Breach of copyright no crime under draft E.U. law

A committee in the European Parliament agreed on substantial changes to a proposed law against counterfeiting and piracy of goods including computer software, music and movies Thursday.

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The legal affairs committee, which will lead the debate on the proposed law when it goes before the whole Parliament for a vote, agreed to restrict enforcement measures to civil law, rather than the more draconian criminal sanctions that the European Commission proposed when it drafted the text in February.

It also agreed that the proposed law, called the Intellectual Property Rights Enforcement directive, should not cover patent infringements.

But in the area of copyright, the committee proposed stretching the reach of the planned law.

Under intense lobbying pressure from the pharmaceutical industry the commission included patents within the directive's scope, said Arlene McCarthy, a member of the Socialist Party in the Parliament. However, since the commission announced its plans European lawmakers have been warned by leading technology firms and renowned legal academics that the proposal is too broad in scope.

Finnish phone maker Nokia Corp. fears that by covering patents, the directive threatens the economic well-being of innovation-based businesses in Europe.

Patent infringement is an everyday risk for innovators, and risk assessment is a business decision, said Tim Frain, Nokia's director of intellectual property in an interview last month, adding that if patent infringement were to be made punishable by criminal sanctions, it would act as a strong disincentive for executives.

"It is vitally important that this directive strikes the right balance between protecting the interests of rights holders without unfairly impeding others from competing in the same market," Frain said.

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 in a recent article published in the European Intellectual Property Review that they are worried that E.U. lawmakers have gone too far in their efforts to protect rights holders.

"Instead of relating only to piracy and counterfeiting, the draft is couched in more general terms," the academics said.

McCarthy is the shadow rapporteur on the proposed directive, which means that she proposes changes on behalf of her party to the main rapporteur, Janelly Fourtou from the Parliament's Conservative Party.

Fourtou decides which changes should be considered by the committee and the committee then decides which amendments to table at the plenary meeting of Parliament.

Despite removing criminal sanctions as a means of intellectual property (IP) rights enforcement, the proposed directive would still be in line with international IP rules called TRIPs (Trade-Related Aspects of Intellectual Property Rights) of the World Trade Organization (WTO), McCarthy said.

TRIPs urges WTO members to impose criminal sanctions such as imprisonment for people who counterfeit goods for commercial gain. According to McCarthy, TRIPs doesn't demand criminal punishment for people like music file sharers on the Internet, who infringe copyright when they download a song.

"Rights holders aren't happy about this change but we felt that giving them the right to press for criminal sanctions (for people like file sharers) was not a good idea," McCarthy said.

Rights holders including software manufacturers, record companies and Hollywood studios won one favorable amendment in the committee meeting Thursday. MEPs agreed to scrap the words "for commercial purposes" from a clause dealing with copyright infringement.

This means that although criminal punishment is ruled out, the directive would still empower record companies and the like to press for civil law sanctions against individuals copying music or other digital data from the Internet for purely noncommercial purposes.

The committee agreed to extend the proposed law to include copying with no commercial incentive, despite an eleventh hour plea from consumer groups and parts of the technology industry.

A letter to the committee from BEUC (Bureau Européen des Unions de Consommateurs), an association of consumer groups, read, "We are worried that the current European Parliament text would allow consumers to be prosecuted, judged and condemned as harshly as a person making and selling millions of copies of CDs. ... We do not see why a consumer downloading music from the Internet to make a private copy for personal and noncommercial use should be prosecuted at all."

The European NetAlliance, which includes firms such as BT Group PLC, Deutsche Telekom AG, Vodafone Group PLC, MCI Communications Corp., Verizon Communications Inc. and Yahoo Inc., also wrote to committee members. It warned of the risks that such a widening of the directive would pose to the future of Europe's online economy.

"It must be ensured that consumers are not placed on the same level as parties that violate copyright for commercial gain or as members of organized crime," the trade group wrote.

The directive may make it onto the agenda of next month's plenary session of the European Parliament. If not it will be debated and voted on early in the new year. After the first Parliamentary reading the proposed directive will go before ministers of the 15 national governments.

The European Parliament and the ministers must reach agreement before the proposal can become law.