Padawan case
It may be inferred from the drafting history of Directive 2001/29 that the concept of ‘fair compensation’ in Article 5(2)(b) was intended to be a ‘new concept’, which, in the absence of a legal definition in the Commission proposal, required the Council to lay down guidelines on its application. Those guidelines may now be found in recital 35 in the preamble to the directive. It follows that the intention of the Community legislature was to introduce a new concept at Community level, without it being linked with pre-existing concepts in international copyright law or that of the Member States. This differentiates this concept somewhat from the concept of ‘equitable remuneration’ used in Article 5 and Article 8(2) of Directive 2006/115, which originated from international copyright law and was adopted verbatim in the Community legal system.
Consequently, the choice of a new concept for compensating the author in the event of private copying appears, in the light of its drafting history, the need for it to be further filled out, its autonomy vis-à-vis Member States and international terminology, and the harmonising objective of Directive 2001/29, to be inspired by the efforts of the Community legislature to take into consideration the pre-existing national legislation originating in the different legal traditions of the Member States. At the same time, it can be assumed that it saw the need for a concept as flexible as possible, capable of developing in the light of regular reviews depending on technological and economic developments.
The wording of Article 5(2)(b) also expressly refers to the fact that the limitation in respect of private copying is subject to the condition of ‘fair compensation’. From a semantic point of view alone, this concept implies a certain balance between conflicting interests. It must be concluded therefore that the fair character of that compensation must be achieved, as the United Kingdom Government has correctly stated, by means of balancing the interests of the rightholder and the user.
The formal characteristic of being the person liable to pay compensation does not as such yet reveal anything about the identity of the natural person within the meaning of Article 5(2)(b) of Directive 2001/29 who avails himself of the private copying rule. That person should be taken as the focus rather than the person liable to pay compensation. Since the user must bear the economic burden of the compensation pursuant to the maxim cuius commoda, eius incommoda, his interests should also be taken into account in the course of the balancing of interests. That corresponds more closely to the intention of the Community legislature which is expressed in recital 31 in the preamble to the directive.
Article 5(2)(b) of Directive 2001/29 does not determine who should actually be obliged to pay. Nor does recital 35 in the preamble to the directive provide any help with interpretation. In certain circumstances, the person liable to pay may by all means be the user himself. It should also be taken into account that in a system of lump‑sum compensation by means of a levy – as provided for in the Spanish legal system – those who are directly liable to pay such fair compensation, that is the dealers and importers according to Article 25(4)(a) of the TRLPI, that levy is normally passed on to the customer and therefore ultimately to the user via the purchase price. Therefore, as the German Government correctly observes, the effect of that provision on the dealers and importers proves to be neutral. Whilst they have to pay the lump-sum compensation to the authors, they do not suffer any prejudice as a result because they are reimbursed for the compensation by the user via the purchase price. In that respect, it would not be correct for the interests of the person liable to pay the compensation to be taken as the sole basis. However, that does not exclude them from being attributed some significance in certain circumstances, for instance when they act to protect the interests of the user.