EU IP Enforcement Directive: More Background Information.
The EU Council has now published Document 10329/06 previously marked as "LIMITE" concerning the 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. The new text provides some background information:
"[...] In the justification for the proposal the Commission i.a. has stated that infringements of intellectual property were a constantly growing phenomenon with an international dimension, since they were a serious threat to national economies and governments. The isparities between the national systems of penalties, apart from hampering the proper functioning of the internal market, would make it difficult to combat counterfeiting and piracy effectively. In addition to the economic and social consequences, counterfeiting and piracy would also pose problems for consumer protection, whereas increasing use of the Internet would enable pirated products to be distributed instantly around the globe. Finally, this phenomenon appeared to be increasingly linked to organised crime.
Since counterfeiting and pirating had become lucrative activities in the same way as other large-scale criminal activities such as drug trafficking. There were high potential profits to be made without risk of serious legal penalties. Additional provisions to strengthen and improve the fight against counterfeiting and piracy were 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 therein, criminal penalties would also constitute, in appropriate cases, a means of enforcing intellectual property rights1. With the entry into force of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), concluded on 15 April 1994 and signed by all the members of the World Trade Organisation, which lays down minimum provisions on means of enforcing trade-related intellectual property rights, according to the Commission only start was made on harmonisation.
Although the agreement includes the implementation of criminal law measures, there were still major disparities in the legal situation in the Community which would not allow the holders of intellectual property rights to benefit from an equivalent level of protection throughout the Community. Regarding criminal penalties, there still were considerable differences. [...]
During the discussions in the Working Party, however, concerns have been raised with respect to the (immediate) need for (further) criminal measures against the violation of intellectual property rights.
One of those concerns directly related to the time-frame for assessment of the effectiveness of the Directive 2004/48/EC of 29 April 2004 on the enforcement of intellectual property rights provided by its Articles 18 and 20. According to Article 20 of this Directive the time-limit for bringing into force the laws, regulations and administrative provisions necessary to comply with this Directive has ended only very recently, on 29 April 2006. Three years after that date - according to Article 18 paragraph 1 - each Member State shall submit to the Commission a report on the implementation of this Directive. On the basis of those reports, the Commission shall draw up a report on the application of this Directive, including an assessment of the effectiveness of the measures taken, as well as an evaluation of its impact on innovation and the development of the information society.
That report shall then be transmitted to the European Parliament, the Council and the European Economic and Social Committee. It shall be accompanied, if necessary and in the light of developments in the Community legal order, by proposals for amendments to this Directive. Consequently, at least one delegation considered it premature to enter into discussions about (future) criminal measures now, from this point of view.
One must concede, however, that the 2004 Directive, while explicitly stating that it should not affect neither Member States' international obligations and notably the TRIPS Agreement, including those relating to criminal procedures and penalties, nor any national provisions in Member States relating to criminal procedures or penalties in respect of infringement of intellectual property rights1, in fact already has acknowledged in its recital 28 that in addition to the civil and administrative measures, procedures and remedies provided for under this Directive, criminal sanctions also constitute, in appropriate cases, a means of ensuring the enforcement of intellectual property rights.
Whereas the scope of the 2004 Directive itself stretches to any infringement of intellectual property rights as provided for by Community law and/or by the national law of the Member State concerned (cf. its Article 2 paragraph 1) criminal sanctions, therefore, could or should be reserved to 'appropriate cases'.
The amended proposal for the Directive seems to have found these 'appropriate' cases by limiting the definition of offences (Article 3) to 'intentional infringements of an intellectual property right on a commercial scale'. [...]
IV. FUTURE QUESTIONS
Does the Council share the Commission's view of the need for further criminal measures to protect intellectual property rights?
Should the outcome of case C-440/05 Commission v Council, currently pending before the Court of Justice, and/or the evaluation process of Directive 2004/48/EC be waited for?
If the discussions should be continued now, should this be done on the basis of the amended proposal for a Directive or with a view to a reduction of the scope of this proposal, in particular as regards intellectual property rights not yet harmonised?"
The Action brought on 8 December 2005 by the Commission of the European Communities against the Council of the European Union (Case C-440/05) is available here.
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Dipl.-Phys. Axel H Horns is Patentanwalt (German Patent Attorney),
European Patent Attorney as well as European Trade Mark Attorney. In particular, he is Member of:
Document 10329/06 previously marked as "LIMITE" concerning the 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. The new text provides some background information: 
earlier posting. 
