IP criminal enforcement directive ready to move to vote

The Legal Affairs Committee of the European Parliament has at last approved the text of the directive on criminal IP enforcement proposed by the European Commission.

On July 12 2005 the commission presented a proposal for a directive aiming at introducing criminal sanctions for IP rights infringements. This proposal was amended following a ruling of the European Court of Justice which held that provisions of criminal law required for the effective implementation of EU law came under the EC Treaty. The commission presented a new proposal on April 26 2006 that consolidated the previous draft directive and framework decision while omitting the provisions relating to jurisdiction and coordination of proceedings (see New proposal for a criminal enforcement directive adopted).

In the justification for the proposal, the commission stated that counterfeiting and piracy, and infringements of intellectual property in general are a constantly growing phenomenon which has an international dimension presenting a serious threat to national economies and governments.

Article 3 of the proposal provided that the EU member states were obliged to consider all intentional infringements of an IP right on a commercial scale as a criminal offence. The article also covered attempting, aiding or abetting and inciting such offences.

The proposal provided for the following penalties:

• imprisonment;
  
  
• fines;
  
  
• seizure and destruction of goods;
  
  
• closure of the establishment or shop producing the infringing goods;
  
  
• a ban on engaging in commercial activities;
  
  
• placement under judicial supervision or judicial winding-up;
  
  
• a ban on access to public assistance or subsidies; and
  
  
• the publication of the judicial decision.

The Legal Affairs Committee has now backed these criminal measures and voted to impose fines of at least €300,000 and four years' imprisonment in serious cases and €100,000 in minor cases.

The initial proposals were criticized for introducing criminal measures for alleged infringements of unexamined IP rights, such as pending or contested patent applications. However, the committee voted to limit the scope of the directive to the following IP rights:

• copyright and related rights;
  
  
• sui generis rights of a database maker;
  
  
• rights of the creator of a topography of a semi-conductor product;
  
  
• trademark rights;
  
  
• design rights;
  
  
• geographical indications; and
  
  
• trade names.

Another controversial aspect of the commission's proposal was that the directive would apply to "intentional infringements on a commercial scale". The committee limited the meaning of 'commercial scale' to "any infringement committed to obtain a commercial advantage" and that of 'intentional' to "deliberate and conscious".

The Parliament will vote on the directive during its plenary session on April 25 2007. If the directive is adopted, the EU member states will have 18 months after entry into force to transpose the directive. In this case, the member states will be forced to adapt their penal laws to EU objectives for the first time.

Some EU member states, such as Portugal, have not yet implemented Directive 2004/48/EC on civil enforcement nearly a year after the deadline for doing so (see Overdue implementation of IP Enforcement Directive tackled).

Angela Heffermann, Sattler & Schanda Rechtsanwälte, Vienna