Enforcement of Intellectual Property Rights Frequently Asked Questions

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1 EUROPEAN COMMISSION MEMO Brussels/Strasbourg, 1 July 2014 Enforcement of Intellectual Property Rights Frequently Asked Questions See also IP/14/760 I. EU Action Plan on enforcement of Intellectual Property Rights 1. What are Intellectual Property Rights (IPR) or IP infringements? IPR or IP infringements are any breaches of intellectual property rights or illicit misappropriation of trade secrets. Intellectual property refers to creations of the mind: inventions; literary and artistic works; and symbols, names and images used in business. Intellectual property is divided into two categories: Industrial Property e.g. patents for inventions, trademarks, industrial designs and geographical indications. Copyright, e.g. literary works (novels, poems and plays), films, music, artistic works (e.g. drawings, paintings, photographs and sculptures) and architectural designs. Rights related to copyright include those of artists for their performances, producers for their recordings, and broadcasters for their radio and television programmes. 2. Why does the Action Plan focus on commercial scale infringements? The EU Action Plan focuses on the fight against commercial scale IP-infringements because they do the most harm to the EU economy. It sets out new enforcement policy tools. One example is the so-called follow the money approach which aims to deprive commercial scale infringers of their revenue flows. Goods and services that are promoted and sold in the EU's Single Market and that do not respect intellectual property rights concern us all as citizens, consumers, businesses and taxpayers. Commercial scale IP-infringement discourages investment in innovation and undermines job creation. A further loss to the economy is the absence of tax revenues coming from these goods or services. Counterfeit goods can also be dangerous or pose a risk to health. MEMO/14/449

2 3. What is new about the EU Action Plan? The Action Plan on enforcement of IPR is a comprehensive Commission response to the economic harm resulting from commercial scale IP infringements. For the first time it also stresses the need for all stakeholders involved in the value chain for any IP intensive product including right-holders themselves to apply due diligence to avoid infringements. The aim is to stimulate growth and employment and reduce incentives for the many commercial scale IP-infringements that undermine the EU economy. The Action Plan sets out ten specific actions providing for new enforcement policy tools: Action 1: The Commission intends to promote the efforts of the Observatory on infringements of Intellectual Property Rights and national authorities to launch and monitor a new generation of targeted communication campaigns. This should include campaigns to raise awareness amongst citizens, especially young people on the economic harm caused by commercial scale IP infringements and on the potential health and safety risks associated with IPR-infringing products, as well as campaigns to highlight the benefits for consumers from choosing IP respecting products and to facilitate access to such products. Action 2: The Commission will launch a series of consultation actions with all relevant stakeholders including civil society on applying due diligence throughout supply chains as a means to prevent commercial scale IP infringements. On the basis of the information collected it intends to develop an EU due-diligence scheme for this purpose. It will, in the first instance, seek to encourage the voluntary take-up of the scheme that it will monitor closely to determine if further initiatives are required. Action 3: The Commission will facilitate the development of further voluntary Memoranda of Understanding to reduce the profits of commercial scale IP infringements in the online environment, following Stakeholder Dialogues involving advertising service providers, payment services and shippers. Action 4: The Commission intends to analyse and report on existing national initiatives seeking to improve IP civil enforcement procedures for SMEs, in particular in respect of low value claims and consider possible action in this field. Action 5: The Commission will issue a Green Paper to consult stakeholders on the need for future EU action based on the best practice found in nationally financed schemes assisting SMEs to enforce their IP rights. Action 6: The Commission will issue a Green Paper to consult stakeholders on the impact of chargeback and related schemes to tackle commercial scale IP infringements. On this basis, it will explore the need and scope for taking concrete action in this field. Action 7: The Commission will establish a Member State Expert Group on IP Enforcement, where Member States could share best practice on the work within the EU of all their concerned authorities and be informed on the delivery of this Action Plan. Action 8: The Commission will support the Observatory in the development of a comprehensive set of sectoral IP enforcement related training programmes for Member State authorities in the context of the Single Market. Action 9: The Commission intends to develop, promote and publish a guide on best practice for public authorities to avoid purchasing counterfeit products. Action 10: The Commission shall publish a biennial report on the economic impact of the EU's IP policy that could serve as a more effective monitoring tool for the EU's new IP enforcement policy as set out in this Communication. 2

3 4. Why are you not presenting the EU Action Plan together with the outcome of the ongoing review of copyright? The two initiatives both concern IPR but have clearly different scopes and objectives. The EU Action Plan covers all intellectual property and is without prejudice to the Commission's ongoing work on the review of EU copyright rules. Its aim is to propose nonlegislative actions to improve the respect of intellectual property rights, addressing in particular commercial scale infringements that affect all strands of economic and social life including health and safety from fake medicines to counterfeit car parts and that are often linked to criminal groups and activities (money laundering etc.). In contrast, the copyright review is undertaking a broad analysis of the existing legislative framework for copyright in the EU s digital single market. This is not covered by the Action Plan. 5. Given the existence of the European Observatory on infringements of IPR, why does the Commission need to invest resources in reports on the European IP economy (action 10 in the European Action Plan)? Firstly, such reports are not covered by the Regulation that set up the Observatory. Moreover, the Commission cannot delegate the monitoring and evaluation of its policies to an external agency. Secondly, these regular biannual economic reports will be a means for the Commission to present analyses on the general efficiency of IP policy in terms of sustaining innovation based on growth and employment. IP policy that is difficult to enforce may have a negative impact on the market. The proposed economic reports will be a source of information for future impact assessments associated with the modernisation of the Commission s policy in this field. Again such analysis would need to be controlled by the Commission rather than left to a body that is primarily composed of interested parties. Thirdly, the Commission will not duplicate the Observatory s work but rather draw on its output as well as that of academic economists following this field to prepare these reports. Furthermore, the Commission is best placed to put the respective analysis in a political context with respect to ongoing work in the various Commission services, be it IPRrelated, on innovation or even more broadly, e.g. the Digital Single Market or Europe This initiative contains 10 non-legislative actions. What will the Commission do when they have been completed? These actions are a decisive first step in building an effective and transparent IP enforcement policy targeted at commercial scale infringements at both EU and national levels. The Commission will consider whether further, potentially legislative, measures are necessary on the basis of the outcomes of these actions. 3

4 II. EU Strategy on Protection and Enforcement of IPRs in Third Countries 1. Why is the Commission producing a revised version of its IPR enforcement Strategy in Third Countries now? There have been significant changes in the international environment since the original Strategy was conceived in Huge technological change has taken place, while the levels of IPR infringements have kept increasing. Trade in products and services has become increasingly globalised. Companies have sought to optimise value chains, for example through outsourcing. This means that the way in which products are created has changed. Over the last decade the role of emerging economies has changed dramatically. The development agenda has become more prominent in IP, the research and innovation landscape has become more multi-polar, and environmental issues have become more important in public policy. The Commission wants to make sure that the Strategy remains fit for purpose, particularly for our stakeholders operating outside the EU, at a time when IPR is increasingly in the international public eye. 2. What has changed in the Commission's approach? The Commission's aim is to take a smarter approach in using the available trade policy tools available to protect and enforce IP. Such tools range from trade agreements, legislative action and dispute settlement, to IPR Dialogues, Helpdesks and technical assistance. Improving EU coherence between IPR and other policies, and leveraging high-level trade and political dialogues to ensure progress on identified IPR issues are part of this. Better engagement and cooperation, and improving interaction with all actors; improving outreach and awareness, including providing and promoting awareness of appropriate IP-related technical assistance programmes; better data collection; enhancing networking and coordination between EU and Member State representations in third countries; and continuing multilateral efforts to improve the international IPR framework, including by encouraging further ratification of existing treaties. 3. How does the Commission decide which countries to focus on in the Strategy? Every 2 years, the Commission conducts a survey to find out how intellectual property rights are being enforced, and produces reports based on the results. These help businesses, in particular small and medium sized firms, by making them more aware of potential IP risks when trading with certain countries outside the EU. The reports also help identify countries where the protection and/or enforcement of intellectual property rights are particularly detrimental to EU interests allowing the Commission to focus on them. 4

5 4. Why do you not have IPR Dialogues/Working Groups with all priority countries? The Commission currently has several IPR Dialogues/Working Groups. These are useful for raising systemic IP issues and sharing best practice. But there are resource constraints, and hence prioritisation is necessary. How useful such dialogues/groups are depends on how willing countries are to engage in meaningful dialogue (for example, the EU does not yet have such a mechanism with India), and their realisation of the importance of an IPR framework and proper enforcement for their own economy and on consumer welfare, but they have shown their effectiveness and impact. 5. How is the Strategy taking the Development Agenda into consideration? The Development Agenda is mainstreamed into the Commission's approach. For example when it comes to bilateral trade agreements, existing EU legislation is taken as a starting point and the level of ambition is adapted to the partner country's level of development. In some cases, the Strategy might rely more on technical assistance and capacity building than on negotiations aimed at improving IPR regimes. The Commission will continue to fully honour the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) requirement that developed countries should offer their companies incentives to transfer technology to least-developed countries (LDCs), and work to encourage LDCs to be in a position to use transferred technology. 6. Why are you considering restricting participation in or funding by EU programmes for non-eu countries? Won't this impact development aid? The Strategy is very clear on this. Some countries persistently break international commitments on IP rules in ways that have a major impact on the EU. Sometimes their authorities are unwilling to cooperate or cooperation shows limited results. In such cases, restricting their participation or funding in specific EU-funded programmes may be considered. This would be in serious and clearly targeted cases. However, this would not affect programmes financed by the European Development Fund or Development Cooperation Instrument. Related to this, there is a substantial section in the Commission Staff Working Document on the EU 2013 Report on Policy Coherence for Development which establishes the policy balance between a robust and practical system of protection for IPRs and its coherence with development aims. 7. Did you hold a public consultation on the IPR Strategy in Third Countries? Yes, a public hearing was held on the revised Strategy. It was open to all interested parties. It was advertised widely and invitations were sent to major stakeholders, such as industry associations and NGOs. More than 100 people took part, most of them representing right-holders and some civil society representatives e.g. from NGOs. The aim was to get feedback and input from a broad range of stakeholders regarding the effectiveness of the previous strategy. The hearing was a complement to the study. The results of the hearing were taken into consideration in the drafting of the Communication. 5

6 8. What is the link between the Strategy on Protection and Enforcement of Intellectual Property Rights in Third Countries and the EU Action Plan on the Enforcement of Intellectual Property Rights? The two are complementary and go hand-in-hand with the existing EU Customs Action Plan. It is a 3-pronged approach. First, the Action Plan against IP infringements is a comprehensive Commission response to the economic harm resulting from commercial scale IP infringements and focuses on what can be done within the EU. Secondly, the IPR Strategy sets out the lines of action to enhance IPR standards and stem trade in IPR infringing goods in third countries. Thirdly, there is the EU Customs Action plan with a specific focus on border enforcement and developing deeper cooperation between customs authorities in the EU and in third countries. The overall aim is to stimulate growth and employment and reduce the incentives for the many commercial scale IP-infringers that undermine the EU economy. 6