May 12, 2006

EU Commission proposes to criminalise European software industry

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Brussels, 12 May 2006. The Commission’s recently relaunched “Enforcement Directive” (IPRED2, 2005/0127 (COD)) proposal aims to criminalise all intentional and commercial IP infringements in order to “combat organised crime” and to “protect national economies and governments”. This however results in the Commission exceeding its competence and is criminalising many EU businesses with unjustified and ill-conceived measures.

A company may infringe on a patent if it thinks the patent would not stand up in court. This is common business practice, in particular in the software industry where most patents are granted on insufficient legal grounds. And while Commission is seeking to criminalise this practice, the US is reconsidering its “treble damages” policy in such cases precisely because of widespread abuse.

Jonas Maebe, FFII board member, comments: “Does the Commission really intend to criminalise Europe’s entire software industry? Can it name even one computer program which does not infringe on a single patent granted by the European Patent Office? It seems they want to replace the Lisbon goals with an Alcatraz program.”

“The EU-Commission proposed means which divert law enforcement resources and which are not well suited to combat organised crime” adds André Rebentisch, FFII WIPO representative. “Appropriate definitions for counterfeiting and copyright piracy are already available in other EU regulations, but here the Commission prefers rather vague terminology which puts our knowledge economy at risk.”

Ante Wessels, FFII analyst, notes: “In only 10 of the EU’s 25 member states patent infringement is a crime today. Does this lead to distortion in trade, does it give the countries in which it is not a crime a competitive advantage? Nobody has ever claimed such a thing. Therefore there is no legal ground for including patent infringement in this directive. There are 10 more IP rights for which this question has to be answered.”

Pieter Hintjens, FFII President, concludes: “We’re very concerned when we see IP enforcement being idolized like this, regardless of the consequences. There is a huge and vital debate about whether we need patents at all in the software industry. This law ignores that debate and seeks to enforce those patents, labeling businessmen as common criminals, terrorists, or mafiosi.”

A full analysis is available at http://wiki.ffii.org/Ipred2060510En

Background information

  • Patent infringements currently constitute a criminal offence in 10 of the 25 member states. In the Netherlands the government previously already proposed to take patent infringements out of criminal law, exactly because in practice criminal provisions are generally unsuited and unused for handling such issues.
  • The proposal stresses that law enforcement bodies should start investigations at their own initiative, i.e. without a complaint from right holders. Law enforcement officials however are often unaware, and rightly so, about private or even public licensing agreements. See e.g. a UK Trading Standards official having a hard time believing that companies can legally resell the freely distributable Firefox web browser: http://business.timesonline.co.uk/article/0,,9075-2051196,00.html

  • Apart from patents, many other rights are subsumed under “IP” where the line between infringement and non-infringement is very blurry. See e.g. the Da Vinci Code case (copyright), or Microsoft vs MikeRoweSoft (trademarks). Criminal law however requires very clear boundaries. Not being able to know beforehand whether one commits a criminal offence or not is unacceptable both morally and in terms of justice and human rights.
  • In case of infringement, the right holder is usually interested in compensation (civil law), not punishment (criminal law). Criminal law must be reserved for criminals, otherwise it risks to lose all authority, effectiveness and respect.
  • Criminal law enforcement is paid for by the public. As Dutch Minister of Justice Donner said: “[Commissioner] Frattini mentioned counterfeiting a Ferrari, but isn’t that Ferrari’s business?”. The directive also received a lot of attention in the Netherlands because this is the first time Brussels interferes with criminal measures without member states having a veto. For more information, see: http://wiki.ffii.org/IpredDonner060428En

  • Both the Dutch Minister of Justice, and Professor in Law Reto M. Hilty (Max Planck Institute for IP) have noted that the only ground for this directive proposal can be that it solves a distortion in trade between member states. There are no known indications that this indeed is the case. For more comments by Professor Hilty on this directive, see: http://www.ipred.org/Hilty

Links

Contact Information

Jonas Maebe
FFII Board Member
jmaebe at ffii.org
(Dutch/English)

Ante Wessels
FFII analyst
+31-6-100 99 063
ante at ffii.org
(Dutch/English)

Benjamin Henrion
FFII Brussels
+32-2-414 84 03
bhenrion at ffii.org
(French/English)

About the FFII

The FFII is a not-for-profit association registered in twenty European countries, dedicated to the development of information goods for the public benefit, based on copyright, free competition, open standards. More than 850 members, 3,500 companies and 100,000 supporters have entrusted the FFII to act as their voice in public policy questions concerning exclusion rights (intellectual property) in data processing.