IP/02/1303

Brussels, 16 September 2002

Public lending right applied inconsistently across the EU, says Commission report

The Public Lending Right (PLR) is being applied differently in different EU Member States. In some cases, it is not being applied properly as required by the 1992 Council Directive on the Rental and Lending Right and Certain Related Rights. Those are the conclusions of a European Commission report published today. The report assesses the implementation of the PLR provisions under the Directive and reiterates the Commission's commitment to ensuring that the PLR is effective in all Member States and to monitoring the way increasing use of new technologies is affecting the application of the PLR. The Directive requires that the authors of books, films and any other copyright works and (at Member States' discretion) other rightholders, either have the right to authorise or refuse lending of their works by institutions such as public libraries, or that they be remunerated for such public lending.

Internal Market Commissioner Frits Bolkestein said: "The Public Lending Right is at a crossroads. Following harmonisation in 1992, we now need to take stock and look to the future, where new technologies will play an ever increasing role. The challenge is to respect cultural traditions and maintain good public access to cultural products while making sure that those who create them get equitable remuneration which allows them to keep on working and giving us pleasure."

The 1992 Directive

Articles 1 and 2 of the 1992 Council Directive on the Rental and Lending Right and Certain Related Rights give authors, performing artists and producers of films and phonograms (records and CDs) an exclusive right to authorise or to prohibit the rental or lending of their works and productions (the exclusive rental and exclusive lending rights).

Article 5 of the Directive covers the Public Lending Right, in other words the intellectual property right attached to the lending of an object to the public. It allows Member States to limit the exclusive lending right by deciding that rightholders should not have the right to prohibit "not-for profit" lending of their works by public libraries, educational libraries and other establishments open to the public. But in that case, authors at least must receive payment for such lending: "the remuneration right".

In order to balance Internal Market needs with allowing each Member State to promote its own cultural objectives, the Directive allows plenty of flexibility. Member States have considerable discretion for determining the level of the remuneration to be paid to rightholders for public lending. The Directive also allows Member States to exempt completely some types of lending establishments from both the exclusive lending right and the remuneration right.

Harmonisation of the PLR is important for the Internal Market because the lending activities of public institutions can have a significant effect on the commercial rental market, particularly for music and films. For example, if a video can be borrowed from a public library free of charge, there may be less demand to rent the same item from a nearby video rental shop. That in turn can reduce income for rightholders who are remunerated for the rental of their work - unless they also receive payment for that same work being lent by public libraries.

According to the Directive, the report issued today was to have been published in 1997. Late implementation of the Directive by Member States meant this deadline could not be met.

Functioning of the PLR

The report concludes that, although the current situation represents an improvement compared to that existing before the Directive, "according to the information at the disposal of the Commission, the PLR does not appear to be applied properly."

There have been serious delays in implementing the Directive in several Member States, which has made it impossible until now for the Commission to produce a report on the effectiveness of the Directive.

The Commission has initiated an infringement procedure against Belgium, which has not yet adopted legal measures to transpose certain provisions of the Directive (see

IP/02/989

and

IP/02/191).

In addition, the report concludes that in France, Greece and Luxembourg "it appears no remuneration at all is paid to the rightholders concerned." In Denmark, Sweden and Finland, there are concerns that the PLR may be applied in a discriminatory way, granted only for national or resident authors (Sweden) or for items published in the national language (Denmark, Finland).

Several Member States, namely Spain, Ireland, Italy, the Netherlands, Portugal, Finland and the UK, have exempted certain, and in some cases many, lending establishments. While the Directive provides for exemptions, the Commission considers that if in practice most lending establishments are exempt, there is a risk that the PLR is deprived of adequate effect.

As guardian of the Treaty, the Commission will continue to monitor the situation and to assess the need for further action, including possible infringement procedures.

In determining its future policy on public lending, the Commission will take full account of the increasing use of new technologies in libraries and the possible future development of on-line lending.