Brussels, 22 October 1998
The Commission adopts a Green Paper on tackling the problem of counterfeiting and piracy in the Single Market
The European Commission has adopted a Green Paper on combating counterfeiting and piracy in the Single Market, marking the start of a wide- ranging consultation of all the parties concerned, the Member States and the institutions of the European Union (EU). This consultation, which is expected to be completed in March 1999, aims to determine the economic impact of counterfeiting and piracy in the Single Market, to assess the effectiveness of the relevant legislation and to propose a number of initiatives to improve the situation. These initiatives could include support for private-sector monitoring, legal protection of security and authentication devices, assessment of the penalties and other means of enforcing intellectual property rights and the setting-up of suitable administrative cooperation between the relevant national authorities.
"There must be a determined fight against counterfeiting and piracy since they jeopardise the proper functioning of the Single Market and are prejudicial to the development all forms of creativity and to the growth and competitiveness of European industry", stated Single Market Commissioner Mario Monti. "All those involved, inventors, industrialists and consumers, must have a guarantee that the Single Market is a secure environment for their activities and the quality of their purchases".
The initiatives on intellectual property rights have so far focussed essentially on harmonising national legislation (for example trademarks, biotechnology inventions) and on creating unitary rights at Community level (for example, the Community trademark). It is necessary to ensure proper implementation not only of the legislation itself, but of the rights and obligations of market operators resulting from this legislation in the Single Market. In fact, counterfeiting and piracy are prejudicial to the proper functioning of the Single Market as they give rise to deflections of trade and distortions of competition, leading to a loss of confidence among market operators in the ability of public authorities to provide effective protection of their rights and to a reduction in investment.
The number of jobs lost in the EU as a result of counterfeiting is estimated at 100,000 per year. Counterfeiting and piracy affect a wide variety of sectors: computing, toys, textiles, perfumes, compact disks, medicines, watches, etc. The levels of counterfeiting and piracy in relation to the turnover of the sectors concerned are considerable in some cases: 35% in the software industry, 25% in the audio-visual industry, 12% in the toy industry etc.
A horizontal initiative could prove to be needed to respond to this phenomenon in a comprehensive way. For the Single Market this would also complement the existing mechanism for controlling counterfeit and pirate products at the external border of the EU, and would thereby reinforce the coherence of EU action.
The Green Paper aims to assess precisely the scale and economic impact of counterfeiting and piracy in the Single Market and to assess the effectiveness of legislation on intellectual property. The improvements under consideration in the Green Paper relate to four specific aspects:
a) Support for private-sector monitoring
Most monitoring of the market surveillance is carried out by professional organisations, trademark holders' associations and collecting societies. However, these monitoring activities, which are often very effective at combating counterfeiting, must comply with Community competition rules. Cooperation between these private bodies and public authorities, particularly for the exchange of information, could be developed and formalised and take the form of memoranda of understanding. Community programmes could support Europe-wide projects in the fields of training, exchange of data or campaigns to raise public awareness.
b) Legal protection of security and authentication devices
One of the means available to holders of intellectual property rights in the fight against counterfeiting and piracy is the use of devices to protect and authenticate their products and services. They may take various forms: security holograms, optical devices, smart cards, magnetic systems, microscopic labels, etc. These devices can be used to trace illegal use back to its source and thus to prosecute offenders. Research and development programmes could contribute to providing innovative solutions.
c) Assessment of the means of enforcing intellectual property rights
The means of enforcing intellectual property rights are based above all on penalties. On 29 June 1995 the Council of Ministers, following a Communication from the Commission, adopted a Resolution calling on the Member States to punish breaches of Community law with the same severity as offences against national legislation. Standard penalty clauses have now been introduced into Regulations and Directives, for example in the proposal concerning copyright in the information society. The question is whether the mechanisms already in place are adequate to ensure uniform application of the legislation, or whether counterfeiting activities have moved location in order to take advantage of differences in the level of penalties. One of the solutions considered in the Green Paper would be to promote at Community level measures and procedures which have proved their effectiveness in certain Member States.
d) Setting up suitable administrative cooperation between the relevant national authorities
Setting up real administrative cooperation between the departments responsible for combating counterfeiting is an effective way of dealing with this phenomenon. One possibility would be to nominate a correspondent responsible for all issues relating to combating counterfeiting in each Member State as a single contact point for the other Member States.
Consultation of the parties concerned
The Green Paper represents a starting point for a wide-ranging consultation of the parties concerned. It will be completed in March 1999 with the organisation, jointly with the German Presidency of the EU Council, of a hearing of all interested parties in Munich on 2 and 3 March, in order to consider in more detail the most important points arising from the coming discussions. The Commission will then be in a position to determine the action to be undertaken in this field.
Copies of the Green Paper may be obtained from the European Commission at the following address:
Rue de la Loi, 200
by fax : (32-2) 299.31.04
and by e-mail: E3@dg15.cec.be
or through the EU's Europa Web site: