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  1. <?xml version="1.0" encoding="UTF-8" ?>
  2. <html>
  3. <head>
  4. <title>FSFE - IPRED2 - The second &quot;Intellectual
  5. Property Rights&quot; Enforcement Directive</title>
  6. </head>
  7. <body>
  8. <h1>Criminalisation of copyright and trademark infringement</h1>
  9. <p>
  10. Support FSFE's work on this and similar
  11. projects: <a href="">join the Fellowship of
  12. FSFE</a>, <a href="/help/donate">donate to FSFE</a>, and
  13. encouraging others to do each.
  14. </p>
  15. <ol>
  16. <li><a href="#status">Status</a></li>
  17. <li><a href="#active">Previous activity</a></li>
  18. <li><a href="#summary">Summary of Directive</a></li>
  19. <li><a href="#harm">Harmful effects on software freedom</a>
  20. <ul>
  21. <li><a href="#swpat">Software patents: Enforcement through fear</a></li>
  22. <li><a href="#models">Harm to efficient software production/distribution models</a></li>
  23. <li><a href="#abuse">Encouragement of commercial abuse, like SCO's</a></li>
  24. <li><a href="#indemnification">Inability to indemnify</a></li>
  25. <li><a href="#grey-areas">Developers in grey areas: DeCSS, filesharing</a></li>
  26. </ul>
  27. </li>
  28. <li><a href="#text">Reading the proposal text: &quot;2006/0168(COD)&quot;</a>
  29. <ul>
  30. <li><a href="#directive">The procedure details</a></li>
  31. <li><a href="#problems">The problems</a>
  32. <ul>
  33. <li><a href="#limits">Weak limits: &quot;intentional&quot; &amp; &quot;commercial scale&quot;</a></li>
  34. <li><a href="#investigation">Disproportionate access for rights holders</a></li>
  35. </ul>
  36. </li>
  37. </ul>
  38. </li>
  39. <li><a href="#options">What we can work for</a></li>
  40. <li><a href="#links">External links</a></li>
  41. </ol>
  42. <h2 id="status">Current status</h2>
  43. <p>
  44. On the 25th of May, 2007, the European Parliament held it's "1st
  45. reading" vote. FFII have published
  46. a <a
  47. href="">table
  48. with each of the amendments</a> indicating which were adopted
  49. and which were not.
  50. </p>
  51. <h2 id="active">Previous activity</h2>
  52. <p>
  53. For information on FSFE's position before the European
  54. Parliament's 1st reading, see
  55. <a href="letter-april-2007.html">our April 2007 open letter to
  56. the MEPs</a>.
  57. </p>
  58. <h2 id="summary">Summary of the Directive</h2>
  59. <ul>
  60. <li>The proposed
  61. Directive: <a
  62. href="">com(2006)168</a></li>
  63. </ul>
  64. <p class="quote">
  65. &quot;Article 3<br />
  66. Offences<br />
  67. Member States shall ensure that all intentional infringements of
  68. an intellectual property right on a commercial scale, and
  69. attempting, aiding or abetting and inciting such infringements,
  70. are treated as criminal offences.&quot;<br />
  71. (Article 3. Page 9 of the proposed directive)
  72. </p>
  73. <p>
  74. The EU definition of &quot;Intellectual property rights&quot;
  75. lumps together patents, copyright, trademarks, design
  76. protections, and many other categories of law. No definition is
  77. given for &quot;intentional&quot; or &quot;commercial
  78. scale&quot;, and no examples are given for what would be
  79. included or what would be excluded.
  80. </p>
  81. <p>
  82. This directive is often called &quot;IPRED2&quot;, however we
  83. recommend not using terms that talk about &quot;Intellectual
  84. Property&quot; as
  85. this <a href="">leads
  86. to confusions</a> that make our work more difficult. Instead,
  87. it can be called &quot;The Criminalisation Directive&quot;.
  88. </p>
  89. <h2 id="harm">Harmful effects on software freedom</h2>
  90. <h3 id="swpat">Software patents: Enforcement through fear</h3>
  91. <p>
  92. We expect that the European Parliament will amend the proposed
  93. Directive to exclude patents from the scope. This is important
  94. because although the European Patent Convention excludes
  95. software from patentability, the European Patent Office is
  96. granting thousands of patents on software ideas. While &gt;90%
  97. of litigation based on such patents would fail in court, they
  98. give the patent holders a legal basis for threatening software
  99. producers/distributors with litigation.
  100. </p>
  101. <p>
  102. If patent infringement is not removed from this Directive, then
  103. the threats of jail time, massive fines, seizing of assets, and
  104. closure of business could generate enough fear among computer
  105. users to make people obey invalide patents granted on software
  106. just because the stakes are too high. (For more on the issue of
  107. software patents, see the page
  108. about <a href="/campaigns/swpat/swpat.html">FSFE's work to
  109. prevent software patentability</a>.)
  110. </p>
  111. <h3 id="models">Harm to efficient software production/distribution models</h3>
  112. <p>
  113. Greatly increasing the risks involved in software development
  114. and distribution will indirectly discriminate against many
  115. software models. High legal risks are easier to bear for bodies
  116. with large funds and full time legal staff.
  117. <a href="/documents/freesoftware.html">Free Software</a>, which
  118. is often contributed to by individuals, by Small- and
  119. Medium-sized Enterprises, and by businesses whose core business
  120. is not software, would be one category of software which would
  121. bear this indirect discrimination.
  122. </p>
  123. <h3 id="abuse">Encouragement of commercial abuse, like SCO's</h3>
  124. <p>
  125. Giving litigators increased access to the resources of national
  126. enforcement bodies, and increasing the severity of effects which
  127. can be achieved by litigation, will encourage people to use
  128. litigation as a commercial tool in the market.
  129. </p>
  130. <p>
  131. SCO in the USA is a well-known example of this: without proving
  132. anything or even showing any evidence, they have accused IBM and
  133. others of intentional, commercial-scale &quot;IP&quot;
  134. infringement, and have slowed the adoption rate of Free Software
  135. such as
  136. the <a
  137. href="/documents/gnuproject.html">GNU/Linux</a>
  138. operating system and harmed the reputation of a handful of
  139. companies (competitors to Microsoft, one of SCO's major
  140. funders).
  141. </p>
  142. <h3 id="indemnification">Inability to indemnify</h3>
  143. <p>
  144. Since criminal offenses cannot be indemnified against, patent
  145. litigation insurance would not be possible, and software
  146. producers could no longer provide indemnity to distributors of
  147. their software.
  148. </p>
  149. <h3 id="grey-areas">Developers in grey areas: DeCSS, filesharing</h3>
  150. <p>
  151. The European Copyright Directive (<a
  152. href="">com(2001)29ec</a>)
  153. greatly increased the scope of copyright law. As well
  154. as prohibiting unauthorised copying of information, copyright
  155. law now restricts how the public can use technology to access or
  156. view copyrighted information. For example, you are a copyright
  157. infringer if you develop your own software to watch a standard
  158. DVD that you have bought. Writing software to share files with
  159. others over a network could be copyright infringement; it's a
  160. grey area. The threat of jail sentences and the other harsh
  161. measures in this directive could scare people away from writing
  162. or publishing many types of useful software, including types of
  163. software which are illegal-but-tolerated or which are grey areas.
  164. </p>
  165. <h2 id="text">Reading the proposal text: &quot;2006/0168(COD)&quot;</h2>
  166. <p>
  167. The IPRED2 proposal was originally published in two parts, but
  168. in May 2006 it was republished as one
  169. directive: <a
  170. href="">com(2006)168</a>).
  171. </p>
  172. <p>
  173. The reason for republishing and changing from two parts to one
  174. part is that there was a precedent-setting case in the European
  175. Court of Justice which implies that EU directives can require
  176. member states to implement criminal sanctions.
  177. </p>
  178. <h3 id="directive">The procedure details</h3>
  179. <p>
  180. The following information in this paragraph applies to the first
  181. published version of IPRED2, but it is likely to be the same for
  182. the current proposal.<br />EP Responsible committee: Legal
  183. Affairs (JURI)<br /> EP
  184. Rapporteur: <a
  185. href=";id=28419">Nicola
  186. Zingaretti</a> (PSE, Italy).<br /> EP committees giving
  187. opinions: Industry, Research and Energy (ITRE), Internal Market
  188. and Consumer Protection (IMCO), Civil Liberties, Justice and
  189. Home Affairs (LIBE).
  190. </p>
  191. <h3 id="problems">The problems</h3>
  192. <p>
  193. The major problems with the directive are Articles 3 and 4
  194. (pages 9 and 10 of the document). Article 3 is quoted in
  195. full <a href="#summary">above</a>. Article 4 lists the harsh
  196. punishments that must be made available for the actions
  197. described in Article 3. These include jail sentences, fines,
  198. closure of business, destruction of goods, being placed under
  199. judicial supervision, and a ban on access to public assistance.
  200. </p>
  201. <h4 id="limits">Weak limits: &quot;intentional&quot; &amp; &quot;commercial
  202. scale&quot;</h4>
  203. <p>
  204. The phrase &quot;<span style="font-style: italic;">all
  205. intentional infringements [...] on a commercial
  206. scale</span>&quot;, will lead many people to think that this
  207. directive will only apply to pre-meditated law-breaking for
  208. profit.
  209. </p>
  210. <p>
  211. Consider a patent holder's lawyer trying to coerce a software
  212. developer into ceasing distribution of their software.<br />
  213. Lawyer: &quot;Hello. You're infringing our patent, cease
  214. distribution of your software.&quot;<br />
  215. Software developer: &quot;There must be a mistake. I've never
  216. read a patent, and anyway, software functionality isn't
  217. patentable in the EU.&quot;<br />
  218. Lawyer: &quot;Well, the European Patent Office granted this
  219. patent, and you infringe it&quot;<br />
  220. Software developer: &quot;It's very unlikely to be held up in
  221. court.&quot;<br />
  222. Lawyer: &quot;Since you intentionally wrote your software, and
  223. since your software is affecting the softwar market, your
  224. infringment is intentional and commercial scale - that makes you
  225. a criminal. Will you cease distribution or risk getting a
  226. criminal record and possibly having your business closed, a
  227. large fine imposed, and maybe spend some time in jail?&quot;<br />
  228. Software developer: &quot;...but, my software development was
  229. intentional, but my infringement wasn't. I didn't even know
  230. about this dubiously valid patent.&quot;<br />
  231. Lawyer: &quot;Well, since I've accused you of infringing it,
  232. you're aware of it now. So any continued infringement is
  233. definitely intentional. Will you now cease
  234. distribution?&quot;
  235. </p>
  236. <p id="busker">
  237. A simpler example is a person playing songs on the street for
  238. the change that people throw. The proposed text makes the
  239. musician a criminal if any song they play is copyrighted and is
  240. played without first obtaining a license. It also makes the
  241. person that drove them into the city centre a criminal, for
  242. aiding the infringement. People that throw money or stand
  243. around a listen could be criminals for inciting the
  244. infringement. And anyone that can prevent the infringement, but
  245. doesn't, is a criminal for abetting the infringement. This type
  246. of example can be useful to help people to understand how
  247. ludicrous the text is, but it doesn't explain the harm to
  248. software freedom, so it's only good as a stepping stone to
  249. further understanding.
  250. </p>
  251. <h4 id="investigation">Disproportionate access for rights holders</h4>
  252. <p>
  253. The directive also gives special privilege to rights holders to
  254. influence the investigation:
  255. </p>
  256. <p class="quote">&quot;Article 7<br />Joint investigation
  257. teams<br />The Member States must ensure that the
  258. holders of intellectual property rights concerned, or their
  259. representatives, and experts, are allowed to assist the
  260. investigations carried out by joint investigation teams into the
  261. offences referred to in Article 3.&quot;
  262. </p>
  263. <p>
  264. Also of concern is Article 8 (page 11) which says that Member
  265. States should investigate and prosecute &quot;intellectual
  266. property right&quot; infringements, even when the rights-holder
  267. has not requested it.
  268. </p>
  269. <h2 id="options">What we can work for</h2>
  270. <ul>
  271. <li>
  272. We can ask the European Parliament and the Council of
  273. Ministers to limit criminal sanctions to cases where the
  274. infringement was done to fund organised crime or causes a
  275. health or safety risk to the public. Organised crime and
  276. public health and safety risks are stated as the
  277. justifications of this directive, so tying the Articles to the
  278. justifications seems reasonable.
  279. </li>
  280. <li>
  281. We can ask the European Parliament and the Council of
  282. Ministers to remove the criminalisation of &quot;attempting,
  283. aiding or abetting and inciting [intellectual property right]
  284. infringements&quot;. For most EU member states,
  285. this is proposing harsher punishments for incitement or
  286. abetting of &quot;intellectual property right&quot;
  287. infringements than currently exist for actually committing
  288. such an infringement.
  289. </li>
  290. <li>
  291. We can build pressure in the European Parliament to simply
  292. reject this directive. Drafting law is the European
  293. Commission's responsibility, not the European Parliament.
  294. Since the Commission has handed the Parliament this directive
  295. which is basically one single sentence containing undefined
  296. and vague terms, it would be reasonable for the Parliament to
  297. reject this proposal on the grounds that the Commission has
  298. not done its job.
  299. </li>
  300. <li>
  301. We can look into the case law of existing criminal sanctions
  302. for patent, copyright, and trademark infringement. Some MEPs
  303. think that this direcitve is simply harmonising existing
  304. laws. In fact, laws like this exist in very few EU members
  305. states - and it would be interesting if we knew how often they
  306. were used. If they are old, rarely-used laws, then it would
  307. be hard for anyone to advocate making them mandatory across
  308. the EU.
  309. </li>
  310. <li>
  311. We can try to get patents excluded from this directive. This
  312. is quite practical because patents are particularly easy to
  313. infringe unknowingly. Doing so unknowingly may not shield
  314. anyone from the criminal sanctions here because
  315. &quot;intentional&quot; may apply to the act which lead to
  316. infringement (writing the software) rather than the
  317. infringement itself. Further, even if unknowing infringement
  318. was excluded, this directive would give patent holders the
  319. power to turn an offence into a crime simply by informing the
  320. infringer. This would have obvious uses in the market -
  321. informing an infringer just before a product release or during
  322. the bidding for a contract are two examples of valuable
  323. misuse.
  324. </li>
  325. </ul>
  326. <h2 id="todo">What needs to be done immediately</h2>
  327. <p>
  328. Hopefully this webpage will be useful for informing others. If
  329. you think something should be added to this webpage, please
  330. contact us.
  331. </p>
  332. <p>
  333. Many Member States already have criminal sanctions for copyright
  334. and trademark infringement, and some even have criminal
  335. sanctions for patent infringement. When politicians ask
  336. &quot;What harm have existing criminal sanctions caused in other
  337. EU Member States?&quot; we need to have a list of good examples.
  338. This list has to be gathered, and for that we need your help.
  339. </p>
  340. <h2 id="links">External links</h2>
  341. <ul>
  342. <li>
  343. The proposal: <a
  344. href="">com(2006)168</a>.
  345. (Also linked to above.)
  346. </li>
  347. <!-- Information should become available at this webpage, but it's not there now -->
  348. <!-- <li> -->
  349. <!-- <a -->
  350. <!-- href=";procnum=COD/2006/0168">The -->
  351. <!-- European Parliament information page for the directive</a>. -->
  352. <!-- </li> -->
  353. <li>
  354. <a href="">Did You
  355. Say &quot;Intellectual Property&quot;? It's a Seductive
  356. Mirage</a>, an essay by Richard Stallman about terminology.
  357. </li>
  358. <li>
  359. <a
  360. href="">The
  361. Charter of Fundamental Rights</a>. This directive seems to
  362. violate Article 49 on proportionality of criminal penalties.
  363. </li>
  364. <li>
  365. A ZDNet UK article: <a
  366. href=",39020487,39211542,00.htm">Making
  367. IP infringement a crime</a>.
  368. </li>
  369. <li>
  370. <a
  371. href="">com(2000)789</a>,
  372. a related Communication from the Commission.
  373. </li>
  374. <li>
  375. <a
  376. href="">IPRED-1,
  377. this directive's predecessor</a>
  378. </li>
  379. </ul>
  380. </body>
  381. <timestamp>$Date$ $Author$</timestamp>
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