Was the UK government wrong to not implement a private copying levy system?

Copyright law protects rightholders against the unauthorised use of a protected work. In practice, since the advent of digital media and the explosion of copying by private individuals, that protection has been rather less than complete. Rightholders have rarely attempted to enforce against non-commercial copying even though there was no legal exception permitting it. However, now that recent changes to UK legislation allow users to make copies of works in certain cases, some rights holders are arguing that this has left them without sufficient protection. In October 2014, the UK government introduced a private copying exception to the existing copyright law regime. This provision enables individuals to make a copy of works protected by copyright that they have lawfully and permanently acquired for their own private use, provided that the use is not for commercial purposes. As you can imagine, this is likely to be an exception that will be relied on for a vast number of copies of musical works. Users commonly make further copies of musical works which they have legitimately purchased, from smartphone to laptop to in-car stereo and so on. However, in contrast to a number of continental jurisdictions, the UK government has implemented this exception without also implementing a levying system to compensate the rights holders. Under such systems, copyright owners get a payment for each sale of electronic equipment which is capable of being used for such copies.

EU copyright legislation requires EU countries which elect to introduce a new private copying exception into national law to ensure that rights holders receive “fair compensation” for that activity. However, where countries introduce such legislation they can do so without also introducing an associated mechanism for compensating rights holders where only minimal harm to rights holders would arise as a result of the private copying taking place.

The Musician’s Union, the British Academy of Songwriters, Composers and Authors (BASCA) and UK Music have applied for judicial review of the UK legislation implementing the private copying exception. They say that the UK government was wrong not to include a mechanism for compensating rights holders for the act of private copying.

This challenge is still waiting to be decided by the English courts. But in a recent decision the CJEU, in the case Copydan (Case C-463/12), which provided guidance on some aspects of private copying levies, the CJEU was asked to provide guidance in relation to what harm might be considered too small to warrant compensation. Unfortunately, the CJEU declined to give detailed guidance on this point but did state “it is within the discretion of the Member States to set the threshold for such prejudice, it being understood that that threshold must, inter alia, be applied in a manner consistent with the principle of equal treatment”. According to the Court’s established case-law, the principle of equal treatment requires that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment is objectively justified. It is therefore arguable that so long as the private copying exception is applied in the same way in respect of all copyright works the UK will be within its rights to say that the harm caused by private copying is too small, and so no levy system needs to be implemented. Whether the courts will accept that argument is another matter!