Hunting down the pirates

On 26 April 2004 the Council of Ministers adopted the European Directive on Measures and Procedures to Ensure the Enforcement of Intellectual Property Rights (2004/48/EC). Member states were given approximately two years to implement it. When implemented it should be a useful protection for brand owners against counterfeiting and piracy.

The main aims of the Directive are to harmonise the procedures, remedies and penalties available against those involved in IP infringement by creating a level playing field for rights holders to take action against counterfeiting and piracy throughout all member states. It is based on the “best practice” already found in at least one member state’s national law. At present no single Member State, including the accession countries, meets all the requirements and so implementing national legislation will be required across the board. Interestingly, provision is made for the appointment of national correspondents from each member state to facilitate co-operation and exchange of information amongst all states and the Commission. States and Commission each have a duty to encourage codes of conduct to assist with the enforcement of IP rights.

Does it go too far?

Some sectors have criticised the Directive as giving too much power and a raft of new rights to IP rights holders. For example there was concern that the provisions would be used against ordinary individuals downloading music from the internet. The writers’ view is that this criticism is unfair and, particularly from a Scottish perspective where most of the remedies already exist, potentially unfounded. Also the Directive focuses primarily on commercial pirates. Indeed certain of the more controversial and wide reaching provisions for the recovery of banking, financial or commercial documents, disclosure of origin of goods and distribution network and the seizing of infringers’ assets only apply to acts committed on a commercial scale. These are acts committed for direct or indirect economic or commercial advantage, which would normally exclude infringing acts done by good faith end-consumers. The Internal Market Commissioner has indicated in several press releases that the emphasis is “on catching the big fish rather than the tiddlers”.

Substantive national IP law is not altered or affected by the Directive, which rather deals with ensuring that the remedies available to enforce those rights are consistent throughout the EU. Furthermore, it does not create a new EU-wide single legal action or a central European court. IPR enforcement will still very much be a national matter based on the usual rules of jurisdiction. Whilst local legal advice in each state should always be obtained, the consistency of remedies should in future allow more certain general guidance to be given on the remedies available across Europe.

Changes in the UK

The Directive includes procedures for the preservation, protection and recovery of evidence, interim measures such as interim interdict/injunctions and seizure of assets, and destruction, recall or permanent removal from the market of infringing goods as well as monetary compensation, permanent interdict and damages. Obviously the remedies are only available once a national judge is satisfied that they are proportional and appropriate, and that the commercial scale requirement, if applicable, is satisfied.

Whilst the Scottish court system already allows for most of these in some form, there are a few new remedies which may prove valuable:

There would be a right of information allowing judges to order certain persons such as the infringer or/and the person caught holding the infringing goods to disclose names and addresses of those involved in distributing the goods, along with details of quantities and prices.

The successful pursuer can ask the court to order that the infringer advertises the court’s decision against it at the infringer’s expense.

There may be scope for trying to increase damages on the basis that the court will be allowed to consider “elements other than the economic factor, such as the moral prejudice cost to the right holder by the infringement”.

The persons entitled to request such remedies will not only be the right holders but (subject to national law) could also extend to people who have a direct interest in enforcing the rights, which could include professional organisations in charge of the management of those rights. At present, such organisations can be hampered by legal technicalities regarding title to sue.

It will be interesting to monitor the implementation of the Directive in the UK and see how it impacts practically upon the enforcement of IPR. Member states have a duty to provide a report on the functioning of the Directive within three years of national implementation.

Robert Buchan and Gill Grassie, IP and Technology Department, Maclay Murray and Spens