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Copyright Levies In France – The Saga Continues…

11 April 2013
There have been new developments in France in the copyright levies saga.  The French Conseil Constitutionnel ("Constitutional Court") and the Private Copy Commission issued new decisions which - whilst providing useful clarification - are unlikely to bring to a close heated debates on this issue.

The issue of copyright levies in France is one that has given rise to considerable attention in the recent years. 

The system in place in France is aimed at compensating authors for the private copying exception applicable under French copyright law.  Whilst the principle of the compensation is one that a number of jurisdictions adhere to, the specifics of the French system have made it very prone to criticism. Concerns voiced against the French copyright levies system come from two main angles, either they go to the root of the system and the method used for calculating the rates or they are based on the distortion of competition resulting from the fact that French rates are higher than in most jurisdictions.

We previously reported on the intricacies of the French system and the attacks it came under following a landmark Padawan decision from the European Court of Justice which essentially highlighted that copyright levies could not apply to reproduction equipment acquired by professionals for purposes other than private copying.  As we then explained, the French Conseil d'Etat, France's highest administrative court issued a decision dated June 17, 2011 which cancelled a key decision of the Private Copy Commission (Decision 11 of December 17, 2008) in order to sing from the same hymn-sheet as the ECJ.  The Conseil d'Etat thereby invalidated Decision 11 for making no distinction between devices for professional and recording devices that could be deemed to be used for private copying.

The implementation of Decision 11 was delayed for a period of six months.

In this rather tensed climate, a transitory regime was set up through a new law n°2011-1898 of December 20, 2011 regarding copyright levies, which essentially applied the Padawan decision.

Subsequently, in the course of proceedings before the Conseil d'Etat, the union of audio-visual electronic industries (Simavelec) called upon the Conseil Constitutionnel in order to question the constitutionality of Article 6.1 of the new law which maintained the rates until December 31, 2012 to allow the Private Copy Commission to issue a new decision. In a decision dated July 20, 2012, the Conseil Constitutionnel ruled that these provisions were in line with the French Constitution.

However, another question was filed before the Conseil Constitutionnel regarding Article 6.2 of the new law by SFR, one of the main French telecommunication provider, and Copie France, one of the French collecting societies, claiming with other industrials that these newly adopted provisions prevented their actions in court.

Said Article 6.2 provided indeed that levies – for devices not acquired for professional use – already collected pursuant to the now cancelled Decision 11 (for which court proceedings had been initiated before June 17 2011 and which had not led to a res judicata decision), were deemed to be valid.

The Conseil Constitutionnel ruled that Article 6.2 was unconstitutional in its decision of January 15, 2013. It based its ruling on its previous case law holding that, for such provisions to be admissible, they had to be balanced against the general interest, the principle of non-retroactivity of penalties and sanctions, and the respect of res judicata decisions.  In light of this, the Conseil Constitutionnel took the view that the financial reasons behind the levies at stake – the amount of which could not be determined – were insufficient to justify a limitation to the right of action of the involved entities.

In addition, the Private Copy Commission issued Decision 15 on December 14, 2012 in an effort to provide clarification on the current applicable rates from January 1st, 2013 onwards.

This Decision 15 has provided long sought-after clarification on the method of calculation of the rates in its article 4.

Other interesting provisions contained in Decision 15 include a mechanism of tax relief for high recording capacity devices, introduced in an effort to avoid disproportionate impact of the levy on the final price of such devices.

Decision 15 has also reasserted the principle of the application of copyright levies to media tablets, by making their taxation permanent.

Altogether, this Decision 15 is rendered in a climate of unfavourable uncertainty.  Whether or not Decision 15 remains unchallenged, an in-depth review of the French copyright levies system is under consideration, and expert reports on this issue are currently in the pipeline.  In light of the above it is quite clear that these new developments are merely a new episode of a saga that remains completely open and promised to an eventful  future.

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