In December 2015, the European Commission launched a public consultation on whether Directive 2004/48/EC on the enforcement of intellectual property rights (the Enforcement Directive) is still fit for purpose. The Commission is seeking input from a wide range of stakeholders – IP owners; the judiciary and legal profession; intermediaries such as internet service providers and social media platforms; public authorities; and consumers and civil society – about their experiences of enforcing IP rights in the EU. According to the Commission, this input is intended to support its assessment of the current legal framework governing the enforcement of IP rights and the potential need for amendments to the Enforcement Directive. The consultation consists of five different questionnaires for the different stakeholder groups, and will end on 15 April 2016.
Origins of the consultation
The consultation stems from the Commission’s Digital Single Market and Single Market strategies, on which we have written previously (see e.g. here and here). The Commission sees modernisation of IP enforcement as an important element of these strategies. It has shown particular interest in adopting a ‘follow-the-money’ approach to IP enforcement, which seeks to deprive commercial-scale infringers of the revenue that draws them into such activities (rather than penalising citizens who often infringe IP rights unknowingly). As the Commission puts it on the ‘Enforcement of intellectual property rights’ page of its website: “An efficient and effectively enforced intellectual property infrastructure is necessary to ensure the stimulation of investment in innovation and to avoid commercial-scale [IPR] infringements that result in economic harm”. It is also focusing on the cross-border applicability of IP enforcement, suggesting that a “comprehensive enforcement policy is required to successfully combat these infringements at EU and national level, especially given the borderless nature of the internet”.
But why are competition lawyers interested in all this?
The primary purpose of the Enforcement Directive, as originally conceived in 2004, was to require all EU countries to apply equivalent sets of measures to enable IP owners to enforce their rights effectively. Of particular relevance from a competition law perspective, however, is its further aim of preventing the abusive or disproportionate exercise of IP rights. Recital 12 of the Preamble to the Directive directly refers to the importance of avoiding harm to competition, stating: “This Directive should not affect the application of the rules of competition, and in particular Articles 81 and 82 [now Articles 101 and 102] of the Treaty. The measures provided for in this Directive should not be used to restrict competition unduly in a manner contrary to the Treaty.”
In the run-up to this consultation, the CJEU referred to the Enforcement Directive’s treatment of the intersection between IP law and competition law in its Huawei v ZTE judgment of July 2015 (which we have written about here). In that judgment, the CJEU considered whether the holder of a standard essential patent can seek injunctive relief against a manufacturer of standard-compliant products without abusing a dominant position under EU competition law. In answering that question, the Court emphasised the importance of striking the right balance between “maintaining free competition” on the one hand and safeguarding IP holders’ rights – and particularly their “right to effective judicial protection” – on the other.
The Commission’s consultation on the Enforcement Directive also raises questions relating to the intersection between IP law and competition law, albeit more obliquely. For instance, the questionnaires for the different stakeholder groups include sections on the availability of injunctive relief, posing questions such as “Do you see a need for criteria defining the proportionality of an injunction?” and “Should the Directive explicitly establish that all types of intermediaries can be injuncted?”. Given the past and current interventions by DG Competition into the seeking of injunctive and similar mandatory relief by holders of SEPs, these questions have direct relevance to the way in which competition law is enforced in the EU – both through public authority investigations and in private actions.
In addition, the questionnaires for the judiciary and legal profession and member states and public authorities both include the question: “Do you think that the existing rules strike the right balance between the need to effectively protect IPR and preventing IPR infringements and the need to protect fundamental rights including the right to respect for private life, the right to protection of personal data, the freedom to conduct a business as well as the freedom of information?” (emphasis added).
If, after having reviewed the responses to its consultation, the Commission comes to the view that it is necessary to make changes to the Enforcement Directive, it is to be hoped that the Commission will bear in mind the need to maintain an appropriate balance between free competition on the one hand and the ability of IP holders to protect and enforce their rights on the other.