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| = IPRED 2 = | We kindly thank you for the invitation to send in notes. We would like to draw your attention to the following: |
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| Proposal for a EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE on criminal measures aimed at ensuring the enforcement of intellectual property rights |
* IPRED 2 confuses "piracy" and commercial infringement. IPRED 2 criminalises companies that are not pirates. |
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| Proposal for a COUNCIL FRAMEWORK DECISION to strengthen the criminal law framework to combat intellectual property offences |
* Patents, especially software patents, are unfit for criminal sanctions. Microsoft has been violating many patents, and had to pay huge damages. But do we really want to see Bill Gates in prison? Europe´s software developers are to be kept out of prison. |
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| == IPRED 2 == | * Depending on the outcome of the lawmaking process and interpretation by courts, not for profit activities will be a crime, or organised crime or not. |
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| Violates the legitimacy principle. Violates the subsidiarity principle. IPRED 2 is excessive. | * There even was a call to remove "commercial scale" from the directive, which was motivated by the remark that courts could interpret "commercial scale" differently. This is not an argument, since the ECJ will have the final word. More importantly, removing or undermining "commercial scale" will have enormous consequenses, not for profit activities by individuals will be criminalised. We could see adolescents' not for profit actions countered with means suited for fighting organised crime. We should be very clear about whether we want this. It should not be an "accidental" byproduct of this directive. "Commercial scale" is not clear enough. |
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| == Legitimacy == | * Not for profit internet file sharing of copyrighted material is a new issue, that requires a balanced and well thought-out solution. Levies on writeable CDs, DVDs, etc are an indication that there are more possible ways to follow. And first it should be clear too in how far file sharing actually stimulates buying. We may cross the line. If our youngsters are criminals already, what would they care about other crimes? If companies are criminalised, shouldn't they go underground or leave Europe? Criminal law should be the ultimum remedium. |
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| We can say: "Fact X is a crime". This rule has to be written down in a law in advance. Before the act. Criminal laws are strict. They have to be, it is a protection against arbitrary power. People are entitled to know what is a crime in advance. | * Severe sanctions on copyright violations may endanger freedom of speech. |
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| Civil law is less strict. In a copyright case a Dutch court decided a smell can be “a work” in the sense of the copyright law. The scope of the copyright law became broader. In criminal law this would be a violation of the legitimacy principle. People could not know it is a crime to violate a smell. | * Severe sanctions pose a threat, and will provoke false threats. A US study revealed that a third of take down notices demanded removal when the target had a clear legal defense. Take down notices often result in online materials being pulled from the internet, generally without notice to the target. |
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| We have a complication. If you add or increase sanctions to a law that is enforced in a civil way, definitions have to be interpreted in a more strict way. The scope of the law will become more narrow. For instance in copyright law there are issues with definitions like “work”, “independent” recreation, “parody”. | * Right-holders may assist the police with the investigation, help to draw conclusions. This threatens the neutrality of police investigation. |
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| Trade marks. Trade marks have to be defended rigorously, otherwise they are lost. Trade Marks are unstable. Fact X can turn out not to be a crime! We will have a crazy situation at hand. Fact X can turn out to be a crime, or fact X can turn out not to be a crime! And you will find out in court. This should never be allowed! We are not living in the dark middle ages, this is the 21st century. People are entitled to know what is a crime in advance. Otherwise legitimacy is lost, there is no protection against arbitrary power. | * The directive is not just a harmonisation. In many cases, minor offences become criminal offences. Fines go up. Maximum custodial sentences go up, in the case of Dutch trade name violations more than a 100 times. Violations that do not have criminal sanctions now are criminalised. For instance patents have criminal sanctions only in 10 EU countries, while in the Netherlands the government proposed to remove the criminal sanctions. |
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| Patents cause lots of problems already. The “As such” exclusions are unclear and drifting. We have a major quality problem at hand. It is impossible to know all patents. | * IP rights do not have clear delimitations. It is even often unclear whether an IP right is valid. Enforcement of IP rights calls for a very balanced approach. |
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| Especially in the software field, problems are huge. There are countless software developers around the world, who often keep their source code secret. There is no prior art database, it is not known what has already been done. It is not known what is new, and if you do not know what is new, it is impossible to know what is inventive. More than 30.000 software patents have been granted, it is impossible to know them all. It is impossible to write software without violating patents. “Independent (re)discovery” occurs daily. A whole industry will be criminalized. With IPRED 2, just doing your job may get you 4 years in prison. | * National laws make distinctions between minor and criminal offences, between lower and higher sanctions. They may offer other solutions than sanctions. All these subtleties are destroyed with the directive's all-is-a-crime approach. Carefully balanced national procedural law systems are distorted. A violation of subsidiarity principle. |
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| Patents can be invalidated in court. In civil court cases, there is almost always a counterclaim for invalidity. It may take weeks to establish whether the patent should have been granted or not. Counterclaims are often granted. Patents are fundamentally unstable. Again fact X can be a crime or not a crime. There is no legitimacy at all. No protection against arbitrary power. | * "Trade mark counterfeiting" and "copyright piracy" are already forbidden in European countries. On a world-wide scale, the TRIPS treaty sees to that. The main problems are countered. IPRED 1 is being implemented at the moment. Effects are not clear yet, it is unknown whether further measures are needed. Why would we rush IPRED2? |
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| Patents are totally unfit for criminal sanctions. | We conclude that the directive and framework are untimely, distortive and do not offer a proper solution for new issues. They should be rejected. |
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| == Excessive == | You will find more information about this here [url] (pdf with www.ipred.org/en content) |
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| Let´s take a look at trade names. In the Netherlands, on first offence the civil servant can propose measures to take to stop the offence. Then there will be no punishment. Violating a trade name is a minor offence in the Netherlands, the fine is 2250 euro. On second offence the fine is the same or two weeks of prison. With IPRED 2 violating trade names is a criminal offence, the sanctions for a first offence are 100.000 or 300.000 euro, depending on the circumstances, or 4 years of prison. The prison sentence is more than 100 times as severe for a first offense as it is now in the Netherlands for a second offence. In the Netherlands, there have not been cases for the last 50 years. Clearly, there is a total lack of necessity. And the sanctions are disproportionate to the offense, which is a violation of article 49(3) of the Charter of Fundamental Rights. == IP-rights == We took a look at four "intellectual property" rights. There are many of them and they are very different from each other. This is the list of the ones concerned: copyright, rights related to copyright, sui generis right of a database maker, rights of the creator of the topographies of a semiconductor product, trademark rights, design rights patent rights, including rights derived from supplementary protection certificates, geographical indications, utility model rights, plant variety rights, trade names, in so far as these are protected as exclusive property rights in the national law concerned. The four we looked at, have many issues, how many issues will the others have? We do not know, the Commission did not investigate the issues at all. == Solve the legitimacy problem == Let´s try to solve the legitimacy problem. Here are the things that at least need to be done: - Exclude unstable rights - Clear up grey area's - Rewrite all IP-laws - Scope of protection has to be drastically narrowed == Privatize the police == Right-holders may assist the police with the investigation, help to draw conclusions (framework art 4, see also the explanatory memorandum on this article). What will be the impact on neutrality of police investigation? Privatization of the police, how far should it go? What are the safeguards against abuse? For instance patents are used strategically. Will the police become part of power play by multinationals? These are really fundamental questions. The Commission provides no answers at all. How could it, the whole justification is one A4 page long, 463 words. == Subsidiarity == IPRED 2 is not needed: piracy is already forbidden in European countries. And TRIPS already lays down severe provisions on means of enforcing trade-related intellectual property rights. These include the implementation of criminal procedures and criminal penalties. In no way the Commission makes clear these are not enough. In 2004 the Council and European Parliament adopted the Intellectual Property Rights Enforcement Directive (IPRED). It is being implemented at the moment. Effects are not clear yet, it is unknown whether further measures are needed. == Conclusion == With IPRED 2 legitimacy is lost. IPRED 2 is excessive and distorts carefully balanced national procedural law systems. The Commission is blind for all the issues. The justification is just one A4 page long, 463 words. IPRED 2 is a grave violation of the subsidiarity principle. On July 6th the European Parliament rejected the software patents directive. Europe can only thank the Parliament for this. The IPRED 2 directive is even more absurd. It should be rejected in first reading. We wish the Parliament the wisdom it had on July 6th 2005. |
Some remarks on TempRemarks |
We kindly thank you for the invitation to send in notes. We would like to draw your attention to the following:
* IPRED 2 confuses "piracy" and commercial infringement. IPRED 2 criminalises companies that are not pirates.
* Patents, especially software patents, are unfit for criminal sanctions. Microsoft has been violating many patents, and had to pay huge damages. But do we really want to see Bill Gates in prison? Europe´s software developers are to be kept out of prison.
* Depending on the outcome of the lawmaking process and interpretation by courts, not for profit activities will be a crime, or organised crime or not.
* There even was a call to remove "commercial scale" from the directive, which was motivated by the remark that courts could interpret "commercial scale" differently. This is not an argument, since the ECJ will have the final word. More importantly, removing or undermining "commercial scale" will have enormous consequenses, not for profit activities by individuals will be criminalised. We could see adolescents' not for profit actions countered with means suited for fighting organised crime. We should be very clear about whether we want this. It should not be an "accidental" byproduct of this directive. "Commercial scale" is not clear enough.
* Not for profit internet file sharing of copyrighted material is a new issue, that requires a balanced and well thought-out solution. Levies on writeable CDs, DVDs, etc are an indication that there are more possible ways to follow. And first it should be clear too in how far file sharing actually stimulates buying. We may cross the line. If our youngsters are criminals already, what would they care about other crimes? If companies are criminalised, shouldn't they go underground or leave Europe? Criminal law should be the ultimum remedium.
* Severe sanctions on copyright violations may endanger freedom of speech.
* Severe sanctions pose a threat, and will provoke false threats. A US study revealed that a third of take down notices demanded removal when the target had a clear legal defense. Take down notices often result in online materials being pulled from the internet, generally without notice to the target.
* Right-holders may assist the police with the investigation, help to draw conclusions. This threatens the neutrality of police investigation.
* The directive is not just a harmonisation. In many cases, minor offences become criminal offences. Fines go up. Maximum custodial sentences go up, in the case of Dutch trade name violations more than a 100 times. Violations that do not have criminal sanctions now are criminalised. For instance patents have criminal sanctions only in 10 EU countries, while in the Netherlands the government proposed to remove the criminal sanctions.
* IP rights do not have clear delimitations. It is even often unclear whether an IP right is valid. Enforcement of IP rights calls for a very balanced approach.
* National laws make distinctions between minor and criminal offences, between lower and higher sanctions. They may offer other solutions than sanctions. All these subtleties are destroyed with the directive's all-is-a-crime approach. Carefully balanced national procedural law systems are distorted. A violation of subsidiarity principle.
* "Trade mark counterfeiting" and "copyright piracy" are already forbidden in European countries. On a world-wide scale, the TRIPS treaty sees to that. The main problems are countered. IPRED 1 is being implemented at the moment. Effects are not clear yet, it is unknown whether further measures are needed. Why would we rush IPRED2?
We conclude that the directive and framework are untimely, distortive and do not offer a proper solution for new issues. They should be rejected.
You will find more information about this here [url] (pdf with www.ipred.org/en content)
Some remarks on TempRemarks