Quotes & Notes

1: The reference for a preliminary ruling in the present case concerns the interpretation of the concept of ‘remuneration’ paid to copyright holders in respect of public lending, as set out in [now art. 6(1) of the Rental Rights Directive].

  15-19: describes the dispute in the main proceedings and the question referred for a preliminary ruling; the referring courtnotes that art. 6(1) – contrary to arts. 8 & 3 of this directive – does not mention “equitable” remuneration, but merely “remuneration”. Thus, at para 19, it refers the following question: ‘Does Article 5(1) of [Directive 92/100], now Article 6(1) of [Directive [2006/115], …, preclude a national provision which sets the remuneration at a flat rate of [EUR] 1 per adult per year and of [EUR] 0.5 per minor per year?’

22: [on the option that MS have to derogate from the exclusive right and transform it into a remuneration right] Inasmuch as the implementation of that optional derogation adversely affects the exclusive right of authors, the latter being deprived of their right to authorise or prohibit a specific form of lending, that option is conditional on receipt by the authors of remuneration in respect of that loan.

 23: [focus of the right is on the act of making available – onus of payment is thus on the bodies that make available] In order to determine, first of all, who are responsible for paying the remuneration due to authors in the case of public lending, it must be stressed that lending is defined by Article 1(3) of Directive 92/100 as the making available for use, for a limited period of time and not for direct or indirect economic or commercial advantage, when it is made through establishments which are accessible to the public. It may be concluded from that definition and from the purpose of that directive that it is the making available of works by the public establishments, thereby rendering possible their loan, and not the actual loan of certain works by the persons registered with such establishments, that constitutes the activity which forms the basis for the obligation to pay the remuneration due to authors. In principle, therefore, the onus is on the bodies which make those works available to pay the remuneration due to authors.

24: that finding is implicitly substantiated by Article 5(3) of Directive 92/100, which allows the Member States to exempt certain categories of lending establishments from payment of remuneration.

25: as regards the concept of remuneration, the Court has already held that the need for uniform application of Community law and the principle of equality require that the terms of a provision of Community law which makes no express reference to the law of the Member States for the purpose of determining its meaning and scope must normally be given an autonomous and uniform interpretation throughout the Community; that interpretation must take into account the context of the provision and the purpose of the legislation in question (see, inter alia, Case C-357/98 Yiadom [2000] ECR I-9265, paragraph 26, and SENA, paragraph 23).

26: [need for autonomous interpretation] The same applies in respect of the concept of ‘remuneration’ in Article 5(1) of Directive 92/100, which is not defined by the latter (concerning the concept of ‘equitable remuneration’, see, by analogy, SENA, paragraph 24).

27: [interpretation – context of concept of remuneration – attention paid to all IPR Directives] With regard to the context in which the concept of remuneration arises, it must be observed that Directive 92/100 is not the only instrument in the field of intellectual property and that, regard being had for the requirements deriving from the unity and coherence of the legal order of the European Union, that concept of remuneration must be interpreted in the light of the rules and principles established by all of the directives on intellectual property, as interpreted by the Court.

28: reminds Padawan

29: [compensation vs remuneration – approximation by virtue of harm] It is true, in the context of Directive 92/100, that, when there is a derogation from the exclusive right of authors, the Community legislature used the word ‘remuneration’ instead of ‘compensation’ provided for in Directive 2001/29. However, that concept of ‘remuneration’ is also designed to establish recompense for authors, arising as it does in a comparable situation in which the fact that the works are being used in the context of public lending without the authorisation of the authors result in harm to the latter.

30: [remuneration and equitable remuneration are different concepts] Furthermore, it must be observed that Article 5(1) of Directive 92/100 refers only to ‘remuneration’, whereas Article 4(1) thereof, relating to rental, refers systematically to ‘equitable remuneration’. The concept of equitable remuneration also appears in Article 8(2) of that directive, relating to broadcasting and communication to the public. That difference in drafting already implies that the two concepts mentioned must not be interpreted in the same way.

31: [concepts are also distinguishable by virtue of different arrangements regarding specific substantive rights] It is also clear from the 18th recital in the preamble to Directive 92/100 that it is necessary to provide for specific arrangements for public lending in order to protect the rights of authors. Consequently, the arrangements for public lending are deemed to be distinguishable from the other arrangements described in that directive. The same must be true as regards the various elements of those arrangements, including those relating to the compensation of authors.

32: [In SENA (at 37), the “question whether that remuneration is equitable in character has to be assessed, in particular, in the light of the value of the use of a protected work in trade”

33: [lending has non-commercial character / criteria of trade value does not apply / remunerations is less than equitable remuneration] However, as has been pointed out in paragraph 23 of the present judgment, in accordance with Article 1(3) of Directive 92/100, lending does not have a direct or indirect economic or commercial character. In those circumstances, the use of a protected work in the event of public lending cannot be assessed in the light of its value in trade. Consequently, the amount of the remuneration will necessarily be less than that which corresponds to equitable remuneration or may even be fixed on a flat-rate basis in order to compensate for the act of making available all the protected works concerned

34: [remuneration has a function – adequate income – cannot be purely symbolic] the remuneration to be fixed must, in accordance with what is set out in the 7th recital [now 5th]  in the preamble to Directive 92/100, be capable of allowing authors to receive an adequate income. Its amount cannot therefore be purely symbolic.

35: [criteria for determining the amount of the remuneration due to authors in the event of public lending – application of the SENA criteria by analogy], … no objective reason justifying the imposition by the Community judicature of specific methods for determining what constitutes uniform equitable remuneration, which would necessarily entail the Court’s acting in the place of the Member States, which are not bound by any particular criteria under Directive 92/100. It is thus for the Member States alone to determine, within their own territory, what are the most relevant criteria for ensuring, within the limits imposed by Community law, and in particular by Directive 92/100, compliance with that Community concept (see, by analogy, SENA, paragraph 34).

36: [MS have wide margin in determination of amount under 6(1)] wording of Article 5(1) of Directive 92/100 reserves a wide margin of discretion to the Member States. The latter may determine the amount of the remuneration due to authors in the event of public lending in accordance with their own cultural promotion objectives.

37: [but that wide margin must have a connection with the harm deriving from the act object of the right, i.e the making available in establishments] However, given that remuneration constitutes, as has been stated in paragraphs 28 and 29 of the present judgment, consideration for the harm caused to authors by reason of the use of their works without their authorisation, the determination of the amount of that remuneration cannot be completely dissociated from the elements which constitute that harm. As that harm is the result of public lending, that is to say, the making available of protected works by establishments accessible to the public, the amount of the remuneration due should take account of the extent to which those works are made available.

38: [calculation method 1: connection of harm with effective making available of works / remuneration must consider these acts] Thus, the higher the number of protected works made available by a public lending establishment, the greater will be the prejudice to copyright. It follows that the amount of remuneration to be paid by such an establishment should take account of the number of works made available to the public and, consequently, that large public lending establishments should pay a greater level of remuneration than smaller establishments.

39: [calculation method 2: relevant public] …the relevant public, namely the number of borrowers registered with a lending establishment, is also equally relevant. The greater the number of persons having access to the protected works, the greater will be the prejudice to authors’ rights. It follows that the amount of remuneration to be paid to authors should be determined by also taking into account the number of borrowers registered with that establishment.

40: [both calculation methods must be used] [the national system in this case does not take into account] the number of works made available to the public à it does not therefore have sufficient regard for the extent of the harm suffered by authors, or for the principle that those authors must receive remuneration that is equivalent to an adequate income, as set out in the 7th recital in the preamble to Directive 92/100 [N.A. the Court establishes a principle from now R(5) that authors (and presumably performers) remuneration right has a minimum level which is equivalent to and adequate income]