The European Commission has published the responses to its consultation on the enforcement of intellectual property rights. On the key question of the suitability of Directive 2004/48/EC to deal with the challenges of the digital environment, views differed greatly. Many criticised the current regime’s shortcomings, although internet service providers (ISPs) stressed that there was no need to change the Directive.

Background

At the same time as adopting a report on the application of Directive 2004/48/EC on the enforcement of intellectual property rights in December 2010, the European Commission also published a public consultation with a view to informing the Commission’s decisions on any possible future measures.

In the digital context, the consultation also covered the right of information and privacy laws, data retention, and more generally the role of the courts and damages. The consultation expired on 31 March 2011.

Contributions were received from organisations such as trade and business associations, consumer organisations, ISPs, academics, collecting societies and public authorities and individuals.

Summay of Responses

Intellectual property right holders and collecting societies were critical of the current system, particularly the role of intermediaries and the supposed failure to stop the increase in online copyright infringement. However, ISPs, telecommunication operators and individual citizens were less critical of the system, saying that change was not required, suggesting instead that change would create legal uncertainty by altering the current balance of interests of right holders, users and intermediaries. Some ISPs said that there was insufficient evidence to prove that the internet causes serious problems in terms of counterfeit goods. Additionally, individual citizens expressed anxiety that revising the current regime would lead to stricter rules that would interfere with net neutrality and freedom of speech.

ISPs and telecommunication operators were against assuming a stronger role in enforcement, saying that this was a task for public authorities. They also said that any measure jeopardising the limited liability regime of ISPs would run against the intention of the European legislature to create an efficient and competitive information, communications and technology market. Many ISPs agreed that a court should be able to order a hosting provider to take down specific material for which the illegal nature and location was clearly identified, but they opposed measures requiring an online intermediary to actively to search its systems for any such material.

Right holders emphasised the importance of guaranteeing privacy to citizens. Many take the view that users can “hide behind anonymity in the online world, thus rendering it impossible for right holders to enforce their rights”. Right holders also stressed that data often are not retained long enough by ISPs to allow right holders to obtain the information they need to enforce their rights. In this respect some respondents called for an obligation in the Directive to store data at least on a temporary basis or alternatively, that storage of data upon request—a “quick freeze”—could be considered.

On the question of damages, certain respondents suggested that damages currently awarded are an insufficient deterrent. Furthermore, it was suggested that the Directive should include measures to enable right holders to recover the full extent of their loss, including lawyers’ fees, expert costs and all costs incurred in establishing infringement. It was also suggested that damages awards should be such that infringers are deprived of any economic benefit deriving from their infringement even, some argued, to the extent that there should be a legal presumption that the damage suffered by the right holder is at least equal to the profits made by the infringer. Member States, however, unanimously opposed the introduction of the concept of punitive damages into the Directive.

Comment

All eyes are now on the Commission to see how it reacts to the responses to its consultation and which, if any, of the stakeholder’s recommendations it decides to take forward.

All the individual responses are available on the website of the Directorate General Internal Market and Services, other than those for which confidentiality was explicitly requested.