Spain: EU Proposals For Harmonization Of Criminal Measures To Combat Counterfeiting And Piracy

The European Commission has recently approved a proposal for a Directive and a proposal for a framework decision aimed at harmonizing the criminal measures that every member State uses to fight both counterfeiting and piracy.

This proposal for a Directive is aimed at completing the previous Directive 2004/48/EC of 29 April, "on the enforcement of intellectual property rights", which harmonizes the civil and administrative measures set out by the member States to fight the breach of IP rights.

Although the EU Member States (including the ten new members) are also members of the World Trade Organization (WTO) and are therefore bound by the TRIPS agreement, which constituted a start for harmonisation on the use of criminal measures to combat counterfeiting and piracy, the Commission deems that there are still major disparities between the national laws which do not allow holders of Intellectual Property Rights to benefit from the same protection throughout EU territory.

In addition, article 61 of the TRIPS agreement obliges WTO members to treat trademark counterfeiting and copyright piracy only as a criminal offence (and to provide for criminal procedures and penalties). Under the TRIPS agreement it is not compulsory to treat infringements of other intellectual property rights such as patents, utility model or industrial designs, as criminal offences.

Just as in the 2004 Directive, "intellectual property" rights include the following: copyright, rights related to copyright, sui generis right of database makers, topographies of semiconductor products, trademarks, designs, patents and supplementary protection certificates, geographical indications, utility models, plant varieties and trade names, in so far as these are protected as exclusive rights in the national law concerned.

This Directive proposal therefore broadens the scope of the rule of minimis passed by the WTO, obliging the EU member States to treat as criminal offences (and to provide for criminal procedures and penalties) not only trademark counterfeiting and copyright piracy, but any other wilful infringement of intellectual property rights.

There are two main specific measures forecasted in this proposal for Directive:

Firstly, all intentional infringements of an intellectual property right on a commercial scale, as well as attempting, aiding or abetting and inciting such infringements, will be treated as criminal offences.

Secondly, the proposal establishes the following penalties to punish such conducts: (i) custodial sentences, (ii) fines, (iii) confiscation of the object, instruments and products stemming from infringements or of goods whose value corresponds to those products, (iv) destruction of the goods infringing an intellectual property right, (v) total or partial closure, on a permanent or temporary basis, of the establishment used primarily to commit the offences, (vi) a permanent or temporary ban on engaging in commercial activities, (vii) being placed under judicial supervision, (viii) judicial dissolution, (ix) a ban on access to public assistance or subsidies, and (x) publication of judicial decisions.

On the other hand, the proposal for a Decision to strengthen the criminal law framework to combat intellectual property offences, complements the abovementioned Directive specifying some kind of penalties and establishing judicial cooperative measures among member States.

For instance, this proposal for a Decision specifies penalties of imprisonment of up to four years if the offence has been committed under the aegis of a criminal organisation, and quantifies the fines with a minimum of between 100,000€ and 300,000€, depending on the infringement. In addition, the filing of a complaint traditionally required to prosecute these offences has been abolished.

Spain, as it has been something of a pioneer in criminal enforcement of intellectual property offences, will not need to make many changes once the Commission’s proposals come into force.

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