By means of the Royal Decree-Act 20/2011, the new Spanish Government – in office since 20 December 2011– abolished Article 25 of the Copyright Act which set out the copyright levy system in Spain. As a result, there are no copyright levies in Spain as of 1 January 2012 until a new regime has been developed.
The industry, IP practitioners and collecting societies expected an amendment of the Spanish copyright levy system in early 2011. In March 2011, the former government announced that the system would be amended in accordance with the legal framework and the case law of the European Union within the next three months. However, only the change of the government following the elections in November led to the amendment.
With the abolishment, the government put an end to one of the most controversial issues in Spanish IP law in the last years. The Spanish copyright levy system has been in place since 1992. In July 2006, it was substantially changed as a result of the (late) implementation of the Directive 2001/29/CE. The system became controversial in the first years of the first decade of 2000, as the collecting societies started to file large claims for copyright levies against the industry.
In the Padawan decision of 21 October 2010 (C-467/08), the Court of Justice of the European Union (CJEU) ruled that a copyright levy system (like the Spanish one) which applied copyright levies indiscriminately to all digital reproduction equipment, devices and media suitable for private copying, including those which were acquired by professionals and companies for other purposes than private copying, was not in accordance with the Directive 2001/29/EC on the Harmonization of Certain Aspects of Copyright and Related Rights. Following this decision, several courts (inter alia, the Courts of Appeal of Barcelona, Murcia and Asturias, as well as several Commercial Courts of Madrid) applied the Padawan doctrine, concluding that the collecting societies based their claims on an indiscriminate application of copyright levies and declaring that it was for the collecting societies to prove the purpose of the use of the digital reproduction equipment.
The copyright levy system was abolished by the Royal Decree-Act 20/2011 (passed by the new Government on 30 December 2011), an economic law whose aim was to adopt urgent measures to reduce the public deficit. Amongst its additional and final provisions, the Act also amended other laws, including the Copyright Act and, in particular, Article 25 of the Copyright Act. Further to the amendment, its new content can be summarized as follows:
- The copyright levy system set out in Article 25 of the Copyright Act is abolished.
- The government develops a new system of payment of copyright levies to be charged to the State General Budget.
- The amount to be paid as compensation will be determined taking into account the harm caused to the author.
The Royal Decree-Act 20/2011 came into force on 1 January 2012. Hence, since that date, manufacturers and importers (dealing as distributors in Spain) of digital reproduction equipment, devices and media are no longer obliged to submit their quarterly liquidations of copyright levies to the collecting societies. However, the right to receive a fair compensation for private copying remains in force and the government will develop a new system of payment of copyright levies - according to recent statements by the new Ministry of Culture, this development will happen soon.