The European Court of Justice (ECJ) ruled on Thursday that the Netherlands' "piracy levy" tax added to the purchase price of copying materials such as blank CDs or DVDs does not properly account for the loss to copyright holders resulting from unlawful copies of protected work. The court stated that a law that makes no distinction between copies of protected material made by users who lawfully own the content and copies made for illegal purposes is detrimental to proper functioning of the market. The court said that if nations were free to make laws permitting copies to be made from counterfeited or pirated sources, copyright holders would be unfairly prejudiced and the lawful sale of intellectual property would be undermined.

The goal of promoting the dissemination of cultural material cannot be achieved by abandoning protections for copyright holders, the court said in a press release about the decision. The court also pointed out that the law as it currently stands unfairly causes those making lawful private copies to shoulder some of the cost of others who make their copies illegally. This decision by the ECJ was a preliminary ruling and merely answers a question of European law. Dutch courts will resolve the merits of the underlying case.

The Netherlands has been at the center of several recent international intellectual property disputes. In January the Netherlands was forced to lift its ban on the torrenting site The Pirate Bay after the ban proved nearly impossible to enforce. In November the Dutch Data Protection Authority (DPA) stated that Google was in violation of the country's data protection act. In April 2013 the Netherlands, along with five other European nations, commenced legal action against Google for alleged privacy violations.

(Published by Jurist – April 11, 2014)