REMUNERATION FOR PRIVATE COPY LEGAL

THE STATE COUNCIL ;

Seen l °), under number 229447, the summary request and the additional memorandum, registered on January 22 and May 22, 2001 at the litigation secretariat of the Council of State, presented for the SYNDICATE DES INDUSTRIES DE MATERIELS AUDIOVISUELS ELECTRONIQUES (SIMAVELEC), headquartered at 11/12 rue Hamelin in Paris Cedex 16 (75783), the NATIONAL SYNDICATE DES SUPPORTS D’ENREGISTREMENT (SNSE), headquartered at 5 bis rue Jacquemont in Paris (75017), the SYNDICAT DES ENTREPRISES DE COMMERCE INTERNATIONAL CONSUMER AUDIO, VIDEO AND COMPUTER EQUIPMENT (SECIMAVI), headquartered at 25/27 rue d’Astorg in Paris (75008); the SYNDICATE OF INDUSTRIES OF AUDIOVISUAL ELECTRONIC EQUIPMENT and others ask the Council of State to annul the decision of January 4, 2001; of the commission provided for in article L.

Seen 2 °), under number 231020, the summary request and the additional memorandum, registered on March 6 and May 18, 2001 at the litigation secretariat of the Council of State, presented for THE SYNDICATE DE L’INDUSTRIE DES TECHNOLOGIES DE L’INFORMATION (SFIB), headquartered at 2, place de la Défense BP 240 in Paris La Défense Cedex (92053), the SYNDICATE DE L’INDUSTRIE DES TECHNOLOGIES DE L’INFORMATION (SFIB) is asking the Council of State for the cancellation of the decision of January 4, 2001 of the committee provided for in Article L. 311-5 of the Intellectual Property Code relating to remuneration for private copying;

Seen 3 °), under number 231083, the summary request and the additional memorandum, registered on March 7 and July 6, 2001 at the litigation secretariat of the Council of State, presented for the SYNDICATE OF LEISURE SOFTWARE EDITORS, whose head office is 5, rue des Orties in Rueil-Malmaison (92500), SOCIETE CRYO SA, with registered office at 24, rue Marc Seguin in Paris (75018), SOCIETE INFOGRAMES INTERTAINMENT, with registered office at 8, rue du ler Mars 1943 in Villeurbanne (69100) and the SOCIETE UBI SOFT SA, whose registered office is 61, rue Saint-Hélier in Rennes (35000), the SYNDICATE OF LEISURE SOFTWARE EDITORS and others ask the Council of State;

l °) annul the decision of January 4, 2001 of the committee provided for in Article L. 311-5 of the Intellectual Property Code relating to remuneration for private copying;

2) to order the State to pay them the sum of 20,000 F for irrecoverable costs;

Having regard to the other documents in the files;

Having regard to the treaty establishing the European Community;

Having regard to the intellectual property code;

Considering the code of administrative justice;

After hearing in public session:

 the report by Mr. Herondart, Auditor;

 the observations of the SCP Célice, Blancpain, Soltner, lawyer of the SYNDICAT DES INDUSTRIES DE MATERIELS ELECTRONIQUES and others, of the SCP Thomas-Raquin, Bénabent, lawyer of the company Copie France and of the company Sorecop, of the SCP Lyon-Caen , Fabiani, Thiriez, lawyer for the Minister of Culture and Communication, SCP Masse-Dessen, Thouvenin, lawyer for the union of leisure software publishers and others, for the SCP Lesourd, lawyer for the union for the industry of information technology (SFIB);

 the conclusions of Ms. Maugüé, Government Commissioner;

Considering that the requests of the SYNDICATE OF INDUSTRIES OF AUDIOVISUAL EQUIPMENT ELECTRONICS and others, of the SYNDICATE OF THE INDUSTRY OF TECHNOLOGIES OF INFORMATION and of the SYNDICATE OF EDITORS OF LEISURE SOFTWARE and others are directed against the same decision of January 4, 2001 of the commission established by Article L. 311-5 of the Intellectual Property Code relating to remuneration for private copying; that it is necessary to join them to rule by a single decision;

Without there being any need to rule on the end of inadmissibility opposed by the Minister of Culture and Communication to the request of the SYNDICATE OF LEISURE SOFTWARE EDITORS and others;

Considering that under the terms of Article L. 122-4 of the Intellectual Property Code: “Any full or partial representation or reproduction made without the consent of the author or his successors in title or successors in title is illegal”; that under Article L. 122-5 of the same code: “When the work has been disclosed, the author may not prohibit: … 2 ° Copies or reproductions strictly reserved for the private use of the copyist and not intended for collective use, with the exception of copies of works of art intended to be used for purposes identical to those for which the original work was created and copies of software other than copying safeguard established under the conditions provided for in II of article L.

Considering that the reproductions authorized for private copying are subject to remuneration provided for in Articles L. 311-1 et seq. Of the Intellectual Property Code; that under the terms of Article L. 311-1 in its wording then in force, “The authors and performers of works fixed on phonograms or videograms, as well as the producers of these phonograms or videograms, are entitled to a remuneration for the reproduction of said works, produced under the conditions mentioned in 2 ° of article L. 122-5 and 2 ° of article L. 211-3 “; that under Article L. 311-4: “The remuneration provided for in Article L. 311-3 is paid by the manufacturer, the importer or the person who makes intra-community acquisitions, within the meaning of 3 ° of 1 of article 256 bis of the general tax code, of recording media usable for the reproduction for private use of works fixed on phonograms or videograms during the putting into circulation in France of these supports. The amount of remuneration depends on the type of medium and the duration of recording that it allows “; that by virtue of Article L. 311-5,” The types of medium, the rates of remuneration and the terms of payment of the latter are determined by a commission chaired by a representative of the State and composed, moreover, for half of persons appointed by the organizations representing the beneficiaries of the right to remuneration, for a quarter,

On the external legality of the decision;

Considering, first of all, that under the terms of article R. 311-7 of the intellectual property code: “The secretariat of the commission is provided by the services of the minister responsible for culture”; that the presence at the meetings of the commission of two agents of the Ministry of Culture responsible for providing the secretariat of the commission, in application of these provisions, did not constitute a procedural irregularity;

Considering, secondly, that it emerges from the documents in the file that the composition of the committee provided for in Article L. 311-5 of the Intellectual Property Code was modified by an order of the Minister of Culture and communication of 5 December 2000 by providing for the presence of a representative of the information technology industry union (SFIB) among the representatives of manufacturers and importers of media; that no decision was taken by the committee before the meeting of 14 December 2000 in which the representative of the SFIB participated as a member of the committee; that, moreover, this representative had sufficient information to rule in full knowledge of the facts, since he participated in the meetings of 20 November and 7 December 2000 as a observer ; that, in these conditions, the applicants are unfounded to maintain that the late appointment of a representative of the SFIB would have tainted the regularity of the procedure which led to the decision of 4 January 2001;

Considering, in the third place, that the decision does not subject the recording media integrated into mobile telephones to remuneration for private copying; that, consequently, the applicants are not founded to maintain, in any event, that the commission should have included representatives of the operators of telecommunications among the representatives of the manufacturers and importers;

Considering, fourthly, that the exception which allows copies strictly reserved for the private use of the copyist provided for in Article L. 122-5 of the Intellectual Property Code does not concern copies of software other than the backup copy drawn up under the conditions provided for in Article L. 122-6-1; that, consequently, the remuneration, provided for in Article L. 311-1 of the same code, cannot apply to the reproduction of leisure software; that, consequently, the authors of leisure software cannot be regarded as representatives of the beneficiaries of the right to remuneration mentioned in article L. 3l1-5 of the code of intellectual property; that the SYNDICATE OF LEISURE SOFTWARE EDITORS and others are not, therefore,

Considering, in the fifth place, that the applicants maintain that the decision is vitiated by illegality, since Article L. 311-5 of the Intellectual Property Code has the effect of delegating to the organizations representing the beneficiaries of the right to remuneration the power to fix the media subject to remuneration for private copying, the rates of remuneration and the terms of payment thereof and to place them in a situation of abuse of a dominant position. in breach of Articles 3 g), 5, 81 and 82 of the Treaty establishing the European Community; that article L. 311-5 of the Intellectual Property Code provides for equal representation within the committee between the beneficiaries of the right to remuneration and the direct and indirect persons liable for it and its chairmanship by a representative of the State having a casting vote in cases of division of votes; that such a composition is not, by itself, contrary to what the applicants maintain, such as to confer on the representatives of the beneficiaries of the right to remuneration the power to fix the scope and terms of the remuneration for private copying and abuse a dominant position; whereas the legislative provisions which determine this composition are therefore not incompatible with the stipulations of the Treaty establishing the European Community; State having a casting vote in the event of a tie; that such a composition is not, in itself, contrary to what the applicants maintain, such as to confer on the representatives of the beneficiaries of the right to remuneration the power to fix the scope and terms of the remuneration for private copying and abuse a dominant position; whereas the legislative provisions which determine this composition are therefore not incompatible with the stipulations of the Treaty establishing the European Community; State having a casting vote in the event of a tie; that such a composition is not, in itself, contrary to what the applicants maintain, such as to confer on the representatives of the beneficiaries of the right to remuneration the power to fix the scope and terms of the remuneration for private copying and abuse a dominant position; whereas the legislative provisions which determine this composition are therefore not incompatible with the stipulations of the Treaty establishing the European Community; such as to confer on the representatives of the beneficiaries of the right to remuneration the power to set the scope and terms of remuneration for private copying and to exploit in an abusive manner a dominant position; whereas the legislative provisions which determine this composition are therefore not incompatible with the stipulations of the Treaty establishing the European Community; such as to confer on the representatives of the beneficiaries of the right to remuneration the power to set the scope and terms of remuneration for private copying and to exploit in an abusive manner a dominant position; whereas the legislative provisions which determine this composition are therefore not incompatible with the stipulations of the Treaty establishing the European Community;

On the internal legality of the decision:

Considering that under Article 28 of the Treaty establishing the European Community: “quantitative restrictions on imports and all measures having equivalent effect are prohibited between Member States”; that under article 30 of this treaty: “The provisions of articles 28 and 29 do not preclude prohibitions or restrictions on import, export or transit, justified by reasons (…) of protection of industrial and commercial property. However, such prohibitions or restrictions must not constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States “;

Considering that the SYNDICATE DES INDUSTRIES DE MATERIELS AUDIOVISUELS ELECTRONIQUES and others maintain that the rates of remuneration for private copying retained for digital media and the limits of the exemption from remuneration for private copying provided for for professional uses by article L. 311-8 of the Intellectual Property Code constitute a measure having equivalent effect to a quantitative restriction on imports, in disregard of the provisions of Article 28 of the Treaty establishing the European Community; that the remuneration for private copying, provided for in Article L. 311-1 of the Intellectual Property Code, is a method of exploiting the right of author and does not constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States; whereas it thus benefits from the exception provided for in Article 30 of the Treaty establishing the European Community;

Considering that digital recording media allow the reproduction for private use of works fixed on phonograms or videograms and are therefore subject to remuneration for private copying, in application of article L. 311-4 of intellectual property code; that, consequently, the argument of the SYNDICATE DE L’INDUSTRIE DES TECHNOLOGIES DE L’INFORMATION based on the fact that digital recording media could not be subject to remuneration for private copying, technological developments making it impossible to accurately measure the phenomenon of private copying on these media, and that copyright should be protected by technical solutions preventing copying has no impact on the legality of the contested decision;

Considering that, given the objective pursued by the remuneration for private copying, the recording period, within the meaning of the provisions of Article L. 311-4 of the Intellectual Property Code, must be understood as the duration of works, fixed on a phonogram or videogram that a recording medium can, at most, reproduce; that taking into account the technological specificities of digital recording media which make it possible to record both data allowing private audio and video copying and other data and recording processes which make it possible to reduce, by techniques known as compression, the number of digital data necessary for the restitution of works and thus to increase the recording capacity of a medium,

Considering that, in order to ensure correct information for taxpayers, the decision could legally set in its annex the rates of remuneration according to the nominal recording capacity for the media making it possible to record both digital data allowing private audio copying and video and other types of data and provide, in its article 5, that the remuneration for recording media similar to these media mentioned in the appendix while having a different nominal recording capacity is fixed according to the report of their respective nominal recording capacities; that by providing for such a system of calculation by reference between the two categories of media that it distinguishes, the commission does not

Considering that under Article L. 311-8 of the Intellectual Property Code: “Remuneration for private copying gives rise to reimbursement when the recording medium is acquired for their own use or production by: 1 ° the audiovisual communication companies; 2 ° Producers of phonograms or videograms and persons who, on behalf of producers of phonograms or videograms, reproduce them; 3 ° Legal persons or organizations, the list of which is decreed by the Minister responsible for culture, who use the recording media for the purpose of helping the visually or hearing impaired “;

Considering that article 7 of the contested decision provides that the payment of remuneration will not be made, once the recording media have been delivered to the persons mentioned in a) and b) of article 5 of the decision of June 30, 1986; that the latter provisions apply to audiovisual communication companies and producers of phonograms or videograms or to persons who reproduce them on their behalf, once they have concluded an agreement with collecting and distributing companies Rights ; that these agreements cannot legally have any other purpose than to inform the collecting and distributing societies of the amount of remuneration which will not be paid to them, the commission, by limiting itself to substituting,

Considering that the committee could legally, in application of article L. 311-4 of the intellectual property code which provides that the amount of remuneration depends on the type of medium, provide for a different hourly rate of remuneration for digital media and analog media which have different qualities; that, in the same way, the commission could legally distinguish the supports allowing exclusively the recording of digital data ensuring the restitution of works fixed on phonograms and on videograms and the supports allowing the recording of other types of digital data;

Whereas if the applicants maintain that the ratio between the hourly rate of remuneration used for private video copying and the hourly rate of remuneration used for private audio copying is higher for digital media than for analog media, it does not emerge documents in the file that the commission, by fixing these rates of remuneration, vitiated its decision with a manifest error of assessment; nor does it appear from the documents in the file that the decision is vitiated by a manifest error of assessment in providing for a relationship between the rates of remuneration provided for DVD-Ram, DVDR and RW Data and for CDRs and RW Data different from the rate between the nominal recording capacities;

Considering that although the applicants maintain that the committee committed a manifest error of assessment by not distinguishing between digital media that can be engraved once and rewritable media, they do not provide any evidence enabling the merits of this plea to be assessed. ;

Considering that if the UNION OF LEISURE SOFTWARE EDITORS and others maintain that the commission should take into account the nature of the work copied without limiting itself to the sole duration of recording, this criterion is not provided for by the article L. 311-4 of the intellectual property code;

Whereas it follows from the foregoing that the applicants are not justified in requesting the annulment of the contested decision;

On the conclusions tending to the application of the provisions of article L. 761-1 of the code of administrative justice:

Considering that the provisions of article L. 761-1 of the code of administrative justice prevent the State, which is not in this case the losing party, from being ordered to pay to the UNION OF LEISURE EDITORS and others the sum claimed by the latter for the costs incurred by them and not included in the costs; that in application of the same provisions, it is necessary to condemn jointly and severally the SYNDICATE OF INDUSTRIES OF AUDIOVISUAL ELECTRONIC MATERIALS, the NATIONAL SYNDICATE OF RECORDING MEDIA, the UNION OF INTERNATIONAL TRADE COMPANIES OF CONSUMER AUDIO VIDEO AND COMPUTER EQUIPMENT, the UNION OF THE INFORMATION TECHNOLOGIES INDUSTRY, THE UNION OF LEISURE SOFTWARE PUBLISHERS, THE COMPANY CRYO SA, THE COMPANY INFOGRAMES INTERTAINNIENT,

DECIDES:

Article 1: The requests of the SYNDICATE OF INDUSTRIES OF AUDIOVISUAL ELECTRONIC EQUIPMENT and others, of the SYNDICATE OF SYNDICATE OF LEISURE SOFTWARE EDITORS and others are rejected.

Article 2: The SYNDICATE OF INDUSTRIES OF AUDIOVISUAL ELECTRONIC EQUIPMENT, the NATIONAL SYNDICATE OF RECORDING MEDIA, the SYNDICATE OF INTERNATIONAL TRADE COMPANIES OF CONSUMER AUDIO VIDEO & COMPUTER EQUIPMENT, the SYNDICATE OF THE INFORMATION TECHNOLOGIES INDUSTRY, the SYNDICATE OF LEISURE SOFTWARE PUBLISHERS, the SOCIETE CRYO SA, the SOCIETE INFOGRAMES INTERTAINMENT, the SOCIETE UBI SOFT SA are ordered to pay jointly the sum of 4,000 euros to the State, the sum of 1,500 euros to the company Sorecop and the sum of 1,500 euros to the company Copie France in application of article L. 761-1 of the code of administrative justice.

Article 3: This decision shall be notified to the SYNDICATE OF INDUSTRIES OF AUDIOVISUAL ELECTRONIC EQUIPMENT, to the NATIONAL SYNDICATE OF RECORDING MEDIA, to the SYNDICATE OF INTERNATIONAL TRADE COMPANIES OF CONSUMER AUDIO VIDEO & COMPUTER EQUIPMENT, to the SYNDICATE OF THE TECHNOLOGY INDUSTRY DE L’INFORMATION, to the UNION OF LEISURE SOFTWARE PUBLISHERS, to the SOCIETE CRYO SA, to the SOCIETE INFOGRAMES INTERTAINMENT, to the SOCIETE UBI SOFT SA and to the Minister of Culture and Communication.