Open letter to the President of the Competitiveness Council Directive on enforcement of intellectual property rights threatens to stifle competition in Europe Dear Ms Harney, IFSO acknowledges that effective law enforcement is required to combat organised crime. However, this Directive goes further than international obligations, and recent amendments to the text by the European Parliament and the Council extend it's effect to include unintentional, trivial, and non-commercial infringements, which may be punishable with penal sanctions. This undermines the user side of the copyright bargain by turning fair dealing into a minefield. Not only will this be harmful to society, but it is clearly beyond the remit of the Directive. More prescriptive than international obligations ================================================ IFSO believes that the current text under discussion within the Council(1) is over prescriptive, as it goes further than international agreements and introduces extra obligations, so called "TRIPS plus" elements on EU member states. We also believe that the proposal fails the tests of proportionality and subsidiarity. Anton Piller and Mareva orders exist in the common law systems of Ireland and the UK and are used in exceptional circumstances to deal with the raiding of premises, the seizure of goods and the freezing of bank accounts. The "draconian and essentially unfair nature of Anton Piller orders"(2) has led the courts to develop stringent pre-conditions which must be met before they will issue such an order. The Directive will raise their status from common law to statute law and may dramatically increase requests for these extreme measures in Ireland and the UK. For the rest of Europe, they will be introduced without any safeguards. (1)st16289[1].en03.PA 19.12.2003 (2)Colombia Picture Industries v Robinson [1987] Ch 38, 76 Scott J Holding back the Information Society ==================================== Internet Service Providers (ISPs) could face limitless injunctions, equipment seizures and could be ordered to disclose customer names, block content or undertake surveillance, thus removing the "mere conduit" status awarded to ISPs in the e-commerce directive, with regards to IPR issues. On receiving a take down request from a rightholder, an ISP will be required to comply. Failure to comply could result in asset seizures. If the request is subsequently proved to be invalid, the ISP could be subject to counter claims. The Directive will introduce new administrative burdens which will hamper innovation, because all uses of computer networks will be subject to authorisation and monitoring. Thus increasing costs and holding back the development of the information society. Less competition, less choice ============================= The proposal will stifle competition and the development of legitimate markets by preventing the reverse engineering of software components in order to produce interoperable products currently permitted under the software Directive(3) e.g. printer and game accessories. It would become more difficult for new, innovative SMEs to sell software and accessories independently of console and printer vendors. It would also seriously undermine the growing use of Free Software (sometimes called Open Source or Libre Software) such as GNU/Linux, which the Information Society Initiative of the European Commission says "may be a unique opportunity for the European software industry - somehow this may be a proverbial `second and last chance'". The result will be less choice and competition and an increase in the monopoly position of the dominant players. (3)Council Directive 91/250/EEC OJ L122, 17/05/1991 Alienates the citizens of the information society ================================================= The amendments proposed by the Council extend the scope of the directive to include any infringement of copyright by anyone, including small-scale, unintentional, non-commercial activities which do not harm the rightholder (Article 2) and seek criminal sanctions for all these infringements (Article 20). The approach of the Council in their recent amendments create a highly unbalanced situation and would be detrimental to the information society, in particular the Lisbon Strategy. It would affect hundreds of thousands of Internet users and create legal uncertainty for millions more. It will alienate large portions of the on-line world, young people in particular, from European politics and institutions. Learning from the U.S. DMCA =========================== The Digital Millennium Copyright Act (DCMA) is the U.S. equivalent of the proposed European copyright framework. After five years in force, there is evidence has been used to stifle scientific research and free expression; undermine competition, reverse engineering and technological innovation and has had a negative impact on fair use and non-infringing use(4). Legislators concerned at the unintended and far reaching effects are introducing new legislation to redress the balance. We therefore request that you use your influence on this important issue affecting the information society to recommend the attached amendments. (4)Unintended Consequences: Five Years under the DMCA www.eff.org/IP/DMCA/unintended_consequences.php Yours sincerely, (modifications are surrounded with ***) article 2 paragraph 1 ------------------------------ Without prejudice to the means | Without prejudice to the means which are or may be provided for | which are or may be provided for in Community or national | in Community or national legislation, in so far as those | legislation, in so far as those means may be more favourable for | means may be more favourable for right holders, the measures ***and | right holders, the measures procedures*** provided for by this | provided for by this Directive Directive shall apply to any | shall apply to infringements of infringement of the following | the following intellectual intellectual property rights: | property rights: copyright, rights copyright, rights related to | related to copyright, sui generis copyright, sui generis rights of a | rights of a database manufacturer database manufacturer and of the | and of the creator of the creator of the topographies of a | topographies of a semiconductor semiconductor product, trademarks, | product, trademarks, designs, ***patents, including supplementary| utility models and plant variety protection certificates, | rights, to the extent that geographical indications, | protection of these rights is including indications of origin***,| provided for by Community law or designs, utility models and plant | by the national law of the Member variety rights, to the extent that | State concerned and from the protection of these rights is | provisions adopted by the Member provided for by Community law or | States in order to comply with by the national law of the Member | those acts ***when the State concerned. In this respect, | infringementis committed for Member States shall ensure that | commercial purposes or causes the judicial authorities take due | significant harm to the right account of the specific | holder***. characteristics of each case, | including the intentional or | unintentional character of the | infringement, when determining the | applicable sanctions or other | measures. | ------------------------------ Justification Maintain the objective of the original Commission proposal which was to combat organised crime and was aimed at infringements carried out for commercial purposes and which significantly harmed the rightholder. It was not intended to criminalise all infringements irrespective of their nature or character. Article 2 paragraph 3 ------------------------------ This Directive shall not affect: | This Directive shall not affect: | (a)the Community provisions | (a)the Community provisions governing the substantive law on | governing the substantive law on intellectual property, Directive | intellectual property, Directive 95/46/EC, Directive 1999/93/EC or | 95/46/EC, Directive 1999/93/EC or Directive 2000/31/EC in general, | Directive 2000/31/EC in general, and the provisions of Articles 12 | and the provisions of Articles 12 to 15 in particular of that | to 15 in particular of that Directive. | Directive. | (b)Member States' international | (b)Member States' international obligations and notably the | obligations and notably the Agreement on Trade-Related Aspects | Agreement on Trade-Related Aspects of Intellectual Property Rights | of Intellectual Property Rights (the "TRIPS Agreement"). | (the "TRIPS Agreement"). | *** | (c)Community provisions regarding | the reverse engineering of | products for interoperability, | Directive 91/250/EC in particular | the provisions of Articles 5 and | 6. | | (d)Community provisions regarding | the protection of patents.*** ------------------------------ Justification The provisions of the software directive with regard to reverse engineering should be maintained (European Parliament report A5-0468/2003 Amendment 15). Patents must be excluded because of their special nature and to prevent the directive from mixing competitive product development with counterfeiting and piracy. See also European Parliament report A5-0468/2003 Amendment 5 to Recital 13: "...while excluding patents and certain activities which do not involve intellectual property in the strict sense." Article 20 ------------------------------ Without prejudice to the civil | Without prejudice to the civil and and/or administrative measures | administrative measures and provided for under this Directive, | procedures laid down by this Member States shall adopt the | Directive, Member States shall necessary measures to ensure that | ***apply appropriate sanctions in at least every infringement of an | cases where intellectual property intellectual property right of a | rights have been infringed.*** serious and intentional nature is | liable to penal sanctions. | ------------------------------ Justification The effect of this provision is to criminalise all infringements. The restriction to infringements of "a serious and intentional nature" is meaningless when these are undefined. Furthermore, it is inappropriate for criminal sanctions to be introduced under a First Pillar co-decision procedure. (European Parliament report A5-0468/2003 Amendment 43). Recital 12 ------------------------------ This Directive shall not affect | This Directive shall not affect the application of the rules of | the application of the rules of competition, and in particular | competition, and in particular Articles 81 and 82 of the Treaty.| Articles 81 and 82 of the | Treaty. ***Furthermore, the measures | provided for in this Directive | must not be used to prevent | competition.*** ------------------------------ Justification IFSO supports the European Parliament amendment to Recital 12 to ensure that the enforcement of intellectual property rights will not be used as a pretext to exclude competitors from the market.