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BREAKING NEWS: EU Commission releases new Action Plan on IPR enforcement

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The EU Commission has just adopted a Communication on an Action Plan [a real working document, published with track changes still on] aiming at renewing the consensus [thus assuming that consensus might not be as enthusiastic as it used to be ...] on the enforcement of IP rights, and a Strategy [the text of which is apparently still unavailable?] for the protection and enforcement of IP rights in third countries.

With the former the Commission seeks to re-orientate its policy for IP enforcement towards a better compliance of IP rights by all economic actors.

Rather than penalising the citizen for infringing – often unknowingly – IP rights, the actions set out in this Action Plan pave the way towards a “follow the money approach” [mentioned just yesterday by Alberto here], seeking to deprive commercial scale infringers of the revenue flows that draw them into such activities.

According to the press release, the EU Action Plan sets out 10 actions to focus the EU's IPR enforcement policy on commercial scale infringements, while the Strategy examines recent changes and presents ways to improve the Commission's current means of action to promote enhanced IPR standards in third countries and to stem the trade in IPR infringing goods.

"The adoption of this Action Plan shows how we want to re-orientate our policy towards better compliance with intellectual property rights by the private sector", said EU Commissioner for Internal Market and Services and Katfriend Michel Barnier. "Rather than penalising the individual for infringing intellectual property rights, often unknowingly, the actions set out here pave the way towards a 'follow the money' approach, with the aim of depriving commercial-scale infringers of their revenue flows."

Reginald says:
follow the money
is a good thing to do ...

“Our businesses, creators and inventors should be duly rewarded for their creative and innovating efforts”, said EU Commissioner for Trade Karel De Gucht. “For that, and to maintain the incentives that drive innovation and creativity, we must keep working on improving standards with our international partners. We will remain open to adapting our approach according to their levels of development, but underline the positive impacts that intellectual property can have on growth, jobs and consumers."

"Effective IPR enforcement must be underpinned by close cooperation amongst enforcement authorities, and between those authorities and business stakeholders. This is essential both within the EU and with our international partners," said Algirdas Šemeta, EU Commissioner for Customs. "Fostering this multi-stakeholder approach is challenging, but it is the only way to ensure proper protection of our intellectual property in the EU and in international trade."

The EU Action Plan against infringements of IP rights foresees:

engaging in a dialogue with stakeholders (eg online advertising agencies and payment service providers) to reduce profits from commercial-scale infringements on the internet;
promoting due diligence among all actors involved in production of goods with a high degree of intellectual property, since responsible supply chain auditing and application of due diligence reduces the risk of IP infringements;
helping small businesses to enforce their IP rights more effectively by improving court procedures; to achieve this, the Commission will look for the first time at national schemes directly assisting SMEs in accessing justice systems;
improving cooperation between Member States and facilitating exchanges of best practices;
providing a comprehensive training programme for Member State authorities with a view to achieving faster preventive actions against commercial scale IP-infringing activities across the EU and identification of barriers to cross-border cooperation.

... But sometimes you also need to
follow the smell of something better

As regards the international protection of IP rights, the Commission proposes:

continuing multilateral efforts to improve the international IPR framework and ensuring that IPR chapters in bilateral trade agreements offer adequate and efficient protection for right-holders;
working with partner countries, through IP dialogues and working groups, to address systemic IP issues and key weaknesses in their IPR systems;
conducting regular surveys in order to identify a list of ‘priority countries’ for focused EU efforts;
assisting SMEs and right-holders on the ground through projects such as IPR Helpdesks whilst leveraging and strengthening IP expertise in the EU and Member States' representations in third countries;
providing and promoting awareness of appropriate IP-related technical assistance programmes to third countries (eg training, capacity building, how to leverage IP assets).

What will happen next?

Still according to the press release, the actions set out in these Communications will be launched and carried out in 2014 and 2015. The Commission will monitor the delivery of these initiatives, and invites the European Parliament, the Council, Member States, the European Economic and Social Committee and stakeholders (including OHIM through the European Observatory on Infringements of Intellectual Property Rights) to actively contribute to the work ahead. The Commission will consider at a later stage [this is not so surprising, says EU IP policy expert Merpel] whether further, potentially legislative, measures are necessary.

Will they be?

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No exhaustion beyond software: Katfriend translates German decision on audiobooks

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Katfriend Johannes Großekettler

A few days ago fellow Kat Alberto reported on the decision of the Court of Appeal of Hamm (Germany), which upheld the earlier ruling of the Regional Court of Bielefeld [here], and held that the right of distribution is not subject to exhaustion when it comes to digital subject-matter [audiobooks in that case] other than software.

In so doing, the German court denied the applicability of the principles expressed by the Court of Justice of the European Union (CJEU) in Case C-128/11 UsedSoft [here] - "whether directly or by analogy" - beyond the (narrow) confines of the Software Directive, which is to be considered as lex specialis in relation to the provisions of the InfoSoc Directive.

Given the uncertainty surrounding the possibility to apply the principles expressed in UsedSoft to digital subject-matter other than software, the decision of the Court of Appeal of Hamm is particularly interesting, although only available in German. At least until today.

Katfriend Johannes Großekettler [here and here] offered in fact to translate and summarise the decision, as you can see here.

After becoming an IP enthusiast during his legal studies in Berlin, Johannes decided to study in the LLM in “Intellectual Property & the Digital Economy” at the University of Glasgow. He is fairly busy right now: besides writing his master thesis on 3D printing and working as a research assistant at CREATe, he is also the president of the newly established student IP Society.

The IPKat wishes to thank him warmly for his great work and overall rare generosity, which hugely impressed even Merpel.

According to Johannes's fantastic summary, the Court of Appeal of Hamm expressed the following principles:

The sale of audio files (audiobooks) over the internet in a way that allows customers to have the opportunity to download and save corresponding files locally on their own data carriers is not covered by the right of distribution within the meaning of § 17 UrhG [it should be instead considered as an act of making available to the public, which is not subject to exhaustion: see §19a UrhG, and also Article 3(3) of the InfoSoc Directive];
In respect of audio files (audiobooks) or copies thereof, the exhaustion of the distribution right within the meaning of § 17(2) UrhG is not caused if customers are given the opportunity to download and save corresponding files locally on their own data carriers and do so;
§ 17(2) UrhG cannot be applied by analogy to cases in which audio files (audiobooks) are sold over the internet in a way which provides customers with the opportunity to download and save corresponding files locally on their own data carriers;
The case law of the CJEU (C-128/11) and German Federal Courts (I ZR 129/08) on computer programs, which are sold without allocating physical data carriers in a way that customers are given the opportunity to download and save corresponding files locally on their own data carriers, is neither directly nor in its principles applicable to similar offers of audio files (audiobooks).

- "Aww, how lovely that you remembered
our anniversary!"
- "Ehm, actually, it's the UsedSoft
anniversary, too"

This Kat understands that this decision might not have come too much as a surprise in Germany, where both the Regional Court of Stuttgart and the Higher Regional Court of Stuttgart excluded exhaustion in a case involving audiobooks in 2011, and so did the Regional Court of Hamburg in a similar case, although relying on different arguments [all these national rulings were issued before UsedSoft: by the way, do not forget that the day after tomorrow is the second anniversary of this CJEU ruling].

The lex specialis nature of the Software Directive has been recently re-affirmed [and probably reinforced] by the CJEU in its decision in Nintendo [here and here].

There the Court upheld the Opinion of Advocate General Sharpston, and stated that the special nature of the Software Directive means that its provisions take precedence over those of the InfoSoc Directive, but only where the subject-matter at stake falls entirely within the scope of the former.

This would not be the case of videogames, which "constitute complex matter comprising not only a computer program but also graphic and sound elements, which, although encrypted in computer language, have a unique creative value which cannot be reduced to that encryption. In so far as the parts of a videogame ... are part of its originality, they are protected, together with the entire work, by copyright in the context of the system established by [the InfoSoc Directive]".

Inspecting the
Software Directive territory?
Should not take too long

If the Software Directive is only applicable to subject-matter that falls entirely in its scope, one may wonder:

How many times this piece of EU legislation should be applied (from now on), considering that quite a few computer programs - not just videogames - may comprise graphic and sound elements that have a unique creative value?
Should the answer to the first question be "Not so many", can the Software Directive be considered still meaningful?
In adopting this interpretation of the Software Directive, did the Court implicitly warned against an extension of the principles expressed in UsedSoft to subject-matter other than "pure" software?

While the CJEU has yet to be expressly asked to rule on the exhaustion of the right of distribution for digital subject-matter other than software [but see here our 2013 Katpoll], you should not expect any legislative response to all this any time soon either: in its leaked draft White Paper [here], the EU Commission stated in fact that policy initiatives regarding digital exhaustion are still premature. But are they?