PRIVATE COPY COMPENSATION
AGECOP’S REPORT ON THE PORTUGUESE LEGAL FRAMEWORK AND
COLLECTION
1. Introduction
The reproduction right is one of the most important and valuable rights
granted to right holders, defined as an exclusive right to authorise or
forbid all acts of reproduction.
However, the majority of EU’s Member States (hereinafter referred to as
MS) foresees some exceptions to this exclusive right, such as the ones
related with institutional uses. One of the most important exceptions to
the reproduction right is private copying
Private copy exception was designed having as inspiration the provisions
set forth in the Berne Convention – which article 9.2 allows the
establishment of exceptions and limitations to the right of reproduction,
provided that the three step test is complied with – and also in the WIPO
Treaties.
Although the majority of MS’s legislation already provided for private copy
exception, Directive 2001/29/CE establishes that MS may allow a
limitation to the exclusive reproduction right “in respect of reproductions
on any medium made by a natural person for private use and for
purposes that are neither directly nor indirectly commercial, on condition
that the rightholders receive fair compensation which takes account of the
application or non-application of technological measures referred to in
Article 6 to the work or subject-matter concerned” (article 5.2 (b) of the
Directive).
1
According to the Directive, MS may provide for the exception of private
copy provided that the three step test is applied and that rightholders
receive a fair compensation.
In what concerns the issue of fair compensations, although the Directive
does not establish any concrete provisions concerning amounts, there are
several principles contained in the recitals that must be attended as
guidelines for its calculation.
Given the above, the Directive’s recitals are of vital importance as
guidelines for MS when implementing the Directive, and within this scope
when providing for the private copy exception and the fair compensation
as an essential condition for its applicability.
According to recital 9 “(9) Any harmonisation of copyright and related
rights must take as a basis a high level of protection, since such rights
are crucial to intellectual creation. Their protection helps to ensure the
maintenance and development of creativity in the interests of authors,
performers, producers, consumers, culture, industry and the public at
large. Intellectual property has therefore been recognised as an integral
part of property.”
The Directive recognises that there must be a righteous balance between
the interest of consumers and of rightholders, which is a difficult task to
accomplish considering that the desirable evolution of technology has lead
us into a situation where digital uses of protected works are massive and
impossible to control.
If consumers have to be protected and also granted the right to enjoy
digital uses of protected works, rightholders’ interests must not be
ignored. In this sequence, recital 10 states that “(10) If authors or
2
performers are to continue their creative and artistic work, they have to
receive an appropriate reward for the use of their work, as must
producers in order to be able to finance this work. The investment
required to produce products such as phonograms, films or multimedia
products, and services such as "on-demand" services, is considerable.
Adequate legal protection of intellectual property rights is necessary in
order to guarantee the availability of such a reward and provide the
opportunity for satisfactory returns on this investment.”
The Directive acknowledges that digital uses have to be carefully handled.
If national legislations only provide for the interest of consumers, there is
a
serious
risk
that
cultural
production
will
be
severely
harmed,
endangering national cultures and the inner bonds that unite MS.
The above stated is stressed on recitals 11 and 12, when stating that
“(11) A rigorous, effective system for the protection of copyright and
related rights is one of the main ways of ensuring that European cultural
creativity and production receive the necessary resources and of
safeguarding the independence and dignity of artistic creators and
performers.”. Therefore, “(12) Adequate protection of copyright works
and subject-matter of related rights is also of great importance from a
cultural standpoint. Article 151 of the Treaty requires the Community to
take cultural aspects into account in its action.”
2. Fair compensation – Levy schemes
As previously stated, the private copy exception may be implemented and
maintained provided that the three step test is established as an essential
condition
for
its
applicability
and
compensation.
3
that
rightholders
receive
fair
The majority of MS have taken an option for levy schemes to compensate
rightholders for the exception to their exclusive reproduction right which is
established under the scope of the private copy concept.
This option is sustained by the fact that reproductions can be made by
users without control from rightholders. In fact, it is impossible to control
copies made by any person, and also the source used to make those
copies.
Therefore, and since it is not feasible nor reasonable to expect that users
will report each copy made – which would be the only way to implement a
solution that would oblige people to pay only for the copies they make -,
MS have taken an option for levy schemes.
Under these schemes, payment of fair compensation is made by every
person purchasing devices and blank media which can be used to copy
protected works. As it is impossible to collect only from the means
effectively used to copy, as per this would imply no collection at all, the
only solution left is collecting over all devices and blank media as they are
all liable to be used for reproduction.
The Directive also acknowledges the existence and maintenance of such
levy schemes, stating in Recital 38 that “(38) Member States should be
allowed to provide for an exception or limitation to the reproduction right
for certain types of reproduction of audio, visual and audio-visual material
for private use, accompanied by fair compensation. This may include the
introduction or continuation of remuneration schemes to compensate for
the prejudice to rightholders. Although differences between those
remuneration schemes affect the functioning of the internal market, those
differences, with respect to analogue private reproduction, should not
have a significant impact on the development of the information society.
Digital private copying is likely to be more widespread and have a greater
economic impact. Due account should therefore be taken of the
4
differences between digital and analogue private copying and a distinction
should be made in certain respects between them.”
3. Legal framework for private copy in Portugal
The Portuguese Copyright Act foresees the private copy exception since
1985.
However, rightholders had to wait until 1998 to get concrete ruling on fair
compensation, when Law 62/98 was published.
According to the above mentioned Law, collective management societies
existing in Portugal and representing authors, artists, publishers and
producers should incorporate a collective society to collect and manage
amounts arising from the fair compensation for private copy.
Therefore, in 1998 the above mentioned societies have incorporated
AGECOP – Associação para a Gestão da Cópia Privada, which has by
members
all
the
collective
societies
representing
authors,
artists,
publishers and producers and is responsible for the collection and
management of all amounts arising from the fair compensation for private
copy of music, audiovisual and reprographic works.
In what concerns the amounts to be collected, there were no levies on any
kind of blank media, and concerning devices, the Law imposed the
collection of 3% (!) of the net selling price, restrained to analogue
devices.
With regards to blank media, the Law said that Ministries of Culture and
Finance should reach an agreement on amounts to be collected. These
amounts were to be collected based on a joint Ministerial Order.
5
The agreement was never reached and the order was never issued. The
situation got even worse when the industry decided to fight against the
Law and claimed for the declaration of unconstitutionality. The decision
came on the end of 2003 and ruled that any provision on fair
compensation for private copy should be thereafter made by Law and
approved by the parliament, as per the compensation was considered as
having the same nature of tax rulings.
The Portuguese State implemented the Directive 2001/29/CE in August
2004, through a Law that finally established amounts for blank media –
Law 50/2004.
Currently, the legal framework for fair compensation due for private copy
can be summarized as follows:
•
Devices – 3% of the net selling price, restrained to analogue
devices. Digitals devices are completely exempted.
•
Blank media (In Euros)
•
Cassetes áudio
0,14
•
Cassetes vídeo (VHS)
0,26
•
CD R áudio
0,13
•
CD R data
0,05
•
CD 8 cm
0,27
•
Minidisc
0,19
•
CD RW áudio
0,19
•
CD RW Data
0,14
•
DVD R
0,14
•
DVD RW
0,30
•
DVD RAM
1,00
6
Collections have started only in 2005. Previously there were no conditions
to make the Law enforceable, as we believe it was not meant to be.
In practical terms, since 1985 users were allowed to copy under private
copy exception, and despite there were provisions that referred the fair
compensation, the amounts and conditions of applicability, added to the
strong and effective attacks driven by the industry, led to a situation
where rightholders received no compensation at all until 2004.
The situation described above caused serious damages to righholders. For
almost 20 years rightholders were not compensated by the private copy of
their works.
4. Current situation
The collection of amounts due to righholders as fair compensation for the
private copy of their works started only in 2005.
Previously, AGECOP and the associations representing the industry and
the consumers had several meetings in the functioning scope of the
Compliance Commission (commission foreseen in the Law, composed by
representatives of the rightsholders, the industry and the consumers, and
presided by IGAC, the body of the Ministry of Culture responsible for the
supervision of collective societies and for the control of the Law’s
compliance). As a result, a document containing all the practical rules
concerning collection, declaration, deliverance and payment of the
remuneration have been established, in accordance with the legal
framework. This document is called the Practical Guidelines and also rules
for refund and exemption procedures, among other aspects.
In 2006, AGECOP invested in an on-line declaration system, which was
designed
taking
into
account
the
suggestions
of
the
association
representing the industry and also of several other companies. This
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system works perfectly and due to that the declaration has become
simpler and clearer, diminishing the administrative costs of the collection.
Also, we promote actions to increase public awareness on the obligation to
collect and deliver levies, towards the industry and the authorities.
Currently, we may say that the system works and we have never received
any claims from the companies or the consumers.
However, under answer to question 15. below, we make several
suggestions
concerning
practical
rules
of
collection
that
could
be
implemented to increase the efficiency of the system. They may be
summarized in 3 main areas: joint responsibility for collection/payment for
all the economical agents integrated in the commercial circuit of the good;
discrimination of the amounts collected in the invoice, to assure
information to consumers and prove of collection; powers to control the
compliance with the obligations to collect, declare, deliver and pay the
levies granted to collective management societies, in order to keep a
regular supervision of the market.
In respect of the reprography area, the reprographic rightsholders are not
compensated for any levies, as the levy over equipment is only
established for analogue devices. The Law foresees since 2004 that
authors and publishers are to be compensated for the private copy of the
respective works through a levy of 3% of the selling price of photocopies
before VAT appliance. They receive 0,000185 for each photocopy!
However, as the Law imposes the entering into agreements with all public
and private entities responsible for providing copies, the average
administrative cost for each agreement is of € 10!
Due to that, authors and publishers are not at all compensated for the
private copy of their works. In the end of the day, they are spending
money to allow consumers to copy freely!
8
This situation has already been disclosed to the Commission and to the
IFRRO community, as AGECOP is a member of IFRRO.
Concerning the Law, the Portuguese situation is a good example of no
balance
at
all
between
consumers
and
rightholders
interests,
as
consumers were allowed to copy freely and for free for 20 years.
In what concerns the implementation of the Directive, we consider that
Law 50/2004 fails fully its purposes by exempting all digital devices.
Considering that nowadays digital copies are massively made and
analogue
devices
are
almost
disappearing,
the
implementation
as
described above is an unjustified benefit granted to the industry in
sacrifice of rightholders interests.
The Directive acknowledges the need to compensate rightholders for the
exceptions of their exclusive reproduction right by stating in recital 35
that “(35) In certain cases of exceptions or limitations, rightholders
should receive fair compensation to compensate them adequately for the
use made of their protected works or other subject-matter. When
determining the form, detailed arrangements and possible level of such
fair
compensation,
account
should
be
taken
of
the
particular
circumstances of each case. When evaluating these circumstances, a
valuable criterion would be the possible harm to the rightholders resulting
from the act in question. In cases where rightholders have already
received payment in some other form, for instance as part of a licence
fee, no specific or separate payment may be due. The level of fair
compensation
should
take
full
account
of
the
degree
of
use
of
technological protection measures referred to in this Directive. In certain
situations where the prejudice to the rightholder would be minimal, no
obligation for payment may arise.”
In what concerns private copy, recital 38 is very clear on the importance
to consider digital copy as a fundamental issue to be addressed in a
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proper manner, namely on a compensation level, when it states that
“(38) Member States should be allowed to provide for an exception or
limitation to the reproduction right for certain types of reproduction of
audio, visual and audio-visual material for private use, accompanied by
fair compensation. This may include the introduction or continuation of
remuneration schemes to compensate for the prejudice to rightholders.
Although differences between those remuneration schemes affect the
functioning of the internal market, those differences, with respect to
analogue private reproduction, should not have a significant impact on
the development of the information society. Digital private copying is
likely to be more widespread and have a greater economic impact. Due
account should therefore be taken of the differences between digital and
analogue private copying and a distinction should be made in certain
respects between them.”
5. Internal
rules
of
AGECOP
–
distribution
and
cultural
purposes
As previously mentioned, AGECOP has by members all the collective
societies representing authors, artists, publishers and producers and is
responsible for the collection and management of all amounts arising from
the fair compensation for private copy of music, audiovisual and
reprographic works.
In what concerns collections over analogue devices and blank media, the
distribution is made according to the following proportions, established by
Law:
•
40% for authors
•
30% for artists
•
30% for producers (division between audio and video producers is
ruled by agreement entered between the representing collective
societies)
10
Deductions for cultural purposes are set in 20% of the total amount of
collections, according to the Law. The correspondent amounts have been
fully applied in accordance with the purposes established by Law, to
initiatives proposed directly by AGECOP and individually by its members.
It must be stressed that AGECOP’s accounts are subject to the control and
supervision of IGAC, which is an institute ruled by the Ministry of Culture,
and that our budget plan for the amounts arising from the deductions
made for cultural purposes is also established based on the previous
guidelines applied by the above mentioned institute.
In what concerns to functioning costs, our Board has been pursuing a
policy of contention that lead that AGECOP’S administration fee is
equivalent to 1,6% of the total amount of collections.
6. Further contacts
We remain fully available for any further query or information on our
collection and management policies, as well as on any other issue that
may be addressed.
For such purposes, please find below our contact details:
Vera Castanheira
Executive Director
AGECOP – Associação para a Gestão da Cópia Privada
Av. Estados Unidos da América, 94, 7º B
1700-178 Lisboa
Portugal
Tel: +351 21 848 66 05
Fax: +351 21 848 66 07
Mail to: [email protected]
[email protected]
Site: www.agecop.pt
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12
Questionnaire:
A. Main characteristics of the PC levies systems
1. Does Table 1 on equipment and blank media reflect the
situation correctly? Is the information contained in Table 1 still
correct?
In what concerns to levies established in Portugal, they are applied over
the selling price of analogue equipment, and correspond to 3% of the net
selling price before VAT is applied. Therefore, reprographich rightsholders
receive no remuneration from levies over equipment and the amounts
collected for music and audiovisual rightsholders at this level are
practically inexistent.
Concerning the levies over media, they are restrained to the legal
schedule approved by Law, as previously quoted, and only apply to CD,
DVD, Minidisc and analogue media.
In the digital environment and with the convergence of equipment, most
devices have a memory capacity and are made to allow the reproduction
and storage of protected works under the scope of the private copy
exception. Levies should therefore increasingly tend to apply to the same
devices across Europe.
Therefore and as previously stated, the existing system in Portugal is
considered to be inadequate to compensate rightsholders. According to
studies conducted, the media used for private copy of works include MP3/
MP4 devices, hard disks and other digital storing devices as memory
cards. The Law must therefore be adjusted, in order to comply with the
set forth in the Copyright Code and in Directive 2001/29/CE and
effectively compensate rightsholders for the private copy of their works.
13
2. How could the legal uncertainties as to which equipment is
levied in different jurisdictions be dealt with?
We do not think that there are legal uncertainties. Each national system
has rules to determine the application of levies to equipment or media and
the rules are generally similar. Thus, the resolution of eventual conflicts is
a matter to be decided by national courts.
Concerning the Portuguese legal framework, no conflicts have aroused
and the list of equipments included in the legal provision of the 3% levy
over the selling price of equipments was established by agreement
between AGECOP, the Industry and IGAC, the body of the Ministry of
Culture leading the Compliance Commission that works towards the
application of the Law.
3. What would be the fairest method to determine the private
copying levy rate that applies to digital equipment and blank
media?
The methods applied to determine the rates include criteria such as the
value of the copyrighted works, the recording capacity and value of the
equipment and media, the use of these equipments for private copying
and the application or non-application of DRM. We consider that these
methods are adequate and that levies should not be established only on
the basis of the “harm” suffered by right holders, although the
compensation of such harm is the initial purpose that justifies the
establishment of levies.
The rates may also depend on factors such as the level of protection of
copyright in the different countries, the level of life, etc.
The basic price of equipment and media itself (without levies) varies a lot
from country to country. These differences can be up to threefold. This
shows: (1) that many factors intervene in the fixation of prices of goods
and services at national level and can lead to great discrepancies, and (2)
14
that levies only play a small role in the different prices for equipment and
media.
In the Portuguese case, we consider urgent to review the legislation and
enlarge the scope of digital media levied, as per most of the media
allowing users to make private copy of righstholders works are being sold
without any compensation. This means that the Industry is profiting on
equipment that is sold based on its capacity to copy and store works, and
the rightsholders are not being compensated.
The Portuguese Law as currently drafted does not comply with the
requirements of the Directive in what concerns to fair compensation over
digital media and equipment.
4. Have new levies on either equipment or media been introduced
or abolished since 2006?
No.
B. Economic, social and cultural dimension of private copying
levies
5. Can you provide updated figures for 2007 on the amount of
levies collected in those jurisdictions that apply a levy scheme?
Collections in Portugal 2007
In 2007 AGECOP collected € 5.752.918,68 and distributed € 4.820.332,33
as follows, in accordance with the proportions established by Law:
9 Authors
€ 1.928.132,93
9 Artists
€ 1.446.099,70
9 Music and audiovisual producers
€ 1.446.099,70
15
The
remaining
amounts
were
1,64%
used
to
pay
for
all
administrative and functioning costs and 20% of the total amount of
the collection, deducted for cultural purposes, as established by
Law. This matter will be developed further on.
6. Are you aware of further economic studies on the topics
discussed in the Document?
No.
7. Table 5 reflects the percentage of private copying levies and the
resulting amounts that are allocated to social and cultural funds.
Does this table summarise the situation correctly? Can you provide
updated figures for 2007?
8. What kind of events are funded by the sums set aside for
cultural funds in the different jurisdictions? Who are the main
beneficiaries of these monies?
9. What percentages of cultural funds are spent on cultural events
and what percentages on pensions or social payments?
10. Should there be a Community-wide (binding or indicative)
threshold for cultural funds deductions?
In Portugal, the Law establishes that 20% of the total amounts collected
by AGECOP must be deducted to create a cultural fund. These moneys
must be applied according to the purposes established by Law: the
promotion of cultural activities, as well as the research and development
of copyright and related rights and the development of actions to increase
public awareness on these matters.
The amounts of the cultural fund have been spent in activities included in
the scopes mentioned above.
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More detailed information can be supplied upon request, but we may
summarize the application of such fund as follows:
a) AGECOP is an umbrella collecting society, having by members all
the existing collecting societies in Portugal, representing authors,
artists, producers and publishers;
b) the cultural fund is applied to initiatives proposed directly by
AGECOP and also by our members, having in this case by budget
guidelines the proportions set forth for the distribution;
c)
In 2007, the cultural fund was fully applied comprising activities
such as scholarships for young artists, workshops on several areas,
seminars, coaching of authorities – such as polices, IGAC, judges,
etc -, post-graduation degrees, consumers and economical studies
on copyright matters, education against piracy, among others.
As showed above, AGECOP manages the cultural fund in accordance with
the rules set forth by national Law. Should there be directions at a
community level, we will not oppose and will assure the full compliance of
the same, as we currently do with national guidelines.
11. What share of individual right holders’ revenues do private
copying levies represent?
As previously stated, AGECOP distributes the amounts collected to its
members, which are collecting societies representing all the categories of
rightsholders. Therefore, we do not have such information, which should
be requested to our members or international bodies representing them.
C. Cross-border trade and e-commerce issues
12. Is there a refund system available in your jurisdictions when
particular equipment is exported to another Member States? If so,
what are the limitations as to the category of traders or
individuals who are entitled to such a refund upon exportation?
13. What is the most suitable system of refunds upon exportation?
Who is the most suitable party to claim those refunds?
17
14. Does table 6 on national refunds and exemption systems
reflect the situation correctly? Please complete and update the
table.
intra-community purchases of blank media and equipment?
In Portugal there is an exemption concerning exportation: levies do not
have to be collected over equipment and media that will be exported.
The Law does not foresee any refund system. However, a refund system
was
regulated
in
the
Practical
Guidelines
document,
designed
by
agreement between AGECOP and the association representing the
industry
and approved by IGAC, the body of the Ministry of Culture
responsible for the regulation and supervision of the compliance with
private copy Laws and regulations, in the scope of the Compliance
Commission.
This system as been implemented since collections have started in 2005
and no complaints were made about the respective functioning, to
AGECOP, the industry or IGAC.
The refund system works according to the following rules:
1. There is no payment of levies whenever the goods are exported and
sold to other EU countries.
2. Sells outside the Portuguese market must be informed to IGAC
(Law) and to AGECOP (Practical Guidelines)
3. As a principle, the situations mentioned above are considered
justified
to
IGAC
and
AGECOP
whenever
the
commercial
transactions are exempted from VAT appliance. Therefore, the
requirements
to
prove
the
refund
situations
are
the
same
established in the VAT laws and court decisions on the matter. (It
must be stressed that the Industry suggested this system as the
most effective and less time consuming for administrative purposes
and AGECOP accepted)
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4. The refund system comprises all categories of equipments and
media subject to levies.
5. The refund system comprises two categories of companies:
a)
Companies
usually
responsible
for
the
collection
and
deliverance/payment of the amounts collected to AGECOP – in
the case such companies will export or re-export the goods they
are exempted of the collection and payment of the levies on such
transaction. This exemption is acknowledged and only has to be
informed to AGECOP through a copy of the document issued by
the Customs Services.
b)
Companies
that
buy
the
equipment
and
media
to
other
companies in the Portuguese market and pay the levy on
acquisition. After that, such companies decide to export the
goods – In this case, companies that have paid for the levy may
ask a refund to the selling companies. In case the selling
companies have not yet delivered the amounts collected to
AGECOP, they may refund the buying company and justify to
AGECOP the non-deliverance of the amounts first collected
because of the export that will be made by the buying company.
In case the selling companies had already delivered the amounts
collected, they may refund their clients and then apply for refund
from AGECOP.
6. Both categories of companies mentioned above are refunded.
However, the refund granted directly by AGECOP aims the
companies that have collected and delivered the levies to AGECOP.
The buying companies referred above have to ask for refund to the
selling companies that are after refunded by AGECOP.
7. In order to confirm and grant the above mentioned refunds,
applying companies must present to AGECOP the same documents
that are required by the VAT service, and foreseen in the applicable
legislation, namely: in case of export, the document proving the
export, duly signed by the Customs Services; in case of selling to
other EU countries, the company may present the proof of
payment, transportation documents - CMR, DAirwaybil 1 AWB or
19
the Bill of landing – transportation contracts, invoices from the
transport companies, sending documents, declaration issued by the
MS receiving the goods in which the intra-community selling is
acknowledged.
8. The amounts to be refunded are credited in the companies current
account and may be reimbursed in currency upon request. Until
today, we have never had any request for reimbursement in
currency and the credit on current account is made the day after
the reception of the requested documents.
According to our experience, our system works perfectly.
15. Who is the most suitable party to pay private copying levies?
Should private end-users be exempt to self-report?
We think the existing system is efficient enough. Can we really expect
consumers to approach titleholders every time they make a copy of their
works? Or each rights holders to approach the millions of people living in
the EU to collect the amounts due for the private copy of their works? No,
this is not expectable or realistic, and would generate a situation where
titleholders would receive no compensation at all and consumers would
have an illegitimate benefit. This would have dramatic consequences; it
would contribute to cause the ruin of all the income for authors, artists
and producers and nobody would want to contribute to cultural production
as per they could not make a life of it. Is this a desirable future for Europe
or for the World? We do not think so.
Also, this system assures that everybody that is liable to copy is paying
for the remuneration, as per the ICT industry reflects the amount of levies
in the selling price of the equipment or media they sell. They act as
collectors, not as debtors, although they make profit from selling
equipments and media that allow copy of protected works and in some
cases can only be used to copy or sustain copies of works (for example,
Mp3 devices).
20
However, we think it would be interesting to have the same rules of
collection and refund in the EU member states, namely in what concerns
to the joint responsibility of manufacturers, importers and retailers, which
seems to be the best method for the payment of levies. We also think that
the problem of the non compliance with the collection of levies, which
generates serious problems between the companies, would be solved if
any agent of the selling chain of the good could effectively collect and
deliver/pay the remuneration.
Also, we find important to consider the fact that the collection of levies
must be transparent in what concerns to the companies obliged to collect.
The creation of an obligation to discriminate the amounts collected in each
invoice is fundamental to inform consumers and demonstrate the
compliance of the rules.
Thus, collective management societies registered and acknowledged by
the Government – as AGECOP – should be granted powers to analyse
documents that prove the compliance of the obligations to collect, declare
and deliver by the companies that are declaring and delivering the
amounts. This would be of great help for keeping the market controlled
and protecting the companies complying with the rules from irregular
behaviours of other companies, as well as to protect consumers from
double collections made by infringing companies. Such powers should be
exercised under obligations of confidentially on commercial matters and
subject to the supervision of the competent official bodies.
Regarding cross-border sales online, we consider that the levies should be
applied in the country where the media or equipment is sold to the end
consumer (country of reception or destination), and that they should be
paid by the online retailer rather than be subject to an obligation to selfreport by private end-users.
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D. Professional users of ICT equipment.
16. How do private copying levies affect professional users (SMEs,
others)?
17. How should collecting societies take into account professional
users? Should professional users be exempted from payments in
the first place or should such users be entitled to a refund after
payment?
Concerning exemptions from the payment of levies on the acquisition of
equipment and media, the Portuguese Law foresees the following, to be
granted by AGECOP upon request (as established in the Practical
Guidelines Agreement):
1. Broadcasters and producers for use in their own productions
2. Entities working on behalf of the handicapped
3. Other cultural entities, upon joint decision of the Ministries of
Culture and Finance, to use in projects of relevant public
interest.
Concerning professional users, they are a small category, and the
application of levies for them is part of the inevitable “mutualisation” of
the private copying levies system.
The management of exceptions or refunds for small and numerous
categories of users would be very liable to fraud schemes - including tax
fraud schemes-, burdensome and would increase the administration fees
and could prejudice the economic viability of the system. In other words,
the more sophisticated the levy systems are, the more expensive they
may become and less effective to compensate righstholders, as main
purpose of its existence, for the copy of their works. A balance needs to
be found between the sophistication of the system and its fairness and
economic viability.
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E. Grey market
18. Has the size of the grey market increased since 2006?
19. What are the measures Member States, collecting societies
and the ICT industry are taking to reduce the size of grey market
in their jurisdiction?
Grey markets are always extremely difficult to measure and we can not
affirm a significant increase or decrease in this respect. However, we do
think that all the stated above in answer 15 should be rapidly
implemented.
The existence of grey market, as other phenomenon of non compliance
with legal rules, such as tax fraud, etc, must be controlled and eliminated,
to ensure the law enforcement. Our suggestions for such purposes have
been made above.
AGECOP develops regular mailing actions, in cooperation with IGAC, to
promote public awareness among the companies of the obligation to
collect. Also, we follow the rules of fair and equal treatment of all
companies and work towards the elimination of infringement behaviours:
we advise and receive notices of infringing companies, which are
immediately communicated to the authorities. However, we believe that
the implementation of the measures suggested in 15 above would
significantly improve the efficiency of the system.
F. Consumer issues
20. Are you aware of consumer surveys on private copying
behaviour which are used as a basis to set levy rates? And
consumer surveys on the main sources of works or sound
recordings that are privately copied?
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A survey on such matters will be conducted in Portugal this year. The
results will be made public when the analysis is concluded.
Our members conduct regular surveys on several copyright matters,
which could be made public upon request and if suitable.
21. How should private copying levy schemes evolve to take into
account convergence in consumer electronics?
In the digital environment and with the convergence of equipment, most
devices have a memory capacity and are made to allow the reproduction
and storage of protected works under the scope of the private copy
exception. Levies should therefore increasingly tend to apply to the same
devices across Europe.
The calculation of levies can take into account the fact that more and
more equipment and media have multi-purpose functions. It is our believe
that whenever a device or media allows the copy and storage of works –
nowadays, this is what the industry sells better! – it should be subject to
levies, calculated and established taking into account the other purposes
of the device.
This is a principle applied by AGECOP since collections started: the 3%
levy on equipment is calculated pro rata, according to the number of
components of the equipment. For example, an hi-fi system costing € 100
will be levied on 3% over € 20, as we agreed to consider 5 functions in
this devices. Also, the CD R Data is levied in € 0,05, while the CD R Audio
is levied in € 0,14.
In the Portuguese case, we consider urgent to review the legislation and
enlarge the scope of digital media levied, as per most of the media
allowing users to make private copy of righstholders works are being sold
without any compensation. This means that the Industry is profiting on
equipment that is sold based on its capacity to copy and store works, and
the rightsholders are not being compensated.
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G. Double payment
22. What are the main issues consumers face when paying for
digital downloads?
23.
Should
licensing
practices
be
adopted
to
account
for
contractually authorised copies?
There is no double payment as there are two rights involved in the digital
scope for the rightholders: the reproduction right and the making
available right, and both must be compensated.
Therefore, there are two different rights involved in the digital scope that
are also foreseen by the Directive 29/2001/EC: the reproduction right,
which is restrained by means of the private copying exception, and the
making available right, a way of direct exploitation of the work. Both
rights must be compensated/remunerated because they correspond to
different uses of the consumers.
This is the accurate interpretation of the set forth in recital 35 of the
InfoSoc Directive.
From what we know, there are methods at national level to take licensed
copies into account in the legislation itself, in the scope of a revision
process. These matters can be better enlightened by our members, as
representing directly the right holders.
However, AGECOP subscribes the position of the IFRRO community on this
regard, as well as the positions of the right holders on this matter,
expressed by national or international representative organisations.
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H. Alternative licensing
24. If right holders decide that their works can be disseminated
for free, how should this be taken into account when collecting
private copying levies?
This question is not clear. However, we think that our members can better
answer this question, as they directly represent rightsholders and can
express their views on the matter.
In any event, we point out that the concept of dissemination “for free” is
not clear. In some cases content may not be offered against a direct
charge but can be remunerated by a subscription, by advertising, or in
another way depending on business models and agreements with the
service providers. In addition, the fact that there is no charge does not
necessarily mean that the content is offered without DRM. Finally, we
should underline that the consent of all right holders is necessary to offer
a copyrighted work for free.
From what we know, as far as the collection of levies is concerned, the
offer of content for free is dealt with in the same way as the offer of public
domain content, and does not have any influence on the calculation or
collection of levies. This is part of the system of “mutualisation” of levies.
Concerning the distribution of the levies to the right holders, there could
be an impact only if some right holders expressly wanted to disseminate
their works for free and expressly waived their right to private copying
levies – such right holders might then not participate in the distribution of
the levies collected.
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I. Distribution issues
25. What is the typical frequency and schedule of levy payouts?
Distribution is made twice a year and generally in May and November. The
distribution of levies should be fair, transparent and non-discriminatory,
and this is what has been made by AGECOP, in compliance with the
proportions established by Law.
In 2007 we have collected € 5.752.918,68 and distributed € 4.820.332,33
as follows, in accordance with the proportions established by Law:
9 Authors
€ 1.928.132,93
9 Artists
€ 1.446.099,70
9 Music and audiovisual producers
€ 1.446.099,70
The cultural fund was fully applied in accordance with the legal purposes,
as explained above.
26. What are the main issues encountered with respect to crossborder distribution?
AGECOP
distributes
to
its
members,
i.e.,
the
collective
societies
representing authors, artists, publishers and producers.
Therefore, questions pertaining distribution to rightsholders can be better
answered by our members. However, as fare as we are informed,
distribution is being made without problems.
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27.
What
are
the
average
administrative
costs
in
levy
administration (in per cent of collected revenue)?
The total functioning cost of 2007 corresponded to 1,64% of the total
amount of collections, as stated in the management report approved in
April 14th by our members, which will be registered in IGAC until May.
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