Intellectual Property Rights

The European Commission says that intellectual property rights need better protection in the EU, and suggests that providing better data, strengthening stakeholder engagement, and encouraging closer Member State cooperation are the ways to achieve this.
The Commission’s objectives have been laid out in two Communications – an Action Plan on IPR in the EU and a Strategy on IPR in third countries  – published this month.
Both Communications aim to address the increasing level infringements of intellectual property rights (IPR), caused in part by recent technological change. Tightening up IPR compliance is vital to protecting EU industrial competitiveness, the Commission believes.

Strategy on Protection and Enforcement

Technological change has made a review of the 2004 strategy a priority. The continual growth of the internet economy and the increasing role played by emerging economies calls for a “smarter approach” in using available trade policy tools to protect and enforce IPR in third countries. These include trade agreements, legislative action and dispute settlement, helpdesks and technical assistance.

The new Strategy puts forward six key challenges and offers possible solutions to each.

1) Improving stakeholder engagement

Public opinion has not been sufficiently taken into account in IP policy. In order to address this, the Commission wants to encourage a broader dialogue with stakeholders including public authorities, civil society and the European Parliament in order to raise awareness and guide policy.

2) Providing better data

Certain data, such as the scale and impact of IPR infringement, are difficult to obtain due to the reluctance of right-holders to disclose details. However, such data are needed in order to support evidence-based policy-making and to quantify more precisely the role and impact of IP and IPR infringement.

Several initiatives, like the setting up of a European Observatory on Infringements of Intellectual Property Rights, have already been taken to enhance data collection and reporting. According to the Commission, data collection and reporting should be further enhanced and regular surveys on ‘priority countries’ conducted.

3) Building on EU legislation

Harmonisation is needed in order to provide a simpler and more predictable framework for consumers and industry, and to facilitate negotiations with third countries. When negotiating with non-EU countries, the lack of harmonisation in some IPR areas can limit the EU’s ability to address IP issues. A Directive on trade secrets, aimed at improving conditions for innovative business activity, has been proposed. Furthermore, the Communication insists on the need for harmonisation in using international treaties. Existing relevant IPR treaties should be ratified by all EU Member States says the Commission.

4) Enhancing cooperation within the EU

Cooperation between Member States and the EU should be improved in order to ensure a more strategic and coherent approach to IP issues in third countries. This should be done for instance in using partnerships established to implement the Market Access Strategy.

5) Improving protection and enforcement in third countries

Although the Commission acknowledges the fact that only a few significant multilateral IPR agreements have been conducted, efforts to improve the international IPR framework should be continued. This includes for example better protection of geographical indications at the World Trade Organisation.
Bilateral agreements are another useful opportunity to address specific issues. Several recently concluded trade agreements have integrated chapters on IP protection enforcement, and this should be encouraged. ‘IP dialogues’ or ‘IP Working groups’ can also be useful in involving regular interactions between the EU and third countries, the delivery of technical assistance to developing countries and the monitoring of the IPR situation in third countries.
In the case of countries that persistently break international commitments on IP rules, EU funding could be restricted. This would not affect programmes financed by the European Development Funds or Development Cooperation Instruments however.

6) Providing Assistance to EU right holders in third countries

The Commission has already established three IPR Helpdesks to provide assistance for EU firms (Greater China, South-East Asia and South America), and the availability of IP expertise in key regions should be increased.
A list of priority countries where EU right-holders suffer inadequate IPR protection will be updated every two years. The aim is to help businesses, and in particular SMEs, by making them more aware of potential IP risk when trading with certain third countries.

EU Action Plan on Enforcement

The new Action Plan focuses on the enforcement of IPR within the EU. It puts a particular emphasis on the fight against commercial scale IP infringement activity, which is seen by the Commission as a key threat.
The Commission puts forward ten actions and proposes new enforcement policy tools. These actions are divided into three main categories: (1) the implication of all actors along the IP value-chain, (2) the cooperation between public authorities and (3) the improvement of the monitoring and targeting of IP enforcement policy.

1) A role for all actors along the IP value-chain

The Commission believes that consumers, employees and business are not always aware of the scale of economic harm that IP infringement activity can cause. The Commission therefore wants to launch and monitor a new generation of targeted communication campaigns in order to raise awareness and highlight the benefits of choosing products that respect IPR.
New technologies have brought benefits – more efficient supply chains, reduced inventory costs and increases in direct deliveries – which are sometimes used by IP-infringing commercial operators. The Commission will launch a series of consultation actions in order to develop an EU due-diligence scheme and will encourage the voluntary take up of the initiative.
In order to detect and interrupt commercial scale IP-infringing activities, agreements between right-holders and business partners on whom they rely on to source, promote, distribute and sell their product are important. Stakeholder Dialogues have been initiated by the Commission, with the aim of facilitating the development of Memoranda of Understanding (MoUs), with the goal being to deprive IP infringers of their revenue streams. In this context, the Commission’s objective is to facilitate the development of further voluntary MoUs to reduce the profits of commercial scale IP infringement online.
Assisting SMEs to enforce their IP rights: The 2004 Directive on the enforcement of intellectual property rights provides harmonised rules on a civil IP redress system. However, the high cost and complexity of litigation can dissuade SMEs from enforcing their IP rights. The Commission therefore aims to consult stakeholders on the need for future EU action to help SMEs enforce their rights.
Chargeback systems: Chargeback schemes enable consumers to contest and not pay for a service or product that they would not have wished to purchase had they already known it was not genuine. According to the Commission, these schemes can play a role in limiting IP-infringing operators. The Commission will therefore consult stakeholders on the impact of chargeback and will explore the need and scope for taking concrete action in this field.

2) Cooperation between public authorities

The transnational nature of organised crime involved in IP-infringement requires enhanced cooperation between national authorities. This is why the Commission has proposed to establish a Member State Expert Group on IP Enforcement, where Member States can share best practice.
The training of national authorities in IP-infringement activities largely takes place at the national level. The Commission believes that there is a need to develop a cross-border IP enforcement authority training programme. It will therefore support the development of a comprehensive set of IP enforcement-related training programmes for national authorities in the context of the Single Market.
Public contractors’ responsibility to screen public procurement for IP-infringing products: The use of public procurement contracts can result in public sector services being infiltrated with IP-infringing products. In order to address this issue, the Commission aims to develop, promote and publish a guide on best practice for public authorities to avoid purchasing counterfeit products.

3) Better monitoring and targeting of IP enforcement policy

In order to target IP enforcement policies at activities that are most likely to harm investment in innovation and economic growth, the Commission will publish a biennial report on the economic impact of the EU’s IP policy. This would, according to the Commission, serve as a more effective monitoring tool for the EU’s new IP enforcement policy.

Next steps

The actions set out in the two Communications will be launched and carried out in 2014 and 2015. On the basis of the outcomes of these actions, the Commission will consider whether further measures are needed.