By Dugie Standeford for Intellectual Property Watch
A European Commission proposal to criminalise intentional, for-profit intellectual property counterfeiting and piracy won backing from the European Parliament on 25 April. The 374-278 first-reading vote on an amended version of the IP enforcement rights directive, known as IPRED2, followed months of controversy and heavy lobbying which show no signs of abating.

Parliamentary changes to the original European Commission draft sparked criticism from industry and civil society groups, and appear to be on a collision course with the Commission (the EU executive body) and European Council of member governments.

IPRED2 applies, among other things, to copyright and related rights, trademark, databases, design rights, and geographical indications. It defines “commercial infringement” as “one committed to obtain a commercial advantage” and “intentional infringement” as “a deliberate and conscious infringement… for the purpose of obtaining an economic advantage on a commercial scale.” It also criminalises aiding and abetting, and inciting an actual infringement.

As adopted, the directive expressly excludes acts by private individuals for personal and not-for-profit purposes, as well as patents. The latter were exempted because the “civil code remains the most appropriate instrument for prosecuting any patent claims,” Nicola Zingaretti, who authored the official report on the proposal for the Legal Affairs Committee, said at a news briefing following the vote.

Many members of Parliament (MEPs) felt that including patents in the penal code would create “divergences” in a directive aimed at “far-reaching harmonisation” of European laws against piracy and counterfeiting, Zingaretti said. Personal use of IP was exempted as well, he said during the 23 April debate, because “this directive is to fight organised crime.”

The vote achieved three objectives, Zingaretti said: It raises the fight against copyright piracy to the pan-European level, opposes consumer crime, but also protects consumer rights by not punishing them for downloading from the Web.

Problem with Definitions

The Commission proposal did not define commercial-scale or intentional infringement. During the parliamentary debate, Enterprise and Industry Commissioner Günter Verheugen criticised the definitions inserted by MEPs, saying they could lead to misunderstandings, a Legal Affairs Committee spokesman said.

The definitions were and are among the most contentious provisions of the parliamentary version of the directive. Content owners fear exempting personal use will boost piracy, while digital rights activists say vague definitions could make criminals of a whole generation of young people who download and share files online.

“The recording industry is not alone in the view that the European Parliament has taken the wrong road in trying to define what constitutes ‘commercial scale’ and ‘intentional’ intellectual property infringements,” said Frances Moore, the International Federation of the Phonographic Industry’s European regional director. The Commission refrained from introducing definitions “in order to keep the directive in line with international laws and allow national judges to use their own discretion when deciding on particular cases.”

Defining commercial scale as “obtaining by a commercial advantage” does not make it clear “if saving money by filesharing instead of buying CDs would give anyone a commercial advantage or not,” said Erik Josefsson, the Electronic Frontier Foundation’s (EFF’s) European affairs coordinator. If it did, he said, the act of sharing files would, under Zingaretti’s definition, not be considered private use for personal and not-for-profit purposes.

The Foundation for a Free Information Infrastructure (FFII) criticised the decision to criminalise incitement to infringement. “Today, ‘inciting’ is only criminal in some member states, and in exceptional cases such as hate speech,” said analyst Jonas Maebe. “Elevating IP rights to the same level is a scary development.”

On the positive side, Maebe said, Parliament decided that abuse of the “misguided measures” will be punishable and that criminal sanctions should not apply to several IP statutory exceptions.

Next Steps

The fight now moves to the EU Council for first reading, then possibly back to Parliament for a second reading. In recent weeks, “several states have started to mount resistance to IPRED2…with the United Kingdom and Holland leading the charge,” European Digital Rights reported.

Governments are concerned about the scope and nature of the directive, FFII said; it is traditionally up to individual countries to set criminal sanctions. And Zingaretti said the Commission itself is “locked in debate” over the proposal, according to Verheugen.

Dugie Standeford may be reached at info@ip-watch.ch.