Some information has appeared in standard media regarding the judgement of the European Court of Justice in case C-467/08 - Padawan SL v. Sociedad General de Autores y Editores de España (SGAE). Within the preliminary ruling proceedings in this matter, the court addressed the legal issues of the right to author’s remuneration, which in the Czech Republic is legislatively termed as remuneration in connection with reproduction of a work for personal use and own internal use (colloquially referred to as “výpalné”). We therefore devote this October circular to certain legal aspects of this decision, as it cannot be excluded that the conclusions contained in the decision may have practical implications for the situation in the Czech Republic as well.

Directive 2001/29/EC of the European Parliament and of the Council on the harmonisation of certain aspects of copyright and related rights in the information society (hereinafter “the Directive”) allows, under Article 5(2)(b) thereof, Member States to adopt national legislation permitting the making of reproductions of copyright works (e.g. musical and audiovisual works) by natural persons “for private use and for ends that are neither directly nor indirectly commercial, on condition that the rightholders receive fair compensation…”.

The Czech Republic has availed itself of this exception in Section 30 and Section 30a of the Copyright Act (Act No. 121/2000 Coll., as amended) regarding the so-called free use of copyright works, which inter alia provides that “use of a work under this Act shall not be deemed to include use for the personal needs of a natural person where the purpose thereof is not to achieve direct or indirect economic or commercial advantage…” Pursuant to Section 30(2) of the Copyright Act, “a person who makes a recording, reproduction or imitation of a work for his personal needs” does not infringe copyright. In the case of reproduction on paper or a similar medium, such non-contractual use of copyright works is also permitted to legal persons and natural persons engaged in business who do so “for their own internal needs”.

The reflection of the possibility to make reproductions of copyright works under these conditions and the requirements for “fair compensation” within the meaning of the Directive is then the existence of the authors’ right to remuneration under Section 25 of the Copyright Act, which in the Czech Republic is collected in practice through the civic association OSA – Ochranný svaz autorský pro práva k dílům hudebním, o.s. (Protective Association of Authors for Rights to Musical Works). As is known, the persons obliged to pay this remuneration to this collective administrator are manufacturers, importers and recipients of blank recording media and certain types of equipment, regardless of the circumstances of by whom these media or equipment are ultimately used. Specifically, regardless of the circumstances of whether the media or equipment are in fact actually intended for persons who may avail themselves of the above-mentioned exceptions to copyright protection or not.

Given that the Spanish legislation was based on the same model as is currently used in the Czech Republic, a request was made by the Spanish national court for resolution of a so-called preliminary question (concerning the interpretation of Community law) by the European Court of Justice within judicial proceedings between the Spanish collective administrator and Padawan SL regarding payment of remuneration to the collective administrator. The European Court of Justice thus addressed, inter alia, in the above-mentioned decision the interpretation of Article 5(2)(b) of the Directive, reaching the view expressed in the third point of the operative part of that decision. That is, that there must be a connection between the use of blank media and the equipment in question and the arising of the claim to author’s remuneration. And that a situation where author’s remuneration is demanded regardless of the fact of which persons actually use the blank media or equipment is incompatible with the provisions of the Directive. From the court’s conclusions it therefore generally follows that the claim to author’s remuneration should not arise in those cases where the blank media and equipment in question are used by persons other than consumers.

In view of the above, it thus appears that the current Czech legislation (in its form after 2006) is incompatible with this decision of the European Court of Justice (and consequently also incompatible with Community law), which may lead in practice to an interesting situation, both in relation to author’s remuneration already paid and in relation to potential future payments of this remuneration.

This text was translated from Czech to English using an AI translator.