Report from the Commission to the Council, the European Parliament and the Economic and Social Committee on the public lending right in the European Union
Date: 2002-09-12
Institutions: European Commission
Subjects: EU law, copyright, intellectual property, report, single market

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 12.9.2002
COM(2002) 502 final

REPORT FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN
PARLIAMENT AND THE ECONOMIC AND SOCIAL COMMITTEE

ON THE PUBLIC LENDING RIGHT IN THE EUROPEAN UNION

TABLE OF CONTENTS

1.

2.

3.

3.1.

3.2.

3.3.

3.4.

4.

4.1.

4.2.

5.

5.1.

5.2.

Introduction: Objectives of the Communication........................................................ 3

Legal Situation concerning the Public Lending Right before adoption of the Directive3

Provisions in Council Directive 92/100/EEC ............................................................ 4

The 1988 Green Paper on Copyright......................................................................... 4

The need for harmonising PLR ................................................................................. 4

The concept of PLR in the Directive......................................................................... 5

The resulting obligations of Member States .............................................................. 6

Situation in the Member States ................................................................................. 7

PLR as set out at national level by the Member States .............................................. 7

Functioning of the PLR ............................................................................................ 9

CONCLUSION ...................................................................................................... 11

PLR and Internal Market aspects ............................................................................ 11

Perspectives............................................................................................................ 11

2

REPORT FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN
PARLIAMENT AND THE ECONOMIC AND SOCIAL COMMITTEE

ON THE PUBLIC LENDING RIGHT IN THE EUROPEAN UNION

1.

INTRODUCTION: OBJECTIVES OF THE COMMUNICATION

On 19 November 1992, the Council of Ministers adopted Directive 92/100/EEC, on
the Rental and Lending Right and Certain Related Rights1. The Directive was to be
implemented by 1 July 1994. Article 5(4) of the Directive provides that
the
Commission should draw up a report on public lending in the Community before 1
July 1997. Since some Member States implemented the Directive only recently, this
deadline could not be met. The concept of public lending is deeply rooted in the
national cultural traditions of the Member States. There are considerable differences
among them in the way public lending operates. As a result, the provisions of the
Directive on this issue only amounted to a limited harmonisation. Consequently, a
report on the functioning of the public lending right was requested of
the
Commission and should be presented by the Commission to the European
Parliament, the Council and the Economic and Social Committee.

The fact that the obligation to present a report was expressly included in Article 5
underlines the particular interest regarding developments in the field of the public
lending right (PLR). In line with Article 5(4) of the Directive, the objective of this
report is to assess the situation of public lending in the Community and to evaluate
the implementation by Member States of the relevant provisions of this Directive,
including the degree of harmonisation achieved and to draw conclusions for the
treatment of PLR in the European Union.

2.

LEGAL SITUATION CONCERNING THE PUBLIC LENDING RIGHT BEFORE ADOPTION
OF THE DIRECTIVE

The origins of the PLR are to be found in the early twentieth century and are closely
linked to the development of public libraries. The importance of private libraries,
which were "lending" books against payment or membership fees, decreased as
public libraries, accessible without any payment, appeared. After World War II, the
number of private libraries reduced to insignificance. Due to the fact that the increase
in the number and improvement of public libraries was strongly supported by the
State, the number of lent items increased considerably. This led authors to ask for
remuneration for this increased use of their works. Legislators did not, however,
introduced progressively the PLR in form of an
react
exclusive right or a right of remuneration for authors.

to this immediately but

The PLR was first
introduced in the Scandinavian countries, (Denmark (1946)
Sweden (1955), Finland (1961)), followed by the Netherlands (1971), Germany
(1972) and the United Kingdom (1979/1982). Germany was the only country in
legislation whereas in the other
which the PLR was integrated into copyright

1

Council Directive 92/100/EEC of 19 November 1992 on rental right and lending right and on certain
rights related to copyright in the field of intellectual property, OJ No L 346 of 27 November 1992, p.61
(“ The Directive”)

3

Member States it was introduced in separate legislation. The provisions in these
countries differed in several respects (rightholders, media and types of libraries
concerned). In Belgium, the PLR was part of the distribution right. In Greece, France
and Luxembourg, authors theoretically enjoyed an exclusive PLR based on the “droit
de destination”. In Spain, an exclusive distribution right existed, however the right
was apparently not exercised in practice. In Portugal, the law could be interpreted in
various ways: no PLR or an exclusive right forming part of a broad distribution right.
In Ireland and Italy, there was neither an exclusive PLR nor a right to remuneration
for public lending.

3.

3.1.

PROVISIONS IN COUNCIL DIRECTIVE 92/100/EEC

The 1988 Green Paper on Copyright2

The 1988 Green Paper on Copyright was the first Commission document to address
the need for harmonisation in the area of copyright and neighbouring rights in a
conceptual framework. It consisted of seven chapters describing and analysing the
areas in which the Commission considered a need for action. Chapter 4 was devoted
to the distribution right, exhaustion and the rental right, whereas Chapter 2 dealt with
piracy. It is in these two chapters that the Directive has its origin. The Green Paper
did not, however, address a possible need for action in the area of non-commercial
lending.

3.2.

The need for harmonising PLR

In the context of the follow-up to the 1988 Green Paper, the Commission organised
several hearings of interested circles on the issues set out in this document. At one of
those hearings, held in September 1989, and dedicated to the distribution right,
exhaustion, and rental right, an overwhelming majority argued in favour of a
harmonisation of both the rental and lending right. According to this majority, a
Directive on the harmonisation of the rental right alone would have been incomplete
if it did not also cover non-commercial lending. Indeed, from an economic point of
view, the public lending right complements the rental right. In some cases, public
lending might even replace rental. Therefore, it was felt necessary to include a PLR
in the draft Directive in order to ensure the proper functioning of the Internal Market
in this field. On the basis of the Green Paper and in the light of the hearing
mentioned above and other input received in the consultation, the Commission
adopted the proposal for a Council Directive3. It proposed harmonisation for both the
rental and public lending right. In its reasoning for the need for harmonising the
public lending right, the Commission focused, amongst others, on the legal and
economic link between the activities of rental and public lending. It was pointed out
that, if rental and lending rights were not addressed together, the steady increase in
public lending activities in the music and film sector might have a considerable
negative effect on the rental business and thereby deprive the rental right of its
meaning.

2

3

Green Paper on “Copyright and the Challenge of Technology; Copyright Issues Requiring Immediate
Action” COM (88) 172 final, 7 June 1988
Proposal for a Council Directive on rental right, lending right and on certain rights related to copyright
OJ No C 53 of 28 February 1991, p35

4

Both the Council and the European Parliament concurred with this view and
supported the principle of harmonisation of the PLR.

3.3.

The concept of PLR in the Directive

The PLR is set out in the Directive as an exclusive right to prohibit or authorise
public lending with or without payment.

The Directive states in its Article 1 (1) that Member States must provide “a right to
authorise or prohibit the rental and lending of originals and copies of copyright
works, and other subject matter as set out in Article 2 (1)". According to Article 2,
the lending right is granted to authors, performing artists, phonogram producers and
film producers. The Directive does not cover rental and lending rights in relation to
buildings and to works of applied art (Article 2(3)).

Article 1(3) defines lending as “making available for use, for a limited period of time
and not for direct or indirect economic or commercial advantage, when it is made
through establishments that are accessible to the public”. Such establishments are in
the first place public libraries. Depending in particular on the definition of the term
law, university libraries and those of educational
“public” under national
establishments may also be covered. Even if this is the case, however, these two
latter categories of libraries will represent, at least in Member States having an
established infrastructure of public libraries, a rather small proportion of all the
lending establishments accessible to the public, in so far as they are only open to a
rather limited and specific part of the general public.

However, while the Directive sets out the obligation to introduce or maintain an
exclusive PLR, it also allows for certain derogations and limitations from this right
as outlined in Article 5. Article 5 reflects the compromise found at the time between
complying with the Internal Market needs on the one hand and taking account of the
different traditions of Member States in this area on the other.

Scope of Article 5

Article 5 provides for a non-obligatory derogation from the exclusive lending right in
respect of public lending. Under certain conditions, it allows Member States to
replace the exclusive right by a remuneration right, or even not to provide for any
remuneration at all. The Article moreover leaves Member States much discretion in
the way they exercise the PLR.

Article 5(1)

According to Article 5(1), Member States may derogate from the exclusive lending
right, as set out in Article 1(1) and (3), provided that at the very least, authors obtain
a remuneration The second sentence of Article 5(1) deals with the amount of the
in accordance with their
remuneration and enables the Member States to fix it
respective “cultural promotion objectives”. This sentence was inserted following a
proposal by a Member State, which intended to create a new library system as a
means of cultural promotion. As it is explicitly provided here that Member States

5

“are free to determine this remuneration”4, the operational impact of this part of
Article 5(1) could be considered limited.

Article 5(2)

While Article 5(2) confirms that Member States may exclude phonograms, films and
computer programs from the application of the exclusive lending right, it reiterates
the notion already contained in Article 5(1), and indicates that, “when Member States
do not apply the exclusive lending right provided in Article 1 as regards
phonograms, films and computer programs, they shall introduce, at least for authors,
a remuneration”. Given that Article 5(2) is a derogation, the Commission is of the
view that this provision has to be interpreted strictly: the exclusive lending right has
to be taken as the rule, and wherever a Member State does not provide for an
exclusive lending right, at least authors must be granted a remuneration right. Article
5(2) confirms that this principle, regarding the remuneration for authors, is of equal
importance with regard to the category of works and other subject matter mentioned
in this provision.

Article 5(3)

Article 5(3) allows a Member State to exempt “certain categories of establishments”
from the payment of the remuneration. Such categories could include traditional
public libraries, but also libraries of universities and educational establishments.
However, the latter two categories will only be of marginal importance as compared
with traditional public libraries, which are open to the general public, at least in
Member States where public libraries are well established. Therefore, if such a
Member State were to exempt under Article 5(3) all public libraries from the
payment of the remuneration referred to in Articles 5(1) and 5(2), it would exempt
the majority of lending establishments from the application of the public lending
right. As a result, the PLR as defined in Article 1(3) would be deprived of adequate
effect. This situation would be contrary to the intention of the Community legislator
in providing for a PLR.

It should also be recalled that when introducing or maintaining a remuneration
scheme for public lending, Member States have to comply with Article 12 (former 6)
of the EC Treaty and not discriminate between Community rightholders on the basis
of their nationality. This is confirmed by Recital 18 of the Directive.

3.4.

The resulting obligations of Member States

To sum up, Article 1 harmonises the exclusive right of public lending for authors
with respect to their works and for performers, phonogram producers and film
producers with respect to their protected subject matter. Whilst Article 5 gives
Member States much flexibility in derogating from the exclusive lending right, a
remuneration must at least be provided for authors. Member States may define the
amount of the remuneration, but it must correspond to the underlying objectives of
the Directive and of copyright protection in general. Member States may exempt
certain, but not all, establishments within the meaning of Article 5(3) from paying
the remuneration.

4

Cf. Article 5(1), second phrase

6

4.

SITUATION IN THE MEMBER STATES

The following description is based on the information available and on cooperation
with Member States, as set out in Article 5(4) of the Directive.

Under Article 15 of the Directive, Member States were required to transpose the
Directive into national law by 1 July 1994. Many of them complied with this
obligation after that date. In substance, the implementation of the PLR by the
Member States has resulted in continued existence of important differences in the
public lending right, as set out at national level.

4.1.

PLR as set out at national level by the Member States

An exclusive lending right for all kinds of works exists in some Member States.
Others have provided for a remuneration right instead. The derogation to the PLR
under Article 5(3) for the benefit of certain categories of establishments is used
Italy8, Portugal9, Spain10 and the United
widely. Greece5, France6,
Kingdom11 grant an exclusive lending right, at
to certain categories of
rightholders.

Ireland7,

least

In Greece, the Copyright Act (CA) grants an exclusive PLR to authors, performing
artists, phonogram and film producers, as well as to posthumous editors.

In France, the harmonised PLR has not been implemented specifically. It is claimed
that
the existing French law already grants authors, performers, producers of
phonograms and videograms an exclusive lending right. The Ministry for Culture
announced recently its intention to present a draft law for the implementation of the
Directive in the near future. This draft shall apparently propose the granting of a
remuneration for authors of books and publishers for the lending of protected works.

In Italy, where there was no PLR prior to the Directive, an exclusive lending right (as
part of the distribution right, but without exhaustion after the first sale) has been
introduced for authors and performers. With respect
to phonograms, films and
videograms, the exclusive right exhausts 18 months after the first distribution.

Ireland has implemented the Directive only recently, by the Copyright and Related
Rights Act 2000. The law grants an exclusive distribution right. This right includes
the public lending of copies of a work and of other protected matter.

5

6

7

8

9

10

11

The implementation was included in the entirely new Copyright Act No 2121/1993 of 4 March 1993
(Official Journal A, No 25)
Act No. 92-597 of 1 July 1992, Journal Officiel 153 du 3 juillet 1992
S.I.44 Copyright and Related Rights Act, 2000 of 1 January 2001
Act No 685 of 16 November 1994 (Gazetta Ufficiale, Serie Generale, No 293 of 16 December 1994)
amending Act No 633
of 22 April 1941 on the protection of authors’ rights and neighbouring rights
Act No 332/97 of 27 November 1997 (Diario da Republica, I Serie A No 275 of 27 November 1997,
p. 6393), amending
the Copyright Act No 63 of 14 March 1985
Act No 43 of 30 December 1994 (BOE No.313 of 31 December 1994), which has later been
incorporated in the Spanish Law on Intellectual Property
Copyright and Related Rights Regulations of 26 November 1996, amending the Copyright, Designs and
Patents Act. At the same time,
the Public Lending Right Act of 1979 applies

7

The Portuguese Copyright Act contains an exclusive distribution right for authors,
performers and producers of phonograms and videograms expressly covering the
PLR. The PLR continues to apply after the distribution.

In Spain, an exclusive public lending right
producers of phonograms and film producers.

is granted to authors, performers,

Under the British PLR scheme, the United Kingdom provides for an exclusive PLR
for authors, film and phonogram producers and for performers. Authors are entitled
to a remuneration when their books are lent by public libraries. Copyright is not
infringed by the lending of copies of a work by educational establishments or by the
lending of a book by a public library if the book is within the PLR scheme.

Instead of an exclusive right, or after its exhaustion, a remuneration right for the
public lending of protected works has been granted in Austria12, Denmark13,
Finland14, Germany15, Luxembourg16, the Netherlands17 and Sweden18.

In Austria, the PLR is part of the distribution right. Authors, performers, producers of
phonograms, film producers and broadcasting organisations are granted a right to
equitable remuneration for public lending after the exhaustion of the distribution
right (exhausted after the first authorised distribution).

In Denmark,
the PLR is part of the exclusive distribution right of authors,
performers, producers of phonograms and film producers. The exclusive PLR is
exhausted after the first authorised distribution of the respective object. This does not
apply to cinematographic works and computer programs in digitised form. Authors,
translators, illustrators, and performers enjoy a remuneration right when their works
or other subject matter are lent by public libraries.

In Finland, a PLR scheme exists which is based on the 1961 Act on grants and
subsidies for authors and translators. The PLR is covered by the exclusive
for public lending of
distribution right and is subject
cinematographic works
of
cinematographic works and computer programs are granted an exclusive PLR once
distribution has taken place. Authors of other works have in principle a right to
remuneration for public lending.

to exhaustion except

programs. Thus,

computer

authors

only

or

In Germany, the exclusive PLR is also exhausted after the first act of authorised
distribution and authors enjoy a remuneration right for specific acts of lending. The
lending institutions concerned include public libraries, public collections of audio-
visual or audio recordings or other original works or copies.

12

13

14

15

16

17

18

Act of 28 June 1993 (BGB1 No 1993/93), amending the Copyright Act (BGB1. No 1936/111)
Act No 706 of 29 September 1998; PLR Act No 21 of 11 January 2000 and Executive Order on PLR
Remuneration of 29 March 2000
Act No 446/1995 amending the Copyright Act (No 404 of 8 July 1961), and by Act of 31 October 1997
(No 967/1997)
Act of 23 June 1995 (BGB1. I S. 842) amending the Copyright Act of 9 September 1965
(BGB1.I S. 1273)
Act of 18 April 2001 (Mémorial A No 50 of 30 April 2001, page 1042)
Act of 21 December 1995 (Stb. 1995, 653), amending the Act on authors’ rights of 1912 and amending
the Act on neighbouring rights.
Act 1997:309 of 13 June 1997

8

The legislation in Luxembourg had granted an exclusive PLR for authors, performers
and phonogram and film producers, subject to exhaustion after the first act of
authorised distribution to the public. New legislation adopted in 2001 grants a
remuneration right only for authors and performers. A decree will have to be
introduced to complete the transposition of the Directive. This decree will set out
both the actual amount of remuneration and a list of establishments exempted from
any PLR.

In Netherlands, the exclusive PLR is exhausted after the first authorised distribution
of the respective object; the Dutch law provides for a remuneration right for authors,
performers, and producers of phonograms and films.

In Sweden, a new PLR scheme started in 1999. A remuneration is granted for public
lending of books, phonograms and printed music in public and school libraries. Half
of the amount paid for the lending of phonograms is paid to authors and half to
performers.

In Belgium19, a combined solution has been chosen: the PLR of the Copyright Act
which existed previously continues to apply for authors and performing artists, as
well as for producers of phonograms and of films. These rightholders enjoy a
remuneration right for public lending of the copies of their works. Belgian Law
allows the public lending of audiovisual works and sound recordings only 6 months
following the first publication of the objects concerned against remuneration. Certain
categories of establishments are exempted from paying any remuneration for their
lending activities. A Royal Decree, not yet enacted, is supposed to lay down the
details of the remuneration and any exemptions thereto.

4.2.

Functioning of the PLR

Payment

According to the information at the disposal of the Commission, the PLR does not
seem to be applied properly.
in certain Member States no
It appears that
remuneration at all is paid to the rightholders concerned. This is reported to be the
situation in Belgium, France, Greece and Luxembourg but it may not be limited to
these countries. In other countries, certain elements are present which give rise to
concerns as to whether direct or indirect discrimination may exist.: the remuneration
is granted only for national authors or authors living in a specific territory (Sweden).
Certain other Member States grant a remuneration right only for books published in
their national language (Denmark, Finland).

19

“Loi relative au droit d’auteur et aux droits voisins” of 30 June 1994, No SC 9586, Moniteur du 27
juillet 1994 p. 19297; concerning
computer programs, the implementation is contained in the law implementing the software Directive
(Moniteur belge of 27 July 1994, No 19315)

9

Beneficiaries of the PLR vary from one Member State to another. Certain Member
States grant an exclusive right at least for authors. In countries where a remuneration
right operates in practice, it is mostly the State, as owner of the libraries, that is
responsible for payment (Denmark, Sweden, and United Kingdom). In Austria and
Germany, the Federal government and the Länder have taken on the public libraries
obligation to pay. In the Netherlands, on the other hand, libraries are obliged to pay
the remuneration themselves. In those countries that provide for an exclusive lending
right,
is also the libraries - as users of copyright – who have to pay the
remuneration required on the basis of contracts.

it

Lending institutions exempted from the PLR

Most countries make use of the possibility to exempt certain lending institutions
from being subject to the PLR.

Ireland, Italy and the Netherlands dispose of an exemption for certain libraries. The
exclusive PLR is not infringed by the lending of items without any remuneration by
educational establishments and establishments to which members of the public have
access in Ireland. Libraries and record libraries belonging to the State are exempted
in Italy. The Netherlands exempts libraries from any remuneration for lending to the
visually impaired and exempts educational and research institutes as such from the
remuneration. Italy exempts from any PLR the libraries belonging to the State and
which lend books, CDs and records.

The United Kingdom also exempts certain public libraries and educational
establishments from the PLR.

A broad exemption exists in Spain and Portugal for museums, archives, libraries,
newspaper libraries, record and film libraries, which belong to public interest bodies
of cultural, scientific or educational character without commercial purpose and for
teaching establishments incorporated in the Spanish educational system; this list
covers, in fact, most lending institutions open to the public. Finland exempts all
public libraries and those who serve research or teaching purposes.

Belgium and Luxembourg are still to enact further decrees, which are expected to
provide an exemption for certain categories of establishments.

Lending objects

The optional derogations from the lending right, under Article 5 of the Directive,
have been used to varying degrees by Member States. A number of countries, when
applying PLR, do not distinguish between the various objects of lending, such as
books, videograms or phonograms (France, Germany, Austria), whereas some
countries have provided an exclusive lending right for specific objects (with or
without exempting libraries from payment). In some countries,
the lending of
cinematographic items is covered by an exclusive lending right (notably in Denmark,
Finland and Sweden). In Italy, the exclusive lending right is granted for the lending
of phonograms and videograms only for a period of 18 months after the first
distribution. In Sweden and Denmark, an exclusive lending right is granted for the
lending of CDRoms and films but only a remuneration right for books and in Sweden
for tapes .

10

5.

CONCLUSION

5.1.

PLR and Internal Market aspects

Since the public lending right was one of the most debated issues during the
negotiations on Directive 92/100/EEC, the degree of harmonisation agreed upon, at
that time, represented an important step forward, but not necessarily the ultimate
solution.

it

is evident

The ways in which most Member States have transposed the Directive represent an
improvement compared to the protection afforded to public lending activities prior to
the Directive. However,
that only partial harmonisation has been
achieved and the legislative measures applied by Member States still vary to a large
extent. Not all Member States have changed their law and some have only made
minor changes as these Member States claim that their existing rules comply with the
obligations of the Directive. It is therefore far from obvious that all Member States
have complied with their minimum obligations under Article 5, notably to provide at
least authors with remuneration for the lending of their works by certain public
establishments.

As regards the relatively low degree of harmonisation of the PLR by the Directive,
the Commission has no clear indications, at least as for now, that this has had a
significantly negative impact either on the economic interests of rightholders or the
proper functioning of the Internal Market.

The Commission has, however, recently received some elements of information
about possible problems of implementation at national
level and about certain
obstacles to the functioning of the Internal Market which may stem from the
relatively low degree of harmonisation. It is examining these concerns closely, also
taking due account of the recent amendments to the respective laws prepared at
national level, at least in some Member States. The fairly limited number of concerns
raised at
the present stage should not be taken as a sign of complacence. In
compliance with its role as guardian of the Treaties, the Commission is committed to
ensure that 7 years after the transposition deadline, the PLR should be fully effective
in all Member States.

5.2.

Perspectives

Both the media market and the role of libraries are undergoing profound changes.
Public libraries are constantly improving their services and are exploiting new
territory in the public lending of all media products with the help of the new digital
environment. These developments are closely observed by rightholders, publishers,
the cultural community and policy makers.

The use of new technologies in public libraries is still in an experimental phase. All
developments in the exploitation of new technologies in libraries must be further
monitored particularly with regard to any potential impact they may have on the
functioning of the Internal Market and in light of their impact on rental and lending
activities.

11

At this point, it is difficult to assess if and if so to what extent, traditional public
lending by libraries will be replaced by new forms of on-line distribution, which
would not be covered by the present scope of this Directive. In this respect, the
Commission will ensure the proper functioning of PLR rules enshrined in the
Directive. In the same spirit, it will continue to examine the functioning of public
lending and observe the new technological developments in lending institutions, with
a view to assessing the possible need for further actions in this field

12