Copyright Levy on Harddisks: Chapter closed!

Let’s start with a short recap: In October 2010, the competent Austrian collecting society extended the then current “blank cassette copyright levy” onto hard disks by announcing corresponding tariffs. HP fighted this by lodging a claim seeking a judgment declaring that the “blank cassette copyright levy” did not entail hard disks so that hard disks remain free from any levy. HP particularly argued that hard disks are only rarely used to store “true” private copies in the legal sense so that the authors do not suffer sufficient “damages” justifying a levy to be imposed on hard disks.

In a second law suit, the competent collecting society sued five Amazon group-companies for rendering of accounts and respective payment of the levy. This suit subsequently took the lead in the dispute about the “hard disk levy” under the regime of the “blank cassette copyright levy”.

After the ECJ dealt with the Amazon-case (C-521/11 – Amazon), the proceeding continued as follows: The Vienna Commercial Court denied the collecting society’s claim (29 Cg 25/14t) and the Vienna Court of Appeals confirmed this denial with its judgment of 28 December 2015 (15 R 186/15f).

In the meantime, the hard disk levy was cast in a legislative mold as “New Storage Media Levy”. The respective amendment of the Austrian Copyright Act entered into force on 1 October 2015. For the period of time before this date and until the Supreme Court rendered its  judgment on 15 March 2017 (Supreme Court, 4 Ob 62/16w; see the respective German language press-release here), there was substantial legal uncertainty: many businesses were subject to pending supplementary payments of the hard disk levy, and these supplementary payments often could have been quite high. Furthermore, it did not help much either that the industry and the collecting societies could not swiftly agree to a new framework agreement and corresponding tariffs. At the end of the day, however, a compromise was reached, and the subsequent framework agreement provided for lower tariffs as compared to the tariffs under the regime of the “blank cassette levy”.

In conjunction with this new framework agreement, the collecting societies proposed a settlement, which not only offered legal certainty for the time between 1 October 2010 (tariff anouncement by the competent collecting society) and 1 October 2015 (when the New Storage Media Levy entered into statutory force), but also the application of the (lower) tariffs stipulated in the “New Storage Media Levy” framework agreement. Hence, concerned businesses had to make the following decision: Should one wait for the positive result of the Amazon suit (which would have rendered all the collecting societies’ claims for supplementary payments entirely moot), or should one seize the opportunity and acquire legal certainty on favourable terms in order to minimize the threatening supplementary payments for the time between 1 October 2010 and 1 October 2015?

As of yesterday, we know that those who seized the settlement opportunity had made the right choice back then. However, it is particularly thanks to Amazon’s endurance in the law suit that this settlement opportunity came into existence.

Be it as it may: Yesterday’s Supreme Court judgment now finally closed the chapter “hard disk levy”, respectively “New Storage Media Levy” also for Austria.