Copyright organizations target PC maker for royalties

Two German copyright organizations have filed suit to get royalty payments of 30 euros (US$27) per computer sold from PC maker Fujitsu Siemens Computer BV.

VG WORT, which represents authors and publishers and VG Bild-Kunst, which represents visual artists, photographers, and filmmakers, filed the lawsuit in Arbitration Court at the German Patent Office in Munich. The organizations see the PC as a copying device.

The lawsuit is based on a 1965 law, originally aimed at tape recorders and photocopiers, which levies intellectual property fees on the sale of duplicating devices. The organizations contend that levies should be paid on PCs, with the proceeds to compensate creators of intellectual property, which can theoretically be duplicated without permission.

"A computer allows you to store material in its RAM and on a hard drive, which is reproduction," said Frank Thoms, a lawyer for VG WORT.

VG WORT and VG Bild-Kunst already receive payment for each scanner, facsimile machine and copier sold in Germany, Thoms said.

"We are now going after the PC and the printer," he said.

Fujitsu Siemens, a 50-50 joint venture of Germany's Siemens AG and Fujitsu Ltd. of Japan, is Europe's second largest PC vendor after Compaq Computer Corp., according to market researcher International Data Corp. (IDC), which is owned by International Data Group Inc., the parent company of the IDG News Service.

The case was filed last week. If successful, the organizations will ask other PC makers to cough up royalties.

"We hope for successful mediation by the (German) Justice Department. If we can settle, we won't need to fight in court," said Thoms, adding that he expects mediation to start by the end of this month, or early May.

Fujitsu Siemens spokeswoman Barbara Schädler said the claim is unfounded and that the company will use "all legal means to fight for its rights." She urged the German government to solve the copyright and IT issue on a European level.

"This could become a competitive disadvantage for German PC makers and sellers, as Germans might buy their PC abroad," Schädler said.

VG WORT and VG Bild-Kunst have been eying PC makers since last April. In December of last year, a spokesman announced that the organizations were prepared to take the case to court. In November 2000, Hewlett-Packard GmbH (HP) settled with the German audiovisual rights organization Zentralstelle für private Überspielungsrechte (ZPÜ). HP agreed to pay 3.60 marks per CD burner, retroactively to February 1998. New drives sold would be subject to a fee of 12 marks under that deal. In March, however, HP retracted that agreement as negotiations between hardware manufacturers and authors' rights guilds collapsed.

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