Companies including Nokia and Microsoft claim that
European lawmakers are criminalising many legitimate businesses in
their efforts to stamp out digital counterfeiting and piracy of
products such as music and films.
They claim that if the law takes the form proposed by the
European Commission, the law would discourage technology firms from
innovating.
Both the commission and the European parliament both want to
make the proposed law broad-ranging, and by doing so both
institutions have been accused of being biased towards the owners
of copyright, patents, and other forms of intellectual
property.
No one questions the main aim of the bill. Everyone agrees that
a pan-European law punishing counterfeiters is the only sensible
way to deal with counterfeiting rings, which rarely limit
themselves to one country.
However, the critics argue that the proposal extends far beyond
the murky world of criminals.
Nokia, for example, fears that by covering patents, the
directive threatens the economic well-being of innovation-based
businesses in Europe.
"It is vitally important that this directive strikes the right
balance between protecting the interests of rightholders without
unfairly impeding others from competing in the same
market," claimed Tim Frain, Nokia's director of intellectual
property.
Patent infringement is an everyday risk for innovators, and risk
assessment is a business decision, said Frain, adding that if
patent infringement were to be made punishable by criminal
sanctions, it would act as a strong disincentive for
executives.
Introducing such harsh remedies for good faith infringements
would present new risks and liabilities for companies conducting
bonafide business in Europe, he said.
Microsoft's senior legal counsel, Marie-Therese Huppertz, shares
some of Frain's concerns. Questioning whether there should there be
the same rules for patent infringements as for counterfeiting, she
agreed that criminal sanctions for patent infringers may well
stifle innovation.
The argument for excluding patents from the scope of the
proposed law appears to have won over Janelly Fourtou, the European
parliamentarian responsible for preparing the parliament's position
on the proposal.
The issue of patents is complex, Fourtou said. Last month a
debate in the European Parliament on a proposal for a law on
software patents provoked one of the most bitter and aggressive
lobbying efforts the House has ever seen, according to several
MEPs.
Fourtou said she did not want the IP enforcement bill to get
bogged down in a similar dispute. However, the commission's desire
to include patents may still win the day.
While trying to narrow the scope of the bill to exclude patents,
Fourtou is, at the same time, seeking to expand its reach in the
field of copyright.
The commission's proposal tried to avoid the situation which has
occurred in the US, where the record industry has sued individuals
who have illegally downloaded music from the internet, including
most famously, a 12-year-old girl from New York.
The commission proposal tries to home in on counterfeiting gangs
by limiting the suggested penalties to those offenders who steal
works for commercial purposes.
Fourtou wants to remove these words from the proposed law.
"Even if you aren't downloading music for profit, you still are
having a very negative effect on authors and musicians," she said.
"Even a young boy who does it innocently causes an economic
counter-effect."
Legal academics in Europe share these companies' concerns about
the proposed law on intellectual property enforcement, which is due
to be debated in the coming weeks.
William Cornish, a professor at the University of Cambridge, and
Josef Drexl, Reto Hilty and Annette Kur from the Max Planck
Institute in Germany, said they are worried that EU lawmakers have
gone too far in their efforts to protect rightholders.
"Instead of relating only to piracy and counterfeiting, the
draft is couched in more general terms," the academics said. They
questioned whether there is a need for such a law and, if there is,
whether the text proposed by the commission is proportional to the
problem it seeks to address.
They also criticised the lawmakers for rushing it through and
for listening too closely to lobbyists.
Thomas Vinje, a partner in the Brussels law firm Morrison &
Foerster, whose clients include Nokia, shares the concerns
expressed by the academics. He said Fourtou's amendments make a bad
situation worse. "She is putting a dangerous weapon in the hands
of, among others, the big record companies," he added.
Counterfeiting costs the computer industry about €3bn in sales
last year, because approximately 35% of software acquired in
western Europe last year was pirated, according to US industry
lobby group the Business Software Alliance.
The International Federation of Phonographic Industries claims
that one in three music CDs sold around the world last year were
pirated copies, and that sales of pirate CDs that year were worth
$4.6bn.
Paul Meller writes for IDG News Service