Amended Proposal for a EU Directive on Criminal Measures Aimed at Ensuring the Enforcement of IP.
The EU Council has published Document 8866/06 conveying an 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 as drafted by the EU Commission.
"[...] This proposal for a Directive amends the proposal for a Parliament and Council Directive on criminal measures aimed at ensuring the enforcement of intellectual property rights (2005/0127 COD). It puts into effect the Communication from the Commission of 23 November 2005 (COM(2005) 583 final) on the implications of the Court's judgment of 13 September 2005 (Case C 176/03 Commission v Council). It was held in that judgment that provisions of criminal law required for the effective implementation of Community law come under the EC Treaty. The Commission states in its Communication that it will make the necessary changes to pending proposals as and when required. It specifically mentions the proposal for a Parliament and Council Directive on criminal measures aimed at ensuring the enforcement of intellectual property rights and the proposal for a Council Framework Decision to strengthen the criminal law framework to combat intellectual property offences (COM(2005) 276 final). Consequently, the proposal for a Framework Decision has been withdrawn and a proposal drawn up amending the proposal for a Directive on criminal measures.
The provisions in the proposal for a Framework Decision relating to penalties and extended powers of confiscation have now been incorporated in the new proposal for a Directive. The only provisions that have not been taken over are those relating to jurisdiction and the coordination of proceedings, contained in Article 5 of the proposal for a Framework Decision. The Commission plans to take a horizontal approach to this subject under its Green Paper on conflicts of jurisdiction and the principle of ne bis in idem in criminal proceedings, adopted on 23 December 2005. It does not consider it essential to lay down specific arrangements for the protection of intellectual property.
Counterfeiting and piracy, and infringements of intellectual property in general, are a constantly growing phenomenon which nowadays has an international dimension, since they are a serious threat to national economies and governments. The disparities between the national systems of penalties, apart from hampering the proper functioning of the internal market, make it difficult to combat counterfeiting and piracy effectively. In addition to the economic and social consequences, counterfeiting and piracy also pose problems for consumer protection, particularly when health and safety are at stake. Increasing use of the Internet enables pirated products to be distributed instantly around the globe. Finally, this phenomenon appears to be increasingly linked to organised crime. Combating this phenomenon is therefore of vital importance for the Community. Counterfeiting and pirating have become lucrative activities in the same way as other large-scale criminal activities such as drug trafficking. There are high potential profits to be made without risk of serious legal penalties. Additional provisions to strengthen and improve the fight against counterfeiting and piracy are therefore necessary to supplement Directive 2004/48/EC of 29 April 2004 on the enforcement of intellectual property rights. In addition to the civil and administrative measures, procedures and remedies provided for in Directive 2004/48/EC, criminal penalties also constitute, in appropriate cases, a means of enforcing intellectual property rights.
A start was made on harmonisation with the entry into force of the TRIPS agreement which lays down minimum provisions on means of enforcing trade-related intellectual property rights. These include the implementation of criminal procedures and criminal penalties, but there are still major disparities in the legal situation in the Community which do not allow the holders of intellectual property rights to benefit from an equivalent level of protection throughout the Community. As regards criminal penalties, there are considerable differences, particularly as regards the level of punishment laid down by national legislation.
As regards impact on fundamental rights, it should be emphasised that the direct objective of this initiative is to implement Article 17(2) of the Charter of Fundamental Rights which states that 'Intellectual property shall be protected'; it does this by approximation of legislation while respecting the different legal traditions and systems of the Member States as well as other fundamental rights and principles recognised by the Charter. The level of sentences has been chosen pursuant to the seriousness of the different forms of wrongful conduct, in accordance with Article 49(3) of the Charter to the effect that sentences should not be disproportionate to the offence.
Since this objective may be better achieved at Community level, the Community may take measures in accordance with the principle of subsidiarity as set out in Article 5 of the treaty. [...]"
A first principle of the Draft is an assertion that the EU Member States will have to ensure 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 amended proposal provides that each EU Member State will have to take the necessary measures to ensure that, when committed by natural persons, offences are punishable by a maximum sentence of at least four years' imprisonment when committed under the aegis of a criminal organisation, or where they carry a health or safety risk. Under some circumstances, heavy files are provided instead of imprisonment.
Furthermore, EU Member States will have to take the necessary measures to allow the total or partial confiscation of goods belonging to convicted natural or legal persons, at least where the offences are committed under the aegis of a criminal organisation or where they carry a health or safety risk.
And the Member States will have to ensure that the holders of intellectual property rights concerned, or their representatives, and experts, are allowed to assist the investigations carried out by joint investigation teams into the offences.
Finally, Member States will also have to ensure that the possibility of initiating investigations into, or prosecution of, offences are not dependent on a report or accusation made by a person subjected to the offence, at least if the acts were committed in the territory of the Member State.
How will these provisions change the landscape of patent infringement? Are such criminal provisions as aimed at by the EU indeed suitable for such complex cases as patent infringement cases? I am in doubt.
Document 8866/06 conveying an 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 as drafted by the EU Commission. 
doubt.