Today, the EU Commission has adopted a strategy intended to to revamp the legal framework in which Intellectual Property Rights (IPR) operate.See also this Draft here.
The IPR Strategy sets out a series of short- and long-term key policy actions in various areas which include:
Patents: the Commission already launched proposals in April for a unitary patent protection under enhanced cooperation (see IP/11/470). Meanwhile, work will continue on proposals relating to the creation of a unified and specialised patent court for the classical European patents and the future European patents with unitary effect. This would considerably reduce litigation costs and the time it takes to resolve patent disputes. It would also increase legal certainty for business.
Trade marks: while trade mark registration in the EU has been harmonised in Member States for almost 20 years and the Community trade mark was established 15 years ago, there is an increasing demand for more streamlined, effective and consistent registration systems. The Commission intends to present proposals in 2011 to modernise the trade mark system both at EU and national levels and adapt it to the Internet era.
Geographical indications (GIs): GIs secure a link between a product's quality and its geographical origin. However, there is currently no such system available at EU level for the protection of non-agricultural products such as Carrara marble or Solingen knives. This leads to an unlevel playing field in the Single Market. The Commission will therefore carry out an in-depth analysis of the existing legal framework in the Member States as well as the potential economic impact of protection for non-agricultural GIs in 2011 and 2012. Depending on the outcome of an impact assessment, these could eventually be followed up by legislative proposals.
Multi-territorial copyright licensing: While the substantive scope of copyright has been largely harmonised, rights are still licensed on a national basis. In view of the digital Single Market, streamlining copyright licensing and revenue distribution is one of the most important challenges that must be addressed. In the 2nd half of 2011, the Commission will submit a proposal to create a legal framework for the efficient multi-territorial collective management of copyright, in particular in the music sector. It will also establish common rules on the transparent governance and revenue distribution. In the second half of 2011, the Commission will also launch a consultation on the various issues related to the online distribution of audiovisual works.
Digital libraries: The creation of European digital libraries that preserve and disseminate Europe's rich cultural and intellectual heritage is key to the development of the knowledge economy. To facilitate this, the Commission is also tabling today a legislative proposal that will enable the digitisation and online availability of so-called "orphan works" (works like books and newspaper or magazine articles that are still protected by copyright but where the right holders are not known or cannot be located to obtain copyright permissions) – see MEMO/11/333. Concurrently, the Commission looks forward to concluding a Memorandum of Understanding amongst libraries, publishers, authors and collecting societies to facilitate licensing solutions to digitise and make available out-of-commerce books.
IPR violations: Counterfeiting and piracy are a growing threat for the economy. Between 2005 and 2009, the number of registered cases at the EU borders of goods suspected of infringing IPR increased from 26 704 to 43 572. Meanwhile, the creative industry estimates that piracy has cost the European music, movie, TV and software industry €10 billion and more than 185 000 jobs in 2008 alone. The Commission is set to intensify its efforts in this area. Firstly, the Commission has tabled a regulation today that is to reinforce the European Observatory on Counterfeiting and Piracy, which it launched in 2009, by entrusting its tasks to the Office for Harmonisation in the Internal Market (OHIM). This will allow the Observatory to benefit from OHIM's intellectual property expertise and strong record of delivery in trade marks and designs. The Regulation now passes to the European Parliament and the Council for consideration. Secondly, in Spring 2012, the Commission will propose to revise the IPR Enforcement Directive (see IP/04/540). The Directive provides for civil law measures allowing right holders to enforce their intellectual property rights but should be adapted, in particular to meet the specific challenges of the digital environment.
IPR enforcement by customs: Customs supervise all trade crossing EU external borders: they carry out controls for many purposes and have an essential role in fighting the trade in IPR infringing goods. In 2009 only, customs intercepted over 40 000 suspect shipments involving 118 million articles. Whilst the majority of goods intercepted are counterfeit or pirated, customs' unique position at the border allows for the enforcement of a wide range of intellectual property rights. As part of today's overall IPR strategy, the Commission also proposes a new customs regulation, to further reinforce the legal framework for customs' actions. The proposal also aims to tackle the trade in small consignments of counterfeit goods sent by post as the overwhelming majority of these goods results from internet sales.
Also today, the EU Commission has released MEMO/11/332 on Intellectual Property Strategy – Frequently Asked Questions. Concerning Copyright, the EU Commission announces further steps as follows:
(1) In 2011, the Commission will present a legislative proposal to simplify the collective management of copyright in the EU. Collecting societies licence the rights of creators and collect and distribute their royalties. The Commission's focus will be two-fold. First will be the establishment of common rules for collecting societies in order to enhance the governance and transparency of all collectively-managed revenue streams. Clearer rules on the governance and transparency of collecting societies will create a level playing field amongst right holders, commercial users and collecting societies. Second, the creation of a clear and well-functioning legal framework for the multi-territorial licensing of musical works for online services will encourage the take-up of new business models to provide online services to European consumers.
(2) In order to promote the dissemination of Europe's intellectual and cultural heritage, the Commission has today tabled a legislative proposal to facilitate the digitisation and making available of "orphan works" (see MEMO/11/333). Orphan works are works such as books, newspapers or films that are still protected by copyright but the copyright holders are not known or locatable. Therefore, they cannot be contacted to give their permission to libraries and archives to digitise their works and make them available online. The lack of a common EU framework on orphan works is impeding the development of European large-scale digital libraries and the functioning of the Europeana portal (see for example IP/09/1544). As part of its efforts in the creation of digital libraries, the Commission is also supporting efforts for the conclusion of an agreement between authors, publishers, libraries and collecting societies to enable the online access to out-of-commerce books through licensing models. The agreement is expected to be adopted in mid-2011. Out-of-commerce books are works that are in-copyright but that are no longer commercially available in traditional or new electronic formats. They differ from orphan works in that their right holders (authors and publishers) are known and locatable.
(3) The proper functioning of the Internal Market requires the development of a durable approach to private copying levies. Remuneration for private copying of copyright-protected works is collected in the form of levies on recording media or recording equipment (photocopiers, printers, Mp3 players, CDs and DVDs etc.). However, different rules and tariffs apply across Member States. This impedes the smooth cross-border flow of goods that are subject to levies. The Commission will appoint a high-level mediator, tasked with resolving differences amongst relevant stakeholders to find workable solutions to improve the administration of levies and which will be used as the basis for legislative action. The issues that will be looked at specifically are the methodology used to impose set tariffs, which equipment should be subject to levies, and ways to improve the cross-border functioning of disparate national levy systems.
(4) In the audio-visual sector, the Commission will launch a public consultation on the online distribution of audiovisual works. A consultative Green Paper is due for adoption in October 2011. On the basis of the results, the Commission will determine whether any follow-up action needs to be taken in order to stimulate the European audiovisual sector as regards issues such as video-on-demand (VoD) services and cross-border broadcast services.
(5) In October 2011, the Commission will present its report on the application of the Artists' Resale Right Directive7 as required by Article 11 of the Directive. One aspect of the report is to quantify the impact that the resale right has had on the sale of works whose authors have deceased ("hereditary resale right"). Five of the 27 Member States (the United Kingdom, the Netherlands, Austria, Malta and Ireland) currently benefit from an exemption to apply the hereditary resale right which expires on 1 January 2012. The Commission is currently analysing the results of a public consultation on the Directive's implementation in order to quantify the impact of the hereditary resale right on the Internal Market.
(6) As part of its long-term strategy on copyright, the Commission will assess the feasibility of creating a European Copyright Code. A future Code could envisage a comprehensive codification of the EU copyright directives and provide an opportunity to examine the feasibility of an optional "unitary" copyright title to provide right holders with the flexibility to choose whether to license and enforce their copyrights nationally or on a multi-territory basis. Given its far-reaching implications, the creation of a European Copyright Code requires further study and analysis.
Concerning enforcement, the plans of the EU Commission appear to be as follows:
(1) In the first year of the existence of the European Observatory on Counterfeiting and Piracy, its institutional framework was set up and initial activities were launched. In the future, the Observatory should focus increasingly on operational tasks, such as organising training for enforcement authorities (customs, police and judicial authorities etc.), setting up a database of national and European case law and fostering cooperation with and support for those third countries which are particularly vulnerable to counterfeiting and piracy and are used by complex criminal networks as manufacturing and distribution bases. As the Observatory is unable to fulfil its full potential under the current set-up, the Commission has today tabled a draft Regulation to provide the Observatory with additional responsibilities and a sustainable structure. Until these arrangements are formally in place following adoption by the European Parliament and the Council, a "Memorandum of Understanding", also published today, enables OHIM to support the Observatory's work in the interim period.
(2) The report on the application of the IPR Enforcement Directive (Directive 2004/48/EC) of 22 December 2010 (see EXME11/11.01) shows that the Directive has provided a solid basis for the enforcement of intellectual property rights in the internal market. However, the report also shows that major provisions of the Directive have led to very diverging interpretations by Member States and their courts, and that the Directive is not fit to deal with new issues related to the Internet. The results of a public consultation on the report are currently being evaluated. On the basis of the consultation process, the Commission will in Spring 2012, propose a revision of the Directive.
(3) Furthermore, the Commission will pursue its efforts to explore to what extent the sale of counterfeit goods over the internet can be reduced through voluntary measures, involving the stakeholders most concerned by this phenomenon (right holders and internet platforms). In this context, a Memorandum of Understanding was signed by major internet platforms and right holders on 4 May 2011. Over the coming twelve months, these stakeholders will review and measure progress, under the auspices of the Commission services.
(4) The increase in international trade has put the spotlight on the international dimension of IPR. For this reason, schemes to prevent and reduce IPR infringements that are based on the internal market have to be complemented by others that focus on the EU's external borders and on third countries. The Commission will therefore strengthen customs enforcement of intellectual property rights through the adoption of a new Customs Regulation and create conditions for effective action, while streamlining procedures; it will ensure higher standards of IPR customs enforcement in third countries and cooperation in the framework of trade agreements and through coordination with international organisations; and it will pursue customs cooperation in order to reduce the scale of IPR infringements in bilateral trade between the EU and China (see also MEMO/11/327).
The Commission's position regarding illegal downloading appears to be as follows:
The Strategy promotes an approach aimed at tackling infringements at their source. Illegal file sharing is a complex phenomenon and involves several different parties all playing a specific role, the Internet Access Provider being one of them.
The follow-up work announced in the Strategy will focus on service providers who either infringe copyright themselves or who systematically and knowingly facilitate or sustain the piracy activities of others, and profit there from. Such an approach will target the corrosive forces driving online piracy, while respecting at the same time the innovative powers of broadband internet without prejudging the legitimate interest of consumers, including those who download. All service providers concerned have to respect an appropriate level of care in their commercial operations.
This approach fully complies and does not alter the existing rules on limited liability for certain types of ISP activities, such as laid down in the e-Commerce Directive. It also does not change the current possibility in the EU acquis to have injunctions imposed by courts upon internet intermediaries who are not infringing themselves but whose networks are used by third parties to infringe.
Along the lines set out in the Strategy and in compliance with the Commission’s Better Regulation approach, the Commission services are currently preparing, in full consultation with all stakeholders concerned, an Impact Assessment on the different potential options for action, on the basis of which the Commission will decide on the way forward. All options are on the table.
The Strategy outlines the policies that the European Commission intends to take during its current mandate, i.e. until 2014. The time line for adoption or action by the Commission is specified in the previous question. Certain legislative initiatives will only come to fruition after agreement is reached between the Council and the European Parliament.
Today, first steps have been taken by the EU Commission as follows:
- Publishing a Proposal for a Regulation of the European parliament and the Council concerning customs enforcement of intellectual property rights (COM(2011) 285); and
- Publishing a Proposal for a
Regulation of the European parliament and the Council on entrusting the Office for Harmonisation in the Internal Market (Trade Marks and
Designs) with certain tasks related to the protection of intellectual property rights,
including the assembling of public and private sector representatives as a
European Observatory on Counterfeiting and Piracy (COM(2011) 288).
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