EuroISPA’s Statement on Intellectual Property Rights Enforcement Directive

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1- General Considerations

EuroISPA welcomes the opportunity to provide comments in the context of the public consultation on the efficiency of proceedings and accessibility of measures for civil enforcement of intellectual property rights. EuroISPA is the world’s largest association of Internet Services Providers (ISPs), representing over 1800 ISPs across the EU and EFTA countries. As an association, we find it difficult to reply to all individual questions raised in the consultation document. Nevertheless we would like to address some concerns from the industry in this general statement.

2- Internet intermediaries must not be obliged to monitor traffic

First and foremost, EuroISPA considers that the Directive 2004/48/EC on the enforcement of intellectual property rights (IPRED) as it stands offers a well-balanced and functioning framework to address in particular online IPR infringements. EuroISPA maintains that Internet intermediaries must under no circumstances be tasked with a monitoring obligation of users’ communications and play a civil enforcement role outside any judicial framework. Fundamental Rights of information, privacy and communication, as well as innovation in the digital economy, would be severely at risk if Internet intermediaries were required to undertake surveillance or to censor the Internet at the advantage of vested interests on an alleged “self-regulatory” basis and outside judicial safeguards.

3- Need for an effective national implementation, not a revision

EuroISPA is convinced that a revision of the IPRED is unnecessary. We recall that the late and inadequate transposition of the IPRED in some Member States is causing legal uncertainties for both Internet intermediaries and rightsholders. As confirmed by the European Commission, in its 2010 Report on the application of the IPRED: “due to late transposition of the Directive in many Member States […], experience in applying the Directive is limited […].Therefore, the Commission has not been able to conduct a critical economic analysis of the impact that the Directive has had on innovation and on development of the information society, as provided for in Article 18 of the Directive”. We therefore urge the Commission to first focus on proper implementation of the Directive’s provisions across the EU and on the effective assessment of the application of its provisions, before considering any revision.

 4- Is digital piracy not the symptom of an inefficient market infrastructure?

In order to understand if a revision is needed, an economic quantification of the problem is required. The Commission has so far failed to provide any neutral, comprehensive study assessing the magnitude of the problem across the EU, as provided for in Article 18 of the Directive. In addition, the study carried out by RAND (Hoorens et al, Measuring IPR infringements in the internal market, Rand Corporation, 2012 http://www.rand.org/pubs/technical_reports/TR1279.html ) concluded that the studies commissioned by the industry presented a number of critical issues, especially regarding the methodology consisting of applying a so-called “substitution rate” which multiplies the total number of infringements by the number of lost sales per infringement. In addition, a recent study of the Commission (Luis Agiar and Bertin Martens for the Joint Research Centre, 2013, http://ftp.jrc.es/EURdoc/JRC79605.pdf ) found that “Internet users do not view illegal downloading as a substitute to legal digital music” and that “digital music piracy does not displace legal music purchases in digital format”. Conversely, the study outlines a “positive effect of online streaming on music consumption channels” while showing that “illegal music downloads have little or no effect on legal digital sales“.

We therefore call on the Commission to assess how such a structure could be changed in a way to accelerate the transition of traditional content business model and chain of economic value to digital content distribution and meet the requirements of the digital age.

5- The intermediary liability exemption is vital for innovation and growth

EuroISPA is deeply concerned that a revision of the IPRED would substantially modify the liability regime provided for in the Directive 2000/31/EC (the e-Commerce Directive). The principles laid down in the e-Commerce Directive (articles 12 to 15) are the cornerstones of the development of the digital economy in the EU, and must be preserved and respected in any other legislation. The provisions in question provide a secure and predictable legal base for the growth of the digital economy in the past and secure the sustained economic growth in the future. Any direct or indirect change to this regime will not only bring with it an increase in burdens for legitimate commerce, having an adverse impact on innovation and distorting competition, but will also undermine consumers’ fundamental rights to privacy and free flow of information.

In addition, transposition of Articles 9 and 11 of the IPRED into national law already introduced injunctions within the majority of Member States. These mechanisms, relatively unknown to many Member States in 2004, proved to be efficient for rightsholders in the enforcement of their rights, especially with regard to commercial infringement, and are largely in use across the EU. In this regard we would like to underline that, at the time of the adoption of the Directive back in 2004, the problem of IPR infringements through P2P networks, for instance, was already well known and the injunction relief mechanisms, as the Commission acknowledges in the evaluation report, contributed positively in addressing this issue through a judicial intervention.

6- Fundamental rights of users and ISPs have to be respected

We have serious concerns that any change to the IPRED – e.g. introducing specific rules on the Digital environment – would be incompatible with fundamental right to the protection of personal data and freedom of communications which are essential for innovation and growth in the digital market. We strongly believe that the balance between fundamental rights at stake (property rights, privacy of communications, freedom of expression, etc.) needs to be decided on a case-by-case basis by a judge. The Court of Justice of the European Union confirmed in its rulings in the cases Scarlet Extended and Sabam v. Netlog that the introduction of enforcement measures should be proportionate and respectful of industry’s freedom to conduct a business activity as laid down in article 16 of the EU Charter of Fundamental Rights. Moreover, any injunctions must be proportionate to the intermediary’s ability to take action and should apply to actual infringements, properly substantiated.

7- “Stay-down” obligations would require general monitoring by ISPs

However, when an online intermediary has taken action to disable access to illegal content, it cannot prevent the same content from being re-uploaded by the content owner or someone else. Obliging a hosting provider to take pro-active measures with regard to content already taken down, albeit by court order or third party notification, will amount to imposing a general monitoring obligation, which is not allowed under the e-Commerce Directive. EuroISPA therefore calls on the Commission to avoid any action that would directly or indirectly jeopardize the limited liability regime of Internet intermediaries set out in the e-Commerce Directive through the revision of the IPRED.

8- Sustainable copyright solutions are needed for the digital age

EuroISPA supports the need to enforce IPRs in order to duly remunerate rightsholders and combat infringing activities. However, an objective and grounded economic quantification of the impact of digital piracy on the market is a prerequisite if Europe is to ensure that it works to best combat piracy without unnecessary cost and risk for the wider Internet ecosystem. We firmly believe that a sustainable solution to IPR infringement lies in a better public awareness on the value and use of IPR as an economic and cultural asset. For Europe’s citizens to fully appreciate the value of IPR, this will require the development of innovative and attractive content services online, at affordable prices and based on new business models, able to meet consumers’ expectations and needs.

9- Due legal process and judicial oversight are indispensable

In addition, due legal process and judicial oversight remains a prerequisite for the sustainable development of the digital single market. EuroISPA underlines, within the context of the current IPRED provisions, that Member States can already introduce faster access to justice, which would be more efficient and less costly. For instance, in Germany, thanks to its transposition of Art. 8 of the Directive 2004/48/EG into national law, rightsholders have the possibility to ask court orders for multiple disclosure of information since end 2008. Conversely, parties accused of infringement should be able to challenge accusation and justify their actions without thereby increasing costs or jeopardizing the liability provision of online intermediaries.

Therefore, we call on the Commission to continue this positive focus on new measures that promote the establishment of innovative services that will effectively allow the value of copyright to be realised and constitute new sources of revenues for creators. A new reality for business models requires that European policy makers work with the Internet establishment to promote, rather than restrict, new developments, especially given the delicate balance it takes to best nurture both the creative industry and those who help to disseminate their work. Intensifying the enforcement measures, restrictions and sanctions already in place runs counter to the sorts of environments that promote innovation and optimal circulation of business and consumer communication activities across the many platforms used today.

10- Conclusions: encourage the creation of innovative, affordable content services

To conclude, EuroISPA considers that the focus of any initiative undertaken by the Commission on the protection of IPRs should be directed towards encouraging the creation of innovative, affordable content services, based on business models which are able to embrace the Internet revolution. This is a much more effective strategy for enforcing IPRs than increasingly repressive legislation which will inevitably produce the opposite result and will only serve to maintain those barriers to trade that are the real obstacle to the creation of a truly European Digital Single Market.

 

 

NOTE

EuroISPA is the world’s largest association of Internet Services Providers (ISPs) representing the interests of more than 1800 ISPs across the EU and the EFTA countries. EuroISPA is a major voice of the Internet industry on information society subjects such as cybercrime, data protection, e-commerce regulation, EU telecommunications law and safe use of the Internet (www.euroispa.org).

Contact: Andrea D’Incecco, Head of Policy: +32 2 503.22.65/ andrea@euroispa.org