EU Copyright Enforcement Draft Clears Parliamentary Panel; Concerns Linger

By Dugie Standeford for Intellectual Property Watch
A European Commission proposal to criminalise commercial intellectual property rights (IPR) infringements is headed for a vote in the European Parliament despite strong opposition to some provisions from industry sectors and consumer groups.

On 20 March, members of the Legal Affairs (JURI) committee backed a report authored by Italian Parliament Member Nicola Zingaretti on the IPR enforcement directive (known as IPRED2), said to be the first to harmonise criminal laws throughout the EU.

If adopted by the Parliament and European Council of member government representatives, the directive would require member states to enact laws penalising deliberate infringements carried out on a commercial scale, as well as those affecting public health and safety. Sanctions range from steep fines to imprisonment, depending on the seriousness of the crime. Activity by private users for personal, non-profit purposes would not fall within the law, according to the committee spokesperson.

Members of Parliament (MEPs) supported the general objectives of the Commission proposal but amended parts of it, a JURI spokesman said. They backed Zingaretti’s recommendation that patent rights be excluded from the scope of the directive. Many member states already enforce patent protection via fines and jail time, the report noted, and MEPs previously rejected a Commission proposal on the patentability of computer-implemented inventions, making an attempt to set criminal penalties for patent infringements “a limited and dangerous foray into a very complex area.”

In the area of copyright breaches, however, even a last-minute compromise floated by Zingaretti failed to resolve ongoing concerns from various interest groups. The deal involved removing “acceptance” of infringement from the definition of intentional infringement, and changing “non-commercial” infringement to “not-for-profit,” said Cornelia Kutterer, senior legal advisor to the European consumer organisation BEUC.

That alleviated some consumer worries, but BEUC continues to oppose the application of criminal laws to copyright piracy, Kutterer said. Moreover, the committee also approved a troublesome amendment permitting destruction of infringing goods, including materials and equipment used for infringing, she said.

The Foundation for a Free Information Infrastructure complained that “experts” on the committee deliberately left key definitions vague, preferring to have them clarified by the European Court of Justice. It also slammed MEPs for ignoring recommendations by the Max Planck Institute and others that would ensure the directive is limited to clear cases of piracy, rather than also capturing conflicts about the extent of protection by legitimate commercial enterprises.

Industry Groups Divided

“The recording industry is not alone in the view that the European Parliament has taken the wrong road” by trying to define what constitutes “commercial scale” and “intentional” infringements, the International Federation of the Phonographic Industry (IFPI) said.

The original Commission proposal left the terms undefined in order to align the directive with the World Trade Organization Agreement on Trade-Related Aspects of IP Rights (TRIPS) and to give national courts discretion in determining what activities constitute commercial infringement, IFPI said: “The objective of this proposal should not be to rewrite substantive European intellectual property legislation.”

High-tech companies said MEPs “made inroads” into improving the directive by excluding patents and focussing on fighting piracy and counterfeiting. “Unfortunately, however, the proposal still does not distinguish between genuine criminal infringements and ‘good faith’ infringements that are a healthy and competitive part of the landscape for business,” said Mark MacGann, director general of the European Information, Communications & Consumer Electronics Technology Industry Associations. It also creates a novel type of IP infringement – aiding or inciting, he said.

But the European Telecommunications Network Operators’ Association called the JURI vote “a good compromise between the interests of the industry to protect IPRs and those of online users.”

A Question of Jurisdiction

The Commission proposal is based on its interpretation of a 2005 European Court of Justice ruling determining that, although the European Community generally has no jurisdiction over criminal laws or procedures, it can order member states to impose criminal sanctions where necessary to ensure that its rules in an area over which it has power are enforced.

“We are turning a new page. This is the first directive where criminal law is included,” Zingaretti said after the JURI vote. His amended report is scheduled for plenary vote in April.

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