1 Enforcement of intellectual
property rights
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5140/11
COM(10) 779
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| Commission Report on the application of Directive 2004/48/EC of the European Parliament and the Council of 29 April 2004 on the enforcement of intellectual property rights
Commission Staff Working Document: analysis of the application of Directive 2004/48/EC of the European Parliament and the Council of 29 April 2004 on the enforcement of intellectual property rights
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| Legal base | —
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| Document originated | 22 December 2011
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| Deposited in Parliament | 11 January 2011
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| Department | Business, Innovation and Skills
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| Basis of consideration | EM of 20 January 2011
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| Previous Committee Report | None
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| To be discussed in Council | No date set
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| Committee's assessment | Legally important
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| Committee's decision | Not cleared; further information requested
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Background
1.1 Directive 2004/48/EC[1]
on the enforcement of intellectual property rights was published
on 30 April 2004. The Directive was implemented into UK law by
the Intellectual Property (Enforcement, etc.) Regulations 2006.[2]
The deadline for implementation by Member States was 26 April
2006;[3] many did not comply,
with the final implementation (Luxembourg) being in June 2009.
1.2 The Directive sought to address the disparities
between the systems of the Member States on the means of enforcing
intellectual property (IP) rights under civil law. These disparities
were considered prejudicial to the proper functioning of the internal
market and meant that IP rights did not enjoy an equivalent level
of protection throughout the EU. The Directive applies to all
infringements of IP rights protected under European or national
law and covers the remedies available through civil law measures.
It encompasses, in the main:
— evidence-gathering
powers for judicial authorities, powers to force offenders and
any other party commercially involved in an infringement to provide
information on the origin of the infringing goods and of the distribution
of networks;
— provisional and precautionary measures
such as interlocutory injunctions or seizures of suspect goods,
corrective measures including permanent injunctions, recall and
definitive removal of the infringing goods from channels of commerce;
— powers to force offenders to pay damages;
and
— measures related to the publication of
judicial decisions.
1.3 The initial proposals for the Directive also
included provisions for criminal sanctions; however these measures
proved controversial in terms of both content and EU competence,
and were omitted from the final legislation. The criminal provisions
were then transferred to a separate proposal which was published
in July 2005 and a further revised proposal in 2006, neither of
which was adopted.
The document
1.4 The report states that owing to late implementation
by some Member States and the resultant deficiency in national
application reports, it has not been possible to assess fully
the effectiveness of the Directive. However, it notes that some
studies carried out by international organisations and industry
have indicated that IP infringement has reached a significant
level with certain goods posing a danger to consumers.[4]
1.5 In order to address the concerns about the protection
of IP rights, the report makes reference to the Commission's adoption
of two Communications, supported by resolutions in the Council,
on an IP rights strategy for Europe and the creation of the European
Observatory on Counterfeiting and Piracy. The Observatory's aims
are to improve understanding of IP infringement and create a platform
for national authorities to exchange best practice, develop joint
enforcement strategies, and make recommendations to policy makers.
The Commission also recognises that European Parliament resolutions
have expressed support for enhanced policies on IP protection,
including strong legal frameworks against counterfeiting and piracy.
At an international level the Commission has worked to combat
IP infringement through bilateral trade agreements, international
initiatives and ACTA (the Anti Counterfeiting Trade Agreement).[5]
1.6 The main conclusion drawn by the report is that,
although some of the provisions have not fully met their intended
objectives, the Directive has had a substantial and positive effect
on the protection of IP rights in civil law in the EU. However
it has become apparent that the Directive was not designed, and
so is unable, to deal with the challenge to the enforcement of
IP rights posed by the Internet.
1.7 The other key findings of the report are:
— infringement
of intellectual property rights causes widespread economic harm;
— proper protection of these rights is
needed to stimulate innovation and culture;
— some studies show that IP infringement
has reached a significant level;
— clarification may be needed to avoid
ambiguity on the scope and interpretation of various provisions
of the Directive;
— the right balance needs to be achieved
by Member States with regard to the right to information and privacy
laws; and
— the Directive does not have an effectively
dissuasive impact — damages awarded in IP rights cases remain
relatively low.
1.8 The staff working document accompanying the report
notes that the Commission is currently examining to what extent
protection of intellectual property rights through criminal law
via a harmonized Directive on criminal measures is necessary to
supplement the enforcement of IP rights through civil law. The
staff working document further states that the absence of harmonisation
in the area of criminal measures to protect IP rights could be
a serious obstacle, hindering cross-border cooperation between
law enforcement agencies. It also notes that, following its assessment,
the Commission intends to present a new legislative proposal which
would replace its earlier 2005 and 2006 proposals for a Directive
on criminal sanctions.
1.9 The report concludes with a request for views
from all interested parties, by 31 March 2011, on the issues raised,
which will inform the Commission's decisions on any future measures.
The Government's view
1.10 In her Explanatory Memorandum of 20 January,
the Parliamentary Under-Secretary of State and Minister for Intellectual
Property at the Department for Business, Innovation and Skills
(Baroness Wilcox) says that, by calling into question the limitations
of the Directive in dealing with the digital environment, the
report prepares the ground for the proposal of further legislative
measures in the EU. Concern that the scale and scope of infringement
is rising could lead, the Minister thinks, to calls by some for
harmonisation of criminal sanctions.
1.11 She says that the report indicates the possibility
of a revised approach to damages in order to reflect the profits
of the infringer as opposed to the loss of the rights holder.
UK policy is based on restorative damages and so any change or
requirement here could have significant implications for the UK's
approach. Both restorative damages and the ability to take account
of profits are currently available as remedies in the UK to ensure
that there is a disincentive to infringing IP rights. The ability
of a rights holder to take only one of these actions could be
viewed as reducing the choices available to them.
1.12 The studies of the harm that IP infringement
causes quoted in the report should be treated with caution, the
Minister says. Other reports such as that from the US Government
Accountability Office (April 2010) suggest the evidence base is
relatively weak.
1.13 She continues that the report suggests further
analysis on how to apply civil law remedies to intermediaries,
such as Internet Service Providers. This issue is a subject of
debate by many Member States and stakeholders. Any solutions suggested
in an EU analysis would still need to be turned into a legislative
proposal which would then be debated by Member States.
1.14 Finally, the report suggests further study of
several issues such as provisional and precautionary measures
and clarification of the meaning of various corrective measures
such as costs of destruction; this further study would in and
of itself be non-binding. Understanding the changes to consumer
and business behaviour enabled by the internet and the possible
methods of enforcing rights within this could be a useful exercise
to inform future EU and UK thinking on this issue.
1.15 The Commission will use feedback from the consultation
to inform its decisions on any future measures that might be envisaged.
The Minister says the Government will respond to this consultation
and share any papers with the Committee.
Conclusion
1.16 In her Explanatory Memorandum, under the
heading of "policy implications", the Minister says
"[c]oncern that the scale and scope of infringement is rising
could lead to calls by some for harmonisation of criminal sanctions".[6]
But this seems inconsistent with the definite, rather than possible,
terms in which the Commission states it will propose legislation
on criminal sanctions for infringement of IP rights in the EU.
We set out here the relevant extract of the Staff Working Document:
"The Commission is currently analysing to
what extent protection of intellectual property rights through
criminal law via a harmonized directive on criminal measures is
necessary to supplement the enforcement of intellectual property
rights through civil law. Absence of harmonisation in the area
of criminal measures to protect intellectual property rights could
be a serious obstacle and hinder cross-border cooperation between
the law enforcement agencies.
"Following this assessment, the Commission
intends to present a new legislative proposal which would replace
the 2006 proposal for a Directive on criminal sanctions."[7]
1.17 The conclusion in the second paragraph appears,
worryingly, to pre-empt the findings of the assessment in the
first, and we will want to look very closely at the evidence base
of any proposals that arise from these two Commission documents,
whether in the civil or criminal field.
1.18 We would be grateful for sight of the Government's
response, following its own consultation exercise, to the Commission's
report on this Directive.
1.19 In the meantime, the report and staff working
document remain under scrutiny.
1 OJ L157,30.04.2004p.45. Back
2
StatutoryInstrument2006No.1028. Back
3
TheUKwasoneofonlyfivecountriestocomplywiththedeadline. Back
4
BASCAP:"TheEconomicImpactofCounterfeitingandPiracy";OECD;2008. Back
5
COM(10)779finalp.4. Back
6
Para 22 of the Explanatory Memorandum. Back
7
P. 25 of the Staff Working Document. Back
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