LFMI comments on the copyright levy

Pursuing activities in one its strategic areas – the tax policy, LFMI has analysed the currently debated new bill of the Law on Copyright and Neighbouring Rights and submitted comments on the proposed new copyright levy, March 2006. It is a tax collected from taxing various medium which can be used for reproducing copyright products and audiovisual equipment with a reproduction function (audio and visual players, film cameras, telephones, copying machines, faxes, etc.). Tax revenues are then distributed among the authors who are harmed through copying of their works.

LFMI concluded that the proposed mechanism of copyright levy will not protect the authors’ rights from violation and it will not even deter from violating these rights, which is the specific requirement for this tax set in EU laws. According to LFMI, such method of taxation would serve as legalization of piracy when it becomes legal to reproduce works because the right to do so has already been paid (by taxing equipment), and, vice versa, all privately imposed measures against piracy would become legally questionable.

The mechanism of copyright levy proposed in the draft law is disproportionate as it is impossible to calculate precisely who suffers what precise loss, while the harm done is only hypothetical. In addition to that, the proposed tax imposed on products brought into the territory of Lithuania is tantamount to import duties, the measure prohibited in the common market of the EU.

LFMI pointed out that the Directive 2004/48/EB does not require adopting such type of taxation which is put forth in the mentioned draft law. According to EU law, member states themselves choose the way of taxation in case it is in general needed.

LFMI thinks that the alternative to a copyright levy could be the right retained for authors to judge themselves whether to permit or prohibit reproduction of their works. No restrictions should be imposed when authors permit copying of their works, while the law should seriously take into account when authors prohibit reproduction. To protect works from copying, authors should be allowed to apply technical measures intended for their protection.

As it is likely that consumers would disregard the authors’ prohibition and circumvent the technical means employed, the law should envisage that a single copy of an author’s work, which is prohibited to be reproduced, made for non-commercial purposes is not harmful and should not be penalized.