The European Commission has issued a report ("the Report") assessing the implementation and impact of the Intellectual Property Rights Enforcement Directive 2004/48/EC ("the Directive").

The Directive, passed in 2004, provides a minimum level of harmonisation across Member States in relation to the enforcement of intellectual property rights ("IPR") by rights holders and public authorities. The Directive provides legal standards in relation to the enforcement of various IPR, including copyrights, designs, and patents, etc.

The Directive was to be implemented in all Member States by April 2006; however, some Member States were late to implement its provisions. This Report is the first evaluation of the progress made under the Directive so far.

Despite the relatively short time for which the provisions of the Directive have been in effect across all of the Member States, the general finding of the Report is that the Directive has indeed had a "substantial and positive effect on the protection of IPR by civil law in Europe".

However, the Report notes that, notwithstanding the improvements to the enforcement procedure, IPR infringement is a growing problem; stating that, "the sheer volume and financial value of IPR infringements are alarming".

The Commission believe this undesirable situation to be due largely to the extraordinary growth and evolution of internet technology over recent years. As the Commission states, "the internet and digital technologies have added an extra, challenging dimension to enforcing intellectual property rights. On the one hand, the internet has allowed creators, inventors and their commercial partners to find new ways to market their products. On the other hand, it has also opened the door to new forms of infringements, some of which have proved difficult to combat."

The Directive was not designed with these challenges in mind, as the development of such technology was still at an early stage. As such, in the Report, the Commission outline the need to assess the existing legal framework in order to combat more effectively online infringement of IPR.

In this regard, the Commission note the key role that internet service providers ("ISPs") play in facilitating the operation of the online environment. While they observe that EU law already contains specific provisions limiting the liability of ISPs whose services are used to infringe IPR, they propose that, "given intermediaries' favourable position to contribute to the prevention and termination of online infringements, the Commission could explore how to involve them more closely".

While this proposal may be worrying for some, it is clear that some degree of change is needed if the EU is to address more effectively the problem of online IPR infringement. However, the Commission will need to tread carefully. There are many diverse stakeholders in the online environment, all of whose interests will require to be balanced by the Commission in formulating any future proposal.

The European Commission welcomes feedback from interested parties on this Report by 31 March 2011. The full text of the Report is available here.