Subject: Amended proposal for a Directive of the European Parliament and of the Council on criminal measures aimed at ensuring the enforcement of intellectual property rights (COM/2006/0168 final - COD 2005/0127)
Monday 26 february 2007
Dear members of the European Parliament,
On. Nicola Zingaretti, rapporteur, decided to postpone the Legal Affairs Committee vote on the Criminal Measures IP Directive. We applaud and welcome this decision that creates time to adequately address important concerns. No compromises have yet been reached on essential issues as whether to criminalise consumers, the scope of the directive, and on measures to ensure IPR disputes that are essentially of a civil nature and occur between legitimate commercial enterprises, are not criminalised.
Some proposed measures threaten to criminalise large portions of the online population without demonstrable need or justification – even IP lawyers like Manders and Lehne risk criminalising themselves and the visitors of their websites.
For the first time ever the European Community can impose criminal laws on the Member States. The Criminal Measures IP directive will influence the lives of 500 million Europeans. Highly respectable law institutions have published critical position papers about the Commission proposal. Their positions are generally in line with the industry's. Below we will identify the four most important unresolved issues and elaborate on how the experts propose to solve them.
Yours sincerely,
On behalf of the FFII,
Ante Wessels
Criminal Measures IP Directive – 4 Essential Issues and Solutions
1. An essential issue is whether to criminalise consumers. MEP Manders proposed an amendment that explicitely criminalises them. Other amendments weaken the definition of commercial scale or even remove it. In our opinion, criminalising consumers is unrelated to the common market and fighting crime. Including them would appear to be a violation of art. 5, Treaty establishing the European Community. Similarly, the Commission's FAQ on the recently introduced proposal on the protection of the environment through criminal law states: "Taking into account the principle of proportionality, the approximation of sanctions foreseen in the Directive is limited to particularly serious cases."
If the Commission wants environmental law to be proportionate, why not law relating to intellectual property as well? We believe the Max Planck Institute proposed the right formulation: "commercial activity with an intention to earn a profit". This formulation offers the best chance to be compliant with art. 5 TEC.
2. The Chartered Institute of Patent Agents, the Max Planck Institute for Intellectual Property, Competition and Tax Law, the Law Society of England and Wales, EICTA, ECIS, ECTA and others have warned the Commission proposal does not just criminalise piracy and counterfeiting, but also criminalises IPR disputes that are essentially of a civil nature and occur between legitimate commercial enterprises. Evidently, this is disproportional and a violation of art. 5 TEC. Legal experts and the industry are against this.
To solve the problem, the Max Planck Institute proposed the following element to be included in the definition of the crime: "Identity with the infringed object of protection (the infringing item emulates the characteristic elements of a protected product or distinctive sign in an unmodified fashion [construction, assembly, etc.])."
3. The Chartered Institute of Patent Agents (CIPA) pointed out that "the proposals would result in significant chilling of competition in many fields because of the fear that genuinely competitive activities could be criminal offences. This applies especially in relation to rights (such as registered designs) which are not examined, and to rights in relation to which there are often significant arguments after examination (eg about their validity and scope), such as patents".
CIPA believes "that criminal sanctions should generally be restricted to registered trade marks and copyright, and the Directive should generally not seek to criminalise acts in relation to other intellectual property rights."
Some companies have asked for design rights to be under the scope, but inclusion of these unexamined rights would cause serious problems as CIPA and others have pointed out.
4. The Max Planck Institute wrote about art. 7: "The obligation of Member States to delegate functions within the conduct of criminal investigations to private parties in such a diffuse manner is therefore incompatible with the fundamental structure of a democratic society."
We assume the European Parliament does not want to take measures which are incompatible with the fundamental structure of a democratic society. Even the Commission now admits art. 7 is wrong. The EP Civil Liberties, Justice and Home Affairs Committee advises to delete the article.
Finally, we would like to remark that criminal measures against copyright piracy and trademark counterfeiting are already available in Europe (TRIPS art. 61). The argument that higher maximum penalties are required for new Member States seems unfounded, since e.g. Czech Republic already has a maximum penalty of 750.000 Euro for selling counterfeit goods. The Commission has not been able to factually justify its proposal. It has not produced any impact assessment. Given that the proposal has moreover been severally criticised by the industry, academics, law professionals and civil society, we believe that Parliament's best course of action is to ask the Commission to retract its current text.
