EU Enforcement Directive Stuck: What Is ‘Commercial Scale’ Infringement? 05/03/2007 by Monika Ermert for Intellectual Property Watch 1 Comment Share this Story:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window) IP-Watch is a non-profit independent news service and depends on subscriptions. To access all of our content, please subscribe here. You may also offer additional support with your subscription, or donate. By Monika Ermert for Intellectual Property Watch For the third time since December, the European Parliament committee vote on an EU directive on criminal sanctions against infringers of intellectual property rights has been postponed. This is a signal that there are great difficulties with the text, say observers from non governmental organisations, who argue that the European Commission should kill it or rewrite it from scratch. But a compromise is near, according to the vice chair of the Committee on Legal Affairs and the Internal Market (JURI), Rainer Wieland (EPP). JURI was scheduled to vote on the report of rapporteur Nicola Zingaretti (PSE) on 28 February to allow the draft directive to move to the full Parliament for a first reading. The directive on criminal measures aimed at ensuring the enforcement of intellectual property rights (IPRED2) is the criminal law follow-up to its predecessor IPRED, which covered civil law sanctions against IP infringements. The main cause of contention over the new directive is the question of who should be punished with fines or jail sentences up to four years for infringing third parties intellectual property rights – the scope of the directive. The Commission’s original proposal states that member states should sanction each wilful IP infringement of commercial scale and refer to paragraph 61 of the TRIPS agreement. But there is no common definition of what is “commercial scale” in the legislation of the 27 EU member states. “In Germany, for example, to buy a machine that will allow you mass copying could be regarded as commercial scale, even if you did not yet start using the machine,” said Wieland. Zingaretti had proposed to define commercial scale more clearly with an amendment stating: “‘Infringements on a commercial scale’ means any infringement of an intellectual property right committed to obtain direct or indirect economic or commercial advantage; this would normally exclude acts carried out by private users for personal and non-commercial purposes.” Zingaretti told Intellectual Property Watch that on the much-debated scope, “The directive has to tackle any commercial and wilful infringement of an intellectual property right. In this sense, the scope of the directive shouldn’t involve consumers and private users, unless they infringe an intellectual property right in a wilful and commercial scale.” IPRED1 had “a very wide scope and did go into everything that was related to civil disputes, between privates as well as companies,” Zingaretti said. “In our case, penal law comes into force only when the violation of a copyright or trademark is conscious and perpetrated on a commercial scale.” Those who stood to lose from this directive therefore were the “big enterprises of crime”, often involved in drug trafficking as well as other black market activities, like the commercial infringements of intellectual property rights. But Hans-Peter Mayer, the shadow rapporteur (who follows the rapporteur’s work for a political party) for the European People’s Party/European Democrats (EPP-ED), immediately before the 28 February vote conveyed the uneasiness of some EPP members with Zingaretti’s approach. “Some EPP members favour a stricter approach to what commercial means. They do not want to exclude private users, especially P2P [peer-to-peer] filesharers,” said a spokesman from Zingaretti’s office after the postponement. An offer to return to the original Commission proposal that would allow every member state to define what would be sanctioned and who would get off without penalty also was not acceptable to the Socialist Group in the Parliament (PSE). PSE members will discuss a possible compromise on 7 March. The EPP-ED also is expected try to renegotiate the “commercial scale” issue before it is tabled again at the next JURI session on 20 March. “We think that if the EU wants to criminalise copyright infringers participating in file sharing networks, it should state so clearly and not do that in a directive which is supposedly geared at fighting organized crime and protecting public safety,” said Jonas Maebe, spokesperson for the Foundation for a Free Information Infrastructure (FFII) which lobbied against IPRED1. FFII welcomed the postponements. “I think most MEPs, not in the least Mr. Zingaretti, by now realise that what they have in front of them is really an abhorrent piece of lawmaking,” said Maebe. “Pretty much every single industry, consumer, law and civil society association that has reacted is against it.” Those who were content-oriented, according to Maebe, were organisations like the European Association for the Protection of Encrypted Works and Services (Association Européenne pour la Protection des Oeuvres et services Cryptés -AEPOC), the International Federation of the Phonographic Industry (IFPI) and the Association des Industries de Marque (European Brands Association). These organisations favour “scrapping the ‘commercial scale’ condition,” a point pushed for by some of the very EPP members who had favoured the inclusion of criminal sanctions already in the IPRED1 (which were later dropped), like French Member of European Parliament Janelly Fourtou (Union pour la Démocratie Française, UDF) and her UDF colleague Nicole Fontaine. Fourtou was heavily criticised for taking the rapporteur’s role in the IPRED1 legislative process despite the strong interest in the issue of her husband, Vivendi head Jean-René Fourtou. She underlined during the IPRED1 discussions that young people who were exchanging files over P2P networks also had to be made aware that they were violating copyright. But the Parliament’s majority decided to passIPRED1 only if it did not involve criminal sanctions. Green Party members still hold “that there is no clear need for a directive of this kind.” Since criminal sanctions were re-tabled by the Commission in IPRED 2, only Green Party members pointed back to the original scepticism about harmonisation of criminal sanctions by repeating that they saw “no clear need for a directive of this kind.” The Fuzzy Line of EU Competence The Parliament’s attempt to harmonise criminal law also touches on the issue of European Union competence, as normally criminal law is reserved for member states’ legislators while directives should cover so-called first pillar topics that concern economic, social and environmental policies. The fight against crime falls under the competence of the third pillar dealing with Police and Judicial Cooperation in Criminal Matters. “If the Council [of EU member states] claims the Commission is overstepping its competence, the Commission will almost certainly go to the European Court of Justice to fight this interpretation,” predicted Maebe. Wieland said that the Parliament should start looking into harmonisation of criminal law. “If we want to do this, we have to start with harmonising the core definitions of the penal code, just like the issue of what is commercial.” Wieland favours a shift of competence to the Parliament and therefore also proposed to not let the Commission decide on which kind of IP rights will be protected beside copyright and trademark rights. This was done with IPRED1 to the alarm of critics of the patent system who saw patents outside the scope of IPRED1 when the Commission included it in a later annex to the directive. Wieland said the list he tabled on the scope including patents did not mean that he favoured prosecuting patent violations with criminal law sanctions. “I only want that the Parliament clearly decides what is covered,” he said. While including patents seems to be opposed by most MEPs, Maebe warns: “Unfortunately, many MEPs seem not to be aware of the fact that the arguments against patents also hold (sometimes even more so) for several other of the included rights, for example the so-called ‘utility models’, also known as ‘petty patents’, registered and unregistered design rights or database rights.” Monika Ermert may be reached at email@example.com. Share this Story:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window) Related "EU Enforcement Directive Stuck: What Is ‘Commercial Scale’ Infringement?" by Intellectual Property Watch is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.