Can copyright management organizations allocate part of the revenue collected from copyright royalties to fund cultural, social, or educational activities that benefit individuals outside their group of rights holders? This is one of the issues addressed by the Court of Justice of the European Union (CJEU) in its October 22, 2026, judgment in Case C‑840/24, Verwertungsgesellschaft Wort (VG Wort), in which it defines the scope of the use of these resources and whose implications could extend beyond the German case to also affect Spanish collecting societies.
Collective Management of Copyright: "Behind-the-Scenes" Conflicts
Many of the rulings handed down by the Court of Justice regarding the collective management of copyright relate to “external” disputes—that is, claims brought by collecting societies against third parties; by contrast, there are fewer “internal” rulings—those that address how collecting societies use their revenues to “compensate” (or not) their members, the rights holders whose rights they administer. The ruling discussed here falls into this latter category.
The ruling stems from a dispute that arose in Germany between VG Wort (a collective management organization for authors of texts and their publishers) and TL and OS (authors of literary works affiliated with VG Wort), regarding payments that VG Wort made to a fund owned by a company wholly owned by the collective management organization itself.
This “funding” involved VG Wort deducting a portion of the revenue received from the private copying levy and the public lending royalty on scientific, technical, and specialized works, in order to subsidize the promotion of science and research by covering the printing costs associated with the publication of scientific and specialized works and other forms of promotion.
The ruling essentially holds that European Union law PROHIBITS a collecting society from funding social, cultural, or educational services that benefit individuals who are NOT copyright holders, UNLESS such funding is provided through “amounts that cannot be distributed” because the relevant rights holders could not be identified or located. The ruling also contains statements regarding what is meant by “holders” for these purposes.
Beyond the specific interests that sparked the conflict in Germany, the ruling serves as an “invitation” for Spanish collecting societies to review their bylaws and practices to verify whether they comply with the criteria established in the ruling. This is, of course, provided that there is not sufficient “consensus” among their “membership” regarding the society’s use of revenues earmarked for social or cultural projects.
Mabel Klimt, managing partner at Elzaburu
