Sanctions law takes aim at ‘mass piracy’

By David Cronin and Anna McLauchlin

Date: 23/06/05

The European Commission will next week approve a blueprint for cracking down on the illegal copying or forgery of consumer goods.

The law is aimed at ensuring that infringements of intellectual property are treated as a criminal offence throughout the Union.

Among the steps which may be taken to deter copyright fraud will be the freezing of suspicious bank accounts and requiring those involved in piracy to compensate the firms whose copyrights they have breached.

By signing off on its draft directive on intellectual property, the Commission is hoping to end a legal wrangle with other EU institutions about how infringements of copyright should be tackled.

Last year, EU governments decided to drop a reference to criminal sanctions in an earlier version of this law because of disagreements over what provision under the Union's treaties it would fall under. The Commission had originally envisaged that sanctions should be recommended as an internal market measure but at MEPs' request, the Council of Ministers decided that the treaty clauses on justice and home affairs should apply.

Franco Frattini, the commissioner for justice, freedom and security, has now reached an agreement with Charlie McCreevy, his colleague in charge of the internal market, that the sanctions should be introduced as a justice and home affairs measure.

But a senior EU official involved in drafting the law confirmed that the directive will apply only to "mass piracy", where the perpetrators wish to make a commercial gain. Individuals who illegally download music from the internet or 'burn' DVDs for their own use would not be prosecuted as a result.

In a related development, the Commission is to publish a recommendation aimed at devising common minimum penalties for counterfeiters across the EU, especially those who are part of crime gangs.

The International Chamber of Commerce has estimated that the global value of counterfeited and pirated goods exceeds €500 billion a year. Though it says "virtually no industry" is left untouched by pirating, it points out that firms manufacturing food and drinks, pharmaceuticals, watches, cigarettes, cosmetics, CDs, videos and software are particularly vulnerable.

The Independent Music Companies Association (IMPALA) argues that piracy hurts both small and major labels. "In countries like Spain, music piracy is horrendous," said Philippe Kern, its secretary-general. "If you walk through Madrid or Barcelona you have direct exposure to it, yet it doesn't seem anyone is doing anything about it. An EU directive would be useful if it highlights to member states the inadequacy of how they enforce existing legislation."

Cornelia Kutterer, legal adviser to the European consumers' organisation BEUC, said it was correct for the Commission to differentiate between small-scale downloading of files and commercial piracy. Treating those who copy some files for no monetary gain as criminals would, she added, send "the entirely wrong signal to people embracing technology".

Preview of a European Commission proposed Directive to crack down on the illegal copying or forgery of consumer goods. It will be seen as a JHA proposal rather than as an internal market proposal and will relate to commercial piracy rather than individuals downloading music (for example)