Application of the “private copy” exception to cloud storage

by Vanessa Guzek

“The so-called “private copying” exception under the Copyright Directive applies to the storage in the cloud of a copy of a protected work for private purposes”, the Court of Justice of the European Union (hereinafter “CJEU“) has decided in its judgment of last Thursday, March 24th of  2022.

This is the judgment in the Austro-Mechana case (C-433/20) on copyright and private copying.

Austro-Mechana is a copyright collecting society which, among other things, exercises the legal rights of use and remuneration that is due under the private copying exception pursuant to Article 5 (2) b) of Directive 2001/29. Austro-Mechana filed a claim before the Commercial Court of Vienna (Austria) against Strato AG, a provider offering cloud storage services for payment of this remuneration. The claim was dismissed on the grounds that Strato AG does not sell storage media to its customers, but provides them with an online storage service.

The Higher Regional Court of Vienna, hearing the appeal, has referred to the CJEU the question whether the storage of content in the context of cloud computing falls within the scope of the private copying exception provided for in Article 5(2)(b) of Directive 2001/29.

To the question raised, the CJEU has stated that the private copying exception applies to copies of works on a server on which the provider of a cloud computing service makes a storage space available to a user. However, Member States are not obliged to subject cloud storage service providers to the payment of fair remuneration for such exception, provided that fair remuneration is otherwise provided for in favor of rightholders.

As to the question of who has to pay the fair compensation, it is, in general, the person who creates the private copy, i.e. the user of the cloud storage services.

However, where there are practical difficulties in identifying end users, Member States may introduce a private copying levy chargeable to the producer or importer of the servers by means of which the cloud computing services are offered to natural persons. That levy will be passed on economically to the purchaser of such servers and will ultimately be borne by the private user who uses that equipment or to whom a reproduction service is provided.

When setting the private copying levy, Member States may take account of the fact that certain devices and media may be used for private copying in connection with cloud computing. However, they must ensure that the levy thus paid, in so far as it affects several devices and media in the single process of private copying, does not exceed the possible harm to the rightholders.

Consequently, Directive 2001/29 does not preclude national legislation which does not make providers of cloud storage services subject to the payment of fair compensation, provided that that legislation provides for the payment of fair compensation in another way.

 

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