IP Crime Enforcement Directive a source of concern for Law Society

The Law Society of England and Wales has "serious concerns" about the European Commission's amended proposed IP Crime Enforcement Directive. Those concerns, no doubt shared by many, were convincingly articulated in a Law Society commentary published in August 2006, which opposes the adoption of the directive in its present form.

The Law Society's commentary includes the following points:

• The Law Society considers that the European Commission's proposal under the directive to set a minimum EU harmonization of the maximum level of criminal sanctions available in member states clearly goes beyond the scope of the ruling in Commission v Council C-176/03. It suggests that even at its most extensive, the European Court of Justice's (ECJ) ruling means that the European Union can only require a particular type of penalty to be imposed without determining how far the member states should go. Moreover, the Advocate General considered that a Framework Decision was the appropriate place for a provision concerning the deprivation of liberty and, despite annulling the framework decision in that case, the court did not contradict him. Thus, according to the Law Society, the commission's proposal "has serious defects as regards legal base". The Law Society cannot see how litigation will be avoided if the proposals are not dealt with (as they were originally) by splitting them into a directive and a Framework Decision. In any event, in the Law Society's view, the commission should await the outcome of Commission v Council C-440/05, a similar case pending before the ECJ, which it suggests may clarify further the scope of EU competence in this field.
  
  
• The Law Society also makes a strong case for limiting the scope of the draft directive to counterfeiting and piracy only. It notes that the directive obliges member states to ensure that all "intentional infringements" of an IP right on a "commercial scale" as well as "attempting, aiding or abetting and inciting such infringements, are treated as criminal offences". It is an "all-encompassing" provision that is too broad for the Law Society, one that leaves member states with no choice but to treat such IP infringements as criminal matters, and presents serious practical difficulties. The Law Society suggests that existing UK criminal IP provisions under the Copyright, Designs and Patents Act 1988 and the Trademarks Act 1994 are adequate insofar as they deal with serious infringements of copyright and trademarks. In other words, the commission should not extend the criminal law to cover patent infringements of a commercial scale.
  
  The Law Society clearly believes that patent infringements, by their nature, do not lend themselves to criminal sanctions. Whereas copyright requires an act of copying, which would constitute the actus reus of the crime, infringement of a patent does not require a similar act of copying.
  
  
• The Law Society argues that the introduction of broad criminal sanctions may upset the balance between the use of civil and criminal proceedings by making it more difficult to draw a distinction between where the civil or the criminal law should be applied. For example, how would the proposal sit with the current confiscation regime? Could enforced closure of businesses pending criminal proceedings lead to large claims for damages following an acquittal?
  
  The Law Society raises further questions. Who, for example, would have the expertise or sufficient financial resources to bring prosecutions? Would it even be possible to afford sufficient certainty in order to bring criminal proceedings against an individual? Would an investigator need to go to the expense of instructing an expert in order to establish whether there has been an offence? If Joint Investigation Teams are allowed, would it be incorrect for the police to rely on the experts of the person alleging a breach, taking into account the inherent problems in relying on these teams, such as accuracy of evidence, integrity of evidence and impartiality?
  
  
• The Law Society also criticizes lack of certainty in the proposed directive. What, for example, is meant by "commercial scale"? It also queries whether the intent attaches to the mens rea of the infringement alone or must there have been an intention that the infringement would be used on a commercial scale? Similarly, as to the aiding and abetting offence, does the accused have to have been aware that the infringement was to be on a commercial scale? The same goes for incitement. For example, could advice given to a third world country regarding a production of generic drugs by a solicitor or IP adviser in the EU be considered incitement?
  
  In addition, the Law Society suggests that mere advice given by a solicitor as to the rights and wrongs of a certain course of conduct would presumably not be caught. But it is not so sure whether a solicitor who draws up the contracts with suppliers for merchandise, which is found to be a result of intentional infringements of an IP right, could be accused of aiding and abetting. The Law Society suggests that a solicitor would probably need to have strayed from the giving of the legal advice into the realm of commercial advice to risk realistically falling foul of the provisions. But it would welcome clarification on this matter.
  

The Law Society's consideration of the commission's proposals raises familiar issues and concerns, many of were expressed in relation to the commission's original proposal, and indeed the civil IP Rights Enforcement Directive, by various organizations. However, some may play down the Law Society's assessment of the implications of the commission's proposals on the basis that national courts and enforcement authorities will not be drawn into inappropriate applications of the directive, even if member states do transpose it literally.

Nevertheless, the Law Society would like to see the commission's proposals watered down so that they cover only matters of counterfeiting and piracy (and not patents or design rights), and would like the commission to return to the format of a Framework Decision containing some of the elements of the original measure proposed in July 2005, subject to dealing with a number of "practical issues" also addressed in the Law Society commentary. In fact, the commentary intimates that there is no need for an IP Crime Enforcement Directive at all in the light of the recent implementation of the civil IP Rights Enforcement Directive which, if it achieves its stated aims of introducing and sustaining effective, proportionate and dissuasive remedies throughout the European Union, would obviate the need for a criminal IP regime (or at least the commission should wait and see whether it does).

Andrew Clay, Hammonds, London