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Karel De Gucht
European Commissioner for Trade
International Trade and Intellectual Property Rights
Speech at the Conference on Intellectual Property Captured – Which Course to Take against Counterfeiters?
Brussels, 7 September 2011
Meine Damen und Herren,
Introduction: Trade policy pursues a clear economic goal: more growth & jobs
Since my first day as European Trade Commissioner, I have been developing all my actions as Trade Commissioner in the wider context of a growth, jobs and world affairs agenda. We cannot conduct trade policy in a vacuum. Our trade policy pursues a clear economic goal and it is important that we reach out and explain our approach. This is why I am delighted to be here tonight to present the contribution of the European Commission to better protect Intellectual Property inside and outside the European Union.
Our approach in trade policy is based on open markets within a strong rules-based international system. This approach fosters growth and jobs in the EU, as well as among our partners around the world.
Trade, in both economic and political terms, is part of the way out of the current economic crisis. Trade fosters greater production efficiency, more competition and more consumer choice.
A high standard of intellectual property protection is essential in a knowledge based economy, such as the EU's, if we want to maintain the conditions necessary for an enabling environment that protects and promotes the essential innovative talent we have in Europe.
The importance of IPR is illustrated by a couple of figures. In 2009, the value of the top 10 brands in EU countries amounted to almost 9% of GDP on average. Copyright-based creative industries such as software, book and newspaper publishing, music and film, contributed 3.3% to EU GDP in 2006 and account for approximately 1.4 million SMEs, representing 8.5 million jobs. Employment in "knowledge-economy" industries increased by 24% between 1996 and 2006 compared to 6% for other industries.
IPR Policy within the EU
We need rules that promote, rather than inhibit, innovation within the EU. My colleague, Michel Barnier, has initiated a policy review which led the Commission to adopt a comprehensive communication in May of this year. I'd like to mention just a few key steps of this communication for the next couple of years:
I mentioned these internal market proposals, not only because they matter to you and to our growth objectives, but also because, in our trade agreements negotiations, we will benefit from a stronger and better harmonised internal market. This creates leverage for us in our negotiations with third countries and allows us to ask for meaningful protection in third countries for EU industry's intellectual property rights.
This allows me to turn to our actions outside the EU:
According to our forecasts, 90% of world growth in the coming 5 years will be outside the EU – in particular in emerging countries. This provides enormous opportunities for EU companies, but at the same time represents an important challenge. A challenge that our companies must be ready to meet and which requires a continued successful strategy to guide their investments in marketing, innovation and technological upgrading. To enable EU companies to maximise their competitiveness and continue to defend their leadership position as up-market, technology oriented global suppliers, they must be able to use of inputs from both intra and extra EU sources without the risk of their IPRs being abused.
The growing value of IPR is an indicator of success. However, it also makes them attractive to counterfeiters and pirates. Widespread violations of IPRs in certain third countries is a clear sign that infringers make full use of advances in technology and weaknesses in IPR protection and adopt modern business models to control the production, distribution and sale of illicit goods across borders and continents. The internet is increasingly one such tool.
Therefore, our IPR enforcement efforts outside the EU matter even more than before. This was recognised by the European Parliament which stated that [I quote]:
"the biggest challenge for the internal market lies in combating infringements of intellectual property rights at the EU's external borders and in third countries".
As most of you are industry representatives, you will be well aware of the economic damage that IPR infringement may cause to right-holders.
It is particularly worrying that IPR infringements seem on the rise. According to a recent Commission report, the number of shipments stopped by customs throughout the EU almost doubled compared to last year, rising from 43,500 in 2009 to almost 80,000 in 2010. Infringers are also no longer just targeting luxury goods but are increasingly targeting healthcare and other consumer products.
Another worrying trend is the growing number of detentions of postal packages which represents a particular challenge for customs officials. The German Anti-Counterfeiting Association recently also highlighted the new phenomenon of sending counterfeit goods in small consignments and noted an increase of 170% in Germany alone between 2009 and 2010.
Ladies and Gentlemen,
So, to sum up, IPR enforcement outside the EU matters much more than before. Not only as we observe a significant increase of counterfeit goods coming in, but also because our export oriented companies see these fakes bite into their sales abroad.
You may then ask yourself: what solutions do we put in place to deal with this problem?
Well, there is no silver bullet to deal with this challenge but we use a variety of tools in our toolbox to confront this issue. These include both legislative and non-legislative initiatives:
I know that many have criticised this agreement - often for matters that were not even on the negotiation table – but the truth is that it will help our European export businesses, of all sizes, to protect their intellectual property from being stolen - and so to maintain their competitiveness and jobs at this critical time.
While the IPR chapters we negotiate should as far as possible offer identical levels of IPR protection to that existing in the EU we are, of course, prepared to take into account the level of development of the countries concerned and adapt our levels of ambitions.
The IPR dialogues allow us to engage in result oriented discussions on specific issues with our counterparts. Such dialogues have allowed us to share best practices in area of IPR protection, but also to resolve particular problems. Many German companies are active partners in these dialogues and problems such companies bring to our attention are often raised with the relevant national authorities by my services.
The world does not stand still; there are many changes taking place, which we are addressing. Let me mention two of them: the Internet and the development dimension.
Our approach towards the internet infringements must be based on the principle that internet users have both rights, such as freedom of expression and data privacy, but also obligations, and namely to respect the same law that applies to them in the physical world. In order to reach the right balance, the Commission is ready to work with all the stakeholders, including consumers, internet service providers and creators of content.
The situation of developing countries however varies considerably and a differentiated approach is called for.
First, while some developing countries do face important challenges in putting in place appropriate IP regimes and will need time and assistance I do not subscribe to the view that weak IP protection in developing countries is inherently in their interest, as these regimes should also enable them to leverage the value of their own intangible assets, such as local culture and local agricultural products (which can be protected as plant varieties or as geographical indications) and to avoid them becoming a target of infringers.
Secondly, emerging countries play as I have already noted an increasing role in the world economy. However, some of these countries are characterised by high IPR infringement rates often as a result of lax or even selective enforcement of the IRP laws. Last year, for instance, more than 80 % of all goods detained at EU borders, suspected of infringing IP rights, originated from China. As these countries increasingly are moving up the value chain and thus moving into areas where our innovative industry relies in part on IPR to protect their competitive edge this threat cannot simply be ignored and requires a response.
These are some of the issues which will be developed in a forthcoming Commission Communication defining a revised IPR strategy vis-à-vis third countries, to be adopted by the end of this year.
This Communication is a good opportunity to review our current strategy and means of action, and to engage in discussions with a broad range of stakeholders.
Before concluding, I would like to call upon you to support our efforts to improve and implement IPR regimes in a more active manner. The European Commission defends your interests by promoting the development of effective IP systems, within the EU and also in third countries. However, we are increasingly faced with loud voices that come out against IP for many different reasons, often unfounded. We need you to help us to help you by enlarging the debate.
Your support may take different forms, of which I would like to give two examples:
As a conclusion, ladies and gentlemen, I would like to stress again my commitment to ensure effective protection of IP rights in third countries, and I count on your support to raise awareness on the importance of this objective.
I thank you for your attention.