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9 copyright societies suing state for €42 million, Reinsalu hopes to settle

Musician Tanel Padar is a member of the board of the Estonian Performers' Association, one of the organisations involved in the suit.
Musician Tanel Padar is a member of the board of the Estonian Performers' Association, one of the organisations involved in the suit. Source: Press materials

Nine copyright societies have turned to the Supreme Court of Estonia demanding the state pay them a total of €42 million in the so-called blank media levy for the period of 2014-2017, inclusive of interest. Minister of Justice Urmas Reinsalu (Pro Patria), however, hopes to settle out of court.

In total, the societies are suing the state for €42.1 million, €37.9 million of which is charged for loss of earnings and €4.2 million in interest.

The applicants' complaint is that the government has failed to update the list of devices that are subject to the private copying levy. The suit was brought by the Estonian Authors' Society, the Estonian Association of the Phonogram Producers, the Estonian Performers' Association, the Estonian Association of Audiovisual Authors, the Estonian Composers' Union, the Association of Estonian Professional Musicians, the Estonian Theatre Directors' Union, the Association of Estonian Scenographers and the Association of Professional Actors of Estonia.

"As an author, performer and phonogram producer, my colleagues and I feel that the government regulation, which is stuck in the era of the cassette tape, has deprived us of an option of funding the creation of music used elsewhere in Europe," said Tanel Padar, a board member of the Estonian Performers' Association.

Each EU member state that allows copying for private use is obliged to create a system that enables collecting a levy on all modern storage and recording media to which artists are entitled by law.

Nearly all states have a system where the levy for personal copying is included in the cost of the device. Based on the Estonian Copyright Act, a similar system is in place in Estonia.

Societies calling for new media to be reflected

The government regulation that is supposed to list all storage and recording media on the market does not mention new recording media, however, and only includes VHS cassettes, compact cassettes and compact discs.

Nine artists' associations sincerely hope that the current government manages to come to an agreement and implement collecting a levy on digital devices this year as it is befitting to an e-state, so as to avoid a situation in which the aforementioned societies are again compelled to turn to court in the following years to receive a fair compensation retrospectively, the associations announced.

The copyright societies are drawing on a Supreme Court decision from March which stipulates that the state is obliged to pay them €80,000 for loss of earnings for the 2010-2013 period. The dispute derives from the fact that the government has since 2006 not updated the list of storage and recording media that is subject to private copying levy.

The Ministry of Justice has previously assessed that the compensation for blank media levy to be €400,000. The amount of the compensation depends on the type of media storage subject to blank media tax. Considering the method used by the circuit court on 31 October, fair compensation is €320,000; however, if smartphones, laptops and personal computers were also subject to the levy, according to the Ministry of Justice's assessment, justified compensation would amount to over €3 million.

The nine copyright societies call upon adding to the list tablets, laptops, personal computers, hard disks, CD and DVD writers, mobile phones, audio or media players, DVDs, HD-DVD and BD recorders, external hard drives, USB flash drives, video tuners with a hard drive, set-top boxes with a recording function as well as smart TVs.

The so-called blank media levy varies from one country to another per head of population — in countries where newer storage and recording media have been subjected to levy, for instance in France, Germany and Belgium, the fee is €2-3 per person per year; the EU average during the relevant period was approximately €1.5. Estonia's fee of €0.02 per person in 2013 ranked last in the EU.

Ministry hopes to settle — for less

The Ministry of Justice hopes to settle out of court, but not for the €42 million sought.

Reinsalu told ERR that there is a need for a new levy system that takes the personal use of data media and recording devices into account. The ministry commissioned a study last year of the scope and behaviours involving the personal use of such devices, and based on the results, a concept for the new system has been developed.

Based on the results of the study, the €42.1 million demanded by the copyright societies is objectively not a realistic magnitude of money, Reinsalu said.

"The government discussed the representative organisations' possible suit, and based on the government's mandate, the Ministry of Justice also proposed settling out of court in an amount pursuant to previous court rulings," the minister said, referring to the Supreme Court's march ruling.

The Ministry of Justice believes that the starting point for the new system should be that the payment of levies for the personal use of devices is done via payments to authors' representative organisations from the state budget. According to Reinsalu, the maximum compensation in this case, accounting for all devices, should be €850,000 per year.

He added that if all recording devices and data media currently in use today are added to the list under the current system, this would mean levies on the users of all iPads, mobile phones, computers and smart TVs at a rate that Reinsalu considered unacceptable.

The minister said that he will introduce the new plan to the Cabinet in the near future and hopes that the bill can be submitted to the Riigikogu before the year is out as well. In the best-case scenario, the new system could be implemented as soon as next year already, he added.

Reinsalu plans to meet with the representative organisations next week.

Editor: Aili Vahtla

Source: BNS, ERR

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