Respect for intellectual property rights

 Frequently Asked Questions

Why is the Commission presenting initiatives on intellectual property rights (IPR)?

Intellectual property rights (IPRs) are one of the main ways that businesses, creators, researchers and inventors can profit from their investment in know-how and creation. Patents, trademarks, geographical indications, designs, and copyrights are essential incentives for creativity and innovation; they enrich the possibilities of choice for the consumer and reinforce job creation in the European economy (see also the fact sheet on the protection of intellectual property).

Sectors that use large amounts of IPR represent around 42% of the European Union's (EU) GDP, worth around € 5.7 trillion per year; they create 38% of jobs and contribute almost 90% to European exports. As competition between companies at the global level is increasingly played out in terms of innovation, creativity and quality, IPR protection is essential for companies, and in particular for SMEs which do not have the necessary resources to manage large intellectual property portfolios or to engage in lengthy proceedings. And yet, according to a recent study, counterfeit and pirated products represent 2.5% of the value of world trade, and this share is on the rise. In addition, 5% of all imports into the EU come from counterfeiting or piracy, with this illicit trade estimated to be worth € 85 billion (see also the fact sheet titled 'What is the importance of intellectual property rights? ”).

To fully play its role of promoting investment in innovation and growth, the IPR system must be balanced, efficient and correctly applied in the European Union (EU), at its borders and internationally. The Commission presents measures to improve the efficiency and predictability of the judicial enforcement system in this matter in the EU. In doing so, it responds to the increase in intellectual property infringements on a global scale and takes into account the need to adapt law enforcement measures to the demands of the digital age in which we are. entered.

How does the Commission intend to step up the fight against counterfeiting and piracy?

The approach adopted by the Commission consists of:

- to deprive offenders acting on a commercial scale (the “big fish” rather than individuals) of the income thanks to which their criminal activities are lucrative (according to the principle known as “follow the money”);

- to clarify the questions of interpretation which have arisen in the application of the 2004 directive on respect for intellectual property rights (the “IPRED” directive);

- to support the initiatives taken by sectoral actors to combat intellectual property infringements, including the development and conclusion of memoranda of understanding and the examination of the value of new technologies such as distributed databases ( of which the “blockchains” are part) to fight against these attacks in the supply chains;

- redouble efforts in the fight against intellectual property infringements on a global scale, by promoting good practices and intensifying cooperation with third countries, by offering more targeted assistance to national customs authorities in the execution of the new customs action plan and by improving administrative cooperation in the fight against counterfeiting.

How will the guidance on the IPRED directive be useful?

The IPRED Directive requires all EU Member States to ensure that effective, dissuasive and proportionate remedies and sanctions are applied to perpetrators of counterfeiting and piracy. Its aim is to create a level playing field for rights holders in the European Union. This means that all EU states have a similar set of measures that allow holders of intellectual property rights to defend these rights.

After an exhaustive assessment of the directive based on studies and consultations, it was concluded that it is still suited to the objectives pursued. The tools provided for by the directive have helped to better protect IPRs before civil courts. Its relevance for facilitating the monitoring of compliance with different IPRs in the digital age is also proven.

However, the effectiveness of the directive is undermined by differences observed inits application from one Member State to another. Some of these differences arise from different national frameworks in civil procedure law and the wide variety of legal and judicial traditions. On the other hand, some important differences are due to a non-uniform interpretation of the directive.

The Commission therefore presents guidelines for the competent courts, legal practitioners and rightholders in order to clarify its point of view on the provisions which are interpreted and applied in different ways in the different Member States. With these guidelines, the Commission strengthens legal certainty for all stakeholders and facilitates the monitoring of IPR compliance before civil courts across the EU immediately, without the need for a lengthy legislative process. .

The Commission will continue, in close collaboration with national experts, including judges, to identify areas where it would be useful to disseminate further concrete guidance based on the experience of good practice, for example on the calculation of damages. -interests and the type of evidence necessary to allow compensation for damage caused by infringements of intellectual property.

Issues raised by interested parties in the context of the assessment of the IPRED Directive but which fall outside the scope of the Directive, such as the role of online platforms and liability issues, are addressed separately, for example in the recent Commission guidelines for online platforms in the fight against illegal content.

In which specific areas do the guidelines on the IPRED directive provide clarification?

The guidelines provide clarifications in the areas for which the provisions of the IPRED Directive have given rise to divergent interpretations in the Member States, not only in the light of the case law of the Court of Justice of the European Union but also of “ national good practices. For example:

- the guidelines specify that the possibility of issuing an injunction to an online platform on the basis of the IPRED directive does not depend on the responsibility of the intermediary in the infringement of IPRs (as is the case in application of the e-commerce directive). The guidelines also explain that by issuing such injunctions to intermediaries, national courts may impose specific monitoring obligations;

- some of the measures provided for in the IPRED directive only apply to infringements committed "on a commercial scale". The Guidelines clarify the notion of 'commercial scale', which should be interpreted on the basis of qualitative elements such as the commercial advantage conferred by IPR infringements as well as quantitative elements such as number / the extent of the damage;

- the guidelines indicate that a party seeking compensation in the form of fixed-rate damages may seek compensation not only for the material damage suffered, but also for the moral damage;

- the guidelines encourage the use of new instruments such as the preventive brief (by which the defendant informs the court even before the formal initiation of an action for the injunction of intellectual property infringement) and dynamic injunctions (intended for repeat offenders , for example).

What is the point of voluntary agreements?

Voluntary cooperation makes an important contribution to curbing online counterfeiting and providing effective solutions.

The memorandum of understanding on the sale of counterfeits on the internet signed in 2011 between rights holders and internet platforms has already produced significant results. Since the entry into force of the MoU, a large number of product offers infringing the rights of holders participating in the initiative have been withdrawn from online platforms. However, with a growing number of counterfeit products entering the EU's single market, all signatories - and new entrants - must persevere in their efforts.

The Commission is working with representatives of the advertising industry to finalize a new sectoral memorandum of understanding to deprive websites infringing intellectual property of advertising revenue. Online advertising is a major source of income for such sites, and a number of countries are working to reduce the inflow of advertising revenue from which these sites benefit to their territory.

Work is also underway with a view to concluding a memorandum of understanding on payment services, which are essential for the offers pinfringing IPRs, and a memorandum of understanding for the transport and shipping sectors, to prevent the use of their services by counterfeiters.

What other measures is the Commission proposing to facilitate judicial enforcement in civil matters?

As part of a comprehensive and balanced package of measures aimed at further improving the enforcement of IPR compliance, the Commission encourages national judges to specialize in the field of intellectual property and promotes the systematic publication of judgments delivered in States members in terms of respect for intellectual property. Together with the European Union Intellectual Property Office (EUIPO), the Commission is also facilitating a wider use of out-of-court settlement to settle intellectual property disputes.

What is the link between the current initiative, the copyright reform and the Commission communication entitled “Combating illegal content online”?

While the Commission's copyright proposal, adopted in September 2016, deals only with copyright, the initiative presented today describes a comprehensive set of measures to improve the enforcement and control of copyright. respect for IPRs throughout the Union and relates not only to copyright but also to other intellectual property rights such as patents or trademarks.

On September 28, 2017, the Commission adopted the Communication entitled 'Tackling illegal content online - For increased accountability of online platforms' with a view to increasing the proactive prevention, detection and removal of illegal content offered online . It offers common tools to detect and remove such online content and prevent its reappearance. The initiative presented today in the field of intellectual property supports the recommendations contained in this communication. In particular, the Commission calls on sectoral players to redouble their vigilance in the fight against IPR infringements. The Commission will also continue the work started with the sectors with a view to improving and extending the voluntary agreements concluded in order to fight against infringements of intellectual property and with a view to promoting and facilitating the conclusion of dedicated memoranda of understanding. intervene with rights holders, internet platforms and businesses in the advertising, shipping and payment services sectors, respectively, and will continue to monitor the concrete impact of these MoUs.

What will change in cooperation with third countries in the field of intellectual property?

On the basis of the positive experience of the EU-China 'IP KEY' program and of the technical cooperation carried out in the ASEAN region, the Commission is now extending these relations to other geographical areas and launching three programs in parallel. IP KEY dedicated to IPRs in China, ASEAN member countries in Southeast Asia and all Latin American countries. These “IP KEY” programs aim to support EU companies and stakeholders who are already active in selected third countries or trying to enter these new markets.

What is the aim of the “list of markets under surveillance in intellectual property”?

In collaboration with the European Observatory on Infringements of Intellectual Property Rights (EUIPO Observatory), the Commission will establish a list of markets under surveillance in the area of ​​intellectual property. This list will identify online and physical markets in third countries that have been reported to commit or facilitate significant IPR infringements. The list should promote the implementation by market owners and operators of solutions aimed at reducing the availability of counterfeit goods and services and raising consumer awareness of the risks associated with counterfeiting and piracy.

The Commission will launch a public consultation in order to collect information on these markets (location, volume of traffic, types of counterfeit goods or services, estimated damage to right holders, possible enforcement measures, etc.). The data verified with the help of the Observatory will be used to determine the markets to be included in the list. This list of markets under intellectual property surveillance will be published for the first time in the second half of 2018, and will then be updated at regular intervals.

What are standards essential patents and why is the Commission taking action on them?

Standard Essential Patents (BEN) are of strategic importance forr the successful digitization of our society and our economy, in which people and objects are interconnected by communication networks and transmit information about their status or their environment, as in the Internet of Things (IoT), for example.

BENs are patents that relate to technologies essential to the implementation of a specific technical standard or specification necessary to enable industry participants to create interoperable products such as mobile phones or other connected devices that use, for example, example, 3G or 4G networks. Without formal standardization and without BEN, there would be no connected vehicles, for example. Telediagnosis or remote operations, or the exchange of patient data would not be possible either.

The manufacture of standards-compliant products, such as connected devices, often involves the use of connectivity technologies that are the subject of one or more BENs. The standards in question are set by standardization bodies such as the European Telecommunications Standards Institute (ETSI), which base their work on open, impartial, transparent, consensus-based procedures to which the interested parties - the holders of patents, industry players, research centers, users and consumers - are involved. These standardization bodies act on the principle of declarations of patent ownership filed by the players in the sector themselves. After the adoption of the standard, the patents which compose it are considered as essential to the functioning of the standards: they are then called “patents essential to the standard” (BEN).

Europe's ability to take a leadership role in technological innovation and fully exploit the potential of 5G and the Internet of Things cannot be fully expressed due to lack of transparency and predictability of the conditions under which BENs must be declared, licensed and applied. Smaller players, such as SMEs or start-ups in the IoT sector, for example, may have to overcome many pitfalls to find their way into the BEN landscape.

- Firstly, the process of declaring BENs to certain standardization bodies (NBs) does not guarantee sufficient access to information, nor is there sufficient control over the patents that must be considered as essential to a standard and on the motivations for such a decision;

- then, opinions differ as to the interpretation to be given to the concept of so-called “FRAND” conditions. By “FRAND” conditions (fair, reasonable and non-discriminatory), we mean the conditions under which BEN holders undertake to make the technology concerned available to users of the standard. When negotiating for a license to use patented technology, the owner of the technology (the BEN holder) and the user of the standard must adhere to FRAND conditions. FRAND conditions are often said to be a two-way street, requiring both parties to negotiations to both conduct negotiations in good faith. The FRAND conditions do not relate only to the price to be paid to be able to use the technology concerned: they can also relate to other specific elements of the granting of a license such as the scope of the rights, the terms of payment, possible licenses. crossed, etc .;

- finally, greater legal certainty is necessary when performing BENs against suspected counterfeiters. The recent judgment of the Court of Justice of the European Union in the Huawei / ZTE case has clarified some aspects of these issues and today's communication provides additional specific guidance.

For the first time, the Commission adopts a global reflection on BENs in Europe and presents its views on certain aspects of an appropriate framework for the licensing of such patents in order to contribute to the establishment of an ecosystem sustainable, balanced and efficient standardization for companies embarking on 5G and the Internet of Things.

What are the guidelines proposed by the Commission for the BEN system?

On the basis of several studies on the granting of licenses for BENs, public consultations and dialogues conducted with the various protagonists, the Commission proposes guidelines and recommendations in favor of a balanced and effective BEN system that allows reconciliation. of two objectives: access to technologies open to product manufacturers through transparent licensing rules andt predictable and, at the same time, that rights holders are rewarded for their research and development and standardization activities and thus encouraged to propose the integration of their best technologies in standards.

This dual objective of efficiency and balance is achieved because communication focuses on three fundamental aspects:

increased transparency of the negotiation environment between BEN holders and potential licensees: improve the quality of information recorded by standardization bodies, make this information available to patent holders, users and third parties, verify the quality of statements regarding patent applications for the final standard and promote tighter control of essential patent claims. To promote the establishment of an appropriate control mechanism, a pilot project will be launched around certain technologies;

minimum principles for valuing BENs: helping the parties to find common ground on the concept of fair licensing conditions following negotiations conducted in good faith, on a case-by-case basis, by proposing principles of interpretation the notion of granting licenses on FRAND conditions, including the principle of non-discrimination. The Commission calls on interested parties to engage in sectoral discussions with a view to establishing effective licensing practices;

a balanced and predictable execution mechanism: propose guidelines for rights holders and users concerning the control of compliance with BENs, promote the deployment of mediation and out-of-court dispute resolution tools while putting in place safeguards against abusive legal proceedings.

With this Communication, the Commission intends to improve the efficiency and fairness of the standardization ecosystem as a whole. While the primary responsibility for improving the licensing conditions for BENs rests with market participants, the Commission aims to foster balanced market-based solutions by highlighting principles to which license holders BEN and users may consider joining. The Commission in no way defends the interests of one or the other actor in the sector: it analyzes the situation, especially having in mind innovative SMEs and new entrants to the 5G and Internet market. internet of things.

Why is standardization important for 5G in Europe and how does this communication relate to it?

ICT standards ensure the interoperability of digital technologies and are the very foundation of a well-functioning digital single market. They ensure that technologies fit together flexibly and reliably, generate economies of scale, stimulate research and innovation and keep markets open.

The Communication is of particular interest for standardization in the field of Internet of Things and 5G in Europe, as it provides a clearer framework, which facilitates the development of patented technologies and the licensing of these technologies. that allow interconnection and connectivity. All actors, from the companies involved in the standardization process to the users of standards, find it in their interest to operate in a more transparent and balanced environment, conducive to the development and licensing of 5G technologies. .

Does communication run the risk of harming the development of “open source” solutions?

In the context of current technological developments, the implementation of "open source" software is of growing importance, especially with regard to standardization in the field of ICT. The Commission is in favor of the development of "open source" solutions. Coordinating open source solutions and interoperability standards is beneficial from all points of view: on the one hand, aligning open source and standardization can speed up the development process. standards and the adoption of ICT standards (especially for SMEs) and, on the other hand, standards can provide for interoperability of open source software implementations.

Applying FRAND terms is not incompatible with a royalty-free environment. The Commission will continue to cooperate with stakeholders, open source communities and standardization bodies to foster an effective interaction between open source and standardization.

What are the next steps?

The Commission will cooperate with interested parties, as appropriate, in the context of the implementation of the actions proposed in the Communication and will continue to collect information on the issues.s pending. It will create a group of experts to gather more experience on issues such as licensing practices, sound valuation of intellectual property and setting FRAND conditions. In addition, the Commission will launch a pilot project on the assessment of the essential character of BENs. It will take stock of the progress made and assess the need for further action to ensure a balanced licensing framework for BENs.