The March 2014 European Council reaffirmed the importance of intellectual property as a key driver for growth and innovation and highlighted the need to fight against counterfeiting to enhance the EU’s industrial competitiveness globally. Intellectual Property Rights (IPR) are one of the principal means through which companies, creators and inventors generate returns on their investment in knowledge. The EU needs innovation and creativity to stay competitive relative to countries with lower labour, energy and raw materials costs, and must create the conditions that stimulate innovation so that European businesses can help us trade our way out of the crisis. This is why knowledge-based industries play a core role in the ‘Global Europe’ and ‘Europe 2020’ strategies. Marketed products, meant as goods and services, that do not respect the intellectual property created by others concern us all as citizens, consumers, businesses and taxpayers. Commercial scale IP-infringing activities dissuade investment in innovation and creativity and thus undermine job creation.
Commercial-scale IP infringements are both insidious and a moving target. However much is done to dissuade such infringements, including through increasing the online legal offer of competitive goods and services, the economic returns on the distribution and sale of IP-infringing products are such that there will always remain an incentive to engage in such activities. Given the speed with which these activities can be developed and exploited, precise detection systems and rapidly implemented preventive measures are essential. At the same time, such measures must be proportionate and minimise any risk that they be abused for anti-competitive practices that could undermine the emergence of new innovative products and business models and unduly restrict fundamental freedoms. The required detection necessitates the sharing of intelligence between stakeholders, and above all between national enforcement authorities. Stronger enforcement alone will not solve problem, which must be addressed through debate and awareness-raising on the wider consequences of IPR infringement, targeting consumers and producers.
Consumers, employees and businesses are not always aware of the scale and economic harm caused by commercial scale IP-infringing activity. This harm includes the substantial negative effects of such activities on fiscal revenues, the related costs for taxpayers, the competitiveness of legitimate businesses and the links to large-scale criminality. At the same time, consumers are not always aware of the detriment they could personally suffer by purchasing IPR-infringing products, particularly with regard to potential risks to their health and safety. The Commission intends to promote the Observatory’s and national authorities’ efforts to launch and monitor a new generation of targeted communication campaigns. This should include campaigns to raise awareness amongst citizens, especially young people on the economic harm caused by commercial scale IP infringements and on the potential health and safety risks associated with IPR-infringing products, as well as campaigns to highlight the benefits for consumers from choosing IP respecting products and to facilitate access to such products.
The Commission will launch a series of consultation actions with all relevant stakeholders including civil society on applying due diligence throughout supply chains as a means to prevent commercial scale IP infringements. On the basis of the collected information it intends to develop an EU due-diligence scheme for this purpose. It will, in the first instance, seek to encourage the voluntary take-up of the scheme that it will monitor closely to determine if further initiatives are required. Agreements between rights-holders and the business partners on whom they rely to source, promote, distribute and sell their products are important to meet the dual goals of rapid detection and interruption of commercial scale IP-infringing activities. Any such memorandum should have well-embedded mechanisms for the protection of fundamental rights and a competitive environment, focusing in particular on preventing potential abuses. The Commission will facilitate the development of further voluntary Memoranda of Understanding to reduce the profits of commercial scale IP infringements in the online environment, following Stakeholder Dialogues involving advertising service providers, payment services and shippers. The Commission intends to analyse and report on existing national initiatives seeking to improve IP civil enforcement procedures for SMEs, in particular in respect of low value claims and consider possible action in this field.
Certain credit and debit card providers offer chargeback schemes where, up to a certain value, consumers can contest and not pay for a service or product that they would not have wished to purchase had they already known it was not genuine. In certain Member States these schemes are required by law. Such schemes obviously mitigate against fraud but can also help ensure that those consumers who unwittingly receive IP-infringing goods and services either do not end up having to pay for them or can subsequently seek compensation. These schemes can play a role in limiting IP-infringing operators of their ill-gotten gains. In 2014, the Commission will launch a consultation exercise on chargeback schemes and other payment confirmation schemes that would reduce the flow of money going into commercial scale IP-infringing activities. This public consultation exercise will explore the scope for taking action in this field.