The Regional Appeal Court of Düsseldorf has decided that computer printers cannot be subject to copyright levies under German Law. Although the judgment has been appealed to the Federal Supreme Court and is not yet binding, it is of great importance for the IT industry. For the first time a German court has completely dismissed a copyright levy claim by a collecting society against the IT industry.

The Court gave its judgment on 23 January 2007 (file number I-20 U 38/06), in proceedings between the collecting society VG Wort and the printer manufacturers Kyocera, Epson and Xerox.

Copyright levies were introduced into the German Copyright Act and many other European copyright acts to compensate rightholders for private copies made by photocopiers and analogue audio and video recorders. In Germany, the wording of the law has not changed within the last twenty years and is still targeted at traditional analogue reproduction devices. Nevertheless, the collecting societies have started to claim copyright levies for nearly all IT devices (PCs, printers, scanners, CD/DVD-drives etc.). The Regional Appeal Court of Düsseldorf disagreed with this extensive practice and stated that copyright levies can only be applied to “input devices”, which are capable of having third party content fed into them (such as scanners), but not to devices which only process content (such as printers or “naked PCs”). The Court further argued that copyright levies cannot be applied in the event the rightholders have agreed to the reproduction. For example, such agreement has to be assumed if rightholders make print works available on the internet.

This judgment of the Regional Appeal Court of Düsseldorf differs from the views of the Regional Appeal Courts of Stuttgart and Munich expressed in parallel proceedings regarding copyright levies on printers and PCs respectively. These Courts have more or less reduced their arguments to the fact that printers and PCs are able to produce copies of a work. The opinion of the Regional Appeal Court of Düsseldorf, however, can be seen as limiting the application of copyright levies to situations for which they were introduced: compensation for reproductions of protected works, which cannot be controlled, by devices, which are intended to undertake such reproductions (e.g. audio recorders, video recorders and photocopiers); as opposed to applying copyright levies to devices which are only used to reproduce third party content to a very small extent.

It has yet to be seen how the Federal Supreme Court will decide the pending proceedings regarding copyright levies on printers and PCs. However, in any event, the decisions of the Federal Supreme Court will not bring an end to the disputes regarding copyright levies in Germany. There are many other devices where it is unclear whether copyright levies apply to them or not. Major discussions are currently taking place regarding the application of copyright levies to mobile phones. Gaming consoles and navigators may be next.

Unfortunately, neither the current draft for a new Copyright Act in Germany nor initiatives in Brussels seem to solve this problem. There has been an initiative of Internal Markets Commissioner McCreevy to adopt and harmonise copyright levies on a European level. However, this initiative has been stopped by Commission President Barroso after an intervention of the French Prime Minister de Villepin in December 2006. Thus, copyright levies will continue to be a major legal and economic issue for everybody who produces, imports or sales devices which are capable of storing third party content, i.e. basically the whole IT and Entertainment Hardware industry.