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Copyright Levies in Germany - Settlement for Computers, Netbooks & Co.

31 January 2014
After three years of legal dispute, the German computer manufacturing industry and the collecting societies agreed upon copyright levies for desktop computers, notebooks, netbooks and workstations by entering into a settlement agreement for the period of 1 January 2011 to 31 December 2016. Pending proceedings at the Higher District Court of Munich that were filed by a number of jointly connected collecting societies in 2011 may shortly come to an end now, as far as these devices are concerned. However, Tablet PC's, the fastest selling devices on the market, are not covered by the settlement agreement.
Copyright Levies in Germany - Settlement for Computers, Netbooks & Co.

By a press release of 27th of January 2014, the Federal Association for Information Technology, Telecommunications and New Media ("BITKOM") announced that BITKOM and the collecting societies jointly connected in the Central Organisation for Private Recording Rights ("ZPÜ") representing the legal interests of authors and other copyright owners in Germany came to a settlement of the legal dispute on copyright levies to be paid on computers that has been ongoing for several years now (since 2011). The collecting society GEMA (Society for Musical Performance and Mechanical Reproduction Rights) representing ZPÜ issued a related press release as well.

Levy rates on computers, notebooks, netbooks and workstations (1 January 20111 – 31 December 2016)

In the settlement agreement, BITKOM and ZPÜ agreed upon different copyright levy rates for private use (EURO 13,19 per PC and notebook, EURO 10,63 per netbook) and commercial use (EURO 4,00 per device or workstation). This settlement, however, does not cover copyright levies for Tablet PC's, which are subject to separate negotiations.

Yet another benefit for the members of the computer industry associations comes with this settlement – they benefit from a 20 per cent discount on the rates given above. Accordingly,the levy rates for members of BITKOM and the second IT industry association BCH ("Bundesverband der Computerhersteller e.V.", www.bch-verband.de) that joined the settlement as well (cf. information in the market, in German) decrease to

Consumer PC
EURO 10,55
Business PC EURO   3,20

(screen diagonal = max. 4,88 inch/ 12,4 cm)

EURO   8,50

(from 1 January 2014 onwards)

EURO   3,20


Impact of the "Padawan" decision of the Court of Justice of the European Union

The settlement and the willingness of both parties to get back to the table has been driven by a decision of the Court of Justice of the European Union (formerly the ECJ) ("CJEU") that made a distinction between computers for personal use and commercially used devices (decision of 21 October 2010, file no. C 467/08 – "Padawan"). In this decision, the CJEU took the view that an indiscriminate application of the private copying levy, in particular with respect to digital reproduction equipment, devices and media, made available to business users (and clearly reserved for uses other than private copying) is incompatible with the Copyright Directive 2001/29/EC.

The "Padawan" decision of the CJEU for the first time considered a standpoint and postulation of the computer industry that had been already raised in preceding negotiations and that was one of the crucial points of issue in the debate and legal dispute between 2002 and 2007.

Prospects of an amicable solution for printing devices in 2014

The agreement on computers and related devices gives new hope that other trouble spots may come to an amicable and mutual settlement as well. It was just a week ago, when the industry and the collecting societies agreed to get back to negotiations in a parallel legal dispute and proceedings concerning copyright levies for printers. A decision scheduled at the Federal Court of Justice ("FCJ", BGH) for 22nd January 2014 was postponed until 31st of April 2014, when the parties will meet for an oral hearing at the FCJ again. The dispute on copyright levies on printing devices has been one of the most longstanding quarrels related to copyright levies in Germany during the past two decades and has been subject to several proceedings at the FCJ and even the Constitutional Court in Germany.


For a better understanding: a short recap on copyright levies under German Copyright Law

In Germany, the reproduction of copyright protected material without the copyright holder's permission is allowed by law (section 53 of German Copyright Act) provided that the copy is made for personal purposes and that no copy protection measures (e.g. Digital Rights Management measures) are circumvented. In order to compensate the holders of copyrights for private copying, the German Copyright Act stipulates that manufacturers or importers of copying devices are obliged to pay levies on the devices that can be used for private copying. The levy system is based on the assumption that the manufacturers or importers of copying devices will pass on the levies to the consumers who will be finally charged for producing private copies.

Regarding the amount of levy the Copyright Act established a lump-sum levy system with fixed rates in 1985. It was inspired by the state of the art of that time focussing on cassette tape recorders, video tape recorders and respective storage media. No surprise, this system soon struggled to cope with new inventions like scanners, all-in-one copying machines, personal computers and other digital devices. The German levy system with fixed, predetermined levies turned out to be too static to respond to the technological progress. Also, this levy system got further complicated by a significant duplication and overlapping of levies (simultaneous request for levies for printing devices, scanners, computers multi-channel devices, copying machines, fax-machines).

The claims of the copyright holders are enforced by collecting societies who distribute the revenues to the individual rights owners after the collection from the distributors, retailers and/ or producers.

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