Copyright protected content and cloud storage: the opinion of the EU Advocate General

The Advocate General of the Court of Justice of the European Union, in the opinion delivered on September 23, 2021 spoke on the correct interpretation of art. 5 (2)(b) of the so-called Infosoc Directive (2001/29/CE) and, in particular, if it is possible to reproduce or store on cloud copyright protected content

The reference for a preliminary ruling, which originated from a controversy before the Higher Regional Court of Vienna between an Austrian collecting society and a hosting service provider, concerns whether or not a compensation is due to exercise the right to reproduction by the latter for the activity of storage of copyrighted material on a commercial server through cloud computing techniques in favor of natural persons for private usage.

One should note that it is the Infosoc Directive itself that in art. 5(2)(b) provides that each Member State can adopt an exception – to the right to reproduction – “for private copy” as long as the rightholder is granted a fair compensation. Therefore, where a State does not use such exception, the reproduction of the copyright protected content without the authorization of the owner would be a violation of the right to reproduction in accordance to art. 2 of the same directive, and therefore, unlawful.

The question for preliminary ruling, object of appeal to the European Court of Justice, is if – and in what extent – the exception for private copy can be applied even to the reproduction of copyright protected content made by natural persons for private use in the storage spaces or on cloud storages made available or provided by a third party.

On this matter, the Advocate General considered that the reproduction based on cloud computing services provided by a third party must be considered to be included in the notion of “reproduction on medium” as referred in the abovementioned art.5 (2)(b) of the Directive. In particular, in the resigned opinion is written that “a separate levy or fee is not due in respect of the reproduction by a natural person for their own personal purposes based on cloud computing services provided by a third party on the condition that the levies paid for devices/media in the Member State in question also reflects the harm caused to the rightholder by such reproduction”.

In the solution offered by the CJEU, Hogan also points out that: “If a Member State has, in fact, elected to provide for a levy system in respect of devices/media, the referring court is in principle entitled to assume that this in itself constitutes ‘fair compensation’ in the sense of Article 5(2)(b) of Directive 2001/29, unless the rightholder (or their representative) can clearly demonstrate that such payment would in the circumstances of the case at hand be inadequate”.

In other words, if the European Court of Justice agrees with the AG’s opinion – and considers applicable the exception of the private copy to cloud reproduction – it will be necessary to identify the “fair compensation” due to the rightholder and, in particular, if such compensation can be included in the (possible) fee for private copy paid by the natural person at the moment of the purchase of medium apt to reproduce copyright protected content or if, on the contrary, a supplementary compensation is required.