CJEU ruling gives clarity over artists’ compensation for home copying

German technology firm Bluechip had challenged a ruling that it would be liable to reimburse audio and audiovisual rights holders for copies of their work made privately by purchasers of Bluechip’s devices.

Germany media rights collective the Central Organisation for Private Copying Rights (ZPÜ) had brought an action that the computer company be ordered to pay compensation for every device it had sold 1 January 2014 and 31 December 2017.

Under German law, devices capable of reproduction can be assumed to actually do that at some point their life, for private purposes, if the seller is unable to rebut that presumption, by showing that they sell only to business that do not resell on to consumers.

This compensation is taken at the manufacturer’s level where it is an easier process than pursuing individual consumers, but as the law operates in different countries – such as Austria – Bluechip had challenged the ruling, which was sent to the CJEU to make a decision.

Now the CJEU has upheld the German approach, meaning manufacturers and importers of machines with storage media will need to pay compensation for private copies unless they can prove that private use of the device is not permitted or that the copies are compatible with other European directives.

Alexander Bibi, an intellectual property (IP) expert with Pinsent Masons in Germany, said the ruling would leave companies across Europe looking at how to address the court’s decision.

“The decision is a good illustration of the need to interpret copyright law in light of its underlying objectives,” he explained.

“The aim is to ensure that authors receive fair remuneration effectively while avoiding disproportionate burdens on market participants. A rebuttable presumption in favour of the payment obligation achieves precisely this.”

“What is crucial for businesses dealing with this outcome is to implement documentation in their sales process, which they can use to rebut the presumption,” added Nils Rauer, a digital media and IP expert with Pinsent Masons.

The ZPÜ said it welcomed the ruling by the court, as it would create new legal certainty and strengthen the rights of creators.