Intellectual property Toolkit

Making IP infringement a crime

Ingrid Marson ZDNet.co.uk

Published: 01 Aug 2005 17:30 BST

Hartmut Pilch of campaign group the Foundation for a Free Information Infrastructure (FFII), does not think many people in the industry will support the criminalisation of patent infringements, including lobby groups acting on behalf of big businesses. "A year ago we agreed with [pro-patent lobby group] EICTA that patents should stay out of that scope," he says. "The copyright lobbies who were behind the IPRED also weren't keen on having patents in it. Thus the Commission seems to be moving against a rather large consensus this time."

Grey marketing
Anderson from the FIPR, says groups that are lobbying for the criminalisation of IP infringement are trying to crack down on legal activities such as grey market trading, rather than counterfeiting.

Grey market trading is a legal form of trading where companies or individuals circumvent the authorised channels of distribution to sell goods at a lower price than intended by the manufacturer in a certain market. For example, a company may take advantage of a software vendor setting particularly high prices for its products in one country by reselling legitimate copies purchased in a market where prices are lower.

"There is a lot of noise being made about how this [directive] is to crack down on piracy. But it's actually around controlling value chains — preventing companies from selling products or spare parts at a cheaper price," says Ross.

Penfold from DLA Piper said the law would not affect products bought and resold within the EU as it is a common market, but would impact the resale of products bought outside the EU. He did not think the full force of the law would be used against companies that resell products outside their jurisdiction. "These criminal penalties are not aimed at parallel importers — they are aimed at counterfeiters," he says.

Overall, Penfold cautioned that the law must be "carefully drafted" to ensure that it treats criminal organisations differently from file sharers, free-software developers and companies using infringing software they do not know to be infringing. "I would find it strange if an organised crime boss gets four years, and an 18 year old in his home downloading music gets the same," he says.

Although it is not yet clear to what extent the proposed directive will impact free software, file sharers and those accused of patent infringement, the fact that the EC has proposed this directive just over a year after the European Parliament rejected proposals to criminalise IP infringements, raises questions about the interaction between the executive and parliamentary institutions in the EU — should the EC be able to propose a similar law so soon after it has been rejected by a clear majority?

Civil rights campaigners, such as the FIPR, are now gearing themselves up to fight the EC's latest attempt to criminalise IP infringements. Anderson from the FIPR called on individuals and computer companies to contact their MEPs and consumer groups. "It's now down to concerned geeks and computer companies to make a fuss in Brussels," says Anderson.