Arjen Schram, 24 May 2024

Questions to the CJEU: A private copy levy due for offline streaming?

Section 16b and 16c of the Dutch Copyright Act (Auteurswet) provide that one may make a few copies of copyrighted works for one’s own practice, study or use, as long as such use does not have a commercial purpose. A copy for one’s own use is called a “home copy” (thuiskopie). If all conditions are met then no permission from the copyright holder is needed for that copy. If that copy is made on a physical medium, such as an external hard disk, phone or tablet, then a small fee is owed to the copyright holder, the so-called private copy levy. That fee is factored into the purchase price of these physical mediums. So without realising it, you have probably already paid a private copy levy many times.

Offline streaming

Several streaming services now offer the option of “offline” streaming. This means that music, a film or series is temporarily downloaded onto a device so that it can be listened to or watched offline at another time. Usually, streaming services impose restrictions on this. For example, a film or series is often available offline for up to 30 days after downloading it. Of course, when cancelling a subscription, the ability to listen to or watch previously downloaded music or films also logically expires.

HP v Stichting Onderhandelingen Thuiskopievergoeding

HP took the position in 2019 in proceedings against the Stichting Onderhandelingen Thuiskopievergoeding because of the aforementioned restrictions that offline copies of music and films, as provided by streaming services, do not qualify as home copies. In HP’s view, streaming services control those home copies and not the end users. Of course, HP’s position is not surprising for a laptop manufacturer. To determine the amount of the home copy levy of data carriers is how often home copies are made on a given physical carrier.

The court of The Hague ruled in 2019 that offline streaming copies (also known as “tethered downloads“) fall to be classified as home copies within the meaning of the Copyright Act. Indeed, according to the court, they were in fact reproductions made for private use. The fact that people already pay a licence fee through streaming services as well did not, according to the court, detract from the Dutch system of home copying fees. The court also found it unnecessary to ask preliminary questions about this to the ECJ.

Court of Appeal of The Hague

In 2022, the case was again submitted to the Hague Court of Appeal. HP took the position that a tethered download is not a home copy because it is not made by a natural person and for his own use. Technically, this is indeed the case. After all, the copy is not made by the user but by the streaming service. The user only has to press the “download” button, effectively giving an instruction to the streaming service. However, Section 16b of the Copyright Act – which deals with copies of music and digital copies – does not require someone to make a copy himself. One may also instruct someone else to do so.

However, the court of appeal noted that it can be deduced from the parliamentary history that a copy does lose its status of a private copy when the other party acts with a commercial purpose (read: the streaming service). The Court of Appeal therefore set aside the earlier judgment by the court of The Hague and ruled that no equitable compensation is due for offline streaming copies(tethered downloads).

Questions to the Court of Justice

The case was referred in cassation to the Supreme Court, which decided on 17 May to refer the following preliminary questions to the ECJ. It is therefore up to the ECJ to tie the knot on this issue.

1. Can a reproduction with the characteristics described above in 2.3 at (i)-(iii) (offline streaming copy or tethered download), having regard also to the three-step test (Art. 5(5) Copyright Directive), be classified as a “reproduction (…) made by a natural person for private use, and without any direct or indirect commercial purpose” within the meaning of Art. 5(2)(b) Copyright Directive?
2. Is a national regulation under which the home copying exception does not include offline streaming copies consistent with the objectives of the Copyright Directive, including a high level of copyright protection, a fair balance between the interests of the rightholder and the interests of the user, and a coherent and technologically neutral application by Member States of the exceptions and limitations?

We are monitoring this case and will keep you informed of further developments!