MESSAGE
| DATE | 2003-10-20 |
| FROM | Ruben Safir Secretary NYLXS
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| SUBJECT | Re: [hangout] And Yet More other events this week
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October 20, 2003 Europe's Antipiracy Proposal Draws Criticism By PAUL
MELLER
BRUSSELS, Oct. 19 - In an effort to fight product counterfeiting and
piracy, the European Union is preparing to enact a sweeping intellectual
property law that critics say is ill-conceived and tilted heavily in
favor of copyright and patent holders.
The proposal would go far beyond existing laws in Europe and the United
States by classifying copyright violations and patent infringements,
even some unwitting ones, as crimes punishable by prison terms.
Lawyers who have studied a draft of the proposed law say that not only
could a teenager who downloaded a music file be sent to jail under it;
so too could managers of the Internet service provider that the teenager
happened to use, whether they knew what the teenager was doing or not.
The proposed law would also make it easier for drug manufacturers to
forestall generic competition by effectively stretching the duration of
their patents, the critics say, and even the makers of replacement auto
parts could face prosecution if they sell their wares to consumers.
Backers of the proposed law, which would replace a patchwork of
regulations in the union's 15 member countries, include influential
European Union officials like Frits Bolkestein, the union's commissioner
for internal markets, whose department drafted the proposed law, and
Janelly Fourtou, the French member of the European Parliament who is in
charge of leading the debate on it.
Mr. Bolkestein said in an interview last month that criminal penalties,
which are rarely invoked in European laws, were necessary in this
case "because the issue of counterfeiting is becoming overwhelming
in importance."
Major corporations in three industries that suffer the most from
counterfeiting - music, films and computer software - have combined their
lobbying to try to make the proposed law as tough and far-reaching as
possible. Even so, when Mr. Bolkestein unveiled the commission's proposed
draft in January, trade associations from the three industries issued
a joint statement saying that the commission had "failed to introduce
urgently needed measures to hold back the epidemic of counterfeiting."
Opposition to the new law was slow to develop but is gaining
momentum. Companies like Nokia, the BT Group, and even Microsoft, itself
a major victim of software piracy, have called the proposed law excessive
and have warned that it could crush technical innovation.
No one on either side of the debate doubts that product counterfeiting is
a major problem. The European Commission estimates that it cost the union
8 billion euros ($9.3 billion) a year in lost economic output from 1998
to 2001. Industry groups say that up to two-thirds of all software in
use in Central and Eastern Europe is pirated and that one out of three
music CD's sold worldwide is counterfeit.
There is a broad consensus here that a Europewide enforcement law
is needed because so much of the illegal activity crosses national
boundaries. But there is less agreement on what the law should cover.
The proposal before the European Parliament is broad, going beyond movies,
music and software to take in all types of intellectual property including
patents, copyrights, trademarks and registered designs.
Critics say that such a sweeping law far exceeds what is needed to combat
piracy and would criminalize innocent conduct in a number of situations
that cannot reasonably be called counterfeiting.
For example, designers at rival technology companies race to match and
improve on each other's work, and must make business decisions every
day about the subtle line separating permissible innovation from patent
infringement. If crossing that line is made a crime instead of just a
civil matter, critics like Nokia say, companies will become much more
timid in the laboratory.
"It is vitally important that this directive strike the right balance
between protecting the interests of right holders without unfairly
impeding others from competing," said Tim Frain, director of intellectual
property at Nokia.
Greg Perry, director general of the European Generic Medicines
Association, said the proposed law would give the big drug companies
"the best tool they could have ever wished for" to fight off generics.
By forcing makers of generic drugs to win court permission to bring
their versions to market, the big patented-drug makers "could use this
proposed law to extend their monopoly by stretching their patent a
further 18 months or so beyond its expiry date," Mr. Perry said. "We
agree that patents should be respected, but we can't support what would
end up allowing for an abuse of the legal system to prevent legitimate
competition."
Ms. Fourtou, the Parliament member shepherding the proposed law through
debate, said in an interview that she had begun to see merit in leaving
patents out of it, because "the issue of patents is so complex."
Last month, a debate on another proposed law on the patentability of
software provoked one of the bitterest lobbying battles the Parliament
had ever seen, according to several members. Ms. Fourtou said she did
not want to see the enforcement law bog down in the same way.
"We are not in a rush, but we'd like this directive agreed before the
union takes in the new members from Eastern Europe," she said. She said
she also wanted to see the law enacted before parliamentary elections
next summer. "I may not be here after the elections," she said.
While she is willing to narrow the proposed law to exclude patents,
Ms. Fourtou is trying to expand its reach over copyrights, and in doing
so she has drawn some criticism for a perceived conflict of interest.
The commission's original draft limited criminal penalties to those
who violate copyrights "for commercial purposes" - language that would
exclude consumers swapping music files.
But Ms. Fourtou has struck that limitation from the amended text of the
proposed law. "In this sense, the scope of the directive is too narrow,"
she said. "Even if you aren't downloading music for profit, you still
are having a very negative effect on authors and musicians. Even a young
boy who does it innocently causes an economic countereffect.
"The Internet is a new way of living for young people," she continued. "It
would be very good to send out a message to them, teach them right
from wrong."
Ms. Fourtou said the change also brought the proposed law into line with
World Trade Organization agreements on intellectual property and with
"the wishes of a large number of professionals," referring mainly to
the record industry.
One of the world's largest record companies is owned by Vivendi Universal,
a French conglomerate whose chief executive is Ms. Fourtou's husband,
Jean-René Fourtou.
Ms. Fourtou said that when she was given charge of the proposed law in
March, neither she nor her colleagues in Parliament saw her husband's
job as a reason for her to recuse herself. "There was a plenary session
of the Parliament in July last year," when Mr. Fourtou took the post at
Vivendi, she said. "My colleagues all saw his name and his photo in the
newspapers. It was not a problem for them. My conscience doesn't have
a problem with this."
Some lawyers and legal experts say that, whether it was influenced by
her husband's position or not, Ms. Fourtou's amendment would give rights
holders too much power.
William Cornish, a professor at Cambridge University, and Josef Drexl,
Reto Hilty and Annetee Kur from the Max Planck Institute in Germany
criticized lawmakers in a statement for rushing through a disproportionate
bill tailored too closely to the wishes of lobbyists.
"Haste and political pressure from interest groups do not make for good
counsel when it comes to regulating complex and sensitive fields like that
of sanctions and procedural measures for I.P. protection," they wrote.
Thomas Vinje, a partner in the Brussels law firm Morrison & Foerster
who shares the concerns expressed by the academics, said Ms. Fourtou's
amendments made a bad proposal worse. "She is putting a dangerous weapon
in the hands of, among others, the big record companies," he said.
Internet service providers worry about being caught between the proposed
law and other European Union rules on data privacy. A provision of the
enforcement bill would subject them to criminal sanctions if they failed
to provide information to copyright holders about subscribers who may
be infringing their rights.
"The balance between privacy of subscribers and the duty to cooperate
with right holders seeking to protect their intellectual property that was
reached in the e-commerce directive could be changed by this directive,"
said Tilmann Kupfer, British Telecom's European regulatory manager.
Mr. Bolkestein, the European commissioner responsible for the proposed
law, said in an interview in September that he was not aware of concerns
that it could trip up legitimate businesses, and said his staff would
look into them. Three weeks later, his spokesman, Jonathan Todd, said
the commission stood by the draft it presented in January.
"The directive changes nothing regarding the definition of rights,
whether they be patent rights, copyright or any other kind of right,"
Mr. Todd said. "All this changes is the penalties."
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