Opinion of Advocate General Hogan delivered on 23 September 2021.

• Jurisdiction: European Union
• ECLI: ECLI:EU:C:2021:763
• Date: 23 September 2021
• Celex Number: 62020CC0433
• Court: Court of Justice (European Union)

Provisional text

OPINION OF ADVOCATE GENERAL

HOGAN

delivered on 23 September 2021(1)

Case C‑433/20

Austro-Mechana Gesellschaft zur Wahrnehmung mechanisch-musikalischer Urheberrechte Gesellschaft mbH

v

Strato AG

(Request for a preliminary ruling from the Oberlandesgericht Wien (Higher Regional Court, Vienna, Austria))

(Request for a preliminary reference – Approximation of laws – Copyright and related rights – Directive 2001/29/EC – Article 2 – Reproduction right – Article 5(2)(b) – Private copying exception – Servers owned by third parties made available to natural persons for private use – Provision of a cloud computing service – Interpretation of terms ‘on any medium’ – Fair compensation)

I. Introduction

1. The advent of the commercial photocopier from the late 1950s onwards was perhaps just the first in a series of technological developments which posed a challenge to traditional understandings of copyright and related rights and, in particular, to the exceptions and limitations thereto. The arrival of the photocopier meant that copyright material could easily be reproduced in a manner which was all but impossible to police or detect. The digital revolution, which has been ongoing since the emergence of the internet and the worldwide web in the early 1990s, has posed ever greater challenges to these traditional understandings.

2. This request for a preliminary reference presents another aspect of this emerging problem. Is a natural person who is lawfully in possession of copyrighted material entitled to make a copy of that material for their own purely private purposes and, on payment of a fee, to store it on a commercial server using cloud computing techniques and, if so, what, if any, payment is then due to the copyright owner? This, in essence, is the issue presented in this reference for a preliminary ruling by the Oberlandesgericht Wien, (Higher Regional Court, Vienna, Austria), which was lodged at the Registry of the Court of Justice of the European Union on 15 September 2020. The reference concerns the interpretation of Article 5(2)(b) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society. (2)

3. The reference has been made in proceedings between the Austro-Mechana Gesellschaft zur Wahrnehmung mechanisch-musikalischer Urheberrechte Gesellschaft mbH (‘Austro-Mechana’), a copyright collecting society, on the one hand, and Strato AG (‘Strato’), a company established in Germany which provides a service for the storage of data in the cloud, on the other hand. The proceedings before the referring court concern the issue of whether compensation for the exploitation of the right of reproduction is due by Strato in respect of cloud-based storage capacity provided by it in Austria to natural persons for private use.

4. The present request for a preliminary ruling provides the Court with an opportunity to examine the issue of copying by natural persons for private use in the digital environment and, more specifically, the reproduction or storage in the cloud (3) of copyright-protected content.

5. It is important to stress that where a ‘private copying’ exception to the exclusive right of reproduction provided in Article 2 of Directive 2001/29 has been adopted by a Member State pursuant to Article 5(2)(b) of that directive, such copying is then lawful provided that what is described as fair compensation is paid to the rightholder. In the event, of course, that the Member State in question does not avail of the Article 5(2)(b) exemption, then such reproduction of copyright material without the consent of the rightholder would be plainly unlawful as contrary to Article 2. (4)

6. In the present case, the Court is required first to examine whether and, if so, to what extent the private copying exception also applies in respect of reproductions in the cloud made by natural persons for private use of copyright-protected content. In the event that the Court were to consider that the private copying exception also applies in respect of such reproductions, the Court would then have to examine the question of what (if any) the ‘fair compensation’ would be in accordance with the provisions of Article 5(2)(b) of Directive 2001/29 which would be due to rightholders in respect of storage in the cloud made available to natural persons for private use by internet services providers.

7. In particular, given that a levy may already have been paid by natural persons when purchasing devices, media or equipment – such as smartphones, tablets or computers (5) – which permit the storage and thus reproduction of copyright-protected content to the cloud and thus provide (fair) compensation to rightholders for the harm suffered as a result of copying, the question then arises whether an (additional) levy should be paid by internet services providers which make available storage in the cloud for that same content by way of the ‘fair compensation’ required by Article 5(2)(b) of Directive 2001/29.

8. Prior to examining these questions, however, it is first necessary to set out the legal context in which the present case arises.

II. Legal context

A. Directive 2001/29

9. Recitals 2, 5, 9, 10, 31, 32, 35, 38 and 44 of Directive 2001/29 are worded as follows:

‘(2) The European Council, meeting at Corfu on 24 and 25 June 1994, stressed the need to create a general and flexible legal framework at Community level in order to foster the development of the information society in Europe. This requires, inter alia, the existence of an internal market for new products and services. Important Community legislation to ensure such a regulatory framework is already in place or its adoption is well under way. Copyright and related rights play an important role in this context as they protect and stimulate the development and marketing of new products and services and the creation and exploitation of their creative content.

…

(5) Technological development has multiplied and diversified the vectors for creation, production and exploitation. While no new concepts for the protection of intellectual property are needed, the current law on copyright and related rights should be adapted and supplemented to respond adequately to economic realities such as new forms of exploitation.

…

(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.

(10) If authors or 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. …

…

(31) A fair balance of rights and interests between the different categories of rightholders, as well as between the different categories of rightholders and users of protected subject matter must be safeguarded. …

(32) This Directive provides for an exhaustive enumeration of exceptions and limitations to the reproduction right and the right of communication to the public. Some exceptions or limitations only apply to the reproduction right, where appropriate. This list takes due account of the different legal traditions in Member States, while, at the same time, aiming to ensure a functioning internal market. Member States should arrive at a coherent application of these exceptions and limitations, which will be assessed when reviewing implementing legislation in the future.

…

(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 levy, 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.

…

(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. …

…

(44) When applying the exceptions and limitations provided for in this Directive, they should be exercised in accordance with international obligations. Such exceptions and limitations may not be applied in a way which prejudices the legitimate interests of the rightholder or which conflicts with the normal exploitation of his work or other subject matter. The provision of such exceptions or limitations by Member States should, in particular, duly reflect the increased economic impact that such exceptions or limitations may have in the context of the new electronic environment. Therefore, the scope of certain exceptions or limitations may have to be even more limited when it comes to certain new uses of copyright works and other subject matter.’

10. Under Article 2 of Directive 2001/29, headed ‘Reproduction right’:

‘Member States shall provide for the...