European collection societies have welcomed a European Court of Justice ruling that upholds the principle of an anti-piracy "digital copying tax" on consumer media and equipment used for reproduction, as applied in Spain and most other European Union member countries.

The ruling follows a 2008 dispute between between Spanish authors collecting society SGAE and Barcelona-based retail company called Padawan, which sells electronic storage devices and equipment, including blank CDs and DVDs and MP3 players.

In Spain, where the copying of copyright-protected works is allowed for private use, a tax, the "digital canon," is applied to all digital media (PCs, blank CDs, MP3 players, mobile phones) that enable the reproduction of music and film works.

The "copying tax," which is met by manufacturers, importers or distributors of digital reproducing equipment, and has been blamed with pushing up the sales price of digital media in Spain, is collected by the government on the behalf of SGAE, who distribute it among its members.

Padawan originally took its dispute with SGAE to the Barcelona Provincial Court in 2008 when SGAE demanded a lump sum payment of over €16,000 ($22,100) for digital media and equipment sold between September 2002 and September 2004 from Traxtore, a Barcelona-based computer shop owned by Padawan.

The case was subsequently referred to the European Court of Justice, which on Oct. 21 ruled in Padawan's favor and stipulated that "the indiscriminate application of the private copying levy... with respect to digital reproduction equipment, devices and media" would be outlawed when trading to other businesses not viewed as private users, or in instances when digital hardware and media was "clearly reserved for uses other than making copies for private purposes." Padawan was judged to belong in this category.

However, the court also ruled that "digital copying tax" would still apply to companies, manufacturers and retailers selling blank CDs, MP3 players and other digital media capable of reproducing copyrighted media to private consumers.

The result is that all sides are claiming victory, even though government culture minister Angeles González-Sinde told Spanish media: "We shall seek alternative ways [to protect intellectual property rights] in league with other affected European countries".

"[We] welcome the ECJ reiteration that performers must receive fair compensation for the private copying of their performances," said a statement from the Brussels-based Association of European Performers' Organizations (AEPO-ARTIS), which represents 29 European performers' collective management societies and has a total membership of 350,000 musicians, singers, dancers and actors.

"In the digital age, the opportunity for individuals to make private copies of copyright protected content is greater than ever," the statement went on to say, adding that the court ruling enforced "that the parties liable to pay this compensation are those who make the digital reproduction equipment available to private users."

A statement from eight Spanish collecting societies, headed by SGAE, also welcomed the court's verdict. A statement on behalf of the bodies said: "[The European Court ruling] has backed the legality of compensation for private copying in Spain and in all of the European Union."

Last year, Spanish collecting societies registered a total "digital copying tax" income of €90 million ($124.4 million).