COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS A Single Market for Intellectual Property RightsBoosting creativity and innovation to provide economic growth, high quality jobs and first class products and services in Europe
Date: 2011-05-24
Institutions: European Commission
Subjects: European patent, economic growth, economic recession, job creation, research and development, single market

EUROPEAN COMMISSION 

Brussels, 24.5.2011 
COM(2011) 287 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

A Single Market for Intellectual Property Rights 
Boosting creativity and innovation to provide economic growth, high quality jobs  
and first class products and services in Europe 

 
 
 
 
  
 
TABLE OF CONTENTS 

1. 

2. 

3. 

INTRODUCTION........................................................................................................ 3 

OPPORTUNITIES AND CHALLENGES FOR A SINGLE MARKET FOR IPR .... 4 

KEY POLICY INITIATIVES TO MEET THE CHALLENGES AHEAD ................ 7 

3.1. 

Reform of the patent system in Europe and accompanying measures......................... 7 

3.1.1.  A unitary patent protection........................................................................................... 7 

3.1.2.  A unified patent litigation system ................................................................................ 8 

3.1.3.  An IPR valorisation instrument.................................................................................... 8 

3.2. 

3.3. 

Modernisation of the trade mark system in Europe ..................................................... 8 

Creation of a comprehensive framework for copyright in the digital single market ... 9 

3.3.1.  European copyright governance and management .................................................... 10 

3.3.2.  Technology and database management...................................................................... 11 

3.3.3.  User-generated content............................................................................................... 12 

3.3.4.  Private copying levies ................................................................................................ 12 

3.3.5.  Access to Europe's cultural heritage and fostering media plurality ........................... 13 

3.3.6.  Performers' rights ....................................................................................................... 14 

3.3.7.  Audiovisual works ..................................................................................................... 14 

3.3.8.  Artists' resale right ..................................................................................................... 14 

3.4. 

The issue of complementary protection of intangible assets ..................................... 15 

3.4.1.  Trade secrets and parasitic copies .............................................................................. 15 

3.4.2.  Non-agricultural geographical indications................................................................. 16 

3.5. 

Enhanced fight against counterfeiting and piracy...................................................... 17 

3.5.1.  Public awareness ........................................................................................................ 18 

3.5.2.  A more sustainable structure for the European Observatory on Counterfeiting and 

Piracy and new tasks .................................................................................................. 18 

3.5.3.  A review of the IPR Enforcement Directive .............................................................. 19 

3.6. 

The international dimension of IPR ........................................................................... 19 

3.6.1.  Multilateral initiatives, including co-ordination with international organisations..... 20 

3.6.2.  Bilateral negotiation and co-operation on IP protection with third countries............ 21 

3.6.3.  Enhanced IPR protection and enforcement at the EU border .................................... 21 

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4. 

1. 

CONCLUSIONS........................................................................................................ 22 

INTRODUCTION 

Putting in place a seamless, integrated Single Market for Intellectual Property Rights (IPR) is 
one of the most concrete ways to release the potential of European inventors and creators and 
empower them to turn ideas into high quality jobs and economic growth. 

This Communication presents the Commission's overall strategic vision for delivering the true 
Single Market for intellectual property that is currently lacking in Europe – a European IPR 
regime  that  is  fit  for  tomorrow's  new  economy,  rewarding  creative  and  inventive  efforts, 
generating  incentives  for  EU-based  innovation  and  allowing  cultural  diversity  to  thrive  by 
offering additional outlets for content in an open and competitive market. 

A  modern,  integrated  European  IPR  regime  will  make  a  major  contribution  to  growth, 
sustainable  job  creation  and  to  the  competitiveness  of  our  economy  –  key  objectives  of  the 
EU 2020  agenda  and  the  Annual  Growth  Survey  which  are  essential  to  sustain  the  EU's 
recovery  from  the  economic  and  financial  crisis.  It  will  enable  the  development  of  sectors 
such  as  e-commerce  and  digital  industries  which  offer  the  greatest  potential  for  future 
growth.1 Innovation not only helps the European economy  to flourish. It is indispensable to 
address the big challenges that humankind is facing in the 21st century: ensuring food security, 
containing climate change, dealing with demographic change and improving citizens' health. 
It also has an essential role to play in the quality of daily life by fostering cultural diversity. 

IPR comprise industrial property rights, such as patents, trademarks, designs and geographical 
indications, copyright and rights related to copyright. 

The galaxy of IP rights 

Copyrights and Neighbouring Rights
Copyrights and Neighbouring Rights
(performers, musicians, broadcasters …)
(performers, musicians, broadcasters …)

Patents
Patents

Intellectual Property Rights
Intellectual Property Rights
« IPR »
« IPR »

Trademarks
Trademarks

Geographical Indications
Geographical Indications

Plant Variety Rights
Plant Variety Rights

Designs 
Designs 

IPR  are  property  rights  that  protect  the  added  value  generated  by  Europe's  knowledge 
economy on the strength of its creators and inventors. IPR catalogues are an important part of 

1 

See: Europe 2020 Strategy (COM (2010) 2020), the Annual Growth Survey 2011 (COM (2011) 11), the 
Digital  Agenda  for  Europe  (COM  (2010)  245),  the  Single  Market  Act  (COM  (2011)  206)  and  the 
Innovation Union (COM (2010) 546). 

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many  European  businesses.  Capitalising  on  IPR portfolios  is  key  for  European  creators  and 
businesses to sustain operations, generate revenues and develop new market opportunities.2 

In the era of globalisation and international competition, the revenue potential of IP is just as 
important as the access to commodities or the reliance on a manufacturing base. 

The  virtuous  IPR  circle  relies  on  an  IPR  policy  that  incentivises  innovation,  which  in  turn 
attracts investment, thereby resulting in new products and services for new consumer demand 
which enhances growth and employment. 

Fast-paced  technological  progress  has  altered  the  way  we  do  business  and  disseminate, 
receive  and  consume  products  and  services,  such  as  online  music  and  audiovisual  services. 
New business models are developing and traditional ones are adapting. New economic players 
and service providers are entering the market. Consumers are changing the way they interact 
with  the  market  place.  European  IPR  legislation  must  provide  the  appropriate  "enabling 
framework"  that  incentivises  investment  by  rewarding  creation,  stimulates  innovation  in  an 
environment of undistorted competition and facilitates the distribution of knowledge. 

2. 

OPPORTUNITIES AND CHALLENGES FOR A SINGLE MARKET FOR IPR 

The case does not need to be made anymore: IPR in their different forms and shapes are key 
assets of the EU economy 

1.4  million  European  SMEs  operate  in  the  creative  industries.  IP-based  industries  represent 
above  average  potential  for  growth  and  job  creation.  According  to  the  European 
Competitiveness Report 2010, creative industries account for 3% of employment (2008) and 
are  among  the  most  dynamic  sectors  in  the  EU.  The  number  of  employees  in  the  creative 
industries in the EU-27 was 6.7 million in 2008. 

Overall  employment  in  creative  industries  increased  by  an  average  of  3.5%  a  year  in  the 
period 2000-2007 compared to 1% a year for the total EU economy. Most of the new jobs in 
the  EU  created  over  the  past  decade  were  in  the  knowledge-based  industries  where 
employment  increased  by  24%.  In  contrast,  employment  in  the  rest  of  the  EU  economy 
increased by just under 6%.3 

An indicative 2002 survey of the Fortune 500 companies estimated that anywhere from 45% 
to  75%  of  the  wealth  of  individual  companies  derives  from  their  IPR.4  In  2009,  it  was 
estimated that intangible assets represented about 81% of the value of the S&P 500 market.5 
The value of the top ten brands in each EU country amounted to almost an average of 9% of 
GDP  per  capita  in  2009.6  IPR  incentivise  and  protect  investment  in  technical  Research  and 

2 

3 

4 
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6 

"The  value  of  knowledge:  European  firms  and  the  intellectual  property  challenge"  an  Economist 
Intelligence Unit White Paper, The Economist, January 2007. 53% of respondents said that the use of 
IPR  will  be  very  important  or  critical  to  their  business  models  in  two  years,  compared  to  35%  who 
considered this to be the case at the time of the survey.  
The  Work  Foundation:  The  knowledge  economy  in  Europe,  report  prepared  for  the  2007  Spring 
European Council. 
Source: http://www.wipo.int/sme/en/documents/valuing_patents.htm. 
Source:  Ocean  Tomo  as  cited  in  "The  2011  drug  patent  'cliff'  and  the  evolution  of  IP  evaluation"  by 
Liza Porteus Viana, Intellectual Property Watch, 11.01.2011. 
Source: Eurobrand Study 2009, Country Review, http://study.eurobrand.cc 

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Development  (1.9%  of  EU  GNP  in  2008).7  Copyright-based  creative  industries  (comprising 
software  and  database  production,8  book  and  newspaper  publishing,9  music10  and  film11) 
contribute 3.3% to the EU GDP (2006).12 

IPR shape the everyday life of citizens 

Patent protection, for instance, is essential for the development of new groundbreaking drugs 
or  medical  equipment.  Ever  more  sophisticated  technical  devices,  such  as  smart  phones  or 
tablet  computers,  third  and  future  generations  of  mobile  telephony,  consumer  electronics, 
more environmentally-friendly cars or high-speed trains, rely on thousands of patents. 

The protection of brand equity stimulates investment in the quality of products and services 
by  helping  the  customer  identify  the  relevant  producer  of  goods  or  services,  particularly  in 
sectors  which  rely  heavily  on  brands  and  customers'  brand  loyalty.  These  sectors  comprise 
those for food products, household goods, pharmaceuticals, fashion, sporting ware, cosmetics, 
consumer electronics, or services offered by the telecommunications, travel, leisure and sports 
industries. In the agri-food sector, the geographical indications and plant variety rights ensure 
protection of quality products and access to authentic products throughout the single market. 
Copyright  stimulates  the  creation  of  creative  content,  such  as  software,  books,  newspapers 
and periodicals, scientific publications, music, films, photography, visual arts, video games or 
software. 

Finally,  Europe's  IPR  system  has  helped  to  create  the  competitive  edge  for  European 
industries 

The development of standards such as GSM and UMTS is a European success story based on 
diligent management of IPR. These European standards have evolved into globally successful 
technologies, due to their technological superiority and Europe's viable IPR system. Europe-
based companies are at the cutting edge in licensing the semiconductor technologies that are 
found  in  more  than  90%  of  the  mobile  phones  sold  globally.  Many  European  companies 
nowadays generate a large part of their revenue through licensing of their IP portfolios. 

Maintaining momentum 

The economic potential of IPR increasingly depends on the ability of multiple IPR owners to 
collaborate and license technologies, products and creative content and to bring new products 
and  services  to  consumers.  Online  music  services  need  to  duplicate  complex  clearing 
processes  in  order  to  be  available  across  several  territories.  This  requires  a  holistic  and 
coherent IPR legal framework. In that context, IPR legislation should be seen as a governance 

7 
8 

9 

10 

11 

12 

Source: Eurostat. 
Software and database production are by far the biggest contributors to copyright industries producing 
nearly a fourth of turnover attributed to these industries. 
According to the Federation of European Publishers, book publishing employs 135,000 people full time 
and contributes approximately EUR 24 billion to EU GDP. 
According to IFPI, total value of the EU recorded music market is around EUR 6 billion. The recorded 
music market presents around a fifth of the total music market which is worth close to EUR 30 billion. 
Motion  picture  production,  distribution  and  exhibition  as  well  as  video  rentals  and  sales  account  for 
10% of copyright turnover. The audiovisual industry in Europe produces more than 1,100 films per year 
and  employs  over  1  million  people.  Source:  Multi-Territory  Licensing  of  Audiovisual  Works  in  the 
European Union, KEA study, October 2010. 
European Competitiveness Report 2010, Commission Staff Working Document, SEC(2010) 1276 final. 

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tool  that  regulates  and  optimises  the  relationship  between  the  three  main  players:  creators, 
service  and  content  providers  and  consumers.  IPR  policy  should  therefore  be  designed  as 
"enabling legislation" allowing for the management of IPR in the most efficient way, thereby 
setting  the  right  incentives  for  creation  and  investment,  innovative  business  models,  the 
promotion  of  cultural  diversity  and  the  broadest  possible  dissemination  of  works  for  the 
benefit of society as a whole. 

Europe  must  become  a  world  leader  in  innovative  licensing  solutions  for  the  seamless 
exploitation  of  innovative  technological  products  and  of  knowledge  and  cultural  products. 
The benefits of an enabling IPR framework should be available to all players, irrespective of 
their  size.  SMEs  should  stand  to  benefit  from  IPR  as  much  as  the  largest  market  players 
operating  within  the  internal  market.  An  IPR  framework  should  also  provide  the  necessary 
incentives for all creative sectors to thrive and flourish thereby contributing to a rich diversity 
of cultural goods and services and expressions. 

The answer is in the Single Market  

The fragmentation of the IPR landscape in the EU has implications for Europe's growth, job 
creation and competitiveness. Licensing transactions are impaired by high costs, complexity 
and legal uncertainty for creators, users and consumers. This is one reason why e-commerce 
has  not  realised  its  full  potential  in  the  EU  and  why  it  is  often  the  biggest  players  who  can 
navigate  the  rules  and  truly  benefit  from  the  Single  Market.  High  transaction  costs 
disincentive  innovation  and  creation.  Innovative  SMEs  struggle  to  benefit  from  IPR  and 
develop IPR-based strategies. The circulation of cultural goods and services remains below its 
potential. 

Existing  rules  are  also  under  the  additional  strain  from  the  acceleration  of  technological 
progress,  which  changes  the  way  products  and  services  are  produced,  disseminated  and 
consumed. Europe is not always sufficiently at the forefront of providing new digital services. 
For example, the legal complexities of digitising its cultural heritage with a view to making it 
accessible online could provoke a "knowledge gap", if not addressed. 

The enforcement of IPR within Europe and at its borders remains imperfect. At the moment 
the development of new technologies poses a challenge for the prevention of the unauthorised 
use of protected works. So far, the EU's IP enforcement framework has not been reconciled 
with  the  new  digital  environment.  In  the  context  of  a  general  reflection  on  adapting  EU 
policies to the digital era, attractive and affordable legal offers of digital content to consumers 
must  be  developed  in  parallel  to  any  measures  to  further  strengthen  IPR  enforcement.  The 
promotion and the protection of IPR, furthermore, do not stop at the EU's borders. This has 
become  a  pressing  issue  in  the  context  of  the  globalisation  of  trade  flows,  and  as  IPR 
constitute a major asset for the EU's competitiveness on emerging markets. 

Promoting  creation  and  innovation  and  driving  economic  growth  are  common  goals  of 
intellectual property and competition law. Strong protection and enforcement  of IPR  should 
be accompanied by rigorous application of competition rules in order to prevent the abuse of 
IPR  which  can  hamper  innovation  or  exclude  new  entrants,  and  especially  SMEs,  from 
markets. 

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The need for a vision to manage change 

The  governance  of  the  EU  IP  framework  should  be  modernized  so  that,  in  particular,  the 
complexity of costs and transactions are reduced and legal certainty is increased, in particular 
for SMEs. This should include an increased recourse to new technologies and tools such as 
machine translation and search tools. 

Care should be taken to ensure the right balance between protection of rights and access, i.e. 
to  develop  fair  regimes  rewarding  and  incentivising  inventors  and  creators,  whilst  ensuring 
the  circulation  and  dissemination  of  goods  and  services,  the  exercise  of  other  fundamental 
rights  and  the  promotion  and  preservation  of  cultural  and  linguistic  diversity.  The 
consolidation  and  streamlining  of  the  governance  of  IPR  should  go  hand  in  hand  with 
strengthening enforcement tools both on the EU and international levels. 

3. 

KEY POLICY INITIATIVES TO MEET THE CHALLENGES AHEAD 

3.1. 

Reform of the patent system in Europe and accompanying measures 

3.1.1.  A unitary patent protection 

The current European patent system is complex, fragmented and costly: obtaining a European 
patent validated in only 13 Member States can cost up to ten times more than a US patent. To 
date, if an SME wants to obtain or maintain patent protection for all 27 EU Member States for 
20 years, the company would, over this period, need to disburse an estimated EUR 200,000, a 
large  part  of  these  costs  consisting  in  translation  costs  and  costs  resulting  from  necessary 
transactions with national offices. 

However, work is underway to create unitary patent protection for twenty-five Member States 
within  the  framework  of  enhanced  cooperation.13  Following  the  adoption  of  the  decision  of 
the  Council  authorising  enhanced  cooperation,14  the  Commission  has  tabled  proposals  for 
implementing  measures.15  It  will  work  with  the  European  Parliament  and  the  participating 
Member States to adopt these measures as quickly as possible. The overall aim of the unitary 
patent  is  that  companies  will  enjoy  significant  cost-savings  as  soon  as  possible  and  it  will 
contribute largely to the simplification of administrative procedures through the elimination of 
the need to validate these patents at national level. 

In  addition,  the  development  of  machine  translation  systems  is  an  essential  feature  that  can 
help reduce high translation costs and make patent protection affordable for companies of all 
sizes. As such, machine translations will not only increase access to patent protection but also 
to patent information in different languages as from the application stage. This is crucial for 
spreading technological knowledge and for fostering innovation in general. In that respect, the 
Commission  welcomes  and  promotes  the  machine  translation  programme  for  patent 
documents which was launched by the European Patent Office in 2010. The aim is to make 
machine  translations  available  for  the  official  languages  of  the  contracting  states  to  the 
European Patent Convention - which includes all official EU languages. 

13 
14 

15 

COM (2010) 790 final. 
Council Decision 2011/167/EU of 10 March 2011 authorizing enhanced cooperation in the area of the 
creation of unitary patent protection, OJ L 76, 22.3.2011, p. 53. 
COM (2011) 215 final and COM (2011) 216 final. 

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3.1.2.  A unified patent litigation system 

Disputes related to patents have to be resolved in different national courts. As well as being 
extremely  expensive  and  time-consuming  for  patent  holders,  this  fragmentation  risks 
producing different decisions in different Member States, creating legal uncertainty. 

The creation of unitary patent protection has to be accompanied by appropriate jurisdictional 
arrangements  responding  to  the  needs  of  the  users  of  the  patent  system.  In  order  for  the 
unitary patent protection to work properly in practice, appropriate jurisdictional arrangements 
should allow for patents to be enforced or revoked throughout the territory of the participating 
Member States and at the same time should ensure high quality judgements and legal security 
for companies. Work on specific jurisdictional arrangements is currently being taken forward, 
taking  also  into  account  the  recent  opinion  of  the  Court  of  Justice  of  the  European  Union 
(A-1/09) on the compatibility of the draft agreement on the European and EU Patents Court 
with the Treaties. 

A  unified  patent  litigation  system  which  would  govern  both  European  bundled  patents  and 
European patents with unitary effect would considerably reduce litigation costs and the time 
taken to resolve patent disputes, whilst increasing legal certainty for users. 

3.1.3.  An IPR valorisation instrument 
Intangible  assets  may  account  for  up  to  three  quarters  of  corporate  value16  and  intellectual 
property  rights  have  reached  such  a  level  of  financial  visibility  and  impact,  that  IP-based 
transactions  are  gaining  more  and  more  importance.  As  a  consequence,  companies  need  to 
develop  appropriate  management  of  such  intangible  assets,  such  as  patents,  trademarks  and 
copyright. 

In its conclusions of February 2011, the European Council invited the Commission to explore 
options for setting up an intellectual property rights valorisation instrument at European level, 
in  particular  to  ease  SMEs'  access  to  the  knowledge  market.  In  this  context,  'valorisation' 
refers to valuing intangible assets in accounting terms and to increasing the opportunities to 
get better value out of IPR and leverage financing. 

In  order  to  carefully  examine  this  issue,  the  Commission  has  launched  a  comprehensive 
analysis including an expert group and a feasibility study. These activities will offer a general 
picture of the situation and help the Commission to consider potential options for the setting 
up  of  such  an  IPR  valorisation  instrument,  as  e.g.  an  innovative  European  IPR  knowledge 
market  platform  to  facilitate  transfer  and  trading.  The  Commission  will  report  back  to  the 
European Council before the end of 2011. 

3.2.  Modernisation of the trade mark system in Europe 

National  trade  mark  registration  in  the  EU  Member  States  has  been  harmonised  for  almost 
20 years17  and  the  Community  trade  mark  was  established  15  years  ago18.  The  trade  mark 
system in Europe shows clear successes. This is reflected, inter alia, in new record figures for 

16 
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18 

See point 2 and footnote 5. 
Directive  2008/95/EC  of  the  European  Parliament  and  of  the  Council  of  22  October  2008  to 
approximate the laws of the Member States relating to trade marks, OJ L 299, 8.11.2008, p. 25. 
Council  Regulation  (EC)  No  207/2009  of  26  February  2009  on  the  Community  trade  mark,  OJ  L78, 
24.3.2009, p.1. 

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Community  trade  mark  applications  filed  in  2010  (more  than  98,000),  and  the  expected 
receipt, in 2011, of the millionth application since the creation of the Community trade mark 
in  1996.  However,  stakeholders  are  increasingly  demanding  faster,  higher  quality,  more 
streamlined trade mark registration systems, which are more consistent, user friendly, publicly 
accessible and technologically up-to-date. To meet these demands, the trade mark system in 
Europe needs to be modernised and adapted to the internet era. 

In 2009, the Commission launched a comprehensive evaluation of the overall functioning of 
the trade mark system in Europe. On the basis of this evaluation and an impact assessment, 
the Commission will present proposals to revise both the Community Trade Mark Regulation 
and the Trade Mark Directive in the last quarter of 2011. 

The  objective  of  the  review  is  to  modernise  the  system  both  at  EU  and  national  levels  by 
making  it  more  effective,  efficient  and  consistent  as  a  whole.  Particular  focus  will  be  on 
possibilities  of:  (1)  simplifying  and  speeding  up  the  registration  procedure,  taking  into 
account  the  requirements  of  the  electronic  age;  (2)  increasing  legal  certainty,  such  as  by 
redefining what may constitute a trade mark; (3) clarifying the scope of trade mark rights inter 
alia as regards goods in various situations throughout the EU customs territory; (4) providing 
a framework for increased cooperation between the Office for Harmonisation in the Internal 
Market  (OHIM)  at  Alicante  and  national  trade  mark  offices  with  the  aim  of  harmonising 
administrative  practice  and  developing  common  tools,  such  as  those  which  offer  far  greater 
options for conducting priority searches, and watching the registry for infringing registrations; 
and  (5)  making  the  Directive  more  coherent  with  the  Regulation,  in  particular,  by  further 
aligning  the  legal  grounds  of  refusal  for  registration  at  European  level,  and  (6)  aligning  the 
grounds for refusal and for coexistence under both the Directive and the Regulation to rules 
on geographical indications. 

In  any  case,  any  amendment  which  the  Commission  will  propose  to  the  Regulation  on  the 
Community  trade  mark  will  be  consistent  with  the  single  market  concept  and  preserve  the 
unitary character of this successful IP title. 

3.3. 

Creation  of  a  comprehensive  framework  for  copyright  in  the  digital  single 
market 

The  internet  is  borderless  but  online  markets  in  the  EU  are  still  fragmented  by  multiple 
barriers.  Europe  remains  a  patchwork  of  national  online  markets  and  there  are  cases  when 
Europeans  are  unable  to  buy  copyright  protected  works  or  services  electronically  across  a 
digital single market. Technology, the fast evolving nature of digital business models and the 
growing  autonomy  of  online  consumers,  all  call  for  a  constant  assessment  as  to  whether 
current  copyright  rules  set  the  right  incentives  and  enable  right  holders,  users  of  rights  and 
consumers to take advantage of the opportunities that modern technologies provide. 

Authors  and  other  creators  expect  a  fair  return  for  the  use  of  their  work,  be  they  books, 
newspaper articles, sound recordings, performances, films or photographs. This is also true of 
publishers  and  producers  who  provide  investments  to  produce  and  disseminate  creative 
works.  The  potential  exists  to  increase  authors'  and  creators'  returns  if  a  proper  copyright 
environment facilitates the licensing and the dissemination of works in a digital single market. 

A  European  governance  framework  to  manage  the  interface  between  creators,  commercial 
users and consumers is crucial if Europe is to exploit the full potential that new technologies 
and  the  digital  marketplace  offer.  Europe  must  develop  copyright  licensing  services, 

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combined  with  web  applications  and  tools,  to  foster  vibrant  cultural  and  creative  industries 
that allow millions of citizens to use and share published knowledge and entertainment easily 
and  legally  across  the  Union  irrespective  of  their  Member  State  of  residence.  A  series  of 
Commission initiatives, set out below, will be proposed to make this goal a reality. 

3.3.1.  European copyright governance and management 

Irrespective of the technology used, reforms of copyright in the internal market should take 
the form of "enabling legislation" for the use of copyright in the most efficient way, thereby 
setting  the  right  incentives  for  creation  and  investment,  innovative  business  models  and 
dissemination of works. They should help to enhance the depth and breadth of repertoire that 
is  available  to  all  consumers  across  the  European  Union.  Gaps  in  the  availability  of  online 
services  for  consumers  in  certain  Member  States  should  be  closed  by  creating  a  stable 
framework  for  the  governance  of  copyright  at  European  level  which  will  be  fit  for  new 
emerging business models. 

Emerging Business Models 

Platforms 

Hardware 

Retail 

Digital content 

Broadcasters 

Networks 

The creation of a European framework for online copyright licensing would greatly stimulate 
the  legal  offer  of  protected  cultural  goods  and  services  across  the  EU.19  Modern  licensing 
technology could help make a wider range of online services available cross-border or even 
create services that are available all over Europe.20 

This is why, in 2011, the Commission will submit proposals to create a legal framework for 
the  collective  management  of  copyright  to  enable  multi-territorial  and  pan-European 
licensing.  While  the  focus  on  the  cross-border  management  of  copyrights  in  the  online 
environment is of particular importance in view of the development of a digital marketplace 

19 

20 

The 2010 IFPI Music Report shows that an average European spends less than EUR 2 on digital music, 
whereas an average American spends almost EUR 8 and an average Japanese EUR 7. 
EMusic, a leading service provider, is present in 27 Member States and has a catalogue of 10 million 
tracks.  iTunes  is  present  in  15  Member  States;  7digital  and  Vodafone  in  12  Member  States;  Nokia 
(OviMusic)  in  11  Member  States;  YouTube  in  10  Member  States;  whereas  LastFM  is  present  in 
9 Member States: http://www.pro-music.org/Content/GetMusicOnline/stores-europe.php. 

EN 

10 

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for cultural goods and services, attention should also be given to the governance structures of 
other forms of collectively managed rights. 

The  new  framework  should  establish  common  rules  on  governance,  transparency  and 
effective  supervision,  including  collectively  managed  revenue  streams.  Clearer  rules  on 
copyright licensing and distribution of revenues will ultimately create a level playing field for 
all actors: right holders, collecting societies, service providers and consumers. 

To  foster  the  development  of  new  online  services  covering  a  greater  share  of  the  world 
repertoire and serving a greater share of European consumers, the framework should allow for 
the  creation  of  European  "rights  brokers"  able  to  license  and  manage  the  world's  musical 
repertoire on a multi-territorial level while also ensuring the development of Europe's cultural 
diversity.  To  that  end,  an  enforceable  European  rights  management  regime  that  facilitates 
cross-border  licensing  should  be  put  in  place.  Cross-border  management  of  copyright  for 
online  services  requires  a  high  level  of  technical  expertise,  infrastructure  and  electronic 
networking.  The  means  should  be  provided  to  ensure  that  all  operators  comply  with  a  high 
level  of  service  standards  for  both  right  holders  and  users  and  that  competition  is  not 
distorted. 

Another approach for a more far-reaching overhaul of copyright at European level could be 
the  creation  of  a  European  Copyright  Code.  This  could  encompass  a  comprehensive 
codification  of  the  present  body  of  EU  copyright  directives  in  order  to  harmonise  and 
consolidate the entitlements provided by copyright and related rights at EU level. This would 
also  provide  an  opportunity  to  examine  whether  the  current  exceptions  and  limitations  to 
copyright granted under the 2001/29/EC Directive21 need to be updated or harmonised at EU 
level.  A  Code  could  therefore  help  to  clarify  the  relationship  between  the  various  exclusive 
rights  enjoyed  by  rights  holders  and  the  scope  of  the  exceptions  and  limitations  to  those 
rights. 

The Commission will also examine the feasibility of creating an optional "unitary" copyright 
title  on  the  basis  of  Article  118  TFEU  and  its  potential  impact  for  the  single  market,  right 
holders and consumers. 

These issues require further study and analysis. The Commission will examine these issues, 
inter alia, in the context of the dialogue with stakeholders foreseen in the Digital Agenda for 
Europe  and  report  in  2012,  in  particular  on  whether  the  2001/29/EC  Directive  needs  to  be 
updated. 

3.3.2.  Technology and database management  

The  ubiquity  of  the  internet  has  spurred  the  need  to  improve  collective  licensing  practices. 
Technology can provide a rich source of pragmatic solutions to adapt copyright licensing to 
the internet and support the distribution of collectively managed revenue streams. Against this 
backdrop,  the  Commission  will  support  measures  to  make  it  simpler  and  efficient  to  access 
copyright protected works through innovative licensing technologies, certification of licensing 
infrastructures,  identification  and  data  exchange  of  actual  usage  and  electronic  data 
management.  It  will  encourage  and  support  projects  undertaken  by  various  stakeholders  to 

21 

Directive 2001/29/EC of 22 May 2011 on the harmonization of certain aspects of copyright and related 
rights in the information society, OJ L167, 22.6.2001, p. 10. 

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develop automated and integrated standards-based rights management infrastructures.22 Inter-
operable  online  databases  should  help  identify  right  holders  and  foster  the  development  of 
licensing  infrastructures.  For  example,  the  compilation  and  availability  of  accurate 
information  on  music  authors´  rights  ownership  information  in  one  authoritative  database  is 
key to facilitating efficient cross border licensing and distribution of royalties to the relevant 
right  holders  in  a  consistent  manner  across  Europe  and  will  also  facilitate  licensing  of 
European repertoire abroad and corresponding distribution of royalties back to their European 
authors. This information should be publicly available and provide transparent information to 
users, thus facilitating licensing. 

3.3.3.  User-generated content 

In light of the fast development of social networking and social media sites which rely on the 
creation and upload of online content by end-users (blogs, podcasts, posts, wikis, mash-ups, 
file and video sharing), specific attention will be given to possible approaches to deal with so-
called user-created  or  user-generated content (UGC).23 In line with its overall approach, the 
Commission  advocates  responsible  use  while  ensuring  that  users  enjoy  the  full  benefits  of 
new interactive online services. 

There is a growing realisation that solutions are needed to make it easier and affordable for 
end-users  to  use  third-party  copyright  protected  content  in  their  own  works.  Users  who 
integrate  copyright-protected  materials  in  their  own  creations  which  are  uploaded  on  the 
internet must have recourse to a simple and efficient permissions system. This is particularly 
pertinent in the case of "amateur" users whose UGC is created for non-commercial purposes 
and yet who face infringement proceedings if they upload material without the right holders' 
consent. The time has come to build on the strength of copyright to act as a broker between 
rights  holders  and  users  of  content  in  a  responsible  way.  The  Commission  will  explore  the 
issue  further,  including  via  contacts  with  all  interested  parties  notably  in  the  context  of  the 
above mentioned dialogue with stakeholders, in order to strike a balance between the rights of 
content creators and the need to take account of new forms of expression. 

3.3.4.  Private copying levies 

The  proper  functioning  of  the  internal  market  also  requires  conciliation  of  private  copying 
levies with the free movements of goods to enable the smooth cross-border trade in goods that 
are  subject  to  private  copying  levies.24  Efforts  will  be  redoubled  to  kick-start  a  stakeholder 
agreement  built  on  the  achievements  of  a  draft  Memorandum  of  Understanding  (MoU) 
brokered by the Commission in 2009. A high level independent mediator will be appointed in 
2011  and  tasked  with  exploring  possible  approaches  with  a  view  to  harmonising  the 
methodology used to impose levies, improve the administration of levies, specifically the type 

22 

23 

24 

Examples of these initiatives include the development of a Global Repertoire Database (GRD) and the 
Automated  Content  Access  Protocol  (ACAP).  The  Commission  is  already  supporting  the  Accessible 
Registries of Rights Information and Orphan Works (ARROW) to identify right holders and clarify the 
rights status of a work, e.g., whether it is an orphan or out-of-commerce work. 
This issue had been raised in the Commission's Green Paper on Copyright in the Knowledge Economy 
and  subsequent  Communication  of  the  same  name  (COM  (2008)  466  and  COM  (2009)  532 
respectively). The conclusion was that further study on the subject was necessary. 
Levies  are payments  due on recording  equipment  and  blank  recording media  in  some  of  the  Member 
States  that  have  introduced  a  statutory  exception  for  private  copying.  According  to  Econlaw  (2007), 
EUR 453 million of private copying levies have been collected on digital devices and carriers in 2006 in 
the European Union. 

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of equipment that is subject to levies, the setting of tariff rates, and the inter-operability of the 
various national systems in light of the cross-border effects that a disparate levy system has on 
the internal market. A concerted effort on all sides to resolve outstanding issues should lay the 
ground for comprehensive legislative action at EU level by 2012. 

3.3.5.  Access to Europe's cultural heritage and fostering media plurality 

Facilitating  the  preservation  and  dissemination  of  Europe's  rich  cultural  and  intellectual 
heritage and encouraging the creation of European digital libraries is key for the development 
of the knowledge economy. Innovative licensing solutions are needed to promote the seamless 
sharing of knowledge and culture that allow academic institutions, businesses, researchers and 
private individuals to lawfully use copyright-protected materials while compensating authors, 
publishers, and other creators for the use of their works. In 2011, the Commission intends to 
proceed by way of a two-pronged approach to promote the digitisation and making available 
of  the  collections  of  European  cultural  institutions  (libraries,  museums  and  archives).  One 
strand is the promotion of collective licensing schemes for works still protected by copyright 
but  no  longer  commercially  available  (works  that  are  "out-of-commerce").  The  other  is  a 
European  legislative  framework  to  identify  and  make  available  so-called  "orphan  works".25 
The  successful  completion  of  these  two  initiatives  will  also  boost  the  development  of 
Europeana26  as  an  online  platform  through  which  citizens  can  access  the  diversity  and 
richness of Europe's cultural heritage. 

The  Commission  is  also  committed  to  continue  working  with  Member  States  to  develop 
viable solutions to tackle the "book famine" faced by millions of visually-impaired people. At 
present, only a very small percentage of publications are available in accessible formats such 
as  Braille,  large  print  or  audio.  The  Commission  recently  brokered  a  MoU27  (signed  in 
September 2010) to facilitate the cross-border exchange of works in special formats and make 
them  accessible  to  persons  with  a  visual  impairment.  The  MoU  establishes  a  system  of 
"trusted  intermediaries"  tasked  with  the  online  delivery  of  special  format  materials  across 
national borders. The Commission will continue to work with stakeholders to set up a network 
of  trusted  intermediaries  in  each  Member  State.  This  will  allow  the  seamless  delivery  of 
special format materials in a safe environment across the EU. The system set up by the MoU 
will be subject to an annual review in order to determine whether the cross-border exchange 
of specially formatted material actually increases or whether action needs to be stepped up. 

Journalists are authors and their work is important not only because they report, comment on 
and interpret the world we live in but also because freedom of the press is living testimony to 
Europe's  pluralistic  and  democratic  society.  Protecting  authors'  rights  for  journalists  and 
ensuring  that  they  maintain  a  say  over  how  their  works  are  exploited  is  therefore  central  to 
maintaining  independent,  high-quality  and  professional  journalism.  Publishers  themselves 
play an important role in disseminating the work of writers, journalists, researchers, scientists, 
photographers  and  other  creators.  In  this  respect,  it  is  important to  safeguard  the  rights  that 
journalists  and  publishers  have  over  the  use  of  their  works  on  the  internet,  in  particular  in 
view  of  the  rise  of  news  aggregation  services.  The  Commission  will  continue  to  examine 
these issues in the light of new legal and technical developments. 

25 

26 
27 

Out-of-commerce  works  differ  from  orphan  works  to  the  extent  that  their  authors  or  publishers  are 
known, but the book is not available in traditional or in the new electronic channels of trade. Orphan 
works are works where the author is not known or, even if known, cannot be located. 
http://www.europeana.eu/portal/. 
http://ec.europa.eu/internal_market/copyright/copyright-infso/copyright-infso_en.htm#otherdocs. 

EN 

13 

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Open  access  as  a  way  of  maximising  the  dissemination  of  research  results  is  a  relatively 
recent  phenomenon.  Different  ways  to  achieve  open  access  exist,  in  particular  open  access 
publishing (for example in open access journals) and self-archiving by authors in institutional 
or subject-based repositories. The potential of open access to increase access to knowledge is 
already widely recognised among the science community, and is being further explored.28 

3.3.6.  Performers' rights  

The Commission is committed to ensuring that all forms of creativity are rewarded. In an age 
that thrives on multi-media formats, it is often the case that performers, including professional 
ones,  are  not  duly  recognised  and  rewarded  for their  creative  input  to  an  artistic  work.  One 
way  to  achieve  a  fair  and  level  playing  field  amongst  creators  is  to  bring  the  term  of 
protection of performers in the music field more in line with that of authors. The Commission 
has made such a proposal29 and expects its adoption in the very near future. The benefits of 
this early deliverable, as part of the Commission's overall copyright policy, will also extend to 
producers  whose  increased  revenue  streams,  particularly  from  the  internet,  will  encourage 
new talent and incentivise producers to invest in new musical acts. 

3.3.7.  Audiovisual works 

Getting the conditions right for smooth, easier and technologically neutral solutions for cross-
border  and  pan-European  licensing  in  the  audiovisual  sector  will  help  content  producers  to 
increase the availability of content, to the benefit of European citizens. The Commission, in 
2011,  will  launch  a  consultation  on  online  distribution  of  audiovisual  works  with  a  view  to 
reporting in 2012. The consultation will address copyright issues, video-on-demand services, 
their  introduction  in  the  media  chronology,  the  cross-border  licensing  of  broadcasting 
services, licensing efficiency and the aspect of promotion of European works. The audiovisual 
Green Paper will also address the status of audiovisual authors and their participation in the 
benefits of online revenue streams. 

3.3.8.  Artists' resale right 

In October 2011, the Commission will report on the implementation and effects of the Resale 
Right Directive.30 It is currently conducting a public consultation to address a wide range of 
questions  relating  to  the  implementation  of  this  Directive,  including:  the  impact  of  the 
Directive  on  the  internal  market,  on  the  competitiveness  of  the  EU  market  in  modern  and 
contemporary art, on the effect of the introduction of the resale right in those Member States 
that  did  not  apply  the  resale  right  in  national  law  prior  to  the  entry  into  force  of  the 
Directive,31 and on the fostering of artistic creativity. 

28 

29 
30 

31 

The Digital Agenda for Europe (p. 23) highlights that knowledge transfer activities should be managed 
effectively  and  supported  by  suitable  financial  instruments  and  publicly  funded  research  should  be 
widely  disseminated  through  Open  Access  publication  of  scientific  data  and  papers.  The  Innovation 
Union  Communication  announces  that  the  Commission  will  promote  open  access  to  the  results  of 
publicly funded research and that it will aim to make open access to publications the general principle 
for projects funded by the EU Research Framework Programmes (Commitment 20). 
COM (2008) 464 final. 
Directive  2001/84/EC  of  27  September  2001  on  the  resale  right  for  the  benefit  of  the  author  of  an 
original work of art, OJ L272, 13.10.2001, p. 32.  
Some  Member  States  benefit  from  an  exemption  to  apply  the  resale  right  to  the  works  of  deceased 
artists  which  expires  on  1  January  2012.  Trade  in  works  subject  to  the  hereditary  resale  right  is  four 

EN 

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3.4. 

The issue of complementary protection of intangible assets 

Current EU legislation on the protection of IPR is complemented by national rules on certain 
practices of "competing at the edge of the law" which often lie at the boundaries between the 
protection of industrial property and other areas of law. 

3.4.1.  Trade secrets and parasitic copies 

One example is the protection of trade secrets.32 Trade secrets are valuable intangible assets of 
a  company  such  as  a  technology,  a  business  or  marketing  strategy,  a  data  compilation  (for 
example, a customer list) or a recipe. The legal regimes in the Member States and the level of 
protection granted throughout the EU differ considerably. 

A  number  of  Member  States  have  specific  civil  law  provisions  on  trade  secrets:  Bulgaria, 
Czech  Republic,  Denmark,  Estonia,  Germany,  Italy,  Lithuania,  Poland,  Portugal,  Slovakia, 
Slovenia,  Spain,  and  Sweden.  Some  of  these  additionally  provide  for  criminal  sanctions. 
However, a significant number of Member States do not have any specific provisions of civil 
law  on  trade  secrets:  Belgium,  Cyprus,  United  Kingdom,  Ireland,  Finland,  Luxembourg, 
Malta,  the  Netherlands,  Romania,  and  France  (although  the  French  IP  Code  regulates  some 
aspects  of  it).  Trade  secrets  can  nevertheless  be  protected,  at  least  in  part,  by  other  means, 
such as a general cause of prohibition of unfair competition, tort law, contract law, labour law 
and criminal law. 

The  significant  differences  in  national  laws  on  the  nature  and  scope  of  trade  secrets 
protection,  as  well  as  regards  the  available  means  of  redress  and  respective  remedies, 
inevitably  result  in  different  levels  of  protection;  with  the  consequence  that,  depending  on 
their  location,  some  companies  are  better  equipped  than  others  to  face  the  challenge  of  an 
information  based  economy.  In  recent  years,  trade  secrets  have  become  increasingly 
vulnerable  to  espionage  attacks  from  the  outside,33  in  particular  due  to  enhanced  data 
exchange and use of the internet, and they are also more and more threatened from the inside 
of the company: according to a private sector study, employee theft of sensitive information, 
e.g., is ten times costlier than accidental loss on a per-incident basis.34 In other circumstances 
however,  trade  secrets  can  also  be  invoked  to  withhold  critical  information  to  hamper 
innovation  and  technical  developments  by  competitors.  Considering  the  complexity  of  this 
issue and its various implications, the Commissions needs to pursue its reflection and gather 
comprehensive evidence before taking a position on a possible way forward. 

Another area of interest is the protection against so-called 'parasitic copies' or 'look-alikes'.35 
Parasitic copies are designed to resemble existing products of well established brands while 

e.g.  Bundesministerium  des 

times greater than trade in works by living artists. In these circumstances, the Commission's report will 
be prospective in nature. 
Trade secrets refer to know-how that has not or not yet been registered as industrial property rights but 
that is actually or potentially valuable to its owner and not generally known or readily ascertainable by 
the public, and which the owner has made a reasonable effort to keep secret. 
See 
http://www.bmi.bund.de/SharedDocs/Downloads/DE/Broschueren/2010/vsb2009.pdf?__blob=publicati
onFile. 
Forrester  Consulting  (study  carried  out  on  behalf  of  RSA  and  Microsoft),  'The  Value  of  Corporate 
Secrets:  How  Compliance  and  Collaboration  Affect  Enterprise  Perceptions  of  Risk.',  March  2010, 
available at http://www.rsa.com/go/press/RSATheSecurityDivisionofEMCNewsRelease_4510.html. 
Referred to in some jurisdictions as 'slavish imitations'. 

Innern,  Verfassungsschutzbericht  2009, 

available 

at 

32 

33 

34 

35 

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maintaining certain differences that prevent them from qualifying as counterfeits. They may 
confuse consumers who either do not pay much attention while shopping or who do not know 
the brand well enough to recognise the differences. 

Also this phenomenon is dealt with by Member States using different concepts and providing 
different  levels  of  protection.  Thus,  while  some  Member  States  have  specific  provisions  on 
parasitic copying under unfair competition law (Austria, Germany, Czech Republic, Spain), in 
some others parasitic copying is dealt with under a catch-all or general clause of prohibition 
of  unfair  competition  (Belgium,  Denmark,  Finland).  Other  Member  States'  laws  do  not 
contain any provisions on unfair competition applicable to parasitic copying and such matters 
are  dealt  with  by  the  Civil  Code,  either  in  specific  provisions  (Italy),  or  by  the  provisions 
generally applicable to tort (France, The Netherlands). Finally, in the United Kingdom there is 
no law on unfair competition, and there are no specific provisions on parasitic copying: rather 
the tort of passing off must be used. For this reason, the effectiveness of the protection varies 
considerably. 

The  Commission  has  embarked  on  work  to  determine  the  economic  impact  of  the  current 
fragmentation of the legal framework with a view to the protection of trade secrets and against 
other  practices  of  "competing  at  the  edge  of  the  law",  such  as  parasitic  copying.  This  work 
will  include  a  comprehensive  external  study  and  a  stakeholder  consultation  to  examine  the 
actual  economic  and  societal  impact  of  these  practices.  It  will  also  assess  the  economic 
benefits that would derive from an EU approach in these areas. 

3.4.2.  Non-agricultural geographical indications 

Geographical indications (GIs) are a tool for securing the link between a product's quality and 
its geographical origin. This allows for niche marketing, brand development and reputation-
based marketing. 

However, for the protection of non-agricultural products, Member States offer different legal 
systems (for instance, through competition or consumer protection law, or through collective 
or  certification  marks)  and  only  on  third  of  them  have  developed  specific  legislation 
considering  GIs  as  a  specific  IPR.  This  fragmentation  of  the  legal  framework  to  grant 
protection for GIs for non-agricultural products may negatively affect the functioning of the 
internal market. Besides, protection for GIs for non-agricultural products is also an important 
issue in bilateral and multilateral trade negotiations with third countries. 

The Commission is about to launch a feasibility study on the issue of GIs for non-agricultural 
and non-food products, encompassing all areas of law in this context. The work will notably 
provide  an  analysis  of  the  existing  legal  frameworks  in  the  Member  States,  an  in-depth 
assessment  of  the  stakeholders'  needs  and  the  potential  economic  impact  of  protection  for 
non-agricultural  GIs.  Drawing  on  the  results  of  this  work,  following  further  reflection  and 
comprehensive  evidence  gathering,  the  Commission  will  decide  on  the  appropriate  way 
forward. 

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3.5. 

Enhanced fight against counterfeiting and piracy36 

Products  and  services  based  on  IPR  can  be  difficult  and  expensive  to  create  but  cheap  to 
replicate and reproduce. Organised and large-scale infringement of IPR has become a global 
phenomenon and is causing worldwide concern. The latest OECD study (2009) estimates that 
international  trade  in  counterfeit  goods  grew  from  just  over  USD  100  billion  in  2000  to 
USD 250  billion  in  2007.37  According  to  the  OECD,  this  amount  is  larger  than  the  national 
GDPs  of  about  150 economies.  The  figures  published  by  the  European  Commission  on 
national customs  activities  reflect that the number of registered cases of goods  suspected of 
infringing  IPR  rose  from  26,704  in  2005  to  43,572  in  2009,  an  increase  of  more  than 
60 percent in five years.38 

Infringers  of  IPR  deprive  EU  creators  of  appropriate  rewards,  create  barriers  to  innovation, 
harm competitiveness, destroy jobs, decrease public finances and possibly threaten the health 
and  safety  of  EU  citizens.  A  study  carried  out  by  the  Centre  for  Economics  and  Business 
Research  (CEBR)  stresses  that  losses  caused  by  counterfeiting  and  piracy  could  reduce  EU 
GDP  by  EUR  8  billion  annually.39  Counterfeiting  also  generates  large  profits  for  organised 
crime  groups  and  distorts  the  internal  market  by  encouraging  illicit  practices  within 
businesses.40 

The EU has begun to address this challenge through civil law measures allowing right holders 
to  enforce  their  intellectual  property  rights,41  through  the  EU  Customs  Regulation 
N°1383/200342  which  allows  for  the  detention  of  goods  suspected  of  infringing  IPR  at  the 
EU's external borders, and by launching, in 2009, a European Observatory on Counterfeiting 
and  Piracy.43  The  Observatory's  main  objectives  are  to  collect  and  report  data  on  the 
economic and societal implications of counterfeiting and piracy and to create a platform for 
representatives from national authorities and stakeholders to exchange ideas and expertise on 
best practices. 

The success of these first measures shows that the EU is on the right path. The initial work of 
the Observatory has triggered positive responses from the European Parliament, the Member 
States and private-sector stakeholders. However, these reactions also show that there is need 
to expand the current work. Furthermore, the Commission report on the application of the IPR 

36 

37 

38 

39 

40 

41 

42 

43 

The  term  "counterfeiting  and  piracy"  should  be  understood  as  covering  the  infringement  of  all 
intellectual property rights as referred to in the Statement by the Commission concerning Article 2 of 
Directive 2004/48/EC, OJ L94, 13.4.2005, p. 37. 
OECD,  Magnitude  of  counterfeiting  and  piracy  of  tangible  products  –  November  2009  update, 
http://www.oecd.org/document/23/0,3343,en_2649_34173_44088983_1_1_1_1,00.html. 
http://ec.europa.eu/taxation_customs/customs/customs_controls/counterfeit_piracy/statistics/ 
index_en.htm. 
CEBR  (2000),  The  Impact  of  Counterfeiting  on  four  main  sectors  in  the  European  Union,  Centre  for 
Economic and Business Research, London. 
See 
2011 
http://www.europol.europa.eu/publications/European_Organised_Crime_Threat_Assessment_(OCTA)/
OCTA_2011.pdf. 
Directive  2004/48/EC  of  29  April  2004  on  the  enforcement  of  intellectual  property  rights,  OJ  L157, 
30.4.2004, p. 16. 
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 , 02.08.2003, p. 7. 
See Communication on enhancing the enforcement of intellectual property rights in the Internal Market 
of 11 September 2009, COM (2009) 467. 

-  EU  Organised  Crime  Threat  Assessment', 

e.g.  Europol, 

'OCTA 

EN 

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Enforcement  Directive  published  in  December  201044  confirmed  the  need  to  strengthen  the 
existing  legislative  framework  for  enforcement  and  to  supplement  this  by  voluntary 
arrangements between stakeholders. Finally, the review of the EU Customs Regulation, which 
included  a  public  consultation  in  2010,  concluded  that  the  legislation  should  be  revised  to 
extend the scope for customs control, as well as to clarify some procedures to safeguard the 
interests of legitimate traders. 

3.5.1.  Public awareness 

Consumers tend not to be aware of the value of IPR and the negative economic and societal 
impact of counterfeiting and piracy and the potential dangers related to counterfeit products.45 
Better information of citizens is therefore an important factor for a successful IP policy. Also 
the  European  Parliament  has  called  on  the  Commission,  the  Member  States  and  on 
stakeholders to raise consumers' awareness, especially among young people, and enable them 
to understand what is at stake in intellectual property.46 

The  Commission  will  therefore  take  action,  in  close  cooperation  with  the  European 
Parliament  and  with  stakeholders,  to  foster  appropriate  public  awareness  campaigns.  The 
European  Observatory  on  Counterfeiting  and  Piracy  is  also  expected  to  contribute  to  this 
objective. 

3.5.2.  A  more  sustainable  structure  for  the  European  Observatory  on  Counterfeiting  and 

Piracy and new tasks 

To  meet  the  challenges  requires  solid  evidence  of  the  scope  of  the  problem,  improved 
knowledge about the origins of counterfeit and pirated goods, of the distribution channels and 
the different actors involved. Furthermore, as trends are changing quickly, in particular in the 
online sphere, stakeholders and public administrations have to cooperate more. 

The Commission, therefore, proposes to extend the tasks currently assigned to the European 
Observatory  on  Counterfeiting  and  Piracy.  In  future,  these  tasks  should  encompass  also  the 
design and organisation of public-awareness campaigns, the provision of appropriate training 
measures  for  enforcement  authorities,  conducting  research  on  innovative  enforcement  and 
detection systems that on the one hand allow licit offers to be as innovative and attractive as 
possible  and  on  the  other  allow  for  more  effective  enforcement  against  counterfeiting  and 
piracy  (e.g.  traceability  systems),  and  the  coordination  of  international  cooperation  on 
capacity  building  with  international  organisations  and  third  countries.  To  this  end,  the 
Observatory  will  need  a  more  sustainable  structure  in  terms  of  expertise,  resources  and 
technical equipment. The tasks of the Observatory should therefore be entrusted to the Office 
for Harmonisation in the Internal Market (OHIM) which, in relation to these tasks, should be 
mandated to cover all categories of IPR. 

44 
45 

46 

EN 

2009 

study 

Eurobarometer 

COM (2010) 779, http://ec.europa.eu/internal_market/iprenforcement/directives_en.htm. 
A 
at: 
http://ec.europa.eu/public_opinion/)  revealed  that  only  between  55%  (LT  and  DK)  and  84%  (FR)  of 
consumers  are  aware  that  there  are  EU  rules  on  counterfeiting  and  piracy.  This  was  a  much  lower 
awareness  percentage  than  in  other  policy  areas.  Furthermore,  the  study  revealed  that  that  one  out  of 
five EU citizens had, on at least one occasion, unintentionally bought a counterfeit product. 
European Parliament Resolution of 22 September 2010, 2009/2178(INI). 

by  DG  MARKT 

(available 

carried 

out 

18 

   EN 

 
                                                 
In  that  context,  the  OHIM  will  also  improve  day-to-day  cooperation  between  enforcement 
authorities and cooperation with private stakeholders, inter alia, by building a new electronic 
information  exchange  and  an  early  warning  system  on  counterfeit  and  pirated  products.  An 
external  study  establishing  an  inventory  of  existing  IT  systems  that  could  be  used  to  build 
such a network was published by the Commission in 2010.47 This study will form the basis for 
further  consultations  and  assessments  aimed  at  identifying  cost-efficient  solutions  and 
creating  synergies  with  existing  systems  and  ongoing  projects,  with  a  view  to  presenting  a 
concept  for  such  an  electronic  network  by  end  2012.  The  network  would  operate  in  full 
compliance with the EU data protection legislation. 

3.5.3.  A review of the IPR Enforcement Directive 

In parallel, the Commission intends to review the IPR Enforcement Directive 2004/48/EC in 
Spring  2012.  The  recently  published  Report  on  the  application  of  the  IPR  Enforcement 
Directive48  shows  that  the  challenge  lies  in  reconciling  IPR  enforcement  in  the  digital 
environment.  The  Commission  will  identify  ways  to  create  a  framework  allowing,  in 
particular,  combating  infringements  of  IPR  via  the  internet  more  effectively.  Any 
amendments should have as their objective tackling the infringements at their source and, to 
that end, foster cooperation of intermediaries, such as internet service providers, while being 
compatible with the goals of broadband policies and without prejudicing the interests of end-
consumers. The Commission will ensure that such amendments respect all fundamental rights 
recognised by the EU Charter of Fundamental Rights, in particular also the rights to private 
life,  protection  of  personal  data,  freedom  of  expression  and  information  and  to  an  effective 
remedy.49 

In  parallel,  the  Commission  will  continue  its  efforts,  on  the  basis  of  the  Memorandum  of 
Understanding  signed  between  stakeholders  on  4  May  2011,50  to  explore  to  what  extent,  in 
particular,  the  sale  of  counterfeit  goods  over  the  internet  can  be  reduced  through  voluntary 
measures,  involving  the  stakeholders  most  concerned  by  this  phenomenon  (right  holders, 
internet platforms and consumers). 

3.6. 

The international dimension of IPR 

The increase in international trade has put the spotlight on the international dimension of IPR. 
Globalisation  provides  Europe  with  immense  opportunities  to  export  and  trade  in  its  IP-
intensive products, services and know-how to third-countries. At the same time, the growth in 
IP  infringements  creates  the  need  to  focus  on  a  robust  global  enforcement  strategy,  in 
accordance with fundamental rights. 

The European Parliament noted in a Resolution51 that "the biggest challenge for the internal 
market  lies  in  combating  infringements  of  intellectual  property  rights  at  the  EU's  external 
borders and in third countries". 

47 
48 
49 
50 
51 

See http://ec.europa.eu/internal_market/iprenforcement/documents_en.htm. 
http://ec.europa.eu/internal_market/iprenforcement/directives_en.htm. 
The right to intellectual property is recognised as a fundamental right in Article 17(2) of the Charter. 
http://ec.europa.eu/internal_market/iprenforcement/stakeholders_dialogues_en.htm#Sale. 
http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P7-TA-2010-
0340. 

EN 

19 

   EN 

 
                                                 
This reasoning was already made when developing the Commission's 2004 "Strategy for the 
Enforcement  of  Intellectual  Property  Rights  in  Third  Countries"52  which  is  currently  being 
reviewed.  In  addition,  the  Commission  is  committed  to  ensuring  the  coherence  of  its  IPR 
policy with development policy objectives.53 

3.6.1.  Multilateral initiatives, including co-ordination with international organisations 

The  Commission  will  pursue  its  objective  to  enhance  respect  for  IPR  standards  at  an 
international  level  through  enhancing  effective  cooperation  and  engagement  with  third 
countries in international fora, in particular through its work  in  the  context  of  WIPO,  WTO 
and  UPOV  aimed  at  improving  protection  and  enforcement  of  IPR  at  global  level.  It  will 
contribute to the promotion of technological innovation and to the transfer and dissemination 
of  technology,  to  the  mutual  advantage  of  producers  and  users  of  technological  knowledge 
and  in  a  manner  conducive  to  social  and  economic  welfare,  and  to  a  balance  of  rights  and 
obligations.54  Currently  the  actions  of  the  EU  and  of  international  organisations  often  lack 
sufficient coordination thereby hampering their effectiveness.55 

In  the  context  of  WIPO,  the  Commission will continue to  support large-scale ratification of 
the 1996 WIPO Internet Treaties and their proper implementation into domestic laws. It will 
also foster efforts to produce the appropriate tools for assessing the functioning of copyright 
systems. It will support ongoing efforts to combat the global phenomenon of signal piracy and 
internet retransmissions of pirated broadcast signals. The Commission will also redouble its 
efforts  to  create  a  WIPO  agreement  on  the  cross-border  delivery  of  materials  in  special 
formats  tailored  to  the  needs  of  the  reading  disabled  in  line  with  the  objectives  of  the  UN 
Convention on the Rights of Persons with Disabilities. In June 2010, the EU already proposed 
to  WIPO  a  Joint  Recommendation  concerning  the  improved  access  to  works  protected  by 
copyright for persons with a print disability. 

At international level, the Patent Law Treaty has already harmonised and streamlined formal 
procedures  in  respect  of  national  and  regional  patent  applications  and  patents.  The  EU  will 
therefore continue to support discussions at WIPO on substantive patent law harmonization. 
This  would  enhance  patent  quality  and  reduce  costs,  for  the  benefit  of  users  of  the  patent 
system world-wide. 

The  EU  should  also  be  in  a  position  to  ratify  the  Anti-Counterfeiting  Trade  Agreement 
(ACTA)56  once  it  has  been  signed  by  the  contracting  parties  in  the  course  of  2011.  ACTA, 
which is fully in line with the EU acquis, is an important step in improving the international 

52 
53 
54 

55 

56 

OJ C129 of 26.5.2005. 
In line with Article 21 of TEU and Article 208 of TFEU. 
Article 7 of the 1994 TRIPS Agreement. The Commission will fully support the implementation of the 
commitments taken in Istanbul on 13 May 2011 with a view to providing flexibilities for the protection 
of public health and, in particular, to promote access to medicines for all and to encourage the provision 
of  assistance  to  developing  countries  in  this  regard,  whilst  ensuring  that  any  such  flexibilities  are 
balanced with the legitimate rights of right holders. 
See  e.g.  the  findings  of  the  ADE  study,  commissioned  by  the  Commission's  Directorate  General  for 
Trade,  'Evaluation  of  the  Intellectual  Property  Rights  Enforcement  Strategy  in  Third  Countries', 
November 2010, http://trade.ec.europa.eu/doclib/cfm/doclib_section.cfm?sec=180&langId=en. 
The  ACTA 
(available  at  http://ec.europa.eu/trade/creating-opportunities/trade-topics/intellectual-
property/anti-counterfeiting/) builds on the 1994 TRIPS agreement to improve global standards for the 
enforcement of IPR. It addresses the way in which companies and individuals can enforce their rights in 
court, at the borders and on the Internet. 

EN 

20 

   EN 

 
                                                 
fight against IPR infringements, in cooperation with countries sharing the same concerns and 
views. The Commission will table its proposal for an EU decision to sign the agreement in the 
coming weeks. 

3.6.2.  Bilateral negotiation and co-operation on IP protection with third countries 

The  EU  will  continue  to  negotiate  IPR  provisions  in  its  free  trade  agreements  (FTAs)  with 
third countries. In negotiating FTAs, the IPR clauses should as far as possible offer identical 
levels  of  IPR  protection  to  that  existing  in  the  EU  while  taking  into  account  the  level  of 
development  of  the  countries  concerned.  Cooperation  through  political  and  technical 
dialogues also form part of the EU's strategy on the trade related elements of IPR. 

The  right  balance  also  needs  to  be  struck  between  protection  of  IPR  in  third  countries  and 
access to knowledge. IPR policy therefore can support inclusive and sustainable growth if it is 
part  of  an  overall  development  strategy  aiming  at  enhancing  the  business  environment, 
promoting research calibrated to development needs and ensuring that health, biodiversity or 
food security objectives are properly taken into account. Affordable technology transfers that 
meet basic needs of populations are key for the least developed countries (LDCs). For such 
transfers to happen, the EU and its Member States must revisit the incentives provided to their 
enterprises  or  institutions  for  the  purpose  of  promoting  and  encouraging  innovation  and 
technology  transfer  to  the  benefit  of  LDCs.  As  an  example  of  a  possible  avenue,  the  pilot 
Global Access in Action partnership involving the WIPO aims at promoting best practices in 
IP licensing for the benefit of LCDs without compromising core commercial markets for IP 
owners.57 In this context, further reflection is needed as to what extent an exemption of LDCs 
from TRIPS obligations beyond 2013 should be pursued. 

Developing and emerging countries are particularly vulnerable to activities infringing IPR and 
are  sometimes  used  by  complex  criminal  networks  as  manufacturing  and  distribution  bases. 
Training measures and capacity-building activities of the EU are therefore essential in order to 
support  these  countries  in  their  fight  against  organised  intellectual  property  infringements. 
Such measures will be fostered through the Office for Harmonisation in the Internal Market 
(OHIM) in the context of its work on the European Observatory on Counterfeiting and Piracy 
and through other programmes managed by the Commission. Cooperation on this subject will 
focus  on  those  countries  where  the  highest  impact  on  enforcement  capacity  and  value  for 
money can be expected. 

3.6.3.  Enhanced IPR protection and enforcement at the EU border 

At the EU border, customs authorities are in a privileged position to take effective action. The 
EU Customs Action Plan to combat IPR infringements for the years 2009-201258 sets as the 
priority  for  the  Commission  and  the  Member  States  taking  action  to  strengthen  customs 
enforcement.  In  this  context,  the  Commission  is  proposing  a  new  regulation  replacing 
Regulation  1383/2003,  with  the  objective  of  strengthening  enforcement  while  streamlining 
procedures. A central EU database called COPIS is being developed to store all companies' 
applications for customs action, which are foreseen in the said Regulation. National customs 
authorities  and  the  Commission  should  make  joint  efforts  to  enforce  IPR  effectively.  For 

57 

58 

EN 

The  "Global  Access  In  Action"  project,  incubated  by  the  World  Economic  Forum  Global  Agenda 
and  private  partners, 
Council  on 
http://globalaccessinaction.org. 
Council Resolution of 16 March 2009, OJ C71, 25.3.2009, p. 1. 

supported  by  WIPO 

and  other  public 

and 

IP 

21 

   EN 

 
                                                 
example, the Commission  will establish an expert group and a network of national customs 
contact points in order to prevent the import of IPR-infringing goods sold over the Internet. 

Moreover, combating IPR infringements at the border also means preventing the exportation 
of  illicit  goods  to  the  EU.  The  Commission  and  the  Member  States  are  actively  engaged  in 
customs cooperation with both source countries and other consuming countries by means of 
specific  initiatives  such  as  the  EU-China  Action  Plan  on  customs  cooperation  on  IPR 
enforcement. The Plan should provide the basis for reducing the scale of IPR infringements in 
the bilateral trade between the EU and China. 

4. 

CONCLUSIONS 

All forms of IPR are cornerstones of the new knowledge-based economy. Much of the value, 
market capitalization and competitive advantage of Europe's companies will in future reside 
in  their  intangible  assets.  IP  is  the  capital  that  feeds  the  new  economy.  Better  use  of  IP 
portfolios by means of licensing and commercial exploitation is central to successful business 
models. 

The potential of the digital single market where creators, service providers and consumers can 
all benefit and thrive cannot be underestimated. Europe must urgently harness the human and 
technological  resources  at  its  disposal  to  create  a  vibrant  and  competitive  online  market  for 
creative transactions, allowing the largest possible dissemination of digital goods and services 
for the benefit of all. 

This  over-arching  IPR  strategy  addresses  this  challenge.  Fulfilment  of  the  Commission's 
ambitious work programme detailed above will require a sustained level of commitment at the 
European  Parliament,  Council,  Commission  and  Member  State  levels.  Fully  capitalising 
Europe's  rich  IPR  resources  requires  commitment  to  make  full  use  of  Europe's  intellectual 
assets. As the above initiatives demonstrate, more work needs to be done to turn these assets 
into true engines for growth and high quality employment. 

As new challenges and new priorities emerge in the light of experience and of rapid changes 
in technology and society, the Commission is committed to review this strategy and draw the 
appropriate conclusions in close cooperation with stakeholders. 

EN 

22 

   EN 

 
 
ANNEX: LIST OF FUTURE COMMISSION ACTIONS 

No  Action 

Description 

Timing 

1 

2 

3 

Unitary 
protection 

patent 

Proposals  for  Regulations  of  the  European  Parliament  and  of  the  Council  on  (1)  a  unitary  EU 
patent and (2) translation arrangements. 

The Commission adopted proposals on points (1) 
and (2) on 13 April 2011.  

IPR  valorisation 
instrument 

Comprehensive  analysis  on  the  basis  of  ongoing  feasibility  study  and  report  to  the  European 
Council. 

Report to be submitted before the end of 2011. 

Proposals will aim at rendering the EU trade mark system more effective, efficient and coherent. 

Second half 2011 

Revision  of 
the 
Community Trade 
Mark  Regulation 
and 
the  Trade 
Mark Directive 

4 

Orphan works 

Legislative proposal for a Directive on certain permitted uses of orphan works. 

First half 2011 

5 

6 

7 

8 

EN 

Multi-territorial 
collective 
management 
copyright 

of 

Proposal for a legal instrument to create a European framework for online copyright licensing in 
order to create a stable framework for the governance of copyright at the European level. 

Second half 2011 

Audiovisual 
works 

Green Paper public consultation on various issues relating to the online distribution of audiovisual 
works. 

Second half 2011 

Further  measures 
the  area  of 
in 
copyright 

To report following the stakeholder consultation and assess the need for further measures to allow 
EU citizens, online content services providers and right holders to benefit from the full potential of 
the digital internal market. 

2012 

Private 
levies  

copying 

Appointment of a high-level mediator with a view to brokering stakeholder agreement on private 
copying levies.  

Second half 2011 

23 

EN 

 
  
Timing 

Second half 2012 

No  Action 

Description 

Stakeholder consultation. 

User-generated 
content 

European 
Copyright Code 

Assessment and discussions with stakeholders and reporting back. 

2012 and beyond 

of 

Report on the application of Directive 2001/29/EC as required by Article 12 of that Directive. 

2012 

Review 
Directive 
2001/29/EC 

European 
Observatory 
Counterfeiting 
and Piracy  

on 

Proposal  for  a  Regulation  on  entrusting  the  Office  for  Harmonisation  in  the  Internal  Market 
(OHIM)  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. 

May 2011 

Rights 
complementing 
IPR 

Study to assess the economic and societal impact of infringements of trade secrets and practices of 
"competing at the edge of the law" like parasitic copies and to assess the economic benefits of an 
EU approach in this area. 

End 2012 

Non-agricultural 
geographical 
indications  

Feasibility  study  to  consider  an  EU-wide  protection  of  GIs  for  non-agricultural  products.  This 
study  will  provide  an  analysis  of  the  existing  legal  frameworks  in  the  Member  States  and  an  in-
depth  assessment  of  the  stakeholders'  needs  and  the  potential  economic  impact  on  protection  for 
non-agricultural GIs.  

Second half 2012 

Review of the IPR 
Enforcement 
Directive 

Review  of  the  Directive  aimed  at  creating  a  framework  allowing,  in  particular,  to  combat  more 
effectively IPR infringements via the internet at their source. 

First half 2012 

9 

10 

11 

12 

13 

14 

15 

EN 

24 

EN 

 
  
 
16 

17 

18 

19 

No 

Action 

Description 

of 
Regulation 

Proposal for a new Customs Regulation to strengthen customs enforcement of Intellectual Property 
Rights and create conditions for effective action, while streamlining procedures. 

Replacement 
the 
concerning 
customs 
against 
suspected 
infringing 
intellectual 
property rights  

action 
goods 
of 

Timing 

May 2011 

Voluntary 
measures 
stakeholders 
targeting 
infringements 

Stakeholder  agreement  (Memorandum  of  Understanding)  on  the  sale  of  counterfeit  goods  over 
the internet and follow-up process. 

MoU  signed  on  4  May  2011,  evaluation  and 
review by mid-2012. 

of 

IPR 

EU 
COPIS 

database 

Development of database to ensure efficient management of companies' applications for customs 
action and produce statistics of customs detentions. 

First half 2012 

Redefined  strategy  to  adapt  it  to  recent  needs  and  evolutions,  to  ensure  higher  standards  of  IPR 
customs enforcement in third countries and cooperation in the framework of trade agreements. 

End 2011 

Review of the 
Commission's 
2004 strategy for 
the protection and 
enforcement of IP 
rights in third 
countries 

EN 

25 

EN