EU Internal Market Chief: Counterfeiting and Piracy Need Industry-Led Solutions 14/05/2008 by Dugie Standeford for Intellectual Property Watch Leave a Comment Share this: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)By Dugie Standeford for Intellectual Property Watch The European Commission wants practical, pragmatic suggestions for fighting the “modern-day highway robbery” known as piracy and counterfeiting, Internal Market Commissioner Charlie McCreevy said at a 13 May commission-sponsored high level conference on the issues. McCreevy stressed that more regulation is not the answer, and that solutions lie with public-private cooperation. He called on industry to lead the battle against fakes, and on internet service providers (ISPs) to solve the problem of illegal downloads. But he also outlined planned expansion of anti-counterfeiting and anti-piracy efforts within the Commission. Consumers are generally unaware of the dangers lurking in counterfeit goods, said Member of Parliament (MEP) Arlene McCarthy (UK, Socialist), who chairs the European Parliament Internal Market and Consumer Protection Committee. Piracy and counterfeiting also carry social and business costs, she said. Fighting them requires effective laws, strong enforcement, the development of new technologies to enforce IPR online, and greater consumer awareness, she said. She questioned whether the political will exists to require online filtering for copyright infringement. The event, held in Brussels and sponsored by the European Commission Internal Market Directorate-General, gave a platform for the industry perspective. Counterfeiting has seen “alarming growth” in recent years, said Marc-Antoine Jamet, president of l’Union des Fabricants, whose members include Pfizer, Lacoste, Microsoft and Disney. There is qualitative change as activities become global, and diversification into goods and products such as wine, car parts, clothing, and toys, he said. Counterfeiting is increasingly carried out by organised crime, and industrialisation means tourists no longer have to travel to Thailand to buy fakes from China but can find them anywhere, including online, he said. Richard Heath, Unilever vice president, legal, and president-elect of the International Trademark Association, also gave a litany of reasons why counterfeiting is harmful. Health and Safety Dangers Stressed While counterfeit drugs have been a problem for some time, there is a disturbing trend toward counterfeiting of medical devices and diagnostic equipment, said Larry Mallory, Johnson & Johnson vice president for integrated channel management. The products lack regulatory oversight, have not been tested for bio-compatibility or mechanical effectiveness, and none they have found have been sterile, he said. Repackaged or expired genuine products also are a concern, he said. Counterfeiters are becoming more sophisticated and trademark-savvy, Mallory said. Detecting fake medical devices and diagnostic tools is difficult because there is little public awareness of the items, meaning fakes must be caught by nurses or pharmacists. The only thing counterfeiters get right is the packaging, he said. Sales of counterfeit products are driven by hospitals which are under pressure to lower costs, he said. Michael Negel, chief executive officer of Global Sourcing, said microelectronic components taken from televisions and other devices, then reworked and installed in other products can fail unexpectedly, he said. No worldwide system exists for checking whether product components are legitimate, and all industries, in Europe and elsewhere, at times buy from the “spot market” where the chance of purchasing counterfeit or refurbished components is greatest, Negel said. Counterfeit medicines are now showing up more frequently in the EU, the European Federation of Pharmaceutical Industries and Associations said afterward. Current EU rules allow reboxing, relabelling and over-stickering of products, and tablets can be removed from blister packs and reconditioned, the organisation said. It wants the European Commission to ban medicine repackaging. Consumers are not “allies of counterfeiters” but they are confused by the many branded products legally produced in China, said Monique Goyens, director-general of the European Consumers’ Organisation (BEUC). Price is not an absolute criterion for distinguishing a bogus from a genuine item, especially when the counterfeit is part of a branded product, she said. In some discussions of international counterfeiting, concerns have been raised about ensuring that domestic industries do not use counterfeiting fears and increased customs measures in an uncompetitive fashion to discourage or deter imports of competing products. But this concern did not appear to come up at this meeting. WCO: IP Community Hijacked Anti-Counterfeiting Efforts Meanwhile, a relative newcomer agency to the issue said counterfeiting has been a recognised risk for 28 years but nothing has happened to abolish it. Christophe Zimmermann, head of the World Customs Organisation counterfeiting and piracy unit, said “more and more meetings” have failed to curb the growth of fake goods, because the discussion has been hijacked by the intellectual property community and current policies are no good. Zimmermann urged policy makers to treat counterfeiting like illegal drugs. Let the specialists fight it in the ports and waterways, he said, adding that customs agents and police should work with rights holders to counter the billions of packages and containers that pass through ports every year. He asked the Commission to use its financial clout to steer funds where they are needed. Other speakers touted the benefits of a universal system for authenticating brands, or the pooling of existing databases to allow law enforcement agencies to access global information. Some audience members expressed scepticism about promoting a given technical solution, saying criminals could easily get around it. ISP Liability Debate Continues A panel on fighting illegal downloads and the sale of fake goods on the internet sparked yet another round in the continuing feud between copyright owners and ISPs. International Federation for the Phonographic Industry President John Kennedy and British Telecom (BT) Media and Convergence Director Simon Milner sparred over the need to spread France’s proposed “three strikes” approach across Europe. The music industry believes that the best way to fight piracy is for service providers to agree to notify subscribers of alleged infringements and, if necessary, to cut off their internet access, Kennedy said. But three years after he raised the issue, ISPs continue to “filibuster,” he said. BT is “genuinely open-minded” about rights owners’ problem but oppose a one-size-fits-all approach, said Milner. The three-strikes or “graduated response” response is disproportionate, he said. MEP Malcolm Harbour (UK, European People’s Party/European Democrats) authored the European Parliament report on proposed changes to consumer protection provisions of EU telecommunications directives. He wants ISPs to be required to give potential subscribers pre-contractual information about copyright infringement online and update subscribers regularly. But Harbour said public authorities should be responsible for protecting IP rights because they are responsible for enforcing them. Cutting off accused infringers raises practical and consumer issues, he said. McCreevy has established a unit in the Internal Market Directorate-General that will be devoted to fighting IP theft, he said. He wants its resources expanded over time to mobilise anti-counterfeiting efforts, he said. Key priorities for the Commission are better information-gathering and improved cooperation between member countries, he said. But McCreevy stressed that the private sector itself is best placed to lead the battle against the fakes. The EU will do all it can, “but the real initiative and power is in your hands,” he told industry representatives. Dugie Standeford may be reached at firstname.lastname@example.org. Share this: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 Internal Market Chief: Counterfeiting and Piracy Need Industry-Led Solutions" by Intellectual Property Watch is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.