Harmonising national penal codes?
Despite a whole range of rules on the protection of intellectual property, counterfeiting and piracy have continued to grow in the world because offenders have the possibility of making substantial profits without risking any serious legal penalties.
In July 2005, the Commission presented a double proposal for a directive and a Council framework decision aimed at introducing criminal sanctions for IPR infringements.
The proposal was redrafted in April 2006, to take into account a judgment by the Court , dating from 13 September 2005, which holds that the EU has powers to harmonise member states' criminal law, if required for the effective implementation of Community law (see Communication COM/2005/0583 final ). If adopted, the Directive would be the first ever to harmonise member states' criminal law.
On 5-6 October 2006, the Justice and Home Affairs Council discussed the Commission's amended proposal, stressing the principle of subsidiarity and adding that the harmonisation of criminal law should be a last resort.
Getting the punishment right
The double proposal has raised the question of which sanctions are appropriate for infringements of intellectual property rights. The draft Directive mandates that "all intentional infringements of an intellectual property right on a commercial scale, and attempting, aiding or abetting and inciting such infringements, are treated as criminal offences".
The proposal revives measures set out by the Commission in its initial draft for the directive on the enforcement of intellectual property rights, which were scrapped by Parliament when it adopted the directive in 2004.
These include custodial sentences, fines, the destruction or confiscation of fake goods or of products of a corresponding value, the closure establishments used to commit offences, bans on engaging in commercial activities, placing under judicial supervision, bans on access to public assistance or subsidies, and the publication of judicial decisions.
In addition, the draft framework decision provides for extended powers of confiscation and grants holders of intellectual property rights the right to assist the work of joint investigation teams.
The proposals have been criticised by a wide range of industries, including computer and software manufacturers, telecom operators, generic medicines manufacturers and trademark holders, for failing to fence in the Directive's scope on the specific problem of commercial counterfeiting.
Stakeholders said the draft risked criminalising even small-scale infringements for personal use, such as copying the content of a DVD to a computer's hard disk or making a back-up of a copy-protected CD.
A further point of criticism was that the draft would also introduce criminal measures for alleged infringements of unexamined intellectual property rights, such as pending or contested patent applications.
In a first reading vote on 25 April 2007, Parliament took up these concerns and voted to exclude private individuals from the scope of the Directive, so long as they do not generate any profit from the use of the product. Smaller offences will also remain under national civil law.
Furthermore, Parliament also decided to leave patents on inventions out of the Directive on the basis that such breaches are more difficult to verify and that civil law remains the most appropriate instrument for prosecuting this type of infringement.
The scope of the directive would thus be limited to the following intellectual property rights:
- Copyright and related rights;
sui generis rights of a database maker;
- rights of the creator of a topography of a semi-conductor product;
- trademark rights;
- design rights;
- geographical indications, and;
- trade names.
The Directive will only enter into force if approved by member states. But that could prove somewhat difficult as countries such as the UK and the Netherlands fear that the EU is going too far by harmonising criminal codes – infringing on an area traditionally reserved for member states.
Furthermore, legal experts say the text could be be attacked before the Court for its possible lack of a proper legal foundation (see 'Positions').