OPINION OF ADVOCATE GENERAL
COLLINS
delivered on 13 July 2023(1)
Case C‑260/22
Seven.One Entertainment Group GmbH
v
Corint Media GmbH
(Request for a preliminary ruling from the Landgericht Erfurt (Regional Court, Erfurt, Germany))
(Reference for a preliminary ruling – Directive 2001/29/EC – Article 2(e) – Reproduction right for broadcasting organisations of fixations of their broadcasts – Article 5(2)(b) – Private copying exception – Fair compensation condition – Blank media levy – Harm to broadcasting organisations – Charter of Fundamental Rights of the European Union – Equal treatment – Principles of primacy of EU law and direct effect – Emanations of the State)
I. Introduction
1. This request for a preliminary ruling by the Landgericht Erfurt (Regional Court, Erfurt, Germany) arises in the context of proceedings concerning an exclusive copyright management contract (‘the contract’) concluded between Seven.One Entertainment Group GmbH, a broadcasting organisation that produces and broadcasts ‘SAT.1 Gold’ (2) in Germany (‘the applicant’), and Corint Media GmbH, a collective management organisation that defends and enforces the copyright interests of private television channels and radio stations (‘the defendant’). Under the contract, the defendant has taken on the obligation to enforce the applicant’s right to receive fair compensation for reproductions of fixations of its broadcasts that natural persons make for their private use. The defendant claims that it is not obliged to enforce that right because, although national copyright law permits private copying of fixations of broadcasts, it excludes any corresponding right to compensation.
2. The request for a preliminary ruling concerns the interpretation of Article 2(e) and Article 5(2)(b) of Directive 2001/29/EC. (3) Article 2(e) of Directive 2001/29 confers an exclusive reproduction right on broadcasting organisations over fixations of their broadcasts. By Article 5(2)(b) of Directive 2001/29, Member States may opt to limit the exclusive reproduction rights in Article 2 of that directive by providing for a private copying exception. That exception applies to reproductions on any medium that a natural person makes for his or her private use, (4) subject to the rightholders receiving fair compensation. By its request for a preliminary ruling, the Landgericht Erfurt (Regional Court, Erfurt) seeks to ascertain whether national law may create a private copying exception with respect to the reproduction of fixations of broadcasts while excluding broadcasting organisations from a right to receive fair compensation. The referring court asks, in particular, whether the exclusion of fair compensation may be justified by the fact that, in their capacity as producers of television programmes, certain broadcasting organisations are entitled to compensation for the private copying of their television programmes produced ‘in-house’. (5)
II. Legal framework
A. European Union law
3. Article 2 of Directive 2001/29, entitled ‘Reproduction right’, provides:
‘Member States shall provide for the exclusive right to authorise or prohibit direct or indirect, temporary or permanent reproduction by any means and in any form, in whole or in part:
(a) for authors, of their works;
(b) for performers, of fixations of their performances;
(c) for phonogram producers, of their phonograms;
(d) for the producers of the first fixations of films, in respect of the original and copies of their films;
(e) for broadcasting organisations, of fixations of their broadcasts, whether those broadcasts are transmitted by wire or over the air, including by cable or satellite.’
4. Article 5, headed ‘Exceptions and limitations’, states:
‘…
2. Member States may provide for exceptions or limitations to the reproduction right provided for in Article 2 in the following cases:
…
(b) in respect of reproductions on any medium made by a natural person for private use and for ends that are neither directly nor indirectly commercial, on condition that the rightholders receive fair compensation …’
B. German law
5. Paragraph 53(1) of the Gesetz über Urheberrecht und verwandte Schutzrechte – Urheberrechtsgesetz (Law on copyright and related rights) of 9 September 1965, (6) in the version applicable to the dispute in the main proceedings (‘the UrhG’), is found in Section 6 of Part 1 of the UrhG and provides that:
‘It shall be permissible for a natural person to make single copies of a work for private use on any medium, provided that they do not serve any commercial purpose either directly or indirectly and provided that they are not copied from a model that has obviously been unlawfully produced or made publicly accessible. A person authorised to make copies may have such copies made by another person where this is done free of charge or where this involves copies on paper or any similar medium, effected by the use of any kind of photomechanical technique or by some other process having similar effects.’
6. Under Paragraph 54(1) of the UrhG:
‘If the nature of the work gives rise to an expectation of reproduction permitted under Paragraph 53(1) or (2) or Paragraphs 60a to 60f, the author of the work shall have a claim to payment of fair remuneration against the producer of devices and of storage media of the type used, alone or in combination with other devices, storage media or accessories, to make such reproductions.’
7. Under Paragraph 87 of the UrhG:
‘(1) Broadcasting organisations have the exclusive right to,
1. rebroadcast their broadcast and make it available to the public,
2. make video or audio recordings of their broadcast, take photographs of their broadcast, as well as reproduce and distribute the video and audio recordings or photographs, with the exception of the rental right,
…
(4) Paragraph 10(1) and the provisions of Section 6 of Part 1, with the exception of the second sentence of Paragraph 47(2), and Paragraph 54(1), shall apply mutatis mutandis.
…’
III. The dispute in the main proceedings and the questions referred for a preliminary ruling
8. The applicant contends that the defendant must enforce the applicant’s right under the contract to a ‘blank media levy’ as compensation for harm caused by private copying pursuant to the exception under Paragraph 53(1) of the UrhG. The applicant claims that it is ‘significantly affected’ by private copying, in particular, by the recording of its channel by means of (online) video recorders. The defendant’s response is that it cannot comply with the applicant’s claim because Paragraph 87(4) of the UrhG excludes broadcasting organisations from the blank media levy that Paragraph 54(1) of the UrhG provides for.
9. The referring court states that, by virtue of Article 2(e) of Directive 2001/29 and Paragraph 87(1)(2) of the UrhG, broadcasting organisations have an exclusive reproduction right in fixations of their broadcasts. Paragraph 87(4) and Paragraph 53(1) of the UrhG limit that reproduction right by the application of a private copying exception without providing for any right to compensation. Paragraph 87(4) of the UrhG (7) may, for this reason, be incompatible with Article 2(e) and Article 5(2)(b) of Directive 2001/29. The referring court cites the case-law of the Court of Justice, according to which a private copying exception adopted pursuant to national law may limit the exclusive reproduction right only if the rightholder is paid fair compensation. (8) If the exclusion of the right to fair compensation under national law is compatible with Directive 2001/29, a ‘blank media levy’ is not due under the contract and the referring court should dismiss the action before it. If that exclusion is incompatible with Directive 2001/29, however, the applicant is entitled to succeed in its action since, under the contract, the defendant is required to collect the blank media levy on the applicant’s behalf.
10. The referring court is thus of the view that the exclusion of broadcasting organisations from the right to fair compensation is unjustified. The fact that broadcasting organisations may be entitled to fair compensation in their capacity as film producers pursuant to Article 2(d) of Directive 2001/29 does not justify that exclusion. The referring court observes that many television channels of private broadcasting organisations consist primarily of commissioned productions and that the film producer’s right usually belongs to the production companies rather than to the broadcasting organisations. In any event, radio broadcasting organisations do not produce films. In addition, the referring court considers that the exclusion of broadcasting organisations from the blank media levy may be contrary to the principle of equal treatment under Article 20 of the Charter of Fundamental Rights of the European Union (‘the Charter’). The issue as to whether that exclusion is contrary to Article 11 of the Charter on the right to freedom of expression, as it limits the freedom to broadcast, also arises.
11. In those circumstances, the Landgericht Erfurt (Regional Court, Erfurt) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:
‘(1) Must Directive [2001/29] be interpreted as meaning that broadcasting organisations are entitled, directly and originally, to the right to the fair compensation provided for under the “private copying” exception, in accordance with Article 5(2)(b) of Directive [2001/29]?
(2) Having regard to their right under Article 2(e) of Directive [2001/29], can broadcasting organisations be excluded from the right to fair compensation under Article 5(2)(b) of Directive [2001/29] because they may also be entitled to fair compensation in their capacity as film producers under that provision?
(3) If Question 2 is answered in the affirmative:
Is the general exclusion of broadcasting organisations permissible even though, depending on their specific programming, they sometimes acquire film producers’ rights only to a very small extent (in particular in the case of television channels with a high proportion of programmes licensed from third parties) and they sometimes acquire no film producers’ rights at all (in particular in the case of radio broadcasters)?’
IV. The procedure before the Court
12. The applicant, the German, Italian and Austrian Governments, and the European Commission submitted written observations. The applicant, the defendant, the German and Austrian Governments and the Commission presented oral argument and replied to questions put by the Court at the hearing on 29 March 2023.
V. Analysis
13. The referring court’s questions seek to ascertain whether Article 2(e) and Article 5(2)(b) of Directive 2001/29 preclude a Member State from providing a private copying exception to the exclusive reproduction right of broadcasting organisations in fixations of their broadcasts while excluding a right to fair compensation in respect of that copying.
A. Summary of the observations submitted
14. The applicant, the defendant and the Commission submit that broadcasting organisations may not be excluded from the right to fair compensation pursuant to Article 5(2)(b) of Directive 2001/29 because private copying causes them more than minimal harm. The applicant and the defendant observe that private copying of broadcasts using fixed devices and online services is widespread and generates considerable harm for broadcasting organisations. Consultation services for media libraries that broadcasting organisations or their commercial licensees offer are less attractive since users can use their private copies without payment. Broadcasting organisations also forgo advertising revenue since viewers who record broadcasts often do not watch them live. The applicant and the defendant indicated at the hearing that German law excludes no other category of rightholder from the right to receive fair compensation. Nor are rightholders who are paid compensation required to demonstrate the existence of harm in monetary terms or to quantify that harm. The defendant adds that, in its view, private copying per se harms broadcasting organisations.
15. The applicant considers that the reproduction right of producers, pursuant to Article 2(d) of Directive 2001/29, and that of broadcasting organisations, pursuant to Article 2(e) thereof, are distinct. In many instances broadcasting organisations, in particular radio broadcasters, do not produce films. The fact that in rare instances broadcasting organisations also produce films does not warrant the exclusion of a right to compensation for the private copying of broadcasts. The exclusion of broadcasting organisations from the private media levy thus constitutes unjustified discrimination. It also infringes the freedom of expression and information that Article 11 of the Charter recognises and the right to property that Article 17 of the Charter protects.
16. The German and Austrian Governments contend that a category of rightholder may be excluded from the right to compensation for private copying if, due to the inherent characteristics of the members of that category or the manner in which those rights are exploited, rightholders suffer minimal harm. (9) They emphasise that Article 2(e) of Directive 2001/29 protects the ‘technical and organisational performance, embodied in the broadcast’ and that the content of broadcasts is not the subject matter of the broadcasting organisations’ right pursuant to that provision. The reproduction of that content must, therefore, be distinguished from the reproduction of the broadcast or the signal by which it is transmitted. (10) According to those governments, the core activity or traditional commercial model of broadcasting organisations is to make available to the public fixations of their broadcasts. They submit that broadcasting organisations do not suffer direct economic loss from the copying of broadcasts, as such copying does not limit the reception of broadcasts and thus their advertising impact. They also consider that there is no credible evidence of direct harm to the media library services that broadcasting organisations provide. The Austrian Government claimed at the hearing that, with the advent of streaming services, the level of copying of broadcasts has fallen.
17. The Italian Government observes that the exclusion of broadcasting organisations from the right to fair compensation where they provide no creative input in the development of an original work is not discriminatory and may be justified by reference to recitals 9 and 35, and Articles 2 and 3, of Directive 2001/29. That government nevertheless considers that compensation is payable where broadcasting organisations, notwithstanding the absence of any creative input, play a decisive role in stimulating the production of an audiovisual work, particularly by financing its production. By contrast, where broadcasting organisations acquire reproduction rights by negotiation, fair compensation is not due as they do not provide a decisive contribution to the creation of a work.
B. Article 2(e) of Directive 2001/29 – Exclusive right of reproduction
18. Article 2 of Directive 2001/29 requires Member States to grant authors and the holders of certain identified related rights the exclusive right to authorise or to prohibit reproduction of their protected works or other subject matter. (11) As is evident from its title, Directive 2001/29 harmonises certain aspects of copyright stricto sensu and related rights in order, inter alia, to protect and to stimulate the development and marketing of new products and services in the information society. (12)
19. In accordance with Article 2(e) of Directive 2001/29, Member States must provide for the exclusive right of broadcasting organisations to authorise or prohibit the reproduction of fixations of their broadcasts. The exclusive reproduction right under Article 2(e) of Directive 2001/29 protects ‘fixations’, not the content, of broadcasts. In that regard, the Court held in the judgment in Football Association Premier League and Others (13) that authors can rely on their copyright in works exploited within the framework of broadcasts. (14) The broadcasting organisations’ right in respect of reproductions of fixations of their broadcasts pursuant to Article 2(e) of Directive 2001/29 must also be distinguished from their exclusive right to authorise or prohibit the fixation of their broadcasts (15) pursuant to Article 7(2) of Directive 2006/115/EC. (16) In addition, as the Commission observed at the hearing, the broadcasting organisations’ reproduction right under Article 2(e) of Directive 2001/29 is separate and distinct from their right to make available to the public fixations of their broadcasts pursuant to Article 3(2)(d) of that directive.
20. It follows that all of these rights coexist in parallel and that a limitation or exception to one right does not necessarily imply a limitation to another. (17) By way of example, the private copy exception pursuant to Article 5(2)(b) of Directive 2001/29 does not apply to the right of broadcasting organisations to make fixations of their broadcasts available to the public. (18)
21. According to the referring court, Paragraph 87(1)(2) of the UrhG transposes broadcasting organisations’ exclusive right of reproduction in fixations of their broadcasts pursuant to Article 2(e) of Directive 2001/29. The correctness of that transposition and the application of that national provision are not at issue in the present proceedings, which instead focus on the transposition into German law of the exception in Article 5(2)(b) of Directive 2001/29 to the exclusive right of reproduction that Article 2(e) thereof provides for. Paragraph 54(1) of the UrhG provides for the payment of ‘fair remuneration’ in the form of a ‘private media levy’ payable by the producers of devices and storage media used to make reproductions which are permitted pursuant, inter alia, to Paragraph 53(1) of the UrhG. (19) As previously indicated, Paragraph 53(1) of the UrhG provides for a private copying exception in respect, inter alia, of fixations of broadcasts. Paragraph 87(4) of the UrhG, however, excludes broadcasting organisations from the right to fair remuneration.
C. Article 5(2)(b) of Directive 2001/29 – Exclusion of broadcasting organisations from the right to fair compensation
22. In accordance with Article 5(2)(b) of Directive 2001/29, Member States may provide for an exception or limitation to the exclusive reproduction rights in Article 2 of that directive for reproductions made by natural persons for private use on the condition that the holders of that exclusive right receive fair compensation. This is often described as the ‘private copying exception’.
23. It is settled case-law that, although Article 5(2)(b) of Directive 2001/29 is optional, where Member States choose to implement it they must guarantee rightholders the effective recovery of fair compensation. (20) Article 5(2)(b) of Directive 2001/29 provides that the private copying exception applies ‘on condition that the rightholders receive fair compensation’. That provision does not distinguish between the five categories of rightholders (21) described in Article 2 of Directive 2001/29. (22) A literal interpretation of Article 5(2)(b) of Directive 2001/29 results in the right to fair compensation benefiting all of the five categories of rightholders listed in Article 2 thereof without making any distinction between them.
24. Article 5(2)(b) of Directive 2001/29 does not, however, establish the parameters (23) for the payment of fair compensation and the Member States enjoy a broad discretion in creating such parameters.(24) As is apparent from recitals 35 and 38 of Directive 2001/29, (25) it is nevertheless the case that, as a matter of principle, the existence of harm to rightholders triggers a right to compensation. (26) Article 5(5) of Directive 2001/29 also states that the introduction of the private copying exception may not prejudice unreasonably the rightholder’s legitimate interests. (27) Compensation that overestimates (28) or underestimates the harm caused to rightholders by private copying is thus incompatible with the fair balance that is to be maintained between the interests of rightholders, guaranteed by Article 17(2) of the Charter, and the interests and fundamental rights of users of protected subject matter, in particular the freedom of expression and information that Article 11 of the Charter protects, together with the public interest. (29) Member States are not required to ensure the availability of compensation where the harm to rightholders is minimal. (30) The requirement to pay and the level of fair compensation is thus intrinsically linked to the existence and the degree of harm that private copying causes the rightholder. (31)
25. It is thus settled case-law that the person carrying out private copying must, in principle, compensate for harm caused to the rightholder. In accordance, moreover, with Article 3(h) of Directive 2014/26/EU (32), income deriving from a right to compensation that a collective management organisation collects on behalf of rightholders constitutes copyright revenue or related rights revenue.
26. While the Court accepts that remuneration systems for private copying may be imprecise (33) and that compensation may be provided in an indirect form, (34) that does not justify the exclusion of an entire category of rightholder from the right to fair compensation if those rightholders suffer harm. (35) The existence and quantum of such harm is a question of fact which cannot, in principle, be excluded or disregarded by operation of law unless there is cogent evidence that that category of rightholder suffers no more than minimal harm as a result of private copying. It is for the referring court to verify whether broadcasting organisations, such as the applicant, in fact suffer harm from the private copying of fixations of their broadcasts.
27. The applicant and the defendant claim that broadcasting organisations suffer harm, inter alia, from private copying as they face unfair competition in the market for their media library services and their advertising revenue is affected. (36) The German and Austrian Governments strongly dispute that contention. In that regard, it must be emphasised that, contrary to those governments’ claims, the assessment of harm to broadcasting organisations is not limited to the so-called ‘core activity’ of making available to the public fixations of their broadcasts protected by Article 3(2)(d) of Directive 2001/29. While broadcasting organisations may have a ‘core activity’ when viewed from a commercial perspective, they nonetheless enjoy the full range of rights Directive 2001/29 affords them subject always to the exceptions and limitations in Article 5 thereof. Broadcasting organisations enjoy distinct rights under Article 2(e) and Article 3(2)(d) of Directive 2001/29 respectively. Given the express will of the EU legislature to provide for these separate, standalone rights, it is not possible to blur the distinction between them.
28. The unequivocal terms by which Article 2(e) of Directive 2001/29 grants rights cannot be altered or undermined by an incorrect application or extension (37) of the exception in Article 5(2)(b) of that directive. (38) Nor can the right to fair compensation for broadcasting organisations be undermined by artificially classifying or delimiting the manner whereby those organisations exploit the rights Article 2(e) of Directive 2001/29 grants to them.
29. Contrary to the Italian Government’s observations, Article 5(2)(b) of Directive 2001/29 does not make the payment of fair compensation conditional upon the ‘originality’ or ‘creativity’ of the subject matter that Article 2 of that directive protects. (39) Fair compensation is conditional on both the permitted private copying of subject matter protected under Article 2 of Directive 2001/29 and the existence of harm to the rightholder. The reproduction right of authors in their works under Article 2(a) of Directive 2001/29 requires that the subject matter concerned be original and that it be the expression of the author’s own intellectual creation. (40) No such requirement is imposed in respect of the related rights of broadcasting organisations pursuant to Article 2(e) of Directive 2001/29 or on phonogram producers or film producers pursuant to Article 2(c) and (d) thereof. Article 5(2)(b) of Directive 2001/29 thus falls to be applied in a manner consistent with the principle of equal treatment, enshrined in Article 20 of the Charter, according to which comparable situations must not be treated differently and different situations must not be treated in the same way unless such treatment is objectively justified. (41)
30. The fact that broadcasting organisations may receive fair compensation in respect of private copying of films they produce is also irrelevant. Each of the exclusive rights under Article 2(d) and (e) of Directive 2001/29 is separate and distinct. Pursuant to Article 5(2)(b) of that directive, fair compensation is, in principle, due in respect of private copying of the subject matter protected by each of those rights. The reproduction of a fixation of a broadcast may thus give rise to different, independent rights to fair compensation for broadcasting organisations pursuant to Article 5(2)(b) of Directive 2001/29. (42)
D. Application of Article 2(e) and Article 5(2)(b) of Directive 2001/29 to the present proceedings – Dispute between two companies – Principles of primacy of EU law and direct effect – Emanations of the State
31. Given that the referring court seeks an interpretation of a directive in the context of a dispute between two private limited liability companies, (43) it is necessary to examine, in the light of the Commission’s observations,(44) the applicability of any ruling that the Court may give.
32. The principle of primacy of EU law requires, inter alia, that national courts interpret, to the greatest extent possible, their national law so as to make it conform with EU law. It is thus incumbent on the referring court to examine, in particular, whether Paragraph 87(4) of the UrhG can be given an interpretation that conforms with Article 2(e) and Article 5(2)(b) of Directive 2001/29. That requirement is nevertheless limited by general principles of law, which include the requirement that provisions of national law are not to be interpreted contra legem. (45)
33. Without pre-empting the referring court’s ultimate interpretation of its national law, the request for a preliminary ruling states that ‘broadcasting organisations are completely excluded from the entitlement to compensation under national copyright law’. It thus seems uncertain that the referring court will be in a position to interpret the relevant national law provisions, notably Paragraph 87(4) of the UrhG, in such a manner as to make them conform with Article 2(e) and Article 5(2)(b) of Directive 2001/29.
34. Where the referring court is unable to adopt a conforming interpretation of national law, the principle of the primacy of EU law requires it, in a pending case, to disapply any provision of national law which is contrary to an applicable provision of Directive 2001/29 that has direct effect. (46)
35. In my view, both Article 2(e) and Article 5(2)(b) of Directive 2001/29 have such direct effect.
36. The reproduction right in Article 2(e) of Directive 2001/29 is defined in clear, unequivocal terms.(47) It is unqualified and its implementation and effects are neither contingent upon nor subject to Member States adopting measures in any particular form. It follows that Article 2(e) of Directive 2001/29 constitutes a measure of full harmonisation of the broadcasting organisations’ exclusive right of reproduction of fixations of their broadcasts and that Member States have no discretion in implementing that provision. (48)
37. Article 5(2)(b) of Directive 2001/29 unequivocally imposes on those Member States that choose to implement the private copying exception thereunder an unconditional and precise obligation to ensure that rightholders receive fair compensation. (49) While Directive 2001/29 does not provide further details concerning the various elements of the system of fair compensation, and the Member States enjoy a broad discretion in that context, the obligation to ensure that rightholders receive fair compensation has direct effect. The holder of the reproduction right must, ‘by operation of law, directly and originally, be [entitled] to the right to the fair compensation provided for in Article 5(2)(b) of Directive 2001/29 under the “private copying” exception’ and ‘must “necessarily” [be paid fair] compensation’. (50)
38. The question that arises in the present case is whether the applicant can rely on Article 2(e) and Article 5(2)(b) of Directive 2001/29 in proceedings against the defendant in order to have national legislation contrary to those provisions set aside. The third paragraph of Article 288 TFEU provides that directives cannot, of themselves, impose obligations on individuals and therefore cannot be relied on as such against individuals before a national court. Even clear, precise and unconditional provisions of a directive, such as those in Article 2(e) and Article 5(2)(b) of Directive 2001/29, do not enable a national court to disapply a provision of its national law that conflicts with them if, were that court to do so, it would impose an additional obligation upon an individual. (51)
39. A directive may nevertheless be relied on against a Member State, regardless of the capacity in which the latter acts. A national court is obliged to set aside a provision of national law that is contrary to a directive where that directive is relied on against a Member State, the organs of its administration, such as decentralised authorities, or organisations or bodies which are subject to the authority or control of the State or which a Member State requires to perform a task in the public interest and, for that purpose, possesses special powers beyond those which result from the normal rules applicable to relations between individuals. (52)
40. At the hearing, both the defendant and the German Government confirmed that the defendant is a collective management organisation upon which the law has conferred special powers and that it must act in the public interest. It follows that, should the referring court find itself unable to interpret Paragraph 87(4) of the UrhG so as to conform with Article 2(e) and Article 5(2)(b) of Directive 2001/29, the applicant may rely upon the latter provisions in its dispute with the defendant in order to seek to persuade that court to disapply Paragraph 87(4) of the UrhG.
VI. Conclusion
41. In the light of the foregoing considerations, I propose that the Court answer the questions referred by the Landgericht Erfurt (Regional Court, Erfurt, Germany) as follows:
Article 2(e) and 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
must be interpreted as precluding a Member State from providing a private copying exception to the exclusive reproduction right of broadcasting organisations in fixations of their broadcasts while excluding a right to fair compensation in respect of that copying where it causes them more than minimal harm. The fact that broadcasting organisations may be entitled to fair compensation pursuant to Article 5(2)(b) of Directive 2001/29 in their capacity as film producers is irrelevant.