Background
Identification of unauthorised electronic deliveries and calculation of damages for purpose of settlement
Costs of settlement and distribution
Procedure for participation in settlement

Background

In terms of a settlement agreement concluded in October 2008, Stichting Secretariaat van de Association of Scientific, Technical and Medical Publishers (Stichting STM) and Börsenverein des Deutschen Buchhandels e.V. have settled their claims against Subito Dokumente aus Bibliotheken e.V. and its member libraries, arising from unauthorised electronic reproductions and deliveries made in the course of their electronic document delivery services from Germany of scientific, technical and medical journals and articles during the period 1 January 2003 to 31 December 2007.

The claims which were settled had been brought in the German courts, namely the Landgericht München 1, Oberlandesgericht München and the Bundesgerichtshof.

With effect from 1 January 2008, Subito has changed its business model for document delivery services so as to be compliant with applicable copyright legislation, in particular in that Subito has undertaken to be properly licensed by copyright owners to continue with its services nationally in Germany and internationally. More information concerning the licensing of journals and journal articles to document delivery services can be found on the website of STM Publishing.

Identification of unauthorised electronic deliveries and calculation of damages for purpose of settlement

The Subito Settlement Agreement provides a mechanism by which owners of those journals and journal articles, which had been reproduced and delivered without authorisation, and for which title-specific information is available from Subito for the relevant period, may be compensated.

Under the Subito Settlement Agreement it was agreed that all damages payments determined under the provisions of the Subito Settlement Agreement in respect of the unauthorised electronic reproduction an delivery of German and international journals and journal articles were to be remitted, in the first instance, to VG Wort, the German collective licensing organisation mandated by the Börsenverein.

So far as journals and journal articles published outside of Germany are concerned, STM Stichting has mandated IPRO to receive the payment attributable to such journals and journal articles of damages from Subito via VG Wort and to distribute those damages to the representatives of the relative international (viz non-German) copyright holders.

IPRO accepted this mandate and, as part of carrying it out, IPRO is endeavouring to contact the publishers of all journals and journal articles outside Germany, in respect of which sufficient title specific information exists to conclude that they may have been reproduced and delivered without authorisation, so that these publishers can be informed of the settlement and be invited to participate in its compensation scheme.

The amount of the damages was settled by reference to the amounts Subito member libraries held in reserve at the time of the settlement negotiations. The amounts are thus calculated by reference of the VG Wort tariff as in force at the time of delivery.

The following factors play a role in applying the VG Wort tariff to the damages amount available for distribution:

The identifiable quantity of electronic reproductions and deliveries of any given journal or article in a given journal, as evidenced by data received from Subito under the Subito Settlement Agreement.

The year in which the electronic reproduction and/or delivery was made (2003-2007).

The VG Wort categorization of the customer which ordered the copy, which is classified as follows (based on the VG Wort tariff in force between 2003-2007):

- User Group 1
Peoples, trainees, students and universities, science and research institutions financed primarily by public funds, public entities, each including their members and their employees.
- User Group 2
Self-employed and commercial customers.
- User Group 3
Private individuals.

The rate of damages in respect of electronic reproductions and deliveries made for User Group 2 was the highest, followed by User Group 3, with User Group 1 having the lowest rate.

The participation in the settlement is calculated on the basis of this information for all publishers on the same basis. As IPRO received some remittances that were title-tied and some that were not, a decision was taken as part of the STM mandate to IPRO to treat the non-title-tied remittances in the same way as the payments for which title-specific information is available from Subito.

Costs of settlement and distribution

Certain costs and provisions are deducted from the total settlement. These are:

Legal fees for prosecuting the claims in the German courts and finalizing the settlement. It was a term of the settlement agreement that each party bears its own costs.
Administrative fees (charged by IPRO and other rights organisations involved in the case) and legal fees for implementing the settlement.
Provisions for costs which may arise from disputed claims against the settlement fund.

In addition, there will be an additional administrative charge levied against the settlement due to any given publisher to cover IPRO’s additional costs of any dealings with publishers beyond a certain date.

Procedure for participation in settlement

Since May 2009, IPRO has endeavoured to contact publishers who represent the copyright owners of affected journals in order to invite them to participate in the settlement. The procedure for participation in the settlement is as follows:

1. A publisher who is of the opinion that a journal or journals represented by it is affected, must provide IPRO with a list of its journals published up until 31 December 2007 (this document contains hyperlinks to the data sheet plus an instruction on how to complete this sheet). IPRO keeps this list confidential.
         
By “a publisher representing the copyright owners of a journal” is understood a publisher which owns the copyright in the journal or which controls the copyright by being authorised or otherwise entitled to collect royalties and damages arising from the electronic reproduction and delivery of the journal on behalf of the copyright owner, in Germany during the period 2003 - 2007.

2. IPRO compares the publisher’s list against the list it received from Subito of journals which were the subject of unauthorised electronic reproductions and deliveries. IPRO advises the publisher if any of its journals appear on Subito’s list and advises the publisher of the amount available from the settlement, after expenses and costs, in respect of those journals (in Euro), which is subject to a de minimis amount.

3. The publisher is requested to sign a declaration and release agreement, a sample of which can be downloaded here. IPRO also reserves the right to request identification information about the publisher, the authority to represent the copyright holder and the authority of the signatories to the declaration and release agreement.

4. On receipt of the properly executed declaration and release agreement and, where applicable, a satisfactory response to any identification information requested, IPRO pays the settlement amount to the publisher. All bank charges are for the account of the recipient of the payment.