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A balanced IP enforcement system responding to today’s societal challenges

Efficient, well-designed and balanced intellectual property (IP) systems are a key lever to promote investment in innovation and growth. Intellectual Property Rights (IPRs) are one of the principal means through which companies, creators and inventors generate returns on their investment in knowledge and creation.

The digital revolution has opened up a wealth of new opportunities. The internet has brought innovative goods, technology and creative content to a much wider consumer base, thus enabling innovators and creators to reach new markets and audiences. But the digital revolution also exposes the EU’s IP system to greater risks. The on-line environment allows for a much wider and quicker proliferation of IP-infringing goods and content, and makes it often more difficult for consumers to distinguish infringing goods and content from genuine and legal ones. Moreover, infringers of IPRs can hide behind fake identities and are often located outside the EU in jurisdictions with weak enforcement regimes.

Meanwhile, profits from counterfeiting and piracy often go to criminal organisations. These organisations typically operate inside and outside the EU, use both regular and clandestine manufacturing plants, infiltrate supply chains, exploit labour, do not pay taxes, launder money and endanger consumers. Whilst there is a clear need for stronger action against IP infringements, at the same time, the EU should have policies to ensure that respect of IPRs is reconciled with the need for a smooth roll-out of new and innovative technologies. This is of particular importance when such technologies are incorporated into standards.

There are differences in the way certain IPRED provisions (for instance on injunctions, damages and legal costs) are implemented and applied in practice. These differences often stem from uncertainties and diverging views as to how the provisions should be understood, especially because of the challenges linked to the new digital environment. They may also be due to the minimum harmonisation character of IPRED. Probably most importantly, divergences stem from the fact that IPRED works against the background of very diverse national civil enforcement frameworks and judicial traditions. As a consequence, depending on where judicial proceedings are initiated, outcomes may be very different, both in terms of substance as in terms of efficiency or effectiveness.

Transparency about judgments on IPR enforcement is an essential pre-requisite for knowledge exchanges across the single market, more predictability and a cross-border debate among IP practitioners. To date, however, only a few Member States have published IP-related case law on dedicated websites, and rules on availability and publication differ rather widely. The Commission therefore calls on Member States to systematically publish judicial decisions in proceedings relating to IPR infringements, at least from appeal courts and higher.

With the view to further improving the system of judicial enforcement in the EU, the Commission:

  • provides guidance on how to interpret and apply key provisions of the IPR enforcement Directive (IPRED);
  • will work with Member States’ national experts and judges on further, more targeted guidelines, to give more detailed and practical guidance on specific IPRED issues, based on best practices experience;
  • will bring the above-mentioned guidelines and best practices online, inter alia via the Your Europe portal;
  • calls on Member States to encourage the specialisation of judges for IP and IP enforcement-related matters, and to systematically publish judgments rendered in IP enforcement cases;
  • will, together with the EUIPO, take further action to facilitate the wider use of alternative dispute resolution (ADR) to settle IP disputes, including mapping existing ADR tools and analysing the merits of establishing a mediation centre at the EUIPO.

Since the MoU came into effect, a substantial amount of offers for counterfeit products have been removed from online platforms, mainly as a result of more pro-active and preventive measures. The Commission supports the further development of these voluntary agreements, in particular in an online environment, and will seek to ensure that all signatories act diligently and in full respect of EU law generally, and of Articles 101 and 102 TFEU in particular. It will also seek to ensure that a proper balance is found between the various interests of the parties involved and that consumers rights are duly respected.

Traceability of goods is a cornerstone of supply chain security, consumer safety and quality of products. The Commission will consequently seek to enhance the cooperation between rightholders and key actors such as standard organisations and security solutions providers in order to facilitate the dissemination of traceability technologies and support the emergence of new traceability and authentication systems such as blockchain.

Moreover, the Commisison will (de) also look more closely at how compliance with IP protection standards could become part of the process for acquiring the status of ‘authorised economic operator (AEO)’ in the future. The AEO is granted by the customs authorities and gives economic operators certain benefits in customs procedures. It is open to all supply chain actors who meet certain quality criteria set out in EU customs rules and work in close cooperation with customs authorities to ensure the security and integrity of supply chains.

The Commission, in collaboration with the EUIPO, will set up an IP markets watch-list. The watch-list will identify online and physical markets situated outside the EU that are reported to engage in, or facilitate, substantial IPR infringements, and in particular piracy and counterfeiting, in relation to EU consumers. The final output of this exercise will be a list of the most problematic markets with a description of their main features. The Commission will also monitor the measures and actions taken by the local authorities in relation to the listed markets as well as the measures and actions taken by the operators and market owners to curb IP infringements.