As part of its digital single market strategy, the European Commission has published a series of papers setting out its commitment to protection of intellectual property rights in an effort to encourage innovation and creativity.
The Commission's announcement covers three main areas:
- Stepping up the fight against counterfeiting and piracy, by tackling the 'big fish' through a 'follow the money' approach.
- Providing greater legal certainty over enforcement of IP rights by giving guidance on how key provisions in the IP Enforcement Directive should be interpreted by the courts.
- Creating a fair and balanced system for licensing and enforcing Standard Essential Patents (see our bulletin on the SEP proposals).
Dealing with counterfeits and piracy
The backdrop to the Commission's announcements includes recent troubling statistics which demonstrate the size of the counterfeiting problem, with some 5% of all imports into the EU identified as counterfeit and pirated goods, representing an estimated €85 billion in illegal trade, with estimates of total losses in the EU due to counterfeits at €48 billion.
The Commission's proposals include:
- Doing more to exploit the potential of voluntary agreements such as the Memorandum of Understanding concluded between right holders and internet platforms in 2011 (and updated in 2016, to include KPIs). According to the Commission's evaluation of the MoU, it has reaped substantial results in curbing counterfeit goods, as numerous fake goods have been successfully removed from the internet. Stakeholders are finalising a new MoU aimed at withholding advertising on IP infringing websites, with work also underway on an MoU for the transport and shipping industries, and a new MoU aimed at providers of payment services.
- Protecting supply chains against IP infringement threats through promotion of due diligence, and exploration of new technologies such as blockchain.
- Fighting IP infringements through enhanced administrative co-operation in relation to better market surveillance and work towards a new Customs Action Plan.
- Fighting IP infringements worldwide by publishing in Q1 2018 a new report on protection and enforcement of IP in third countries, and creating an IP markets watch-list to be published in the second half of 2018 which will identify online and physical markets that engage in or facilitate substantial IP infringements.
Guidance on the IP Enforcement Directive
Whilst the Commission concludes that the IP Enforcement Directive remains 'fit for purpose', it recognises that in the last decade or so since it took effect in 2004, the courts across EU Member States have adopted divergent interpretations in relation to certain key aspects, including in relation to injunctions, damages and legal costs. Whilst this is partly due to the minimum harmonisation approach adopted in the Directive, divergence is not surprising also due to differences of approach in individual Member States' judicial and procedural systems. Instead of producing a new and updated enforcement regime, the Commission has set out guidance based largely on various European Court of Justice decisions interpreting the Directive, together with some examples of best practice drawn from various Member States. Whilst this guidance is welcome, it is a missed opportunity to modernise the EU enforcement regime.