The draft Directive, issued by the Commission in January last year, is intended to help intellectual property rights holders in their fight against counterfeiting and piracy. It was passed by the Parliament yesterday, with 330 votes in favour, 151 against and 39 abstentions.
Internal Market Commissioner Frits Bolkestein said:
"Today the European Parliament has taken an important step forward in the fight against counterfeiting and piracy while keeping the emphasis on catching 'the big fish' rather than the 'tiddlers' who commit relatively harmless acts like downloading a couple of tracks off the internet for their own use."
The draft Directive has been intensely controversial, with copyright owners and big businesses lobbying for the legislation to be as tough as possible, and civil rights groups and smaller firms stressing that strong legislation will restrict innovation and hurt SMEs.
The draft, which covers infringements of intellectual property rights provided under Community law and/or by national law of the Member States, includes procedures covering evidence and the protection of evidence and provisional measures such as injunctions and seizure.
Under the new legislation right holders will be able to ensure the destruction, recall or permanent removal from the market of illegal goods, as well as financial compensation, injunctions and damages. They will also be able to ask judges to order certain persons to reveal the names and addresses of those involved in distributing the illegal goods or services, along with details of the quantities and prices involved.
The draft Directive includes rules about those who may apply to the courts, the presumption of authorship of copyright or ownership of related rights and legal costs. Over and above general obligations for proportionality, fairness and equity, the draft Directive also contains some safeguards and limitations to protect the interests not only of the defendant but also of potentially innocent offenders, who have unknowingly been involved in illegal practices.
The safeguards offered have not convinced civil liberties and consumer groups which have been vociferous in their protests. As expressed last month by the US-based Electronic Freedom Foundation (EFF), the general concerns over the Directive are that it does not "distinguish between unintentional, non-commercial infringers and for-profit, criminal counterfeiting organisations."
In addition, said the EFF, there are concerns that the broad range and ambiguity of the draft will:
Endanger consumers' privacy and expose them to strident enforcement remedies for unintentional and non-commercial infringement;
Harm free software and open source software distributors, stifling technological innovation, impairing competition and reducing consumer choice; and
Place significant cost burdens on ISPs, network operators and small businesses, which are likely to lead to increased costs for end-users.
But according to the Commission, the text voted by the Parliament represents an appropriate balance among all interests involved, including right holders, commercial users, consumers and intermediaries.
The Commission points out that a proposed provision on criminal sanctions has been dropped. Commissioner Bolkestein explained:
"The Commission considers that effective action against counterfeiting and piracy requires criminal sanctions for serious, intentional infringements committed for commercial purposes. We will therefore examine the possibility of proposing in due course further measures providing for criminal sanctions in this field. Moreover, the Directive will not prevent Member States from applying criminal sanctions if they wish to."
According to the Parliament, the scope of the Directive has been limited, with the inclusion of an amendment stipulating that main enforcement measures need to be applied only for breaches committed on a commercial scale. Simply put, this means that consumers acting in good faith will be excluded from the Directive – so individuals copying music for their own use would not normally be penalised.
Lobby groups are still not satisfied. Robin Gross, Executive Director of civil liberties group IP Justice commented: "Traditional civil liberties, fairness, balance, and proportionality have all be thrown to the wind in the over-zealous rush to pass this dangerous directive".
However, John MacKenzie, intellectual property lawyer with Masons, the international law firm behind OUT-LAW.COM, disputes this claim:
"The Directive specifically provides that measures introduced should be 'fair and equitable' and that states must provide safeguards against their abuse. This means that the courts will be able to ensure that any procedures introduced under these provisions are used fairly. The current criticism seems to ignore the role of the courts in controlling the day-to-day enforcement of intellectual property rights."
Gross also expressed astonishment that the Rapporteur involved – the person responsible for pushing the Directive through Parliament – was French Conservative MEP Janelly Fourtour, whose husband is CEO of entertainment giant Vivendi-Universal.
"How can a member of parliament be in the official position to shepherd through a law in which she personally stands to gain millions of Euros?", she asked. "Such a glaring conflict of
interest calls into question the entire legitimacy of the EU Parliament's law-making capacity."
The draft Directive will now go forward to the Council of Ministers, where it is expected to be approved. Member states will then have two years to implement the legislation.