Year Ahead: Copyright Reform, EPO Governance, Trade Secrets Among Top European IP Issues In 2015

Review, and possibly reform, of the European Union copyright system tops the list of “hot” European intellectual property issues this year. The new European Commission has made modernising copyright rules a major priority, while fresh debate has broken out over the need for levies on digital copying devices to remunerate rights holders.

Meanwhile ongoing unrest between European Patent Office (EPO) staff and management looks likely to continue, as do efforts to finalise the unitary European patent and Unified Patent Court. EU legislation to protect trade secrets could be adopted and trademark law updated. In addition, several important IP-related decisions are expected from the European Court of Justice (ECJ).

Copyright: Major Plank of the Digital Single Market

Completion of a connected digital single market is one of the European Commission’s (EC’s) top goals, it noted in a 2015 work programme [pdf] published on 16 December. This year, as part of the digital single market strategy, the EC will, among other things, “modernise EU legislation on copyright and on audiovisual media services,” it said.

Between December 2013 and March 2014, the EC held a public consultation on the need for review of EU copyright rules, a Commission spokeswoman said. It received nearly 10,000 responses, and is now “working on a balanced proposal to modernise copyright rules in Europe, taking into account the views of all parties involved.” The scope of the new rules is under discussion, and there’s no decision yet on whether the legislation will take the form of a directive or regulation, she said.

This modernisation should take place during the first part of the new EC’s five-year term in light of the digital revolution, new consumer behaviour and Europe’s cultural diversity, President Jean-Claude Juncker has said.

The EC will unveil a proposal this year, after publication of a digital single market strategy in May, EC Vice President, Digital Single Market Andrus Ansip wrote in a 16 December blog post. The EC will host a 24 February #Digital4EU stakeholder forum in Brussels which will include a workshop on “copyright fit for the digital age.”

Copyright reform must ensure the right balance, said Federation of European Publishers Director Anne Bergman-Tahon. If copyright exceptions affect the exploitation of the work, cultural diversity will suffer, so the FEP is “very much looking forward to see the economic analysis undertaken by the EC” before its modernisation efforts, she said.

Separately, the EC is going to launch a range of “stakeholder dialogues” to try to find non-legislative ways of enforcing IP rights, said European Digital Rights Executive Director Joe McNamee. “These require consumer/citizen involvement to be credible, so the Commission needs to provide solid safeguards for the process,” he told Intellectual Property Watch. “This is still a work in progress.”

The European Copyright Society, meanwhile, urged Günther Oettinger, the new commissioner for digital economy and society, to pursue “Union-wide unification (not further harmonization) of copyright” (IPW, European Policy, 5 January 2015).

The European Parliament’s first contribution to the copyright reform debate will be a report on how well Directive 2001/29/EC on the harmonisation of certain aspects of copyright and related rights in the information society has worked, MEP Julia Reda, of the Greens/European Free Alliance and Germany said on her website. Reda presented a draft report [pdf] to the Legal Affairs Committee on 20 January, and a plenary vote is expected on 20 May, she said.

Reda said she will examine whether the information society directive actually lowered barriers to cross-border exchange of knowledge and culture, or succeeded in creating comparable copyright legislation across all EU countries. The report will also look at whether a “directive from a time before Facebook and YouTube is still sufficient in providing legal certainty to all people who create and exchange cultural works on the internet,” she said.

Levy Debate Heats Up

Oettinger has announced that the EC plans to introduce copyright levies on the use of copyright-protected works online, said Hogan Lovells (London) attorney Penelope Thornton. “Copyright levies may well prove to be a hot topic for 2015” as two cases referred, respectively, by Spain and Belgium are pending at the European Court of Justice (ECJ), she told Intellectual Property Watch.

The issue of whether digital devices should be subject to levies to compensate rights owners for copies made by consumers has been controversial for many years, but pressure for levy reform “is now greater than ever,” DigitalEurope said in an 11 December press release. In December, Finland became the latest EU member state to scrap levies, following similar moves in Spain and the UK, said the organisation, which represents information technology, telecommunications and consumer electronics companies.

On the other hand, levies are alive and well in France, where the highest administrative court in December approved the scales of remuneration set by the Private Copy Commission, Hogan Lovells (Paris) IP attorney Camille Pecnard wrote in a 17 December blog. The rulings cover private copying on multimedia touch screen tablet computers and all recording media subject to royalties such as multimedia mobile devices, external hard drives, smartphones, touch screen tablet computers and decoder-recording devices.

Unitary Patent, Court Move Closer

This year could see the entry into force of the unitary patent package, including ratification of the Unitary Patent Court (UPC), an EC spokeswoman said.

Last year’s “steady progress on the UPC looks set to continue in 2015,” said Hogan Lovells (London) attorney Laura Whiting. So far, six out of 25 countries have ratified the agreement, but seven more, including Germany and the United Kingdom, are needed, she said. Spain has challenged two regulations that form part of the package, one that creates unitary patent protection and another that governs applicable translation arrangements. On 18 November 2014, an ECJ advocate general advised the high court to reject the challenges (press release here, pdf). Following that opinion, Spain’s cases look “unlikely to succeed,” Whiting said.

If the ECJ ruling follows the advisory opinion, “we may expect to see a rapid succession of national ratifications of the UPC agreement, which would make it possible for the unitary patent protection system to enter into force sometime in 2016,” said EPO Media Relations Director Rainer Osterwalder: “In that respect, 2015 could be a crucial year.” The costs of the unitary patent may also become clearer, as they’re now under discussion in the EPO Select Committee, he said.

Meanwhile, “there remains a large degree of preparatory work in the workstreams of IT, legal, human resources, facilities and finance which will form the focus of the Preparatory Committee in 2015 and will shape the UPC,” Whiting said. The latest estimate for when the new system will be ready is 2017, she added.

Regarding patent cases, the long-awaited decision in the “Tomato II/Broccoli II” case is likely to emerge from the EPO Enlarged Board of Appeal in coming months, Osterwalder told Intellectual Property Watch. The decision will clarify the patentability of plant products obtained from non-patentable breeding processes that involve biological steps, he said.

In other patent matters “governance of the European Patent Office will remain vast,” said IP consultant Jeremy Phillips, co-founder of the IPKat blog. Although the ECJ Advocate General recommended rejection of Spain’s complaint against the unified patent and UPC, “the current EPO crisis, which calls into question the judicial independence of a body that fulfils key functions for the EU without being an EU institutions, could still have the court concerned over whether similar things might happen, under the control of essentially the same group of government officials, at the UPC,” said Florian Mueller, author of the FOSS Patents blog.

There will likely be continuing tussles between brand pharmaceuticals and generic drugs and the developing world in the areas of HIV and Ebola, Phillips said. The key ECJ case of the year for the telecom and electronics industry will be the decision in ZTE v Huawei concerning the enforcement of standard-essential patents, said Whiting.

Trade Secrets

This year could see the adoption of EC-proposed trade secrets protection legislation, a Commission spokeswoman said. The Council position, issued in May 2014, is to push for minimal harmonisation, giving member states more freedom in how they adopt the legislation into national law and also providing a higher degree of protection, said Baker & McKenzie (Milan) attorney Lorenzo de Martinis.

The proposal is now working its way through the relevant European Parliament committees. Parliament’s first reading will probably take place in the first half of 2015, with a final directive published by summer, said de Martinis. Meanwhile, there could be renewed focus on defensive and reactive strategies against misappropriation and unlawful use of licensed IP rights as industry increasingly “re-shores” plants now located outside the EU, he said. Measures to address risks against cyber-espionage and former/current employees stealing trade secrets “will remain an evergreen,” he added.

The draft directive, however, faces strong opposition from Health Action International Europe and other multi-sectoral organisations. In a 17 December press release [pdf], the coalition criticised the “hasty push” by the EC and Council for the directive. They specifically faulted the draft for its “unreasonably broad definition” of trade secrets; its overly broad protection for companies, which could sue anyone who “unlawfully acquires, uses or discloses” so-called trade secrets; and inadequate safeguards to ensure that consumers, journalists, whistleblowers, researchers and workers have reliable access to important data in the public interest. They worried that companies in the health, environment and food safety fields could refuse to be transparent even when the public interest is at stake.

In addition to HAI, signers of the statement were Corporate Europe Observatory; Medicines in Europe Forum; Council of European Professional and Managerial Staff; Commons Network; GeneWatch UK; La Quadrature du Net; Center for International Environmental Law; Article 19; Association Internationale de la Mutualité; Public Citizen US; Cochrane Collaboration – Nordic Cochrane Centre; International Society of Drug Bulletins; Knowledge Ecology International Europe; and European Public Health Alliance.

GIs, Trademark, and Other Issues

The EC could possibly follow up its consultation on geographical indications (GI) protection for non-agricultural products, a spokeswoman said. It is hosting a 19 January meeting in Brussels [pdf] on the topic. There will likely be continued turmoil over the issue of GIs versus trademarks, Phillips said.

An EC single market forum on IP infrastructures for small and mid-sized businesses is set for 29 January in Milan. Future events hosted by the EC’s internal market, industry, entrepreneurship and SMEs directorate will be posted here.

In addition, trademark law is likely to see a revamp in 2015, in what Phillips called a “fine-tuning of a maturing system.”

“Trialogue” talks are taking place between the EC, European Parliament and Council, and agreement has been reached on several issues, such as the treatment of counterfeit goods in transit and small consignments, said Lichtenstein, Körner & Partners (Stuttgart) attorney Kerstin Gründig-Schnelle. However, divisions remain between governments and Parliament on finance-related matters, trademark rights limitations, fees and other issues, she said. Negotiations on a compromise text are expected to resume in January under the EU Latvian Presidency, she said.

The ECJ will shortly decide in Ryanair v PR Aviation whether owners of online databases whose content is not protected by copyright or database rights can contractually limit a third party’s freedom to use the database, as protected under the EU Database Directive, said Hogan Lovells (London) attorney Emily McClure. “The decision is hotly anticipated” by online businesses, in particular price comparison websites, whose business models are based on the ability to scrape third-party sites for comparison data, she said.

Although it is not clear whether there will be a decision this year, the EC on 14 January announced that it is investigating whether the proposed creation of a joint venture between copyright collective rights management societies in the UK, Sweden and Germany could violate antitrust law.

And EU antitrust investigations of various aspects of Google’s operations remain pending and it is not clear whether anything will be resolved in 2015. Because the issues at stake will affect many players and are multifaceted and complex, “I will therefore need some time to decide on the next steps,” new Competition Commissioner Margrethe Vestager said in November.

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