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The law would also provide guidelines for the co-operation of agencies enforcing intellectual property rights, in taking action against breaches and theft of copyright.
The EU has been under pressure to tighten laws on intellectual property rights ever since the US Government sanctioned the patenting of business methods last year.
In a speech on counterfeiting and piracy in Stockholm, the EU internal market commissioner Frits Bolkestein said the directive would be formally tabled early next year, after which there is likely to be at least a year of negotiations.
Calling it a "major initiative", the commissioner said the proposal was part of an agreed action plan, which might also lead to concordance on minimum criminal sanctions for copyright offences, and the extension of Europol's authority to include the co-ordination of investigations into cross-border breaches.
Bolkestein said: "We are witnessing the globalisation of our economies and the expansion of the means of communication and exchange.
There is also the emergence of modern, sophisticated technologies, which are easy to use for the purpose of copying products. As a result, counterfeiting and piracy have grown considerably. That is a major problem for Europe in terms of risks for consumers, of discouragement for investment and innovation, and of job losses."