Federal Court of Justice: Cloud services do not have to pay copyright levy

The Federal Court of Justice (BGH) has clarified that authors are entitled to remuneration for private copies in the cloud. However, they cannot demand a corresponding payment directly from the cloud providers. The German Copyright Act (UrhG) therefore stipulates that this levy is linked to the sale of physical devices and storage media such as CDs or DVDs. Accordingly, only the relevant manufacturers, importers or retailers must pay compensation for legitimate private copying.

An analogous application of the compensation regulations for these affected parties to providers of services in the computer clouds is out of the question according to the recently published ruling from July 17 "due to the lack of an unintended regulatory gap" (case reference: I ZB 82/24). The judges in Karlsruhe therefore do not see an unintended loophole in the Copyright Act. The legislator had apparently deliberately decided that the payment obligation did not apply to cloud services. The provisions of the EU Copyright Directive of 2001 also did not require the German clause to be extended to cloud storage.

The case concerns an application by the Zentralstelle für private Überspielungsrechte (ZPÜ), which asserts copyright information and remuneration claims on behalf of several collecting societies. It also did so against several cloud providers, including Dropbox, but did not get very far in court. Among other things, the parties concerned had to explain how much of their online storage they had demonstrably made available to private and commercial end users. The collecting societies then wanted to publish a specific tariff for the remuneration. The Arbitration Board at the German Patent and Trade Mark Office (DPMA) was supposed to carry out an empirical study on this, but rejected this request in March 2024.

Rights of economic operators to be observed

The ZPÜ now wanted the Arbitration Board to be obliged by the Bavarian Supreme Court to carry out the requested market analysis on PCs, tablets, cell phones, smartwatches and cloud servers after all. However, the Munich judges rejected ZPÜ's application for a court ruling. The BGH therefore had to deal with the appeal against this decision.

According to the BGH, uploading and downloading copyright-protected content from the cloud can be considered a single act to create a private copy. EU countries are therefore allowed to introduce a system in which a compensation payment is only levied to the authors for devices or storage media that are necessary for this process. These are smartphones or hard disks, for example. According to the ruling, the amount of the levy must be calculated in such a way that it adequately compensates for the damage suffered by the creators of the work.

The judges in Karlsruhe also refer to a ruling by the European Court of Justice in 2015: according to this ruling, the Member States may not provide for modalities for fair compensation that result in different categories of economic operators who market comparable goods covered by the private copying clause. Different groups of users of protected subjects are treated unequally without justification.

Doubts about appropriate compensation

At the same time, the BGH has not missed the point: If users replace their local storage space, such as on hard disks or USB sticks, with cloud services, the revenue from the private copying levy decreases. To assess whether this development jeopardizes the statutory compensation obligation, the entire usage behaviour of consumers would have to be comprehensively analysed. The arbitration board had proposed such an in-depth investigation, but the ZPÜ had not agreed to this.

The judges in Karlsruhe also referred to doubts expressed by academics whether the current system of device and storage media remuneration is suitable for ensuring appropriate compensation for private copying. This is in view of the increasing use of the cloud. The majority of these voices considered an adjustment of the statutory provisions to be appropriate. However, there were no indications of this from the lower court's explanations. The ZPÜ already called on politicians last year to "implement cloud remuneration in Germany".

(mma)