# CE2004070EN.01016601.xml

| 20.3.2004 | EN | Official Journal of the European Union | CE 70/166 |
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20.3.2004

EN

Official Journal of the European Union

CE 70/166

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(2004/C 70 E/176)

WRITTEN QUESTION E-2932/03

by Cristiana Muscardini (UEN) to the Commission

(6 October 2003)

Subject:   Combating counterfeiting

Subject:

Counterfeiting is now reaching intolerable levels. According to a study conducted by the American Chamber of Commerce in Italy with the cooperation of KPMG, it is having an extremely damaging impact on Italian companies and government revenues. The annual losses for companies are currently estimated at EUR 8 billion, with the annual shortfall in tax revenues standing at close to EUR 3 billion. Many of the companies affected are Italian, but a large number of them are European or American. The latter in particular operate in high-technology sectors. The effects are being felt not just by companies, as it might seem at first glance, but also by the Italian economy, since counterfeiting, in the same way as piracy, acts as a major disincentive to investment in Italy. It is common knowledge that the market sectors hardest hit by counterfeiting are the audiovisual, pay TV, music, software, video games, fashion, book, clock-making, sports goods, domestic goods, alcohol and toy sectors.

Given this situation, which is most probably much the same in other industrialised countries in Europe, would the Commission not agree that:

| 1. | it should conduct an in-depth analysis of counterfeiting in all EU Member States with a view to quantifying the damage to companies and tax revenues? |
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1.

it should conduct an in-depth analysis of counterfeiting in all EU Member States with a view to quantifying the damage to companies and tax revenues?

| 2. | it should take steps aimed at putting forward common measures to:






  — | protect original products and, thereby, trade marks and copyright? |
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2.

it should take steps aimed at putting forward common measures to:

—

protect original products and, thereby, trade marks and copyright?

| — | closely monitor products bearing quality labels (such as EC) in order to ensure that consumers do not confuse them with the EU's own quality labels? |
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—

closely monitor products bearing quality labels (such as EC) in order to ensure that consumers do not confuse them with the EU's own quality labels?

| 3. | the proposal for a directive on measures and procedures to ensure the enforcement of intellectual property rights (2003/2004 (COD)) of 30 January 2003 is totally incapable of tackling an enormous increase in counterfeiting in an enlarged Europe? |
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3.

the proposal for a directive on measures and procedures to ensure the enforcement of intellectual property rights (2003/2004 (COD)) of 30 January 2003 is totally incapable of tackling an enormous increase in counterfeiting in an enlarged Europe?

Answer given by Mr Bolkestein on behalf of the Commission

(25 November 2003)

(25 November 2003)

| 1. | The Commission has taken note of the study on counterfeiting conducted by the American Chamber of Commerce in Italy. The tendency reflected in the study coincides with previous statistics on estimated damages that have been published at national, European and international level. Independent studies show that ever-increasing harm is being done to business (lower level of investment, closure of small and medium-sized enterprises SMEs)), society (job losses, consumer safety, threat to creativity) and governments (loss of tax revenue) because of increasing counterfeiting and piracy.
  In order to combat this type of fraud more effectively, some years ago the Commission set up an annual study aimed at qualifying and quantifying these practices at the EU's external borders. Each year, the Commission does in fact publish almost 70 pages of statistics on actions taken by the EU customs authorities to combat counterfeiting and piracy. Information on the nature of the counterfeit products, their origin, the means of transport used and the value of these goods on the internal market are all analysed in order to gain a better understanding of this international fraud.
  As counterfeit and pirated goods fall outside the mainstream economy, it is by definition difficult to produce exact and objective figures on these activities within the internal market. In 2002, a study was published, commissioned by the Commission, which developed and recommended efficient methods of research for collecting, analysing and comparing data on counterfeiting and piracy (1). Member States and private organisations can use the method developed in the study to measure the incidence in a range of different product sectors. |
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1.

The Commission has taken note of the study on counterfeiting conducted by the American Chamber of Commerce in Italy. The tendency reflected in the study coincides with previous statistics on estimated damages that have been published at national, European and international level. Independent studies show that ever-increasing harm is being done to business (lower level of investment, closure of small and medium-sized enterprises SMEs)), society (job losses, consumer safety, threat to creativity) and governments (loss of tax revenue) because of increasing counterfeiting and piracy.

In order to combat this type of fraud more effectively, some years ago the Commission set up an annual study aimed at qualifying and quantifying these practices at the EU's external borders. Each year, the Commission does in fact publish almost 70 pages of statistics on actions taken by the EU customs authorities to combat counterfeiting and piracy. Information on the nature of the counterfeit products, their origin, the means of transport used and the value of these goods on the internal market are all analysed in order to gain a better understanding of this international fraud.

As counterfeit and pirated goods fall outside the mainstream economy, it is by definition difficult to produce exact and objective figures on these activities within the internal market. In 2002, a study was published, commissioned by the Commission, which developed and recommended efficient methods of research for collecting, analysing and comparing data on counterfeiting and piracy (1). Member States and private organisations can use the method developed in the study to measure the incidence in a range of different product sectors.

1

| 2. and 3. | The fight against counterfeiting and piracy is one of the priorities for the Commission which is already involved in the adoption of vigorous measures intended to improve and step up the fight against counterfeiting and piracy.
  On 22 July 2003, the Council of Ministers adopted on the basis of a Proposal from the Commission (2) a new Regulation (3) to improve customs controls to counteract infringements of intellectual property rights. This new law will provide a broader protection than previous measures as well as better, simpler and cheaper protection for right holders of all nationalities.
  In parallel with this tighter legislation, the Commission wanted to improve customs control in this field by developing and attempting to harmonise new criteria for better risk analysis. In 2002, for example, the Italian customs authorities alone intercepted almost 36 million counterfeit or pirated items.
  In addition, the Commission is working on the implementation of its action plan adopted in November 2000 (4) on combating counterfeiting and piracy in the single market. A key element of the action plan was the presentation in January 2003 of a Proposal for a Directive (5) that aims at the harmonisation of the measures and procedures necessary to ensure the enforcement of intellectual property (IP) rights within the internal market. The Proposal covers infringements of all intellectual property rights which have been harmonised within the Union, including trade marks and copyrights. The proposed measures include, inter alia, injunctions to halt the sale of counterfeit or pirated goods, provisional measures such as precautionary freezing of suspected offenders' bank accounts, evidence-gathering powers for judicial authorities and powers to force offenders to pay damages to right holders to compensate for lost income. It also requires Member States to ensure that all serious infringements of intellectual property rights are treated as a criminal offence to which criminal sanctions may be applied. Member States remain free to adopt or maintain in their legal order measures which are more favourable for right holders. The Commission believes that once the Council and the Parliament have formally adopted the Directive, the Community will be in the possession of an important and efficient instrument in the fight against piracy and counterfeiting in an enlarged Union.
  The Commission also intends to propose an initiative in 2004 with a view to adopting a framework decision to strengthen the penal framework for combating counterfeiting. The purpose of this initiative will be to set minimum thresholds for prison sentences incurred for counterfeiting offences, particularly when these are committed in connection with organised crime. In addition, the aim is to achieve an optimum level of police and judicial cooperation in this field.
  The Commission would like to clarify that the ‘CE’ marking is not a quality marking. The ‘CE’ marking (which stands for ‘conformità europea’) indicates that a product complies with the requirements of relevant Community technical Directives (so called New Approach Directives) and that relevant prescribed conformity assessment procedures to verify compliance have been carried out. According to those Directives, it is then up to the Member States' market surveillance authorities to verify that this is really the case and, where necessary, either to restrict or forbid the placing on the market of non-compliant products or to withdraw them from the market (see also Council Decision 93/465/EEC of 22 July 1993 (6) concerning the modules for the various phases of the conformity assessment procedures and the rules for the affixing and use of the CE conformity marking and Council Directive 92/59/EEC of 29 June 1992, on general product safety (7)).
  The Communication from the Commission to the Council and the Parliament ‘Enhancing the Implementation of the New Approach Directives’ of 7 May 2003 (8), while reaffirming the Member States' responsibility for market surveillance, calls for an improved level of market surveillance through reinforced administrative co-operation between Member States' market surveillance authorities.
  Furthermore, the Community has already adopted measures in order to ensure that consumers do not confuse national or private quality labels with other indications that are protected on the basis of Community legislation. Labelling, indications and advertising are for example subject to general rules laid down in Community legislation such as the Directive on misleading and comparative advertising (Council Directive 84/450/EEC of 10 September 1984 (9), as amended by Directive 97/55/EC of the Parliament and of the Council, of 6 October 1997 (10)).
  The Commission's proposal for a Directive on unfair business-to-consumer commercial practices (11) also includes a provision which would specifically prohibit any marketing, including advertising, which is likely to distort consumers' decisions by creating confusion with any products, trade marks, trade names and other distinguishing marks of a competitor. |
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2. and 3.

The fight against counterfeiting and piracy is one of the priorities for the Commission which is already involved in the adoption of vigorous measures intended to improve and step up the fight against counterfeiting and piracy.

On 22 July 2003, the Council of Ministers adopted on the basis of a Proposal from the Commission (2) a new Regulation (3) to improve customs controls to counteract infringements of intellectual property rights. This new law will provide a broader protection than previous measures as well as better, simpler and cheaper protection for right holders of all nationalities.

2

3

In parallel with this tighter legislation, the Commission wanted to improve customs control in this field by developing and attempting to harmonise new criteria for better risk analysis. In 2002, for example, the Italian customs authorities alone intercepted almost 36 million counterfeit or pirated items.

In addition, the Commission is working on the implementation of its action plan adopted in November 2000 (4) on combating counterfeiting and piracy in the single market. A key element of the action plan was the presentation in January 2003 of a Proposal for a Directive (5) that aims at the harmonisation of the measures and procedures necessary to ensure the enforcement of intellectual property (IP) rights within the internal market. The Proposal covers infringements of all intellectual property rights which have been harmonised within the Union, including trade marks and copyrights. The proposed measures include, inter alia, injunctions to halt the sale of counterfeit or pirated goods, provisional measures such as precautionary freezing of suspected offenders' bank accounts, evidence-gathering powers for judicial authorities and powers to force offenders to pay damages to right holders to compensate for lost income. It also requires Member States to ensure that all serious infringements of intellectual property rights are treated as a criminal offence to which criminal sanctions may be applied. Member States remain free to adopt or maintain in their legal order measures which are more favourable for right holders. The Commission believes that once the Council and the Parliament have formally adopted the Directive, the Community will be in the possession of an important and efficient instrument in the fight against piracy and counterfeiting in an enlarged Union.

4

5

The Commission also intends to propose an initiative in 2004 with a view to adopting a framework decision to strengthen the penal framework for combating counterfeiting. The purpose of this initiative will be to set minimum thresholds for prison sentences incurred for counterfeiting offences, particularly when these are committed in connection with organised crime. In addition, the aim is to achieve an optimum level of police and judicial cooperation in this field.

The Commission would like to clarify that the ‘CE’ marking is not a quality marking. The ‘CE’ marking (which stands for ‘conformità europea’) indicates that a product complies with the requirements of relevant Community technical Directives (so called New Approach Directives) and that relevant prescribed conformity assessment procedures to verify compliance have been carried out. According to those Directives, it is then up to the Member States' market surveillance authorities to verify that this is really the case and, where necessary, either to restrict or forbid the placing on the market of non-compliant products or to withdraw them from the market (see also Council Decision 93/465/EEC of 22 July 1993 (6) concerning the modules for the various phases of the conformity assessment procedures and the rules for the affixing and use of the CE conformity marking and Council Directive 92/59/EEC of 29 June 1992, on general product safety (7)).

6

7

The Communication from the Commission to the Council and the Parliament ‘Enhancing the Implementation of the New Approach Directives’ of 7 May 2003 (8), while reaffirming the Member States' responsibility for market surveillance, calls for an improved level of market surveillance through reinforced administrative co-operation between Member States' market surveillance authorities.

8

Furthermore, the Community has already adopted measures in order to ensure that consumers do not confuse national or private quality labels with other indications that are protected on the basis of Community legislation. Labelling, indications and advertising are for example subject to general rules laid down in Community legislation such as the Directive on misleading and comparative advertising (Council Directive 84/450/EEC of 10 September 1984 (9), as amended by Directive 97/55/EC of the Parliament and of the Council, of 6 October 1997 (10)).

9

10

The Commission's proposal for a Directive on unfair business-to-consumer commercial practices (11) also includes a provision which would specifically prohibit any marketing, including advertising, which is likely to distort consumers' decisions by creating confusion with any products, trade marks, trade names and other distinguishing marks of a competitor.

11

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(1)  http://europa.eu.int/comm/internal_market/en/indprop/piracy/index.htm

1

(2)  COM(2003) 20 final.

2

(3)  Council Regulation (EC) No 1383/2003 of 22 July 2003 concerning customs action against goods suspected of infringing certain intellectual property rights and the measures to be taken against goods found to have infringed such rights, OJ L 196, 2.8.2003.

3

(4)  COM(2000) 789 final.

4

(5)  COM(2003) 46 final.

5

(6)  OJ L 220, 30.8.1993.

6

(7)  OJ L 228, 11.8.1992.

7

(8)  COM(2003) 240 final.

8

(9)  OJ L 250, 19.9.1984.

9

(10)  OJ L 290, 23.10.1997.

10

(11)  COM(2003) 356 final.

11

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