Press release
Intellectual property: pirates and counterfeiters to feel the full weight of criminal law
Research and innovation - 25-04-2007 - 14:07
Plenary sessions
Plenary sessions
The first EU directive aiming at harmonising national criminal law was backed by the European Parliament when it adopted on Wednesday a first-reading report on legislation imposing criminal sanctions for the infringement of intellectual property rights. If ultimately adopted, the directive will oblige all Member States to regard any intentional infringement of an intellectual property right carried out on a commercial scale as a criminal offence.
The deterrent measures being proposed range from fines to imprisonment, according to the gravity of the crime.
Commercial operators, not private users, targeted
Parliament, in approving today the report by Nicola Zingaretti (PES, IT) by 374 votes to 278 with 17 abstentions, has backed the overall aim of the Commission proposal, while amending some of its provisions. The EP excluded patent rights from the scope of the directive, and decided that criminal sanctions should apply only to infringements deliberately carried out to obtain a commercial advantage. Piracy committed by private users for personal, non-profit purposes is therefore also excluded.
The proposed directive aims to ensure that national judicial authorities will always be able to impose sufficiently serious penalties by setting out minimum levels for the upper limits on punishments imposed by national law.
At present maximum fines for violating intellectual property rights range from £586 in Greece to £67,000 in Holland. Maximum prison sentences range from three months in Greece to 10 years in Britain.
Under the new directive, in cases of serious crimes committed by a criminal organisation, the maximum penalty must be at least €300,000 and/or four years' imprisonment. The same applies where the offences carry a health or safety risk. For less serious infringements, the maximum penalties should include criminal and civil fines of at least €100,000. Aiding or abetting and inciting anyone to infringe intellectual property rights will also be treated as a criminal offence. In some cases, remedies can include the seizure and destruction of counterfeited goods.
Crime pays - for the moment
Counterfeiting is estimated by industry sources to reduce EU GDP by 8 billion euros annually, with individual companies losing a total of between 45 and 65 billion euros. Annual losses in revenue are estimated at 7.2 % for perfume and toiletries, 5.8 % for pharmaceuticals and 11.5 % for the toy and sports sector. 40% of software in use worldwide is believed to be pirated, and 37% in the EU (= a loss of revenue of 2.9 billion euros annually). Worldwide, 36% of all music CDs and cassettes sold are pirated (total sales of pirated goods is 5 billion units).
First use of criminal law to enforce Community legislation
This is the first directive using criminal law (with the exception of cross-border damage to the environment, where the right to impose criminal sanctions is laid down in the treaties).
The proposed directive reflects the Commission's interpretation of the European Court of Justice's ruling of 13 September 2005. According to the Commission, this judgment allows for measures under the Community method to insist on criminal sanctions where these are required for the effective implementation of Community law. This view is contested by those who believe criminal law is not a Community competence, but an amendment rejecting the entire proposal on this basis, tabled by the GUE/NGL and Greens/EFA groups, was defeated by 452 votes to 197 with 11 abstentions.
The text adopted by the Parliament will now be sent to the Council for discussion by national governments.
REF.: 20070420IPR05539