FFII letter to MEPs: Commercial scale definition in IPR Enforcement directive

Tuesday 6 March 2007

Dear Members of the European Parliament,

We understand that the Political Groups will decide this week on a definition of "commercial scale" for the Criminal measures IP directive (COM/2006/0168 final - COD 2005/0127)

One of the options is amendment 46 by On. Nicola Zingaretti, rapporteur: "(b) 'infringements on a commercial scale' means any infringement of an intellectual property right committed to obtain economic or commercial advantage; this would normally exclude acts carried out by private users for non-commercial purposes;"

We appreciate the difficulty of finding a good compromise. We would like to remark that the formulation "this would normally exclude" is ambiguous and does not meet the standard of clarity of criminal law. As currently drafted the formulation does not exclude all acts carried out by private users for non-commercial purposes.

Furthermore, many every day acts in the information society, like sharing an article (who never forwarded an article by email?), are not covered by the exception because they are acts of publication. There may be an economic or commercial advantage in such cases. The definition may have far reaching consequences, it risks criminalising office workers and the young generation and create secondary liability for service providers and software developers in an unforeseeable way. The lack of a Commission impact assessment is dearly felt in this respect.

An other option would be to leave "commercial scale" undefined. This option is conform the TRIPS treaty. On the other hand it may lead to legal uncertainty for many years, until the ECJ decides on an interpretation of commercial scale. We would therefore prefer that you as legislators propose a definition now.

The Max Planck Institute proposed this formulation: "commercial activity with an intention to earn a profit". We believe this is the best option, it is technically sound and it solves the matter right away.

We would also like to draw your attention to the Justification to JURI Amendment 30 by Mr Lehne:

"Its current wording could indeed criminalize IPR disputes that are essentially of a civil nature and occur between legitimate commercial enterprises."

The Commission proposal indeed does not just criminalise piracy and counterfeiting, but also a broad range of common business activities practised by legitimate enterprises. This well-established fact has been confirmed by at least the following stake holders: The Max Planck Institute for Intellectual Property, Competition and Tax Law, the Chartered Institute of Patent Agents, the Law Society of England and Wales, the Austrian Federal Chamber of Labour, EGA, EICTA, ECIS, ECTA, FIPR, BEUC, LACA and ETNO.

Below we will discuss 2 options to solve this problem.

Yours sincerely,

Ante Wessels

Limit the directive to clear cases of piracy

There are basically two options for limiting the directive to clear cases of piracy. Either limit the definition of the crime to piracy (and counterfeiting). This leaves piracy undefined, may create legal uncertainty for many years. The member states can interpret piracy as they like, finally the ECJ may give an interpretation. Politicians leave the matter to the Court.

The other option is to follow the recommendations by the Max Planck Institute. We believe this is the best option, since it solves the matter right away. In order to limit the directive to clear cases of piracy, the Max Planck Institute proposed:

"Indeed, when proper account is taken of the proportionality principle [...], harmonisation of criminal penalties can only be justified in relation to acts fulfilling the following elements cumulatively:

- 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.]).
- Commercial activity with an intention to earn a profit.
- Intent or contingent intent (dolus eventualis) with regard to the existence of the infringed right."

The first element is implemented in JURI amendments 47 and 51 (and others):

"For the purposes of this Directive, "infringement" means an infringement where the infringing item emulates the characteristic elements of a protected product or distinctive sign in an unmodified fashion."

The second element is implemented in JURI amendments 53, 54 and others. Again, a proper definition prevents legal uncertainty.

The Chartered Institute of Patent Agents (CIPA) warned against inclusion of rights which are not examined, and against 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."

See for this and other issues our earlier letter: Criminal Measures IP Directive - 4 Essential Issues and Solutions

* Chartered Institute of Patent Attorneys

* Max Planck Institute

* Dutch Parliament

* Law Society of England and Wales

* EPO Scenarios Prof. Paul A. David (Oxford, Stanford)

* EICTA

* ECTA

* ECIS

* FIPR

* LACA

* EGA

* Austrian Federal Chamber of Labour

* BEUC

* ETNO

* FFII

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