IFRRO ELF Copenhagen April 2012 How to use

IFRRO ELF Copenhagen April 2012 How to use recent CJEU landmark rulings in negotiations with the MOE industry REPROBEL IFRRO Kurt Van Damme, Director Legal, Strategy & International Relations IFRRO ELF - 27 April 2012 1

IFRRO ELF COPENHAGEN APRIL 2012 Content overview > 1 – The 1997 Belgian reprography levy Royal Decree 2 – The industry’s main arguments 3 – Reprobel’s position/reply (with referral to recent CJEU rulings) 4 – The bigger picture 2

IFRRO ELF COPENHAGEN APRIL 2012 1 – The 1997 Belgian reprography levy Royal Decree Content overview: 1 – The 1997 Belgian reprography levy Royal Decree 2 – The industry’s main arguments 3 – Reprobel’s position/reply 4 – The bigger picture a – General principles - Dual system: equiment & operator levy - Reprobel 2011 reprography collections: 22. 6 M EUR (12. 3 EL / 10. 3 OL) - Speed based (capacity) - Technology neutral - Seven categories (speed bands) - Current levies: 4. 84 – 1, 776. 84 EUR (20 -39 cpm: 188. 99 EUR) b – Pitfalls & problems - Outdated: 1997 = copiers only - Speed criterion contested for inkjets (draft v. normal) - “Market distortion” – (too) high levy for medium-end devices - Declaration distortion (grand majority of devices declared in low-end) - Ongoing legal proceedings with MOE (inkjet only) - Printers not included yet (L. 2005 transposing copyright directive) c – Ongoing negotiations - Fostered by Cabinet & IP office - Double aim: transposing L. 2005 & modernising system - Reprobel, Agoria & Eurimag - Ongoing for several years but new momentum 3

IFRRO ELF COPENHAGEN APRIL 2012 2 – The industry’s main arguments Content overview: 1 – The 1997 Belgian reprography levy Royal Decree 2 – The industry’s main arguments 3 – Reprobel’s position/reply 4 – The bigger picture a – Actual use (printers out-of-scope) - actual use should be assessed on a devicespecific basis - no actual use proved for printers b – “De minimis” / free, open or unprotected content (waiver) - implicit waiver of RH’s remuneration rights in case of free, open or unprotected content, or content with print option - “de minimis”: no commercial damage for RH to be compensated under levy scheme c – Licensing and levies (“double dip”) - no double remuneration for licensed content (fee & levy) d - Illegal content / content from an illegal source - both illegal reproductions and reproductions from illegal source not to be remunerated under levy scheme - 3 -step test: depriving RH of individual legal relief + double dip (again) - Belgian law dates back to 1994, decree to 1997 – preinternet era – more illegal reproductions/from illegal source now e – International benchmarking f – Market (development) distortion (Belgium / intra EU) g – Photographic or similar technique (printers) h – “Chain of devices” argument 4

IFRRO ELF COPENHAGEN APRIL 2012 3 – Reprobel’s position/reply (1) Content overview: 1 – The 1997 Belgian reprography levy Royal Decree 2 – The industry’s main arguments 3 – Reprobel’s position/reply 4 – The bigger picture Apart from more economical/fundamental arguments, Reprobel has used the following court rulings & legal instruments to support its position and claims: a – PADAWAN (CJEU, Private Copy, 21 October 2010): - Padawan sets some general principles for both private copy & reprography – ‘notoriously vague’ but not on these issues - Possible RH’s harm - Potential use / presumed use (Reprobel: even if debtor is not a natural person – reprography: broader scope in BEL) – much needed for printers! – 2005 law may run counter to EU law as it stands now - (cf. Conseil d’Etat BEL 1 December 2011, Nokia/Sony Ericsson) - Padawan softens/nuances ‘de minimis’ rule: Directive (recital 35): “In certain situations where the prejudice to the rightholder would be minimal, no obligation for payment may arise” CJEU in PADAWAN: “However, given the pratical difficulties in identifying end users and obliging them to compensate rightholders for the harm caused to them, and bearing in mind the fact that the harm which may arise from each private use, considered separately, may be minimal and therefore does not give rise to an obligation for payment, [. . . ] it is open to Member States to establish a “private copying levy” for the purposes of financing fair compensation´[. . . ]” Reprobel: end use / harmful effect of individual reproduction act is irrelevant (+ minimal is often not minimal at all & all RH should be compensated) - ‘No exception without fair compensation’ b – OPUS (CJEU, Private Copy, 16 June 2011): - Obligation to achieve a certain result for member states to set up levy system with effective fair compensation for RH - Distant selling arragements (interpretation by national court needed) 5 - Forum, applicable law & auditing

IFRRO ELF COPENHAGEN APRIL 2012 3 – Reprobel’s position/reply (2) Content overview: 1 – The 1997 Belgian reprography levy Royal Decree 2 – The industry’s main arguments 3 – Reprobel’s position/reply 4 – The bigger picture c – LUKSAN (CJEU, Private Copy, 9 Feb 2012): - High level of & “adequale legal” copyright protection - Art. 17 Charter Fundamental Rights EU (no deprival of property without FC) - No waiver of levy remunerations/fair compensation - CJEU in LUKSAN: “The provision at issue authorises an exception solely to the reproduction right and cannot be extended to remuneration rights. [. . . ] Imposition on the Member States of such on obligation to achieve a result of recovery of the fair compensation for the rightholders (OPUS, see above – KVD) proves conceptually irreconcilable with the possibility for a rightholder to waive that fair compensation”. (cf. Belgian Creative Commons License) d – VEWA (CJEU, PLR, 30 June 2011): - Adequate income for use of copyright works without authorisation e – NORMA (Gerechtshof Den Haag - HOL, Private Copy, 27 March 2012): - Potential harm / presumed use (“more then neglectible”) - Balance ‘old’ v. ‘new’ devices when setting up levy scheme - Dutch State condemned + financial relief (yet to be assessed) - Important for monitoring: new devices brought to market f – Spanish Supreme Court (CEDRO/VEGAP, Private Copy/Repr. , 7 March 2012) - no independant copying function (cf. BEL: Lexmark ‘PC Connect’) g – Recital 35 Copyright directive: - Levies v. licensing/TPM – “In case were rightsholders have already received payment in some other form, for instance as part of a license fee, no specific or separate payment may be due” h – “photographic or similar technique” (5. 2. a Directive) - Emphasis on output, not on technique used - EC position in German case not yet used in BEL 6

IFRRO ELF COPENHAGEN APRIL 2012 4 – The bigger picture (1) Content overview: 1 – The 1997 Belgian reprography Royal Decree 2 – The industry’s main arguments 3 – Reprobel’s position/reply 4 – The bigger picture a – Communication policy: positive, proactive, constructive, no “a priori’s”, will to change the system – part of larger & integrated communication policy (new website, logo, house style, newsletter, …) – copyright unfriendly environment b – Reliable & objective data (third party information: KPMG, Gf. K, TNS, Profacts, IDC, Info. Source) – no device specific approach for copying/printing surveying – link with 5 -yearly survey (Profacts – ° 2013) c – Safe simulation principles (device, speed and pricing data from third parties inconsistent with Reprobel’s own data on the basis of declarations received and/or incomplete) d – Lobbying & PR - PR bureau: Whyte Corporate Affairs - simple & ‘sexy’ messages for decision makers - using the “force de frappe” and economical importance of our sector (knowledge based economy) – “story telling” - road show & informal political contacts - emphasis: consumer friendliness, fairness and administrative simplification, whilst ensuring fair compensation for RH e – Equipment v. Operator Levy - 1997: 40% operator / 60% equipment - 2012: 55% equipment / 45% operator - no imposed artificial split wanted - government is main contributor to operator levy (important argument in view of economical crisis) 7

IFRRO ELF COPENHAGEN APRIL 2012 4 – The bigger picture (2) Content overview: 1 – The 1997 Belgian reprography levy Royal Decree 2 – The industry’s main arguments 3 – Reprobel’s position/reply 4 – The bigger picture f – A closer look at the industry’s business model (“razorblade”) – levy scheme is more fair & equitable – no link between levy amount level & retail prices – comparison with total reproduction cost for enterprises g – De facto linked with other files (PLR, private copy, digital exception for education & scientific research): opportunity & danger at the same time h – Benchmarking: per capita is not the right basis – other parameters I – Broad scope of Belgian reprography levy scheme: “private” use (incl. inhouse), illegal reproductions & reproductions from illegal source (additional compensation in cases where RH find no adequate relief – no double dip) 8

THANKS FOR YOUR ATTENTION. 9

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