Top EU court says printers can be taxed to compensate for piracy losses

Europe's top court ruled Thursday that it is legal for countries to impose a levy on printer manufacturers in order to compensate rights holders for unauthorized reproduction of their work.

Under European Union law, authors and other rights holders have the exclusive right to authorize or prohibit reproduction of their protected works, but individual member states may provide exceptions or limitations to those rights.

In many cases, making private copies, including reproductions on paper, of works by rights holders is permitted. However if national authorities decide to permit exceptions they must ensure that copyright holders receive "fair compensation." This grants E.U. member states broad discretion in determining how to impose levies.

The European Court of Justice made its ruling after it was asked by the Federal Court of Justice in Germany to examine a case brought by VG Wort, the authorized copyright-collecting society representing authors and publishers of literary works in Germany.

VG Wort had requested that authorities order Canon, Epson, Fujitsu, Hewlett-Packard, Kyocera and Xerox to provide information on the nature and quantity of printers that they have sold since 2001. In addition, VG Wort claims that Kyocera, Epson and Xerox should pay it remuneration by way of a levy on personal computers, printers and plotters marketed in Germany between 2001 and 2007.

The court said it is open to Germany implementing a system in which owners of any printer, including multifunction devices, contribute to compensating authors for harm suffered by reproduction of their protected works. This means a levy on printer makers, the cost of which the manufacturers can pass on to customers.

The court does however limit the amount that can be levied. "The overall amount of fair compensation must not be substantially different from the fixed amount owed for the reproduction obtained through the use of one single device," the ruling said.

The court also said that even if rights holders don't take any measures to prevent copying of their work, such as using the EURion Constellation (a pattern of dots that will cause modern color copiers to lock up when they detect it), they are still entitled to fair compensation, since the use of such measures is voluntary.

However, E.U. countries may take into account whether such measures were used when determining the rights holders' compensation in order to encourage their use.

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