On May 22 2015 the Paris High Court ordered Copie France – the collective management organisation tasked with managing the private copying levy – to pay more than €1 million to three distributors in relation to overpayments of the private copying levy.

Facts

The three suits arose following the Council of State's invalidation of several decisions of the Private Copying Levy Committee.

The decisions, which were regulatory by nature, sought to set out the various types of media that are eligible for payment of the private copying levy and the calculation scales to be used for each. The decisions were invalidated by the Council of State based on their incompatibility with EU Directive 2001/29/EC: they related to all media, whereas only media acquired for non-professional purposes give rise to payment of the private copying levy. This principle was set out in the European Court of Justice's Padawan decision (October 21 2010) and was then formalised by the French legislature.

Therefore, the three distributors argued that certain payments made based on two of the invalidated decisions (Decisions 11 and 13) were retroactively undue. They sought the repayment of these sums which, according to their calculations, totalled a little over €58 million.

Decision

The Paris High Court began by addressing the connecting factor between the payments made and the invalidated decisions. It held that the date on which the media entered into circulation, rather than the date of the invoices, should be taken into account. It transpired that only part of the disputed payments had been based on the two invalidated decisions; the rest were connected to previous decisions.

The claimants disputed these previous decisions, stating that they were also invalid as they were incompatible with Directive 2001/29/EC on the same grounds used to invalidate Decisions 11 and 13. The court noted that directives cannot have direct horizontal effect in a lawsuit between individuals; therefore, the decisions were fully applicable and the relevant payments could not be deemed not to be due.

All that remained was to assess the invoices based on the invalidated decisions. The court acknowledged that the claimants could invoke the invalidation as the proceedings had been brought before the Council of State decisions.

However, Copie France argued that the invalidation of both decisions did not mean that no private copying levy was owed for the entry into circulation of the media in question. The court upheld this argument under the IP Code, stating that it applied to all, "especially the ordinary court". It established the rights of authors, performers and producers to payment of the private copying levy. Therefore, the right to set-off prevailed over the invalidation of a regulatory decision which set out the practical terms of the right.

Thus, the payments made by the claimants and calculated according to the scales of the invalidated decisions had a legal basis. However, the court took into account the fact that the amounts invoiced by Copie France had – wrongly – failed to reflect the impossibility of requesting payment of the private copying levy for the use of media for professional purposes.

In order to fix the compensation owed on account of the overpayment, the court held that the calculation scales established by the new decisions, which had been adopted following the invalidation of the previous decisions, could constitute useful reference points.

The court ordered the assessment of the undue amount which was to be repaid to the three claimants. However, in asserting the principle of the right to remuneration, the court determined the private copying levy owed for the media put into circulation for the period in which there was no scale.

As France has no copyright tribunal, this was an exceptional case in which the court established the rate applicable to remuneration managed by a collective management organisation.

For further information on this topic please contact Sylvain Naillat or Eric Lauvaux at Nomos by telephone (+33 01 43 18 55 00) or email (snaillat@nomosparis.com or elauvaux@nomosparis.com). The Nomos website can be accessed at www.nomosparis.com.

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