EN Official Journal of the European Union C 129/3

Strategy for the enforcement of intellectual property rights in third countries

(2005/C 129/03)

INTRODUCTION

Violations of intellectual property rights (IPR) continue to increase, having reached, in recent years, industrial proportions. This happens despite the fact that, by now, most of the WTO members have adopted legislation implementing minimum standards of IPR enforcement. It is, therefore, essential for the European Union to increasingly focus on vigorous and effective implementation of the enforcement legislation.

This Strategy intends to be a contribution to the improvement of the situation in third countries. It is a logical sequence of recent initiatives like the Enforcement Directive (1), that will harmonize enforcement legislation within the European Union, and the revision of the Customs Regulation (2), that provides action against counterfeit or pirated goods at the Community's border.

The purposes of the Strategy are to:

— Provide a long-term line of action for the Commission with the goal of achieving a significant reduction of the level of IPR violations in third countries;

— Describe, prioritise and coordinate the mechanisms available to the Commission services for achieving their goal (3);

— Inform right-holders and other entities concerned of the means and actions already available and to be implemented, and raise their awareness for the importance of their participation.

— Enhance cooperation with right-holders and other private entities concerned, by seeking their input on the identification of priorities and establishing public-private partnerships in fields like technical assistance, information to the public, etc.

This Strategy does not intend to:

— Impose unilateral solutions to the problem — It is clear that, ultimately, any proposed solutions will only be effective if they are prioritised and considered to be important by the recipient country. The Commission is ready to assist in the creation of such conditions.

— Propose a one-size-fits-all approach to promoting IPR enforcement — It will be necessary to have a flexible approach that takes into account different needs, level of development, membership or not of the World Trade Organisation (WTO), and main problems in terms of IPR (country of production, transit or consumption of infringing goods) of the countries in question.

— Copy other models of IPR enforcement or create alliances against certain countries — The Commission is ready and willing to improve cooperation and to create synergies with countries sharing its concerns and facing similar problems. It is, however, important that this strategy remains primarily focussed on positive and constructive efforts.

PROPOSED ACTIONS TO ADDRESS THE PROBLEM

1. Identifying the priority countries

It is important to identify a limited number of countries on which the efforts of the Commission in the framework of the present strategy should be concentrated (cf. Annex I, section 4). The human and financial resources allocated to the enforcement of IPR (4) being limited, it is unrealistic to pretend that our action can extend equally to all, or even most, of the countries where piracy and counterfeiting occur. Therefore, a mechanism to assess which are the most problematic countries/regions, or those where the action of the Community is most urgently required, will be an essential tool for the successful implementation of this strategy.

At the end of 2002, the Commission launched a survey to assess the situation in third countries regarding violations and enforcement of IPR (5). By identifying with more accuracy the problems, the survey provided a diagnostic that allowed the Commission to develop the present strategy. At the same time, it gave substantial information to help identify those countries on which the priorities should be focused and to which the bulk of our limited resources should be allocated.

Specific actions:

— Put in place a mechanism that will periodically conduct an exercise similar to the ‘Survey on Enforcement of Intellectual Property Rights in Third Countries’, based on a questionnaire distributed to entities like Commission Delegations, Embassies of Member States, right-holders and associations, Chambers of Commerce, etc. Replies will be analysed and results made available to the public. Such results, in conjunction with other reliable sources of information available to the Commission (6), should be the basis for renewing the list of the priority countries for the subsequent period.

2. Multilateral/Bilateral agreements

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) (7) has a detailed chapter dedicated to the setting of minimum standards of IPR enforcement and technical cooperation. It also provides for a structure responsible for monitoring the implementation of the provisions of the Agreement and for consultation between Members, i.e. the TRIPs Council. Finally, it puts in place a dispute prevention and settlement mechanism. These characteristics make TRIPs one of the most adequate and effective instruments to address problems related to IPR violations.

The numerous bilateral agreements established by the European Community contain a chapter dedicated to IP. This chapter usually establishes that a very high standard of protection of IP (including the enforcement thereof) must be achieved. Most agreements also include a clause allowing for technical cooperation in this field. These clauses must be carefully monitored and effectively implemented, notably with respect to the more ‘problematic’ countries.

The institutional structures of these multilateral and bilateral agreements (TRIPs Council, Association Councils, the World Intellectual Property Organisation — WIPO, etc.) can be used to monitor and discuss legislation and enforcement problems from a very early stage. They allow for a structured political dialogue and can act as fora to submit new initiatives or to act as ‘early warning’ for arising problems, before there is a need to adopt stricter measures.

It is also envisaged to make the enforcement clauses in future bilateral or bi-regional agreements more operational and to clearly define what the EU regards as the highest international standards in this area and what kind of efforts it expects from its trading partners.

Specific actions:

— The EU will consult other trading partners regarding the possibility of launching an initiative in the TRIPs Council highlighting the fact that the implementation of TRIPs requirements in national laws has proven to be insufficient to combat piracy and counterfeiting, and that the TRIPs Agreement itself has several shortcomings.

— For example, the TRIPs Council could consider in the future a number of actions to tackle the situation, including the extension of the obligation to make available customs measures to goods in transit and for export (8).

— Ensure a continued effort in the monitoring of the TRIPs compliance of legislation, in particular in the ‘priority’ countries.

— Revisit the approach to the IPR chapter of bilateral agreements, including the clarification and strengthening of the enforcement clauses. Although in designing the rules for each specific negotiation it is important to take into account the situation and the capacity of our partners, instruments such as the new EU Directive harmonising the enforcement of IPR within the Community, as well as the new customs' Regulation on counterfeit and pirated goods may constitute an important source of inspiration and a useful benchmark.

— Raise more systematically enforcement concerns at Summit meetings and in the Councils/Committees created in the framework of these bilateral agreements. In order to allow the Commission to obtain an effective reaction from its counterparts, it is essential that it receives credible and detailed information from right-holders, either directly or via the EC Delegation or the embassies of the Member States in the countries concerned.

3. Political dialogue

The Commission must make clear to its trading partners that effective protection of IP, at least at the level set in TRIPs, is absolutely essential, and that the first step for fighting piracy and counterfeiting is an adequate level of enforcement at the source, i.e. in the countries where these goods are produced and exported. The Commission will also emphasize that effective enforcement is in most cases of mutual interest, be it for health or consumer reasons, or more broadly for these countries attractiveness to foreign investment. In its contacts, at different levels with the authorities of the countries concerned, the Commission must strongly convey the message that it is willing to assist them in raising the level of enforcement, but also that it will not refrain from using the instruments at its disposal in cases where deficient enforcement is harming its right-holders.

In addition, the Commission is increasing its cooperation with countries heavily affected by this type of practices and that share the Community's concerns, like Japan. This will result in an increased exchange of information and even in participation in joint initiatives in third countries. In addition, such ‘joint ventures’ should produce a rationalisation of resources between countries sharing identical concerns and pursuing parallel initiatives.

Finally, the EC Delegations in the ‘problematic’ countries can play an important role, by establishing close links with the local enforcement entities, with the Community right-holders operating in these countries and with the embassies of EU Member States and other countries concerned.

Specific actions:

— The message ‘improve your enforcement’ should be repeated, as frequently and at as high a level as possible, in the Commission's contacts with authorities of the countries in question and in all appropriate fora, notably the WTO and WIPO. It must be perceived as a priority concern.

— This commitment to include IPR enforcement in the political dialogue is illustrated by the following initiatives:

— At the EU — Japan Summit of 2003, the Commission and Japan agreed to establish an improved dialogue in a number of areas, including IPR. An ‘EU — Japan Joint Initiative for IPR Enforcement in Asia’ was established, focusing on elements like (a) the close follow-up of the progress of Asian countries in the field; (b) coordinating technical assistance programmes and responsibilities; (c) enhancing EU-Japan efforts to raise awareness in the fight against piracy and counterfeiting and to promote the strengthening of IPR enforcement; (d) exploring the possibility to cooperate in other areas of IPR. The initiative is implemented by an Annual Work Plan containing specific activities.

— The Commission and China agreed in the margins of the 2003 EU-China Summit to hold, at least once a year, a ‘EU-China Dialogue on Intellectual Property’. Among other issues, the discussions should focus on efforts to combat piracy and counterfeiting, institutional reforms, enforcement-related areas such as central and sub-central enforcement by customs, police, administrative and judiciary bodies, public awareness of consumers and right-holders. The first meeting took place in October 2004.

— Basic training will be provided to officials in priority Delegations so that they can offer a minimum of information to entities with enforcement problems. The idea is to create some networking between Commission officials in Delegations and to establish closer teamwork between Delegations and the Headquarters. Teamwork will facilitate the compilation of information and the definition of targeted actions for the different countries and/or for a regional approach.

4. Incentives/Technical cooperation

Most of the countries with deficient enforcement will claim a lack of resources and the existence of more pressing priorities than protecting IP rights. IP enforcement is a complex and multi-disciplinary activity. It involves drafting legislation, training judges, police forces, customs officials and other experts, setting up agencies or task-forces, public awareness raising, etc. Most of these needs can be, and to some extent already have been, addressed by the Commission via technical cooperation programmes, but it is important to do more and better.

Technical assistance is an activity favoured by the EU for its contribution towards poverty alleviation and development. It is thus important to show that adequate IPR enforcement can contribute to this goal by making a link with investment opportunities, transfer of technology and know-how, protection of traditional knowledge, improvement of health and safety standards, etc.

It will be necessary to have a flexible approach that takes into account the recipient country's different needs, level of development, membership or not of the World Trade Organisation (WTO), and main problems in terms of IPR (country of production, transit or consumption of fake goods). Any cooperation programmes will only be effective if they are prioritised and indeed felt as important in the recipient country.

It is also relevant to share information and to ensure a minimum level of synergy between the main providers of technical assistance, such as WIPO, the World Customs Organisation (WCO), the Member States and third countries like Japan, the US and others.

Finally, the following difficulties must be stressed:

(a) In most cases, technical cooperation is ‘demand driven’, i.e. it requires a request by the beneficiary of the action. It is important to turn it into a ‘dialogue driven’ request, by discussing its importance and benefits for the recipient.

(b) It is a mid to long-term solution, with few immediate results. However, the present strategy is a long term one, and adequate enforcement is a goal that will not be achieved only by immediate actions, in particular in the case of least-developed countries, not yet bound by TRIPs requirements.

(c) Implementing the programmes implies a complex administrative process. This is why further strengthening coordination between the Commission services responsible for the different aspects of IPR enforcement and between the Commission and third parties is an essential component of the present strategy.

Specific actions:

— Ensure that, at least, the countries identified as priorities are given the option to include intellectual property in the trade-related technical assistance programmes or to obtain specific IP programmes.

— In particular, the Commission would like to extend technical assistance to Latin America, since it is a region where enforcement can certainly be improved and where no programme is in place.

— There are a number of programmes that cover IPR. Some, like ECAP (9) I and II, for the ASEAN countries, or even the recently concluded EU-China IPR programme are specifically destined to provide assistance on IPR. Others are generally designed to cover trade related issues, but may include IPR among their objectives — WTO II (10) and Small Project Facility (11), for China; technical cooperation programmes under the framework of the Cotonou Agreement for the African, Caribbean and Pacific (ACP) countries; or the CARDS (12) programme, for the countries of the Balkans. The Commission will ensure that the component of IPR enforcement is adequately covered by these programmes.

— In the case of ‘production’ countries, the focus in any cooperation programmes must shift from assistance in drafting legislation to a more enforcement-oriented strategy, including training programmes for judges, police, and customs.

— It must be pointed out that this practice is already being successfully implemented in the specific field of customs (DG TAXUD). There are a number of customs cooperation agreements that, inter alia, cover an essential tool of IPR enforcement (customs controls of fake goods). These agreements with countries like India and China (a new one is soon to be concluded) produce positive results in terms of training and of passing on our experience and methods to these countries. Furthermore, they illustrate how one can build on the existing TRIPs requirements (cf. the control of exports and goods in transit, in addition to the control of imports). It is likely that a similar agreement may be established with Japan still in 2004.

— Exchange ideas and information with other key providers of technical cooperation, like WIPO, the US, Japan and certain EU Member States, with the aim of avoiding duplication of efforts and sharing of best-practices.

— Improve the dialogue mechanisms with: (a) the WCO (under the coordination of DG TAXUD) to assess the compatibility of their technical assistance with our positions and the complementarity with our programmes; (b) WIPO and other providers of assistance (the European Patent Office, the Office of the EU Trademarks and Designs, etc.) to share information and to better coordinate strategies.

— Technical cooperation is also an important element of the TRIPs Agreement (Article 67) and it ‘fits’ into the objectives of the Doha Development Agenda. It can be considered to take an enforcement-oriented initiative in this framework.

5. Dispute Settlement/Sanctions

No rule can be really effective without the threat of a sanction. Countries where IP violations are systematic, and where no government action to address the problem is effectively taken, could be publicly identified. As a last resort, consideration should be given to resorting to dispute settlement mechanisms provided for in multilateral and bilateral agreements.

The existing Trade Barriers Regulation (TBR) mechanism (13) could be a starting-point. TBR is a legal instrument that gives the right to Community enterprises and industries to lodge a complaint, which obliges the Commission to investigate and evaluate whether there is evidence of violation of international trade rules resulting in adverse trade effects. The result is that the procedure will lead to either a mutually agreed solution to the problem or recourse to dispute settlement.

The TBR has a broad scope of application, covering not only goods but also, to some extent, intellectual property rights and services, when the violation of rules concerning these rights has an impact on trade between the EC and a third country.

Resort to other trade related mechanisms could also be considered. For instance, the EU includes similar instruments in an increasing number of bilateral agreements that will be triggered in cases of non-compliance with the required high(est) standards of IP protection.

Deficient enforcement derives more frequently from the way the rules are (not) de facto implemented by the competent authorities than from an absence of legislation or a blatant contradiction of legislation with TRIPs requirements. However, when such deficiencies become systemic, they can substantiate a dispute settlement case.

Specific actions:

— Remind right-holders of the possibility to make use of the TBR mechanism in cases of evidence of violation of TRIPs or of the high(est) standards as agreed in bilateral agreements between the EC and third countries. This mechanism is launched by the lodging of a complaint.

— The Commission is ready, in clearly justified cases, to make ex officio use of the WTO dispute settlement mechanism and of the similar dispute settlement tools included in our bilateral agreements in case of non-compliance with the mutually accepted standards of IP protection.

— Consider other mechanisms which could be used to reduce the level of IPR violations in third countries.

6. Creation of public-private partnerships

There are numerous companies and associations which have been active in the fight against piracy/counterfeiting for many years. They constitute an invaluable source of information, but also a key partner for any awareness raising initiatives. Some of these entities are already present, and very active, in most problematic countries.

Other than the specific actions now proposed, there are within the Commission other examples of initiatives to create public-private partnerships that are directly or indirectly linked with IPR enforcement.

One of these projects involved the creation of Innovation Relay Centres, to support companies dealing with transfers of technology (14). This project includes people with extensive experience in the IPR area (licensing, transfer of IP rights, etc) and could be used to collect information about enforcement problems in third countries. So far the network only covers the EU, but consideration is being given to extending it to third countries. There is a pilot project with an office in Chile.

There is also already in place the ‘IPR Help-Desk’ (15), a project sponsored by the Commission to support creativity and innovation. The purpose of the Help-Desk is not to handle complaints but to provide information to the EU industry. It may therefore give guidance to companies facing violations of their rights in third countries.

Finally, the Commission has a long experience of involving private operators in their seminars and training programmes covering, in particular, border enforcement of IPR.

Specific actions:

— Support the creation of local IP networks involving companies, associations and chambers of commerce. This practice is already being implemented in certain key countries and will be actively supported by DG TRADE.

— Improve cooperation with companies and associations that are active in the fight against piracy/counterfeiting, inter alia by exchanging information about future initiatives and ensuring the cross-participation of experts from the Commission and from private entities in events organised by the other party.

7. Awareness raising/Drawing on our own experience

Providing better information to the public is another very relevant dimension of the Strategy. This can be divided into the following components:

(a) Raising the awareness of users/consumers in third countries. This must be done from two perspectives: (a) to promote the benefits of IPR in terms of promotion of creativity, investment, transfer of technology, protection of traditions and quality; (b) to inform about the dangers of IPR violations to public health, consumer protection, public security, etc.

(b) Raising the awareness of right-holders. Again from two different perspectives: (a) the risks incurred by trading in certain countries where IPR enforcement is ineffective and the minimum precautions that must be adopted, like registering the IP right in those countries (frequently, small and medium sized companies do not even apply for the protection of their intellectual property in third countries where they are producing or selling their goods); (b) the need to use the means available in these third countries to enforce their rights. Countries which are members of the WTO (with the exception of least-developed countries) must have implemented minimum standards of IP protection and enforcement since 2000. It is clear that the first steps to protect and enforce IPRs must be taken by the right-holders themselves, and that they must use, to the maximum extent, the available mechanisms before being entitled to legitimately complain about the effectiveness of such protection and enforcement.

Specific actions:

— The Commission does not have the resources to pursue alone extensive awareness raising campaigns in third countries. However, this activity could be implemented by some of the abovementioned means, i.e. by inclusion in existing technical cooperation programmes and by public-private partnerships.

— The Commission services sponsored the drafting of a ‘Guidebook on Enforcement of Intellectual Property Rights’. This Guidebook is mainly intended to assist public authorities of developing and least developed countries in their efforts to put in place systems and procedures for the effective enforcement of IPR. In particular, the guidebook considers the most common difficulties confronting those countries in the enforcement of IPR and provides guidance on how to achieve effective and long-lasting protection for such rights. The guidebook identifies useful resources which may be of assistance to authorities and right-holders facing difficulties.

— The Guidebook will be publicly available through the Commission website.

8. Institutional cooperation

The Commission services responsible for the different aspects of IPR enforcement will step up their coordination and cooperation with a view to enhancing the role of the Commission. Without creating an additional layer of bureaucracy, it is necessary to:

(a) further improve information exchange and coordination between the services in charge of the different aspects of IPR enforcement;

(b) simplify the identification and the access of external entities (right-holders, third country authorities, etc.) to the service responsible for the specific issue concerning them.

Specific actions:

— Inter-service meetings will be regularly organised to follow up the initiatives being implemented in the framework of the present strategy and to discuss the results obtained, as well as the inclusion of new initiatives. Furthermore, increased cooperation between the services involved with technical assistance issues will be introduced in order to promote IPR enforcement-related assistance to relevant third countries.

— In order to help third parties understand the distribution of tasks among the different Commission services:

— A new Commission webpage will be created, presenting: (a) the existing legislation to enforce IPR; (b) a vademecum on enforcement, including the Commission contact points for the various types of IP rights and aspects of their enforcement, as well as links to the various web-pages of the different services dealing with it.

— Cross-links will be inserted in the existing web-pages of each service dealing with certain aspects of IPR or certain sectors.

— Ensure coordination with other Commission initiatives linked with IPR, such as the Innovation Relay Centres and the IPR Help-Desk, and their effective contribution to the objective of the present Strategy by collecting and distributing information vis-à-vis the private sector.

(1) Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004, is available at:

http://europa.eu.int/eur-lex/pri/en/oj/dat/2004/l_195/l_19520040602en00160025.pdf

(2) Council Regulation (EC) No 1383/2003 of 22 July 2003, is available at:

http://europa.eu.int/comm/taxation_customs/customs/counterfeit_piracy/files/counterfeit_en.pdf

(3) This Strategy has no direct supplementary financial implications on the budget of the European Commission.

(4) Reference to intellectual property rights in this paper is made in its wider meaning, i.e., including copyright and related rights, but also trademarks, patents, designs, geographical indications, undisclosed information, etc.

(5) The complete results of the ‘Survey on Enforcement of Intellectual Property Rights in Third Countries’, including a detailed report per country, for all the countries for which sufficient information was received, are available at:

http://europa.eu.int/comm/trade/issues/sectoral/intell_property/survey_en.htm

(6) A valuable source of information about the origin, the itinerary and the nature of counterfeit and pirated goods destined to, or in transit via the Community are the annual statistics about the goods originating from third countries seized by Customs at the Community border. The report is released by DG TAXUD. The figures for 2003 can be found at:

http://europa.eu.int/comm/taxation_customs/customs/counterfeit_piracy/index_en.htm

(7) Agreement on Trade-Related Aspects of Intellectual Property, Annex 1C to the Agreement establishing the World Trade Organisation (TRIPs, Marrakesh 1994).

(8) Article 51 of the TRIPs Agreement only stipulates the obligation for Members to have in place customs measures for imported goods.

(9) EC-ASEAN IPR Programme comprises a regional and a national component and covers all areas of IPR. It has a value of EUR 5 million. An additional EUR 2 million is planned, to take account of the inclusion of Laos, Cambodia and Vietnam. The project started in 2000 and has a duration of 5 years

(10) WTO II is the largest WTO related support programme in China, with a value of EUR 15 million over 5 years — to which China has indicated willingness to contribute with an additional 30 %. A chapter on IPR will be proposed. The programme should be launched before the end of 2004.

(11) Project designed to support small initiatives in China. With a total value of EUR 9,6 million, and a duration of 5 years, the initiatives are demand-driven, but the inclusion of IPR related projects will be actively encouraged.

(12) In the framework of the Community Assistance for Reconstruction, Development and Stabilisation (CARDS) programme for the Western Balkans, a project called ‘Industrial and Intellectual Property Rights’ was launched in July 2003. The project will have a duration of 36 months and a value of EUR 2,25 million.

(13) Council Regulation (EC) No 3286/94 of 22 December 1994 laying down Community procedures in the field of the common commercial policy in order to ensure the exercise of the Community's rights under international trade rules, in particular those established under the auspices of the WTO.

http://europa.eu.int/comm/trade/issues/respectrules/tbr/legis/adgreg06a.htm

(14) This project is managed by DG ENTR. For more information see:

http://europa.eu.int/comm/enterprise/innovation/networks.htm#irc

(15) http://www.ipr-helpdesk.org