The European Court of Justice today (Oct. 26) ruled that Spain broke European Union law by failing to provide royalties for copyright holders from the public lending and rental of items like CDs and D

The European Court of Justice today (Oct. 26) ruled that Spain broke European Union law by failing to provide royalties for copyright holders from the public lending and rental of items like CDs and DVDs.

The Luxembourg-based Court ordered Spain to amend its laws and provide compensation for rightholders through royalty mechanisms.

The case was brought by the European Commission -- the EU's executive authority -- which said Spain's interpretation of the royalty rules breached a 1992 EU directive on rental and lending rights. Spain adopted the 1992 rules, which recognize the right to remuneration but exempted all categories of public lending establishments, as part of a cultural promotion program.

The Court ruled that this exemption was unlawful, and unfairly denied rightholders their royalties. "By exempting almost all, if not all, categories of establishments undertaking the public lending of works protected by copyright from the obligation to pay remuneration to authors for the lending carried out, the Kingdom of Spain has failed to fulfil its obligations," the Court said in its ruling.

The 1992 directive gives authors of music, films and books and any other copyright works an exclusive right to license or ban the lending of their works by institutions like libraries.