Introduction
On 14 November 2024, the Court of Justice of the European Union (‘CJEU’) delivered its judgment in Case C-230/23 Reprobel CV v Copaco Belgium NV (‘Reprobel’) that certain provisions of the Information Society Directive (‘InfoSoc Directive’) could produce a vertical direct effect, entitling domestic courts of EU Member States to disapply erroneous national transpositions of the InfoSoc Directive. Article 5(2)(a) and (b) of the Directive enables Member States to provide an exception to the rightholder’s reproduction right under Article 2. These provisions effectively allow photocopiers, such as Copaco to make available reproduction equipment for private use, provided they remunerate copyright holders. This is known as the ‘reprography exception’. These royalties were to be collected by Reprobel CV, a Belgian collecting society on behalf of authors and publishers.
The doctrine of direct effect
The doctrine of direct effect was originally set out in Case 26/62 Van Gend en Loos, where the now CJEU recognised that EU law has direct effect, that is, it could be directly enforced before national courts. While EU directives do not produce horizontal direct effect (Case 152/84 Marshall, para 48), they only produce vertical direct effect (i.e. individuals can directly invoke provisions in a directive before a national court against a State), provided the provision relied upon is sufficiently clear, precise, and unconditional (Case 41/74 Van Duyn). The upshot of this lack of horizontal direct effect has been for the Court to adopt a wide interpretation regarding what constitutes the state. For example, British Gas Corporation was construed as a public body because it has special powers “beyond those which result from the normal rules applicable in relations between individuals” to perform a responsibility in accordance with a measure adopted by a State (Case C-188/89 Foster v British Gas).
The background and claims in Reprobel
In Case C-572/13 Hewlett-Packard Belgium, the CJEU had ruled that flat-rate remuneration which might overcompensate rights holders was incompatible with Article 5(2)(a) and (b), rendering the relevant provisions of LCRR incompatible with InfoSoc Directive. Consequently, Copaco decided to suspend payment of compensation to Reprobel CV until the relevant provisions of Belgian copyright law were aligned with Article 5(2)(a) and (b). On 16 December 2020, Reprobel brought an action before the Referring Court for outstanding remuneration combined with interest and damages. Copaco denied the claim on the grounds that Articles 59 – 61 of the LCRR were incompatible with the Directive. It argued that Article 5(2)(a) and (b) produced a vertical direct effect, as Reprobel was an emanation of the State. Additionally, it claimed that the Referring Court should consider disapplying such incorrect implementation of Article 5(2)(a) and (b) in national law. Conversely, relying on the decision in Van Duyn, Reprobel and the Belgian government argued that Article 5(2)(a) and (b) were insufficiently unconditional to produce direct effect, as it conferred Member States a wide discretion for organising a mechanism for fair compensation. Moreover, it denied that it qualified as a State entity by arguing that it is an association governed by private law. Subsequently, the Referring Court stayed the proceedings and referred the following questions to the CJEU:
- the qualification of an entity like Reprobel; and
- does Article 5(2)(a) and (b) of InfoSoc Directive produce vertical direct effect?
Reprobel judgment: CJEU’s response
The CJEU found that, although Reprobel is not a central organ of the State, it is legally entrusted to collect a levy from manufacturers or distributors that facilitate users with devices to reap the advantage of the exceptions, and subsequently pay fair remuneration to relevant rightholders. To perform such a task, it has been granted special powers beyond those which typically arise between individuals, thereby qualifying as a State entity. Further, with respect to vertical application of Article 5(2)(a) and (b), it ruled that the obligations as to the outcome that is to be achieved could be regarded as sufficiently unconditional and precise, even if the manner and form to achieve this outcome are left to the national legislator’s discretion. Such an obligation includes inter alia that the level of compensation due to rightholders must correspond to the harm resulting from the making of copies under either provision. Therefore, the CJEU concluded that the provisions involved produced a vertical direct effect. Moreover, it ruled that, since the provisions produced a vertical direct effect, the domestic courts were obliged to disapply equivalent provisions under national legislation without seeking approval of the legislature.
Reprobel in the wider landscape
Article 114 Treaty on the Functioning of the European Union (‘TFEU’) confers upon the EU the competence to enact measures for the harmonisation of national laws. Harmonisation based on Article 114 TFEU takes the form of minimum harmonisation, as opposed to Article 118 which takes the form of maximum harmonisation. The fact that the legal basis of directives, including the InfoSoc Directive relating to copyright has been Article 114 TFEU indicates that the EU’s objective has always been to create minimum harmonisation. However, this creates room for differences between Member States’ domestic laws, as opposed to Article 118 which enables the EU to provide uniform protection across the internal market. The decision in Reprobel arguably aligns with AG Mengozzi’s observation in Case C-521/11 Amazon.com International Sales and Others that the reason behind most problems relating to the application of the InfoSoc Directive is that it is based on Article 114 TFEU (minimum harmonisation), as opposed to Article 118 TFEU. To promote creativity and innovation, it is necessary to adopt a higher level of harmonisation than that achieved by the InfoSoc Directive. While the examples abound, Reprobel indeed underlines the Member States’ continuous failure to properly transpose directives into national laws, particularly within the copyright arena.
Conclusion
Reprobel demonstrates the limits associated with adopting copyright directives that are based on minimum harmonisation. Considering the EU’s overall digital single market strategy for copyright works, it is questionable whether the system of minimum harmonisation is suitable for legislative framework of copyright.
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