copyright and Rights in Performances (Personal Copies for Private Use) Regulations 2014 (Draft S.I.)

1.  By a request dated 7th May 2014, the Joint Committee on Statutory Instruments asked the Department to submit a memorandum on the following point:

"The draft Regulations purport to give effect to Directive 2001/29/EC, Article 5(2)(b) of which permits a member State to provide for an exception to reproduction rights in respect of copies made by a natural person for private use and for non-commercial purposes "on condition that the rightholders receive fair compensation".

Explain why no provision is made in the draft Regulations for rightholders to receive such compensation, having regard to judgments of the Court of Justice of the European Union in cases such as C-467/08 Padawan v SGAE and C-435/12 ACI Adam BV v Stichting de Thuiskopie, which indicate that a compensation scheme should be established where a member State introduces a private copying exception under Article 5(2)(b)."

2.  As stated in paragraphs 13 to 19 of the Voluntary Memorandum submitted by the Department to the Committee and the Department's responses to the letters dated 1st and 11th April 2014 from UK Music to the Committee, the Department's view is that Article 5(2)(b), when read together with Recital (35) and Article 5(5), does not require the establishment of a compensation scheme in cases where the private copying exception is narrow in scope and does not cause harm (or at least causes only minimal harm) to rightholders. The Department considers that this view is not inconsistent with the case law cited by the Committee since the Court in both cases recognised that the requirement to pay compensation is necessary where the right to take private copies causes "harm" to the rightholder.

3.  Cases C-467/08 Padawan v SGAE and C-435/12 ACI Adam BV v Stichting de Thuiskopie, considered the requirement for fair compensation in the context of the private copying exception.

4.  The Court in the ACI Adam case referred to the requirement in paragraphs 50 to 51 of its judgment:

50     The purpose of such compensation is, according to the case-law of the Court, to compensate authors for private copies made of their protected works without their authorisation, with the result that it must be regarded as recompense for the harm suffered by authors as a result of such unauthorised copies (see, to that effect, Padawan EU:C:2010:620, paragraphs 30, 39 and 40).

51     Accordingly, it is, in principle, for the person who has caused such harm, namely the person who has made the copy of the protected work without seeking prior authorisation from the rightholder, to make good the harm suffered by financing the compensation which will be paid to that rightholder (see, to that effect, Padawan EU:C:2010:620, paragraph 45, and Case C­462/09 Stichting de Thuiskopie EU:C:2011:397, paragraph 26).

5.  As noted by the Court at paragraph 50, the purpose of the compensation is to "recompense the harm suffered by authors" arising out of the exception. This is consistent with recital (35) which provides that "When determining the form, detailed arrangements and possible level of such fair compensation, account should be taken of the particular circumstances of each case. When evaluating these circumstances, a valuable criterion would be the possible harm to the rightholders resulting from the act in question….in certain situations where the prejudice to the rightholder would be minimal, no obligation for payment may arise".

6.  The new UK personal copying exception has been narrowly drawn to ensure that no harm is caused to the rightholder. As it applies only to lawfully purchased copies, the exception ensures that rightsholders remain able to receive adequate remuneration with respect to their works at the point of sale.

7.  This is in contrast with the much wider private copying exceptions provided by other EU Member States, which are accompanied by levies on media/equipment to deliver fair compensation. These exceptions permit copies to be made from sources which are not owned by the copier - for instance, borrowed or rented DVDs, or music streamed over the internet - and allow copies to be distributed within private circles including friends and family. Therefore, the exceptions provided by these Member States enable individuals to acquire copies of works without paying for them. The Department agrees that such exceptions may undermine sales of copies of works, and that this may constitute prejudice to rightholders which requires compensation under the Directive.

8.  The new UK exception is much narrower than the private copying exceptions in these other Member States. As it is not expected to harm rightholders, no compensation is required, and therefore no compensation mechanism needs to be established.

9.  In summary, therefore the Department's position is that the Directive permits the introduction of a private copying exception without the establishment of a compensation scheme in cases where the exception will cause no (or minimal) harm to the rightholder.

Department for Business, Innovation and Skills

12 May 2014

previous page contents next page

© Parliamentary copyright 2014
Prepared 2 July 2014