Page 160 - A Study on the Role of UGC Platforms in Copyright Law：An Intermediary-oriented Approach

A Study on the Role of UGC Platforms in Copyright Law: Chapter 5 Formulating a Non-commercial UGC Creation Levy Scheme
An Intermediary-oriented Approach

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drawback. Glynn Lunney suggested that levy schemes could cross-subsidise copyright
owners of works with less popular appeal because copyright owners of popular works suffer
more loss under the non-proprietary levy scheme. In this way, levy schemes could narrow
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the gap between the wealthiest and least wealthy copyright owners. Copyright owners on
average would be better off under the levy scheme because the transaction costs attached to
the proprietary regime have blocked many possible uses and the revenue from these uses.
5.5 Application of the Non-commercial UGC Creation Levy

According to the current Copyright Royalty and Distribution Reform Act passed by the
US in 2004, the determination and adjustments of the terms and rates of royalty payments are
determined by three copyright royalty judges appointed by the Librarian of Congress. They
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must hold collective expertise in arbitration, copyright law and economics. This thesis
argues that other countries can also set up special authorities similar to the copyright royalty
judges in the US to take charge of copyright issues over royalties. This section advances
some recommendations on how to determine leviable devices and services and how to
calculate and distribute the levies. The following application procedure applies to both the
non-commercial UGC creation levy discussed in this chapter and the non-commercial UGC
access levy in the previous chapter.

5.5.1 Levies to be imposed on services and devices

The current levy schemes under the EU copyright system have applied to a variety of
devices and media, such as copiers, fax machines, scanners, printers, copy papers, personal
computers, CD burners, DVD burners, blue ray devices, mobile phones, E-readers and
MP4s, which are primarily designed for and significantly benefit from the reproduction of
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copyrighted works. Similarly, the proposed UGC levies should be imposed on all services
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and devices whose value has been substantially enhanced by facilitating UGC creation.
To be consistent with the CJEU’s open attitude towards leviable devices and services,
the criterion for ‘substantial enhancement’ should not be high. For example, in the VG
WORT judgement of 2013, the CJEU confirmed the legitimacy of imposing levies on all
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devices in the chain. In the 2015 Copydan Bandkopi v. Nokia decision, the court held that
multifunctional media could be subject to the levy scheme even though the device was not

202 Lunney (n 73) 912.
203 Ibid 869, 915. See supra note 183 and accompanying text.
204 Copyright Royalty and Distribution Reform Act of 2004, sec 3.
205 IFRRO and WIPO, 'International Survey of Text and Image Copyright Levies' (2016) 31-32, table 5-8. <https://www.wipo.
int/publications/en/details.jsp?id=4192&plang=EN> accessed 15 July 2019.
206 Netanel (n 73) 4.
207 C 457/11 to C-460/11, 27/6/2013, para 12.

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