European Commissioner for Internal Market and
World Intellectual Property Day Meeting
Ladies and Gentlemen,
Thank you very much for inviting me here today to celebrate and to promote respect for Intellectual Property. While the actual date of World Intellectual Property Day was of course last Saturday the 26th, the topic is more than worthy of a second day in the spotlight and it gives me great pleasure to be here.
As Commissioner for Internal Market and Services, I am responsible for developing intellectual property rights throughout Europe. And I congratulate William Fry Solicitors on highlighting this very important area of property rights for the past four years by hosting an annual event such as this one today.
Intellectual property is a key competitive asset in Europe's ability to compete in the global economy. There are several reasons for this. The main reason is that through innovation, high quality design, effective branding and top quality production, EU companies have the ability to sell products at a premium price. Accordingly, we do not have to compete on price alone.
Innovation, invention and creativity – the ingredients that are transformed into music and books and products from new technologies to designer handbags – are what give us that advantage. But as you are aware, there is growing concern in the European Union about the increasing misappropriation of intellectual property. The theft of ideas is big business.
Piracy and counterfeiting have gone way beyond the purchase of a fake designer handbag, a DVD or a top brand name watch in a bar on the Costa del Sol or on a sidewalk in New York. It is having an increasingly serious effect on our economies and on the health and safety of our families. We've all heard the alarming stories about fake aeroplane and car parts, toothpastes tainted with chemicals and dangerous toys. In fact, my colleague Meglena Kuneva in publishing the 2007 report on the operation of the Rapid Alert System for non-food consumer products said that the summer of 2007 will be remembered as "the summer of recalls". Within the European Union last year, there was a rise of over 50% in the number of dangerous products removed from sale.
The number of products and sectors concerned is also increasing. The OECD estimates infringements of intellectual property at more than €150 billion per year. That is more than the GDP of 150 small countries. And this figure does not even include counterfeit and pirated products produced and consumed domestically.
Unfortunately, clever ideas are easily stolen. To ensure prosperity and jobs for our businesses and workers we have to take countermeasures.
Customs authorities are in the frontline to defend us against the incoming wave of counterfeits, and they are currently reporting a massive diversification in the types of counterfeit products: they come from all sectors where there is a potential profit. Those who carry out the act of counterfeiting and piracy are doing so on an industrial scale and are acting like professionals.
This, Ladies and Gentleman, is a worrying development which requires an immediate, concerted, comprehensive joint response from stakeholders and authorities, at national and European level. Obviously, it is not enough to work at the international level or at our external frontiers. We have to complement these necessary but insufficient actions by measures within Europe. The Internal Market with its four freedoms cannot be taken hostage by rogue traders marketing counterfeit and pirated goods.
I believe that the industry sectors concerned are the best placed to lead in this battle. Industry holds the rights concerned and should take the necessary steps to preserve its assets. It is industry that has the inherent knowledge to identify the fake products and to uncover the production and distribution network used to manufacture and market the counterfeits. It is industry who should balance the economic advantages of delocalization against the increased risk of counterfeiting and piracy. Industry should unite in the fight against counterfeiting and piracy by developing collaboration and mutual assistance models on the basis of stakeholder agreements. It is industry who should partner with the authorities and provide technical expertise and information enabling the competent authorities to intervene. Such a public-private partnership is the key to success.
Industry can count on the active support of the European and national authorities in the fight against counterfeiting and piracy. It is important that we make sure authorities at all levels work together efficiently in order to optimize the effect of their actions.
We have to attack the infringers at the place where it hurts them most: in their wallets. With the enforcement Directive in place complemented by supplementary measures at national level, the legal instruments are there to take away the profits generated by counterfeiters and pirates and to compensate the damage done to the legitimate rights holders.
We have enough laws on the statute book to combat counterfeiting and piracy, both in the online and in the offline world. The challenge now is to apply these laws in a coherent, balanced and intelligent way. On May 13th next, together with Members of the European Parliament, I am hosting a high level conference in Brussels in order to start a process of stakeholder dialogues aiming at finding practical approaches to combat counterfeiting and piracy within the internal market.
Intellectual property rights deserve respect. There is no point in having an intellectual property right if it is not respected. It is important for Europe’s economy and culture that we continue to enforce our intellectual property rights.
Now I would like to focus on a category of creators who do not always receive the respect they deserve for their innovation and creativity – performers. Here in Ireland, we have a particularly rich, cultural heritage in music – composers and producers as well as some extraordinarily talented musicians and singers. And while given the population of the country we punch way above our weight in terms of world famous acts, the vast majority of performers, here as well as elsewhere, are not well known.
In fact, 95% of Europe's performers earn nothing like enough from their profession and have to take on at least one 'day job'. I have wanted to do something for Europe's performers for quite some time, something that would enable them to earn more for their work and allow them to spend more time doing what they do best – performing.
Many of you will know, that when I announced my proposal to extend the term of copyright protection for European performers from 50 to 95 years, I said that I was determined that this extension will benefit all artists – whether featured or session musicians. And it has always been my view that copyright protection for Europe's performers represents a moral right to control the use of their work and earn a living from their performances.
As you know, an author currently enjoys copyright protection that lasts for 70 years after his or her death. Performers on the other hand only have protection of their work for 50 years from the time of their performance. This means that an increasing number of them are seeing their performances fall into the public domain during their lifetimes. Not only do they no longer have a say in how their performances are used, but also their royalty payments and their airplay remuneration dry up.
This is particularly hard as it happens at a time in life when they are getting older and probably not working as much. And the music business is not the type that comes with a pension scheme. A Commission survey shows that many European performers start their career in their early 20s. Indeed session musicians, who are not members of a band, often start playing as young as 17. So given that men in the European Union have a life expectancy of 75 years and women 81, the current term of protection is no longer the lifetime coverage it once was. I have no concern for the famous names – although they too will benefit – the measure is aimed at the thousands of anonymous session musicians who have contributed to much loved and listened to sound recordings.
By extending the term of protection for performers we will go some way towards solving a number of problems.
Extending the term is not enough in itself. I have also proposed that each record company set up a special fund specifically devoted to session musicians. The company will have to pay a percentage of its increased revenues in the extended period into this fund. This will mean that the thousands of session musicians will increase their earnings.
Performers, except for the very famous, have always been in a weak bargaining position with their record labels. We want to improve their situation by introducing 'use it or lose it' clauses into their contracts. This means that if the record company does not make the sound recording available on the market for a certain time, performers can get their rights back. Not only will this give performers another chance to earn money on their performances, it will also mean that more music is on offer to the public.
Once the extended period kicks in, the performers who have not managed to reimburse the record company for its investments in them will benefit from a 'clean slate'. In this way they will enjoy all the royalties for the extended period even if they did not ever qualify for them in the initial period.
Some may be concerned that extending protection to performers and sound recordings will increase the price of music. However, empirical evidence indicates that prices of recordings that are in or out of copyright are relatively similar.
We have also analysed the consequences of term extension on trade, especially with the USA. The conclusion is that most of the additional revenue collected during the extended period would remain in Europe and benefit European performers.
I am hoping the proposal will be presented by the summer.
Performers deserve respect for their huge contribution to European culture. They also deserve to finally accede to their just position in the hierarchy of intellectual property rights.
Thank you very much Ladies and Gentlemen and let me conclude by saying that to encourage innovation and promote respect for intellectual property – which is our theme for today - we have to ensure that the economic benefits of creativity and entrepreneurship go to those who are innovative, creative and show entrepreneurial spirit.