Explanatory Memorandum to COM(2011)288 - Entrusting the Office for Harmonisation in the Internal Market (Trade Marks and Designs) with certain tasks related to the protection of intellectual property rights, including the assembling of public and private sector representatives as a European Observatory on Counterfeiting and Piracy - Main contents
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| dossier | COM(2011)288 - Entrusting the Office for Harmonisation in the Internal Market (Trade Marks and Designs) with certain tasks related to the ... |
|---|---|
| source | COM(2011)288  |
| date | 24-05-2011 |
Creativity, knowledge and innovation are drivers of our future growth. The Europe 2020 Strategy i has therefore identified smart growth as one of three priorities for the Commission’s future policymaking. It also stresses the need to boost the EU’s research performance, promote innovation and knowledge transfer and ensure that innovative ideas can be turned into new products and services that create growth and quality jobs.
The Commission has committed itself to supporting these objectives by creating a high-standard intellectual property (IP) culture i. One threat to a successful IP policy, and therefore to growth and competitiveness, lies in the increase of intellectual property infringements observed in recent years. For instance, in 2009, the OECD estimated that international trade in counterfeit and pirated goods accounted for USD 250 billion in 2007, which is larger than the national GDPs of 150 economies i. Also, figures published by EU customs authorities reflect a clear increase in customs activity, with a rise in registered cases from 26,704 in 2005 to 43,572 in 2009, i.e. up by about 60 % in five years i. Concerning piracy (or online copyright infringements), the economic impact is less clear at this stage, due to the very recent nature of this phenomenon. However, the most recent industry study carried, out in 2010, by Paris-based TERA Consultants and commissioned by the International Chamber of Commerce’s Business Action to Stop Counterfeiting and Piracy (BASCAP) initiative, indicates that EUR 10 billion and more than 185,000 jobs were lost due to piracy in the music, movie, TV, and software industries in the EU in 2008 i.
Various studies published by industry and international organisations confirm the steady growth of trade in counterfeit and pirated goods and conclude that it:
- significantly reduces investment in innovation and destroys jobs i;
- threatens the health and safety of European consumers i;
- creates serious problems for European SMEs i;
- results in tax loss revenues due to reductions in declared sales i;
- is attractive to organised crime i.
One of the main initiatives to address this threat launched by the Council i and the Commission in 2009 i was to set up a European Observatory on Counterfeiting and Piracy to improve understanding on intellectual property rights (IPR) infringements ('the Observatory').
In line with the Council's request of 2008, the Observatory in its current form is a centre of expertise with no legal personality managed by the Commission services. Its role is twofold: (i) becoming the central resource for gathering, monitoring and reporting information and data related to all IPR infringements and (ii) be used as a platform for cooperation between representatives from national authorities and stakeholders to exchange ideas and expertise on best practices, to develop joint enforcement strategies and to make recommendations to policy-makers. The management of the Observatory encompasses a series of tasks and activities under the responsibility of Commission services.
The Observatory is currently run by three Commission civil servants (two administrators and one assistant) who, in addition also carry out all policy work related to the Observatory.
The latest Council Resolution relating to the Observatory added further responsibilities, by inviting it to assess the needs for implementation of EU-level training programmes for those involved in combating counterfeiting and piracy i. A September 2010 European Parliament Resolution additionally called for the Observatory to compile scientific research data on counterfeiting and IPR regulation i. Finally, a recently published study commissioned by the Commission’s Directorate General for Trade recommends that the Observatory should become a single point of contact within the Commission, for external parties, and an international point for the creation and dissemination of best practice i.
Whereas the current circumstances of the Observatory were appropriate for the launch phase of the project, with its institutional framework being established through consultations and meetings, there is no scope for expanding the Observatory’s remit and developing its operational activities, both of which require a sustainable infrastructure in terms of human resources, financing and IT equipment as well as access to the necessary expertise.
- Consistency with the EU’s other policies and objectives
The proposal’s objectives are in line with existing EU policies and strategies, such as Europe 2020 i. They also fit in with the Commission’s main priorities and proposals concerning its IPR strategy for Europe i.
Contents
- Consultation of interested parties
Since its inception, the structure and financing of the Observatory have been discussed regularly, both at the four Observatory meetings i held so far and in specialist sub-group meetings which have brought together, since September 2009, representatives from a number of private sector organisations within the Observatory.
Members of the European Parliament are kept informed about the work and developments of the Observatory and, on two separate occasions in 2010, the European Parliament Forum on counterfeiting, contraband and organised crime openly discussed the future of the Observatory and, in particular, a possible transfer of the Observatory to the Office for Harmonisation in the Internal Market (OHIM).
Also at the political level, the Council, in response to the two Commission Communications concerning the Observatory i, adopted two Resolutions i welcoming the creation of the Observatory and asking the Commission to elaborate on its role and its tasks. Furthermore, on 22 September 2010 the European Parliament adopted a report on the Commission’s 2009 Communication, advocating greater involvement of the OHIM in enforcement-related matters i.
The idea of entrusting some enforcement-related activities to the OHIM has been favourably received by users of the European trade mark system, who were consulted as part of a comprehensive evaluation of the trade mark system in Europe i. During further discussion in a specific workshop at the Pan-European IP summit 2010, held in Brussels on 2 and 3 December 2010 i, the idea received broad support. Equally, the proposal was viewed positively by the OHIM governing bodies, the Administrative Board and the Budget Committee i, at their meetings in November 2010.
In view of this specific, targeted and continuous consultation process, it was considered that there was no need to organise a supplementary, standard consultation exercise.
- Impact Assessment
The Impact Assessment looked at three different options, each with a number of sub-options.
Under option 1, the Commission services would continue administering the Observatory but their resources would be increased considerably. Under sub-option 1a, the work would entirely or to a very large extent be done in-house, whereas it would be largely outsourced under option 1 b. The second option that was examined would entail entrusting the Observatory to an initiative led by the private sector that should be financed either entirely by the private sector (sub-option 2a), through a Commission grant (sub-option 2 b), or through a public-private partnership (PPP, sub-option 2c). The third option analysed in the Impact Assessment consisted in entrusting the Observatory either to an EU agency to be newly created (sub-option 3a) or to an already existing agency, more particularly the Office for Harmonisation in the Internal Market (OHIM) in Alicante.
Option 1a (more staff in DG MARKT) was considered to be not feasible under the current ‘no growth’ policy of the Commission i. Also option 2a was not considered realistic as there are no indications that the private sector would be prepared to take on such a commitment. Options 1b (outsourcing on a commercial basis) and 2b (tasks delivered by industry led initiative) were considered feasible, but not suitable solutions since they would probably not allow access to data that are considered as sensitive by Member States’ authorities and private stakeholders and, in the case of option 2b, the risk of uneven positions (or even exclusion) for different stakeholders would pose considerable problems in reaching the Observatory’s overall objectives. These disadvantages could be partially avoided in option 2c (PPP), which however would impose on the EU budget annual costs of between EUR 2.41 million and EUR 2.98 million in the first two years, and between EUR 2.61 million and EUR 3.07 million from the third year, depending on the design of the IT systems to be created.
Option 3a (a new EU agency), according to the Impact Assessment, would offer a suitable solution to render the Observatory operational. However, this option would bring substantial costs for the EU budget – between EUR 4.33 million and EUR 5.33 million in the first two years, and between EUR 5.5 million and EUR 6.28 million as of year three – plus a significant time delay in getting the agency up and running.
Option 3b (entrusting the tasks to an existing EU agency, preferably OHIM) would allow the Observatory to have access to expertise, resources and financing and to become quickly operational. In budgetary terms it would offer a cost-efficient solution (with total costs of between EUR 3.3 million and 4.3 million in the first two years and between EUR 4.74 million and 5.52 million as of year three) and allow costs to be covered by financial resources outside of the EU budget.
The Impact Assessment therefore concluded that transferring the Observatory to the OHIM would be the preferred option, given that the latter has appropriate financing and structures and will be capable of delivering on the Observatory’s aims as soon as its basic Regulation has been amended.
- Summary of the proposed action
It is proposed to entrust the Office for Harmonisation in the Internal Market with the tasks and activities relating to the management of the European Observatory on Counterfeiting and Piracy, including those concerning copyright, rights related to copyright and patents.
These tasks should, in future, encompass:
- delivering independent data and assessments on the scope and scale of counterfeiting and piracy in the internal market;
- exchanging and promoting best practices in relation to public authorities;
- spreading of best private sector strategies;
- raising public awareness;
- evaluating the need for and designing European training programmes for authorities involved in the protection of intellectual property rights, in cooperation with other international and European institutions and agencies;
- carrying out research on technical tools to prevent counterfeiting and piracy; and
- fostering international cooperation and providing technical assistance to third-country authorities.
The activities to achieve these tasks should encompass the following:
- organising meetings of the representatives assembled as the Observatory and of its working groups;
- organising meetings of other experts;
- cataloguing and organising seminars and training sessions on IPR infringements and methods to combat such infringements;
- carrying out studies on the scope and impact of counterfeiting and piracy and drawing up of annual reports on developments and trends and of sectoral reports analysing the situation in the different industry and product sectors;
- researching on technical tools to prevent counterfeiting and piracy;
- developing databases to store and analyse data on the scope and impact of IPR infringements, national case law on such infringements and existing training measures, and systems to enhance access of public authorities and private stakeholders to information and allowing for rapid exchange of information between them.
- Legal basis
Article 114 of the Treaty on the Functioning of the European Union (TFEU) is the specific basis for the establishment and functioning of the internal market. The tasks the OHIM is entrusted with under this Regulation relate to the enforcement also of intellectual property rights provided for by the national laws of the Member States and may be regarded as supporting Union legislation in this area. Article 118 i TFEU provides powers to adopt measures for the creation of European intellectual property rights, to provide uniform protection of intellectual property rights throughout the EU and for the setting up of centralised EU-wide authorisation, coordination and supervision arrangements. Therefore, Article 114 and Article 118 i combined constitute the appropriate legal base for this proposal.
- Subsidiarity principle
Many of the activities assigned to the European Observatory on Counterfeiting and Piracy are of a cross-border nature, involving all 27 Member States, and therefore they cannot be effectively delivered by individual Member States. As far as there is a need for bilateral cooperation between two Member States, in individual cases procedures could theoretically be improved at this level. However, given that the tools and methods needed in such a context would be similar for all Member States, it seems more efficient to develop them at EU level. This will ensure that solutions are not tailored to individual Member States’ requirements but are beneficial to all Member States. Furthermore, as far as relations with third countries are concerned, coordination within the Commission services and with other EU and international agencies must take place at the EU level.
Finally, as demonstrated in the Impact Assessment, assigning these tasks to an existing EU agency and more concretely, the OHIM, allows for synergies with already ongoing activities. It also allows for benefitting from the expertise that already exists in OHIM with a view to trademarks and design rights, and from the working relations that OHIM has established with national IP offices. These working relations will enable the OHIM to bring together the experts it needs to carry out its new tasks successfully.
The proposal does not create any costs for the EU budget. Instead, it would allow for savings of around EUR 40,000 as certain costs that are currently borne by the EU budget would in future be borne by the OHIM’s budget.
Article 1
This Article describes the subject of the proposal, which is to enlarge the sphere of competence of the Office for Harmonisation in the Internal Market (OHIM) by entrusting it with the operation of the European Observatory on Counterfeiting and Piracy as a centre of expertise in relation to specific tasks and activities.
This Article defines the tasks and activities which the Office should be carrying out in relation to the Observatory and which can be grouped in six main categories:
- Improve the understanding on the scope and impact of infringements of intellectual property rights and on the value of intellectual property and enhance the knowledge on best public and private sector practices to combat infringements of intellectual property rights;
- raise public awareness of the impact of infringements of intellectual property rights;
- enhance the expertise of persons involved in the enforcement of intellectual property rights;
- enhance the knowledge on technical tools to prevent and combat counterfeiting and piracy, including tracking and tracing systems;
- improve the online exchange, between Member States' authorities involved in the protection of intellectual property rights, of information related to the protection of intellectual property rights, and foster cooperation with and between the central industrial property offices of the Member States, including the Benelux Office for Intellectual Property;
- foster international cooperation.
This Article clarifies that the Office shall carry out the activities to fulfil the tasks set out in Article 2 by making use of its own budgetary means.
This Article covers the participation in and the organisation of the meetings of the Observatory. It provides that the Office is to invite experts from public administrations, bodies and organisations dealing with the protection of intellectual property rights, from the private sector, the European Parliament and the Commission. The representatives from the private sector should cover economic sectors most concerned by counterfeiting. They should therefore include representatives from different industry sectors. Thus, right holders, Internet service providers and telecommunication companies should be represented. In addition, representatives of consumers should also be included. The article, furthermore, provides for the possibility to organise working group meetings of the Observatory.
The Article places an obligation on the Member States’ and private sector representatives to share, within the applicable laws on data protection, statistical and case-law information with the Office in relation to the work of the Observatory, in line with the Council Conclusions of 1 March 2010, and to inform it about their own policies in that area.
This Article sets out the Office’s obligation to adopt the Observatory’s internal administrative instructions and the publication of notices that are necessary in order to ensure the fulfilment of all the tasks entrusted in this Regulation to the Office.
This Article provides that the Office's annual management report shall include a report on the Office's activities under this Regulation. It sets out the main information that needs to be included in the report, in particular a review of the main activities carried out throughout the year, the results achieved, an overall assessment of the Office’s work under the Regulation, information of the planned future work of the Observatory and recommendations on future policies in the area of protection of intellectual property rights.
This Article lays down the rules for evaluation of the Regulation, to be carried out by the Commission, on the performance of the Office in implementing the Regulation in practice, i.e. in particular in fulfilling the tasks set out in Article 2, and on the impact of this work on the protection of intellectual property rights in the EU. The Commission is to consult the Observatory as part of the evaluation process and will send the final evaluation report to the European Parliament and to the Council. The Commission should then launch a broad consultation among stakeholders on the evaluation report, which could be followed by proposals to modify the Regulation, where appropriate.
This Article deals with the entry into force and the effects of the proposed Regulation.