Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on entrusting the Office for Harmonisation in the Internal Market (Trade Marks and Designs) with certain tasks related to the protection of intellectual property rights, including the assembling of public and private sector representatives as a European Observatory on Counterfeiting and Piracy
Date: 2011-05-24
Institutions: European Commission
Subjects: European Union Intellectual Property Office, centralisation of information, fraud, illicit trade, industrial counterfeiting, interinstitutional cooperation (EU), public awareness campaign

EUROPEAN COMMISSION 

Brussels, 24.5.2011 
COM(2011) 288 final 

2011/0135 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on entrusting the Office for Harmonisation in the Internal Market (Trade Marks and 
Designs) with certain tasks related to the protection of intellectual property rights, 
including the assembling of public and private sector representatives as a  
European Observatory on Counterfeiting and Piracy 

{SEC(2011) 612 final} 
{SEC(2011) 613 final} 

 
 
  
 
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Creativity,  knowledge  and  innovation  are  drivers  of  our  future  growth.  The  Europe  2020 
Strategy1 has therefore identified smart growth as one of three priorities for the Commission’s 
future  policymaking.  It  also  stresses  the  need  to  boost  the  EU’s  research  performance, 
promote  innovation  and  knowledge  transfer  and  ensure  that  innovative  ideas  can  be  turned 
into new products and services that create growth and quality jobs. 

The  Commission  has  committed  itself  to  supporting  these  objectives  by  creating  a  high-
standard intellectual property (IP) culture2. One threat to a successful IP policy, and therefore 
to  growth  and  competitiveness,  lies  in  the  increase  of  intellectual  property  infringements 
observed in recent years. For instance, in 2009, the OECD estimated that international trade in 
counterfeit and pirated goods accounted for USD 250 billion in 2007, which is larger than the 
national GDPs of 150 economies3. Also, figures published by EU customs authorities reflect a 
clear  increase  in  customs  activity,  with  a  rise  in  registered  cases  from  26,704  in  2005  to 
43,572 in 2009, i.e. up by about 60 % in five years4. Concerning piracy (or online copyright 
infringements), the economic impact is less clear at this stage, due to the very recent nature of 
this  phenomenon.  However,  the  most  recent  industry  study  carried,  out  in  2010,  by  Paris-
based  TERA  Consultants  and  commissioned  by  the  International  Chamber  of  Commerce’s 
Business Action to Stop Counterfeiting and Piracy (BASCAP) initiative, indicates that EUR 
10 billion and more than 185,000 jobs were lost due to piracy in the music, movie, TV, and 
software industries in the EU in 20085.  

Various  studies  published  by  industry  and  international  organisations  confirm  the  steady 
growth of trade in counterfeit and pirated goods and conclude that it: 

– 

– 

– 

– 

1 

2 

3 

4 

5 
6 

7 
8 

significantly reduces investment in innovation and destroys jobs6; 

threatens the health and safety of European consumers7; 

creates serious problems for European SMEs8; 

results in tax loss revenues due to reductions in declared sales9; 

Communication  from  the  Commission:  ‘Europe  2020:  A  strategy  for  smart,  sustainable  and  inclusive 
growth’ of 3 March 2010 - COM(2010) 2020. 
See in particular Commission Communication of 16 July 2008: ‘An industrial property rights strategy 
for Europe’ - COM(2008) 465. 
OECD,  Magnitude  of  counterfeiting  and  piracy  of  tangible  products  –  November  2009  update, 
http://www.oecd.org/document/23/0,3343. 
European  Commission,  Taxation  and  Customs  Union  Directorate  General,  ‘Report  on  EU  Customs 
enforcement of intellectual property rights - 2009’, 
http://ec.europa.eu/taxation_customs/customs/customs_controls/counterfeit_piracy/statistics/index_en.h
tm. 
http://www.iccwbo.org/bascap/id35360/index.html. 
TERA Consultants, 'Building a Digital Economy: March 2010, 
http://www.iccwbo.org/bascap/id35360/index.html. 
'Report on EU Customs enforcement of intellectual property rights - 2009', see footnote 4. 
Technopolis (2007), ‘Effects of counterfeiting on EU SMEs’,   
http://ec.europa.eu/enterprise/enterprise_policy/industry/doc/Counterfeiting_Main%20Report_Final.pdf 

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– 

is attractive to organised crime10. 

One  of  the  main  initiatives  to  address  this  threat  launched  by  the  Council11  and  the 
Commission in 200912 was to set up a European Observatory on Counterfeiting and Piracy to 
improve understanding on intellectual property rights (IPR) infringements ('the Observatory'). 

In line with the Council's request of 2008, the Observatory in its current form is a centre of 
expertise with no legal personality managed by the Commission services. Its role is twofold: 
(i) becoming the central resource for gathering, monitoring and reporting information and data 
related  to  all  IPR  infringements  and  (ii)  be  used  as  a  platform  for  cooperation  between 
representatives from national authorities and stakeholders to exchange ideas and expertise on 
best  practices,  to  develop  joint  enforcement  strategies  and  to  make  recommendations  to 
policy-makers.  The  management  of  the  Observatory  encompasses  a  series  of  tasks  and 
activities under the responsibility of Commission services. 

The Observatory is currently run by three Commission civil servants (two administrators and 
one assistant) who, in addition also carry out all policy work related to the Observatory.  

The  latest  Council  Resolution  relating  to  the  Observatory  added  further  responsibilities,  by 
inviting it to assess the needs for implementation of EU-level training programmes for those 
involved  in  combating  counterfeiting  and  piracy13.  A  September 2010  European  Parliament 
Resolution  additionally  called  for  the  Observatory  to  compile  scientific  research  data  on 
counterfeiting and IPR regulation14. Finally, a recently published study commissioned by the 
Commission’s  Directorate  General  for  Trade  recommends  that  the  Observatory  should 
become  a  single  point  of  contact  within  the  Commission,  for  external  parties,  and  an 
international point for the creation and dissemination of best practice15. 

Whereas the current circumstances of the Observatory were appropriate for the launch phase 
of  the  project,  with  its  institutional  framework  being  established  through  consultations  and 
meetings,  there  is  no  scope  for  expanding  the  Observatory’s  remit  and  developing  its 
operational  activities,  both  of  which  require  a  sustainable  infrastructure  in  terms  of  human 
resources, financing and IT equipment as well as access to the necessary expertise. 

•  Consistency with the EU’s other policies and objectives 

The  proposal’s  objectives  are  in  line  with  existing  EU  policies  and  strategies,  such  as 
Europe 202016.  They  also  fit  in  with  the  Commission’s  main  priorities  and  proposals 
concerning its IPR strategy for Europe17. 

9 

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11 
12 

13 

14 
15 

16 

Frontier  Economics,  (May  2009),  ‘The  impact  of  counterfeiting  on  Governments  and  Consumers’: 
http://www.iccwbo.org/uploadedFiles/BASCAP/Pages/Impact%20of%20Counterfeiting%20on%20Gov
ernments%20and%20Consumers%20-%0Final%20doc.pdf. 
UNICRI, ‘Counterfeiting: a global spread’, 2008, http://counterfeiting.unicri.it/report2008.php. 
Council Resolution of 25.9.2008 (OJ C 253, 4.10.2008, p. 1). 
Commission  Communication  of  11  September  2009:  ‘Enhancing  the  enforcement  of  intellectual 
property rights in the internal market’ - COM(2009) 467. 
Council Resolution of 1 March 2010 on the enforcement of intellectual property rights in the internal 
market (OJ C56, 6.3.2010, p. 1). 
European Parliament Resolution of 22 September 2010, 2009/2178(INI). 
ADE,  '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. 
COM(2010) 2020. 

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2. 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENTS 

•  Consultation of interested parties 

Since  its  inception,  the  structure  and  financing  of  the  Observatory  have  been  discussed 
regularly,  both  at  the  four  Observatory  meetings18  held  so  far  and  in  specialist  sub-group 
meetings which have brought together, since September 2009, representatives from a number 
of private sector organisations within the Observatory. 

Members of the European Parliament are kept informed about the work and developments of 
the Observatory and, on two separate occasions in 2010, the European Parliament Forum on 
counterfeiting,  contraband  and  organised  crime  openly  discussed  the  future  of  the 
Observatory  and,  in  particular,  a  possible  transfer  of  the  Observatory  to  the  Office  for 
Harmonisation in the Internal Market (OHIM). 

Also at the political level, the Council, in response to the two Commission Communications 
concerning  the  Observatory19,  adopted  two  Resolutions20  welcoming  the  creation  of  the 
Observatory and asking the Commission to elaborate on its role and its tasks. Furthermore, on 
22 September  2010  the  European  Parliament  adopted  a  report  on  the  Commission’s  2009 
Communication,  advocating  greater  involvement  of  the  OHIM  in  enforcement-related 
matters21. 

The idea of entrusting some enforcement-related activities to the OHIM has been favourably 
received  by  users  of  the  European  trade  mark  system,  who  were  consulted  as  part  of  a 
comprehensive evaluation of the trade mark system in Europe22. During further discussion in 
a  specific  workshop  at  the  Pan-European  IP  summit  2010,  held  in  Brussels  on  2  and 
3 December  201023,  the  idea  received  broad  support.  Equally,  the  proposal  was  viewed 
positively  by  the  OHIM  governing  bodies,  the  Administrative  Board  and  the  Budget 
Committee24, at their meetings in November 2010. 

In view of this specific, targeted and continuous consultation process, it was considered that 
there was no need to organise a supplementary, standard consultation exercise. 

•  Impact Assessment 

The Impact Assessment looked at three different options, each with a number of sub-options. 

17 

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19 

20 
21 

22 

23 
24 

COM(2008) 465; see also Commission Communication of 27 October 2010: ‘Towards a Single Market 
Act – for a highly competitive social market economy’ - COM(2010) 608. 
These  meetings  took  place  on  4 September  2009,  14  December  2009,  16  February  2010  and  10  June 
2010. 
Commission  Communication  of  16  July  2008:  ‘An  industrial  property  rights  strategy  for  Europe’  - 
COM(2008) 465 and COM(2009) 467. 
Council Resolutions of 25 September 2008 and of 1 March 2010. 
Resolution  of  22  September  2010  on  the  enforcement  of  intellectual  property  rights  in  the  internal 
market (2009/2178(INI)), A7-0175/2010. 
For  details  refer  to  the  text  of  the  study  prepared  the  Max  Planck  Institute  for  Intellectual  Property, 
Competition and Tax Law and available at 
http://ec.europa.eu/internal_market/indprop/tm/index_en.htm. 
http://www.premiercercle.com/sites/ip2010/overview.php. 
Both bodies are composed of representatives of Member States and of the Commission. 

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Under option 1, the Commission services would continue administering the Observatory but 
their  resources  would  be  increased  considerably.  Under  sub-option  1a,  the  work  would 
entirely  or  to  a  very  large  extent  be  done  in-house,  whereas  it  would  be  largely  outsourced 
under  option  1 b.  The  second  option  that  was  examined  would  entail  entrusting  the 
Observatory to an initiative led by the private sector that should be financed either entirely by 
the private sector (sub-option 2a), through a Commission grant (sub-option 2 b), or through a 
public-private  partnership  (PPP,  sub-option  2c).  The  third  option  analysed  in  the  Impact 
Assessment  consisted  in  entrusting  the  Observatory  either  to  an  EU  agency  to  be  newly 
created  (sub-option  3a)  or  to  an  already  existing  agency,  more  particularly  the  Office  for 
Harmonisation in the Internal Market (OHIM) in Alicante. 

Option 1a (more staff in DG MARKT) was considered to be not feasible under the current ‘no 
growth’ policy of the Commission25. Also option 2a was not considered realistic as there are 
no  indications  that  the  private  sector  would  be  prepared  to  take  on  such  a  commitment. 
Options  1b  (outsourcing  on  a  commercial  basis)  and  2b  (tasks  delivered  by  industry  led 
initiative) were considered feasible, but not suitable solutions since they would probably not 
allow access to data that are considered as sensitive by Member States’ authorities and private 
stakeholders and, in the case of option 2b, the risk of uneven positions (or even exclusion) for 
different  stakeholders  would  pose  considerable  problems  in  reaching  the  Observatory’s 
overall objectives. These disadvantages could be partially avoided in option 2c (PPP), which 
however  would  impose  on  the  EU  budget  annual  costs  of  between  EUR 2.41  million  and 
EUR 2.98 million in the first two years, and between EUR 2.61 million and EUR 3.07 million 
from the third year, depending on the design of the IT systems to be created. 

Option  3a  (a  new  EU  agency),  according  to  the  Impact  Assessment,  would  offer  a  suitable 
solution to render the Observatory operational. However, this option would bring substantial 
costs for the EU budget – between EUR 4.33 million and EUR 5.33 million in the first two 
years,  and  between  EUR  5.5  million  and  EUR  6.28  million  as  of  year  three  –  plus  a 
significant time delay in getting the agency up and running. 

Option 3b (entrusting the tasks to an existing EU agency, preferably OHIM) would allow the 
Observatory  to  have  access  to  expertise,  resources  and  financing  and  to  become  quickly 
operational.  In  budgetary  terms  it  would  offer  a  cost-efficient  solution  (with  total  costs  of 
between EUR 3.3 million and 4.3 million in the first two years and between EUR 4.74 million 
and 5.52 million as of year three) and allow costs to be covered by financial resources outside 
of the EU budget. 

The  Impact  Assessment  therefore  concluded  that  transferring  the  Observatory  to  the  OHIM 
would  be  the  preferred  option,  given  that  the  latter  has  appropriate  financing  and  structures 
and will be capable of delivering on the Observatory’s aims as soon as its basic Regulation 
has been amended. 

25 

See SEC(2007) 530. 

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3. 

LEGAL ELEMENTS OF THE PROPOSAL 

•  Summary of the proposed action 

It is proposed to entrust the Office for Harmonisation in the Internal Market with the tasks and 
activities  relating  to  the  management  of  the  European  Observatory  on  Counterfeiting  and 
Piracy, including those concerning copyright, rights related to copyright and patents. 

These tasks should, in future, encompass: 

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– 

– 

– 

– 

– 

– 

delivering independent data and assessments on the scope and scale of counterfeiting 
and piracy in the internal market; 

exchanging and promoting best practices in relation to public authorities; 

spreading of best private sector strategies; 

raising public awareness; 

evaluating the need for and designing European training programmes for authorities 
involved  in  the  protection  of  intellectual  property  rights,  in  cooperation  with  other 
international and European institutions and agencies; 

carrying out research on technical tools to prevent counterfeiting and piracy; and 

fostering  international  cooperation  and  providing  technical  assistance  to  third-
country authorities. 

The activities to achieve these tasks should encompass the following: 

– 

– 

– 

– 

– 

– 

organising  meetings  of  the  representatives  assembled  as  the  Observatory  and  of  its 
working groups; 

organising meetings of other experts; 

cataloguing and organising seminars and training sessions on IPR infringements and 
methods to combat such infringements; 

carrying  out  studies  on  the  scope  and  impact  of  counterfeiting  and  piracy  and 
drawing  up  of  annual  reports  on  developments  and  trends  and  of  sectoral  reports 
analysing the situation in the different industry and product sectors; 

researching on technical tools to prevent counterfeiting and piracy; 

developing  databases  to  store  and  analyse  data  on  the  scope  and  impact  of  IPR 
infringements,  national  case  law  on  such  infringements  and  existing  training 
measures,  and  systems  to  enhance  access  of  public  authorities  and  private 
stakeholders to information and allowing for rapid exchange of information between 
them. 

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•  Legal basis 

Article 114 of the Treaty on the Functioning of the European Union  (TFEU) is the  specific 
basis  for  the  establishment  and  functioning  of  the  internal  market.  The  tasks  the  OHIM  is 
entrusted  with  under  this  Regulation  relate  to  the  enforcement  also  of  intellectual  property 
rights  provided  for  by  the  national  laws  of  the  Member  States  and  may  be  regarded  as 
supporting  Union  legislation  in  this  area.  Article  118(1)  TFEU  provides  powers  to  adopt 
measures  for  the  creation  of  European  intellectual  property  rights,  to  provide  uniform 
protection  of  intellectual  property  rights  throughout  the  EU  and  for  the  setting  up  of 
centralised  EU-wide  authorisation,  coordination  and  supervision  arrangements.  Therefore, 
Article  114  and  Article  118(1)  combined  constitute  the  appropriate  legal  base  for  this 
proposal. 

•  Subsidiarity principle 

Many of the activities assigned to the European Observatory on Counterfeiting and Piracy are 
of  a  cross-border  nature,  involving  all  27  Member  States,  and  therefore  they  cannot  be 
effectively  delivered  by  individual  Member  States.  As  far  as  there  is  a  need  for  bilateral 
cooperation  between  two  Member  States,  in  individual  cases  procedures  could  theoretically 
be improved at this level. However, given that the tools and methods needed in such a context 
would be similar for all Member States, it seems more efficient to develop them at EU level. 
This will ensure that solutions are not tailored to individual Member States’ requirements but 
are beneficial to all Member States. Furthermore, as far as relations with third countries are 
concerned, coordination within the Commission services and with other EU and international 
agencies must take place at the EU level. 

Finally,  as  demonstrated  in  the  Impact  Assessment,  assigning  these  tasks  to  an  existing  EU 
agency and more concretely, the OHIM, allows for synergies with already ongoing activities. 
It also allows for benefitting from the  expertise that already exists in OHIM with a view to 
trademarks and design rights, and from the working relations that OHIM has established with 
national  IP  offices.  These  working  relations  will  enable  the  OHIM  to  bring  together  the 
experts it needs to carry out its new tasks successfully. 

4. 

BUDGETARY IMPLICATIONS 

The proposal does not create any costs for the EU budget. Instead, it would allow for savings 
of  around  EUR  40,000  as  certain  costs  that  are  currently  borne  by  the  EU  budget  would  in 
future be borne by the OHIM’s budget. 

5. 

EXPLANATION OF THE ARTICLES 

Article 1 

This  Article  describes  the  subject  of  the  proposal,  which  is  to  enlarge  the  sphere  of 
competence of the Office for Harmonisation in the Internal Market (OHIM) by entrusting it 
with the operation of the European Observatory on Counterfeiting and Piracy as a centre of 
expertise in relation to specific tasks and activities. 

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Article 2 

This Article defines the tasks and activities which the Office should be carrying out in relation 
to the Observatory and which can be grouped in six main categories: 

– 

– 

– 

– 

– 

Improve the understanding on the scope and impact of infringements of intellectual 
property rights and on the value of intellectual property and enhance the knowledge 
on  best  public  and  private  sector  practices  to  combat  infringements  of  intellectual 
property rights; 

raise public awareness of the impact of infringements of intellectual property rights; 

enhance the expertise of persons involved in the enforcement of intellectual property 
rights; 

enhance the knowledge on technical tools to prevent and combat counterfeiting and 
piracy, including tracking and tracing systems; 

improve  the  online  exchange,  between  Member  States'  authorities  involved  in  the 
protection  of intellectual property  rights, of information related  to the protection of 
intellectual  property  rights,  and  foster  cooperation  with  and  between  the  central 
industrial  property  offices  of  the  Member  States,  including  the  Benelux  Office  for 
Intellectual Property; 

– 

foster international cooperation. 

Article 3 

This Article clarifies that the Office shall carry out the activities to fulfil the tasks set out in 
Article 2 by making use of its own budgetary means. 

Article 4 

This  Article  covers  the  participation  in  and  the  organisation  of  the  meetings  of  the 
Observatory.  It  provides  that  the  Office  is  to  invite  experts  from  public  administrations, 
bodies and organisations dealing with the protection of intellectual property rights, from the 
private  sector,  the  European  Parliament  and  the  Commission.  The  representatives  from  the 
private sector should cover economic sectors most concerned by counterfeiting. They should 
therefore include representatives from different industry sectors. Thus, right holders, Internet 
service  providers  and  telecommunication  companies  should  be  represented.  In  addition, 
representatives  of consumers should also be included. The article, furthermore, provides for 
the possibility to organise working group meetings of the Observatory. 

Article 5 

The Article places an obligation on the Member States’ and private sector representatives to 
share, within the applicable laws on data protection, statistical and case-law information with 
the Office in relation to the work of the Observatory, in line with the Council Conclusions of 
1 March 2010, and to inform it about their own policies in that area. 

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Article 6 

This Article sets out the Office’s obligation to adopt the Observatory’s internal administrative 
instructions and the publication of notices that are necessary in order to ensure the fulfilment 
of all the tasks entrusted in this Regulation to the Office. 

Article 7 

This Article provides that the Office's annual management report shall include a report on the 
Office's  activities  under  this  Regulation.  It  sets  out  the  main  information  that  needs  to  be 
included in the report, in particular a review of the main activities carried out throughout the 
year, the results achieved, an overall assessment of the Office’s work under the Regulation, 
information  of  the  planned  future  work  of  the  Observatory  and  recommendations  on  future 
policies in the area of protection of intellectual property rights. 

Article 8 

This  Article  lays  down  the  rules  for  evaluation  of  the  Regulation,  to  be  carried  out  by  the 
Commission, on the performance of the Office in implementing the Regulation in practice, i.e. 
in particular in fulfilling the tasks set out in Article 2, and on the impact of this work on the 
protection  of  intellectual  property  rights  in  the  EU.  The  Commission  is  to  consult  the 
Observatory as part of the evaluation process and will send the final evaluation report to the 
European  Parliament  and  to  the  Council.  The  Commission  should  then  launch  a  broad 
consultation  among  stakeholders  on  the  evaluation  report,  which  could  be  followed  by 
proposals to modify the Regulation, where appropriate.  

Article 9 

This Article deals with the entry into force and the effects of the proposed Regulation. 

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2011/0135 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on entrusting the Office for Harmonisation in the Internal Market (Trade Marks and Designs) 
with certain tasks related to the protection of intellectual property rights, including the 
assembling of public and private sector representatives as a  
European Observatory on Counterfeiting and Piracy 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 114 
and 118(1) thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national Parliaments, 

Having regard to the opinion of the European Economic and Social Committee26, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

26 
27 

The economic well-being of the European Union (hereinafter referred to as "the Union") relies 
on  sustained  creativity  and  innovation.  Therefore  measures  for  their  effective  protection  are 
indispensible in ensuring its future prosperity. 

Intellectual  property  rights  are  vital  business  assets  that  help  to  ensure  that  innovators  and 
creators get a fair return for their work and that their investment in research and new ideas is 
protected. 

A sound, harmonised and progressive approach to intellectual property rights is fundamental in 
the endeavour to fulfil the ambitions of the Europe 2020 Strategy27. 

The constant rise of infringements of intellectual property rights constitutes a genuine threat not 
only to the Union economy, but also to the health and safety of Union consumers. Therefore, 
effective,  immediate  and  coordinated  actions  at  European  and  global  levels  are  needed  to 
successfully combat this phenomenon. 

OJ C , , p. . 
Communication  from  the  Commission  of  3  March  2010:  'Europe  2020:  A  strategy  for  smart,  sustainable  and 
inclusive growth' - COM(2010) 2020. 

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(5) 

(6) 

(7) 

(8) 

(9) 

In  the  context  of  the  overall  intellectual  property  rights  strategy  foreseen  by  the  Council 
Resolution  of  25  September  2008  on  a  comprehensive  European  anti-counterfeiting  and  anti-
piracy  plan28,  the  Council  called  on  the  Commission  to  launch  a  European  Observatory  on 
Counterfeiting  and  Piracy  (hereinafter  referred  to  as  "the  Observatory").  The  Commission 
therefore formed a network of experts from the public and the private sectors and described its 
tasks  in  the  Communication  "Enhancing  the  enforcement  of  intellectual  property  rights  in  the 
internal market"29. 

The  Communication  set  out  that  the  Observatory  should  become  the  central  resource  for 
gathering,  monitoring  and  reporting  information  and  data  related  to  all  intellectual  property 
rights  infringements.  It  should  be  used  as  a  platform  for  cooperation  between  representatives 
from national authorities and stakeholders to exchange ideas and expertise on best practices, to 
develop  joint  enforcement  strategies  and  to  make  recommendations  to  policy-makers.  The 
Communication specified that the Observatory would be hosted and managed by the services of 
the Commission. 

In its Resolution on the enforcement of intellectual property rights in the internal market of 1 
March 201030, the Council invited the Commission, the Member States and industry to provide 
the Observatory with available reliable and comparable data on counterfeiting and piracy and to 
jointly  develop  and  agree,  in  the  context  of  the  Observatory,  on  plans  to  collect  further 
information.  The  Council  also  invited  the  Observatory  to  publish  each  year  a  comprehensive 
annual report covering the scope, scale and principal characteristics of counterfeiting and piracy 
as  well  as  its  impact  on  the  internal  market.  That  annual  report  should  be  prepared  with  the 
information provided by the authorities of the Member States, the Commission and the private 
sector, within the limits of data protection law, on the scope, scale and principal characteristics 
of counterfeiting and piracy as well as its impact on the internal market. 

In its Conclusions of 25 May 201031, the Council invited the Commission to establish a legal 
basis  for  the  involvement  of  the  Office  for  Harmonization  in  the  Internal  Market  (hereinafter 
referred  to  as  'the  Office')  in  enforcement  related  activities,  including  the  fight  against 
counterfeiting,  in  particular  through  fostering  its  cooperation  with  the  national  trade  mark 
offices and the Observatory. 

Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the 
enforcement  of  intellectual  property  rights32  provides  inter  alia  for  measures  to  promote 
cooperation,  including  the  exchange  of  information,  among  Member  States  and  between 
Member States and the Commission.  

(10)  The  European  Parliament,  in  its  Resolution  of  22  September  2010  on  enforcement  of 
intellectual  property  rights  in  the  internal  market33,  called  on  the  Member  States  and  the 

28 
29 
30 

31 

32 
33 

OJ C 253, 4.10.2008, p. 1. 
COM(2009) 467, 14.9.2009. 
Council Resolution of 1 March 2010 on the enforcement of intellectual property rights in the internal market (OJ C 
56, 6.3.2010, p. 1). 
Council Conclusions of 25 May 2010 on the future revision of the Trade Mark system in the European Union (OJ 
C 140, 29.5.2010, p. 22). 
OJ L 195, 2.6.2004, p. 16. 
European Parliament Resolution of 22 September 2010, 2009/2178(INI). 

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Commission  to  extend  the  cooperation  between  the  Office  and  national  intellectual  property 
offices to also include the fight against infringements of intellectual property rights. 

(11) 

In  view  of  the  range  of  tasks  assigned  to  the  Observatory,  a  solution  is  needed  to  ensure  an 
adequate and sustainable infrastructure for the fulfilment of the tasks of the Observatory. 

(12)  Council  Regulation  (EC)  No  207/2009  of  26  February  2009  on  the  Community  trade  mark34 
provides for administrative cooperation between the Office and the courts or authorities of the 
Member States, and the exchange of publications between the Office and the central industrial 
property  offices  of  the  Member  States.  On  that  basis,  the  Office  has  set  up  cooperation  with 
national  offices  that  are  active  in  the  field  of  protection  of  intellectual  property  rights. 
Consequently  the  Office  already  possesses,  to  a  considerable  extent,  the  necessary  experience 
and  expertise  to  provide  an  adequate  and  sustainable  infrastructure  in  the  field  of  the 
Observatory's tasks. 

(13)  The Office is therefore well placed to be entrusted with carrying out those tasks. 

(14)  Those tasks should relate to all intellectual property rights covered by Union law or the national 
law  of  the  Member  State  concerned  in  this  field  since  in  many  cases,  infringing  acts  affect  a 
bundle of intellectual property rights. Furthermore, data and the exchange of best practices are 
needed on the entire range of intellectual property rights, in order to obtain a complete picture 
of  the  situation  and  allow  designing  comprehensive  strategies  to  reduce  intellectual  property 
rights  infringements.  In  the  context  of  those  tasks,  the  Office's  mandate  should  therefore  be 
extended  to  cover  also  the  protection  of  patents,  copyright  and  related  rights  as  well  as 
geographical indications. 

(15)  The  tasks  that  the  Office  should  carry  out  can  be  linked  to  the  enforcement  and  reporting 
measures  laid  down  by  Directive  2004/48/EC.  Thus,  the  Office  should  provide  services  to 
national authorities or operators which affect, in particular, the homogenous implementation of 
the  Directive  and  which  are  likely  to  facilitate  its  application.  The  Office's  tasks  should 
therefore be considered as closely linked to the subject-matter of acts approximating the laws, 
regulations and administrative provisions of the Member States. 

(16)  Assembled by the Office, the Observatory should become a centre of excellence on information 
and data related to infringements of intellectual property rights, by benefiting from the Office's 
expertise, experience and resources. 

(17)  The Office should offer  a  forum  that brings together public authorities and the private sector, 
ensuring  the  collection,  analysis  and  dissemination  of  relevant  objective,  comparable  and 
reliable  data  regarding  the  value  of  intellectual  property  rights  and  the  infringements  of  those 
rights,  the  development  of  best  practices  and  strategies  to  protect  intellectual  property  rights, 
and  raising  public  awareness  of  the  impacts  of  intellectual  property  rights  infringements. 
Furthermore, the Office should fulfil additional tasks, such as to improve the understanding of 
the  value  of  intellectual  property  rights,  enhance  the  expertise  of  persons  involved  in  the 
enforcement  of  intellectual  property  rights  by  appropriate  training  measures,  increase 

34 

OJ L 78, 24.3.2009, p. 1. 

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knowledge  on  techniques  to  prevent  counterfeiting,  and  improve  cooperation  with  third 
countries and international organisations. 

(18)  With regard to representatives of the private sector, the Office should involve, when assembling 
the Observatory in the context of its activities, a representative selection of the economic sectors 
most  concerned  by  and  most  experienced  in  the  fight  against  infringements  of  intellectual 
property  rights,  in  particular  representatives  of  right  holders  and  Internet  service  providers. 
Also, a proper representation of consumers and of small and medium sized enterprises should 
be ensured. 

(19)  The  Office  should  implement  the  tasks  and  activities  related  to  the  protection  of  intellectual 

property rights by making use of its own budgetary means, 

HAVE ADOPTED THIS REGULATION 

Article 1 
Subject matter 

This Regulation entrusts the Office for Harmonization in the Internal Market (hereinafter referred to as 
"the Office") with certain tasks related to the protection of intellectual property rights. In carrying out 
these tasks the Office shall regularly invite experts, authorities and stakeholders which will assemble 
under  the  name  "European  Observatory  on  Counterfeiting  and  Piracy"(hereinafter  referred  to  as  "the 
Observatory"). 

1. 

The Office shall have the following tasks: 

Article 2 
Tasks and activities 

(a) 

improving  the  understanding  on  the  scope  and  impact  of  infringements  of  intellectual 
property rights, protected under European Union law or the national laws of the Member 
States, including industrial property rights, copyright and rights related to copyright; 

(b) 

improving the understanding on the value of intellectual property; 

(c) 

enhancing  the  knowledge  on  best  public  and  private  sector  practices  to  protect 
intellectual property rights; 

(d) 

raising citizens' awareness of the impact of infringements of intellectual property rights; 

(e) 

(f) 

(g) 

enhancing the expertise of persons involved in the enforcement of intellectual property 
rights; 

enhancing  the  knowledge  on  technical  tools  to  prevent  and  combat  counterfeiting  and 
piracy, including tracking and tracing systems; 

improving  the  online  exchange,  between  Member  States'  authorities  involved  in  the 
protection  of  intellectual  property  rights,  of  information  related  to  the  protection  of 

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13 

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intellectual  property  rights,  and  fostering  cooperation  with  and  between  the  central 
industrial  property  offices  of  the  Member  States,  including  the  Benelux  Office  for 
Intellectual Property; 

(h) 

fostering international cooperation with intellectual property offices in third countries to 
build  strategies  and  developing  techniques  for  the  protection  of  intellectual  property 
rights, skills and tools. 

2. 

In the fulfilment of the tasks set out in paragraph 1, the Office shall carry out the following 
activities: 

(a) 

assembling, in accordance with Article 4, the Observatory at regular intervals; 

(b) 

(c) 

(d) 

(e) 

establishing  a  methodology  for  the  collection,  analysis  and  reporting  of  independent, 
objective, comparable and reliable data related to infringements of intellectual property 
rights; 

collecting, analysing and disseminating relevant objective, comparable and reliable data 
regarding infringements of intellectual property rights; 

collecting, analysing and disseminating relevant objective, comparable and reliable data 
regarding  the  economic  value  of  intellectual  property  and  its  contribution  to  economic 
growth,  welfare,  innovation,  creativity,  cultural  diversity,  the  creation  of  high  quality 
jobs and the development of high quality products and services within the Union; 

providing regular assessments and specific reports by economic sector, geographic area 
and type of intellectual property right infringed, which evaluate, inter alia, the impact of 
intellectual  property  rights  infringements  on  society,  economy,  health,  environment, 
safety  and  security,  and  the  relation  of  such  infringements  with  organized  crime  and 
terrorism; 

(f) 

collecting, analysing and disseminating information regarding best practices between the 
representatives  meeting  as  the  Observatory,  and  developing  strategies  based  on  such 
practices; 

(g)  drawing  up  reports  and  publications  to  raise  awareness  of  the  Union's  citizens  of  the 
impact of infringements of intellectual property rights, and organising conferences, on-
line and off-line campaigns, events and meetings at European and international levels; 

(h)  developing  and  organising  on-line  and  other  forms  of  training  for  national  officials 

involved in the protection of intellectual property rights; 

(i) 

organising ad hoc meetings of experts to support its work under this Regulation; 

(j) 

researching, evaluating and promoting technical  tools for professionals and benchmark 
techniques,  including  tracking  and  tracing  systems  which  help  to  distinguish  genuine 
from counterfeit products; 

(k)  working with national authorities to develop an on-line network to exchange information 
related  to  the  protection  of  intellectual  property  rights,  including  real-time  alerts  and 

EN 

14 

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information  on  infringements  of  intellectual  property  rights  between  administrations, 
bodies and organisations in the Member States dealing with the protection of intellectual 
property rights; 

(l) 

building  strategies  in  cooperation  with  the  central  industrial  property  offices  of  the 
Member States, including the Benelux  Office for  Intellectual  Property,  and developing 
techniques,  skills  and  tools  related  to  the  protection  of  intellectual  property  rights, 
including training programmes and awareness campaigns; 

(m)  developing programmes on technical assistance for third countries as well as developing 
and delivering specific training programmes and events for officials from third countries 
involved in the protection of intellectual property rights; 

(n)  making recommendations to the Commission on issues falling within the scope of this 

Regulation, including on the basis of a request from the Commission; 

(o)  drawing up an annual work programme for the meetings referred to in point (a) in line 
with the Union's policies and priorities in the field of protection of intellectual property 
rights; 

(p) 

carrying  out  similar  activities  necessary  for  the  Office  to  fulfil  the  tasks  set  out  in 
paragraph 1. 

Article 3 
Financing 

The Office shall at all times ensure that the activities entrusted to it by this Regulation are carried out 
by making use of its own budgetary means. 

Article 4 
Meetings of the Observatory 

1. 

2. 

3. 

4. 

The Office shall invite to the meetings referred to in point (a) of Article 2(2) representatives 
from  public  administrations,  bodies  and  organisations  dealing  with  the  protection  of 
intellectual property rights and representatives from the private sector. 

Representatives  meeting  as  the  Observatory  invited  from  the  private  sector  shall  include  a 
broad  and  representative  range  of  Union  and  national  bodies  representing  the  different 
economic sectors most concerned by and most experienced in the fight against infringements 
of intellectual property rights.  

Consumer organisations and small and medium sized enterprises shall be properly represented. 

The  Office  shall  invite  one  national  representative  from  each  Member  State,  and  five 
representatives each from the European Parliament and the Commission. 

The  names  of  the  representatives,  the  agenda  and  the  minutes  of  the  meetings  shall  be 
published on the Office's website. 

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15 

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5. 

The meetings referred to in point (a) of Article 2(2) may also be organised in working groups 
within  the  Observatory.  Up  to  two  representatives  from  the  European  Parliament  and  up  to 
two  representatives  from  the  Commission  shall  be  invited  to  the  meetings  of  the  working 
groups as observers. 

Article 5 
Information obligations 

Without prejudice to law governing the processing of personal data, Member States and private sector 
representatives meeting as the Observatory shall: 

(a) 

(b) 

(c) 

inform  the  Office  of  their  policies  and  strategies  on  the  protection  of  intellectual  property 
rights and any changes thereto; 

provide statistical data on infringements of intellectual property rights; 

inform the Office of any relevant case law. 

Article 6 
Internal administrative instructions and notices 

Using the powers conferred on it by Article 124 of Regulation (EC) No 207/2009, the President of the 
Office  shall  adopt  the  internal  administrative  instructions  and  shall  publish  the  notices  that  are 
necessary for the fulfilment of all the tasks entrusted to the Office in this Regulation. 

Article 7 
Content of the management report 

The management report foreseen in point (d) of Article 124(2) of Regulation (EC) No 207/2009 shall 
contain at least the following information on the Office's tasks and activities under this Regulation: 

(a) 

(b) 

(c) 

(d) 

(e) 

a review of the main activities carried out during the preceding calendar year; 

the results achieved during the preceding calendar year, accompanied, where appropriate, by 
sectoral reports analysing the situation in the different industry and product sectors; 

an overall assessment of the fulfilment of the Office's tasks as provided for in this Regulation; 

an overview of the activities that the Office intends to undertake in the future; 

recommendations  on  the  future  policies  in  the  area  of  the  protection  of  intellectual  property 
rights, including on how to enhance an effective cooperation between Member States. 

Article 8 
Evaluation 

1. 

Within 5 years after entry into force of this Regulation, the Commission shall adopt a report 
evaluating the application of this Regulation. 

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16 

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2. 

3. 

4. 

The  evaluation  report  shall  assess  the  performance  of  the  Office  in  the  operation  of  this 
Regulation, in particular as regards its impact on the protection of intellectual property rights 
in the internal market. 

The  Commission  shall,  when  preparing  the  evaluation  report,  consult  the  representatives 
meeting as the Observatory on the issues set out in paragraph 2. 

The  Commission  shall  transmit  the  evaluation  report  to  the  European  Parliament  and  the 
Council and undertake a broad consultation among stakeholders on the evaluation report. 

Article 9 
Entry into force 

This  Regulation  shall  enter  into  force  on  the  [twentieth]  day  following  that  of  its  publication  in  the 
Official Journal of the European Union. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels,  

For the European Parliament 
The President 

For the Council 
The President 

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17 

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LEGISLATIVE FINANCIAL STATEMENT FOR PROPOSALS 

1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE  

1.1.  Title of the proposal/initiative 

1.2.  Policy area(s) concerned in the ABM/ABB structure 

1.3.  Nature of the proposal/initiative: Legislative proposal 

1.4.  Objective(s) 

1.5.  Grounds for the proposal/initiative 

1.6.  Duration and financial impact 

1.7.  Management method(s) envisaged 

2. 

MANAGEMENT MEASURES  

2.1.  Monitoring and reporting rules 

2.2.  Management and control system 

2.3.  Measures to prevent fraud and irregularities 

3. 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE  

3.1.  Heading(s)  of  the  multiannual  financial  framework  and  expenditure  budget  line(s) 
affected 

3.2.  Estimated impact on expenditure 

3.2.1. Summary of estimated impact on expenditure 

3.2.2. Estimated impact on operational appropriations 

3.2.3. Estimated impact on appropriations of an administrative nature 

3.2.4. Compatibility with the current multiannual financial framework 

3.2.5. Third-party participation in financing 

3.3.  Estimated impact on revenue

EN 

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LEGISLATIVE FINANCIAL STATEMENT FOR PROPOSALS 

1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE  

1.1. 

Title of the proposal/initiative  

Regulation  of  the  European  Parliament  and  of  the  Council  on  entrusting  the  Office  for 
Harmonisation in the Internal Market (Trade Marks and Designs) with certain tasks related to 
the  protection  of  intellectual  property  rights,  including  the  assembling  of  public  and  private 
sector representatives as a European Observatory on Counterfeiting and Piracy 

1.2. 

Policy area(s) concerned in the ABM/ABB structure35  

Internal Market – knowledge based economy – the enforcement of intellectual property rights  

1.3. 

Nature of the proposal/initiative  

(cid:133) The proposal/initiative relates to a new action  

(cid:133) The proposal/initiative relates to a new action following a pilot project/preparatory action36  

(cid:133) The proposal/initiative relates to the extension of an existing action  

(cid:51)The proposal/initiative relates to an action redirected towards a new action  

1.4. 

Objectives 

1.4.1.  The Commission's multiannual strategic objective(s) targeted by the proposal/initiative  

The general objective is to enhance effective enforcement of IPR, in order to avoid significant 
harm  being  caused  by  counterfeiting  and  piracy  to  the  European  economy  and  to  the  health 
and  safety  of  European  citizens.  This  Objective  concurs  with  existing  EU  policies  and 
strategies,  such  as  Europe  202037.  They  also  fit  with  the  Commission's  main  priorities  and 
proposals concerning its IPR strategy for Europe38.  

Over  the  last  ten  years  IPR  infringements  have  increased  significantly.  In  2009,  the  OECD 
estimated that international trade in counterfeit and pirated goods was up to USD 250 billion 
in 2007, which is larger than the national GDPs of 150 economies39. Figures published by EU 
customs authorities reflect a clear increase in customs activity, with a rise in registered cases 
from 4,694 in 1999 to 43,572 in 2009, i.e. by about  920%  in ten years. Concerning Internet 
piracy, the most recent industry study carried, out in 2010, by Paris-based TERA Consultants 

35 
36 
37 
38 
39 

EN 

ABM: Activity-Based Management – ABB: Activity-Based Budgeting. 
As referred to in Article 49(6)(a) or (b) of the Financial Regulation. 
COM(2010) 2020. 
COM(2008) 465. 
OECD,  Magnitude  of  counterfeiting  and  piracy  of 
http://www.oecd.org/document/23/0,3343. 

tangible  products  –  November  2009  update, 

19 

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and  commissioned  by  the  International  Chamber  of  Commerce’s  Business  Action  to  Stop 
Counterfeiting and Piracy (BASCAP) initiative, indicates that EUR 10 billion and more than 
185,000 jobs were lost due to piracy in the music, movie, TV, and software industries in the 
EU in 200840.  

At EU level, the primary initiative in combating the problem is the European Observatory on 
Counterfeiting  and  Piracy  ('the  Observatory'),  which  is  administered  by  the  Commission's 
DG Internal Market and Services (DG MARKT).  

1.4.2. 

Specific objective(s) and ABM/ABB activity(ies) concerned  

Specific objective: 

Over the last two years, the Observatory's institutional framework has been set up. This setting 
up  phase  of  the  Observatory  having  been  concluded  it  shows  that,  due  to  a  lack  of  funding, 
human  resources,  IT  and  meeting  capacities  and  necessary  expertise,  with  its  current 
infrastructure it will not be able to meet its objectives in the future and that the taking on of 
additional tasks under the current setting would be excluded. 

The  specific  objective  therefore  is  to  ensure  that  the  Observatory  has  the  necessary 
infrastructure to deliver its tasks effectively, as quickly as possible and without any costs for 
the EU budget. The tasks include enhancing knowledge among public authorities and private 
stakeholders about the scope, impact and trends related to counterfeiting and piracy and about 
effective  techniques  to  fight  the  problem,  improving  day-to-day  enforcement  related 
cooperation;  and  informing  consumers  of  the  economic  impact  and  dangers  related  to 
counterfeiting  and  piracy  and  improving  the  coordination  of  actions  directed  towards  third 
countries. 

In  this  initiative  the  Observatory  would  be  run  by  an  existing  agency  the  Office  for 
Harmonisation  in  the  Internal  market  (OHIM).  This  would  allow  the  Observatory  to  profit 
from existing administrative structures (such as human resources and finance). The OHIM is 
the  EU  agency  responsible  for  registering  Community  trade  marks  and  designs,  valid  in  all 
27 EU  Member  States.  Given  the  clear  relationship  between  the  protection  of  IP  rights  and 
their  enforcement,  the  expertise  already  available  within  the  OHIM  appears  particularly 
pertinent to taking over the Observatory's tasks. 

ABM/ABB activity(ies) concerned:  

Internal Market policy. 

40 

http://www.iccwbo.org/bascap/id35360/index.html. 

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1.4.3.  Expected result(s) and impact 

Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted. 

Unless more coordinated and sustainable action is taken to combat infringements of IPR, the 
EU faces a damaging trend that will have a real impact on its economic recovery, wealth and 
jobs.  This  trend  includes  a  rise  in  products  that  can  potentially  cause  serious  harm  to 
consumers, such as fake medicines, food products, cosmetics, and fake household equipment.  

The  Observatory  would  significantly  enhance  enforcement  by  providing  reliable,  objective 
data  in  order  to  identify  trends  and  threats,  greater  coordination  and  exchange  between 
responsible  authorities  in  the  Member  States  on  best  practice,  and  real-time  exchanges  of 
information  between  stakeholders  on  specific  counterfeit  products,  exchanges  on  successful 
public  and  private  sector  strategies;  training  for  enforcement  authorities,  greater  consumer 
awareness  training  for  authorities  in  vulnerable  third  countries  to  combat  counterfeiting  and 
piracy. 

Apart  from  the  cost  savings  compared  to  the  current  situation  that  are  demonstrated  in  the 
Impact Assessment, this initiative would also have the advantage of allowing the Observatory 
to become quickly operational. The Office for Harmonisation in the Internal Market (OHIM) 
is the single EU agency dealing with trade marks and designs and would be a suitable host for 
the Observatory. It has already established a basis of expertise in the area of enforcement of 
trademarks and designs, through its training seminars and activities, and is planning to develop 
further enforcement projects, such as an IT information system on registered trade marks and 
designs. Moreover, synergies between the tasks of the Observatory and those already carried 
out by the OHIM would significantly limit the number of additional staff required. 

1.4.4. 

Indicators of results and impact  

Specify the indicators for monitoring implementation of the proposal/initiative. 

Timeliness  of  the  collation  and  publication  of  reports  on  counterfeiting  and  piracy  by  the 
Office,  research  on  best  practices,  the  development  and  delivery  of  tool  kits  on  awareness 
raising, and the development, delivery and maintenance of databases; Quality  of reports and 
research (accuracy and usefulness), quality and impact of strategies that will be developed in 
the  fields  of  public  awareness,  research  and  training,  including  the  number,  impact  and 
influence  of  campaigns  carried  out  successfully,  the  number  of  persons  trained  and  the 
accessibility of data. 

1.5. 

Grounds for the proposal/initiative  

1.5.1.  Requirement(s) to be met in the short or long term  

Given  the  need  to  expand  the  Observatory's  activities  quickly,  in  the  short  term,  the 
Commission has decided that the Observatory will focus on data collection, public awareness 
measures and training, the identification and exchange of best public and private practices, and 
improving  day-to-day  cooperation,  research  on  technical  tools  to  prevent  counterfeiting  and 
piracy and international technical assistance. 

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1.5.2.  Added value of EU involvement 

Many of the activities required to fight counterfeiting and piracy are of a cross-border nature, 
based on cooperation and coordination. To be fully effective, they require the engagement and 
involvement of all 27 Member States. Therefore, it is essential to develop EU level tools and 
structures which would allow all Member States to benefit from the results. 

1.5.3.  Lessons learned from similar experiences in the past 

In 2009, the OECD and other organisations outlined key issues that had failed to prevent the 
growth of counterfeiting and piracy; this led to a significant reduction in investment and the 
destruction  of  jobs41;  a  growing  threat  to  the  health  and  safety  of  European  consumers42; 
serious  problems  for  EU  SMEs43,  tax  losses  due  to  reductions  in  declared  sales  and  the 
involvement of organised crime. 

1.5.4.  Coherence and possible synergy with other relevant instruments 

The  proposal  builds  on  the  Commission  Communication  of  200944  defining  the  tasks  of  the 
European Observatory on Counterfeiting and Piracy. Its objectives are in line with existing EU 
policies  and  strategies,  such  as  Europe  202045.  They  also  fit  with  the  Commission's  main 
priorities and proposals concerning its IPR strategy for Europe46. 

41 
42 

43 

44 
45 
46 

TERA Consultants, 'Building a Digital Economy: March 2010, http://www.iccwbo.org/bascap/id35360/index.html. 
European Commission, Taxation and Customs Union Directorate General, 'Report on EU Customs enforcement of 
intellectual property rights - 2009',   
http://ec.europa.eu/taxation_customs/customs/customs_controls/counterfeit_piracy/statistics/index_en.htm. 
Technopolis (2007), 'Effects of counterfeiting on EU SMEs', 
http://ec.europa.eu/enterprise/enterprise_policy/industry/doc/Counterfeiting_Main%20Report_Final.pdf. 
COM(2009) 467. 
COM(2010) 2020. 
COM(2008) 465; see also Commission Communication of 27 October 2010: 'Towards a Single market Act – for a 
highly competitive social market economy' - COM(2010) 608. 

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1.6. 

Duration and financial impact  

(cid:133) Proposal/initiative of limited duration  

–  (cid:133)  Proposal/initiative in effect from [DD/MM]YYYY to [DD/MM]YYYY  

–  (cid:133)  Financial impact from YYYY to YYYY  

(cid:51) Proposal/initiative of unlimited duration 

–  Implementation  with  a  start-up  period  from  2012  to  2013  (assuming  that  the  Regulation 

would enter into force in the course of 2012), 

–  followed by full-scale operation. 

1.7.  Management mode(s) envisaged47  

(cid:133) Centralised direct management by the Commission  

(cid:51) Centralised indirect management with the delegation of implementation tasks to: 

–  (cid:133)  executive agencies  

–  (cid:51)  bodies set up by the Communities48  

–  (cid:133)  national public-sector bodies/bodies with public-service mission  

–  (cid:133)  persons entrusted with the implementation of specific actions pursuant to Title V of the 
Treaty  on  European  Union  and  identified  in  the  relevant  basic  act  within  the  meaning  of 
Article 49 of the Financial Regulation  

(cid:133) Shared management with the Member States  

(cid:133) Decentralised management with third countries  

(cid:133) Joint management with international organisations (to be specified) 

If more than one management mode is indicated, please provide details in the "Comments" section. 

Comments  

It is proposed to delegate the tasks to an already existing body, i.e. the Office for Harmonisation in the 
Internal Market (OHIM). 

47 

48 

Details  of  management  modes  and  references  to  the  Financial  Regulation  may  be  found  on  the  BudgWeb  site: 
http://www.cc.cec/budg/man/budgmanag/budgmanag_en.html 
As referred to in Article 185 of the Financial Regulation. 

EN 

23 

   EN 

 
                                                 
2. 

MANAGEMENT MEASURES  

2.1.  Monitoring and reporting rules  

Specify frequency and conditions. 

The proposed Regulation provides that, within five years after its entry into force, the Commission 
shall  evaluate  the  performance  of  the  Office  in  the  operation  of  that  Regulation,  in  particular  as 
regards its impact on the protection of intellectual property rights. 

The Commission's evaluation report of the Office on the activities carried out under the proposed 
Regulation will include: 

(1) 

(2) 

(3) 

An assessment of the results that will be published by the Observatory in quarterly highlight 
reports and in its annual report, based on comprehensive, objective data; 

Any audit reports carried out by the OHIM on the work of the Observatory; 

A  survey  of  public  and  private  stakeholders  on  their  perceptions  of  the  Office's  work,  in 
terms of comprehensiveness, reliability, accuracy, usefulness, objectivity and independence 
of its results. 

The  criteria  that  will  be  used  in  order  to  assess  the  effect  and  impact  of  the  measure  will  be,  in 
particular: 

•  Progress made in the development of the Observatory's activities; 

•  The success of the Observatory's strategy; 

•  The efficient use of resources; 

•  Impact and implications for public and private stakeholders. 

The following will act as the main monitoring indices: 

•  Timeliness  of  the  collation  and  publication  of  reports,  of  research  on  best  practices,  the 
development and delivery of tool kits on awareness raising, and the development, delivery and 
maintenance of databases. 

•  Quality of reports and research (accuracy and usefulness), quality and impact of strategies that 
will be developed in the fields of public awareness, research and training, including the number 
of campaigns carried out successfully and the number of persons trained, accessibility of data 

EN 

24 

   EN 

 
 
2.2.  Management and control system  

2.2.1.  Risk(s) identified  

- The new tasks of the Office should also serve to assess, at Commission level, whether any 
additional  activities  are  needed  at  EU  level  and  what  these  activities  should  be.  It  therefore 
needs to be ensured that the work programme and the priorities set by the Office are in line 
with the information needs of the Commission. The delegation to the agency creates a risk that 
such alignment is not respected in practice. 

- The current emphasis of the Office on trademarks and designs creates a risk that copyright 
and other intellectual property titles will not be treated with the same priority as the former. 

A full risk assessment will be created based on the above criteria. 

2.2.2.  Control method(s) envisaged  

Regular  risk  assessments  will  be  made  and  review  reports  completed,  on  the  basis  of  the 
annual reports of the Office and the evaluation to be carried out by the Commission. 

2.3.  Measures to prevent fraud and irregularities  

Specify existing or envisaged prevention and protection measures. 

The OHIM already has stringent policies and procedures in this area. 

EN 

25 

   EN 

 
3. 

3.1. 

Heading of 
multiannual 
financial 
framework 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE  

Heading(s)  of  the  multiannual  financial  framework  and  expenditure  budget  line(s) 
affected  

•  Existing expenditure budget lines  

In order of multiannual financial framework headings and budget lines. 

Budget line 

Type of  
expenditure

Contribution  

Number  
[Description………………………...……….] 

DA/NDA 
(49) 

from 
EFTA50 
countries 

from 
candidate 
countries51 

from third 
countries 

within the meaning 
of Article 18(1)(aa) 
of the Financial 
Regulation  

12  01  01  Expenditure  related  to  staff 
in  active  employment  of  ‘Internal 
market’ policy area 

to 
12  01  03  Expenditure  related 
equipment,  furniture  and  services  of 
‘Internal market’ policy area 

DNA 

NO 

NO 

NO 

NO 

DNA 

NO 

NO 

NO 

NO 

•  The proposed initiative would lead to savings on these budget lines. 

•  New budget lines requested  

In order of multiannual financial framework headings and budget lines. 

Heading of 
multiannual 
financial 
framework 

Budget line 

Type of 
expenditure

Contribution  

Number  
[Heading……………………………………..] 

Diff./non-
diff. 

[XX.YY.YY.YY] 

from 
EFTA 
countries 

from 
candidate 
countries 

from third 
countries 

within the meaning 
of Article 18(1)(aa) 
of the Financial 
Regulation  

YES/N
O 

YES/N
O 

YES/N
O 

YES/NO 

49 
50 
51 

DA= Differentiated appropriations / DNA= Non-Differentiated Appropriations. 
EFTA: European Free Trade Association.  
Candidate countries and, where applicable, potential candidate countries from the Western Balkans. 

EN 

26 

   EN 

 
 
 
 
 
 
                                                 
3.2. 

Estimated impact on expenditure  

3.2.1. 

Summary of estimated impact on expenditure  

Heading of multiannual financial 
framework:  

Number 

Internal Market policies 

EUR million (to 3 decimal places) 

DG: MARKT 

(cid:121) Operational appropriations  

Number of budget line 

Number of budget line 

Appropriations 
of 
 from the envelop of specific programs53  
Number of budget line 

an 

administrative 

TOTAL appropriations 
for DG <…….> 

Year 
N52 

Year 
N+1 

Year 
N+2 

Year 
N+3 

… enter as many years as 
necessary to show the duration 
of the impact (see point 1.6) 

TOTAL 

Commitments 

Payments 

Commitments 

Payments 

(1) 

(2) 

(1a) 

(2a) 

nature 

financed 

Commitments 

Payments 

(3) 

=1+1a 
+3 

=2+2a 

+3 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

52 
53 

EN 

Year N is the year in which implementation of the proposal/initiative starts. 
Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes and/or actions (former "BA" lines), indirect 
research, direct research. 

27 

E

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
(cid:121) TOTAL operational appropriations  

Commitments 

Payments 

(cid:121)  TOTAL  appropriations  of  an  administrative  nature 
financed from the envelop of specific programs  

(4) 

(5) 

(6) 

TOTAL appropriations  
under HEADING <….> 
of the multiannual financial framework 

Commitments 

=4+ 6 

Payments 

=5+ 6 

If more than one heading is affected by the proposal / initiative: 

(cid:121) TOTAL operational appropriations  

Commitments 

Payments 

(cid:121)  TOTAL  appropriations  of  an  administrative  nature 
financed from the envelop of specific programs  

(4) 

(5) 

(6) 

TOTAL appropriations  
under HEADINGS 1 to 4 
of the multiannual financial framework 
(Reference amount) 

Commitments 

=4+ 6 

Payments 

=5+ 6 

0 

0 

0 

0 

EN 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

28 

E

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Heading of multiannual financial 
framework:  

5 

" Administrative expenditure " 

Year 
N 

Year 
N+1 

Year 
N+2 

Year 
N+3 

… enter as many years as 
necessary to show the duration 
of the impact (see point 1.6)  

TOTAL 

EUR million (to 3 decimal places) 

DG: <…….> 

(cid:121) Human resources  
(cid:121) Other administrative expenditure  

TOTAL DG <…….> 

Appropriations  

TOTAL appropriations 
under HEADING 5 
of the multiannual financial framework  

(Total 
= Total payments) 

commitments 

Year 
N54 

Year 
N+1 

Year 
N+2 

Year 
N+3 

… enter as many years as 
necessary to show the duration 
of the impact (see point 1.6) 

TOTAL 

EUR million (to 3 decimal places) 

TOTAL appropriations  
under HEADINGS 1 to 5 
of the multiannual financial framework  

Commitments 

Payments 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

54 

Year N is the year in which implementation of the proposal/initiative starts. 

EN 

29 

E

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.2.  Estimated impact on operational appropriations  

–  (cid:51)  The proposal/initiative does not require the use of operational appropriations  

–  (cid:133)  The proposal/initiative requires the use of operational appropriations, as explained below: 

Indicate 
objectives and 
outputs  

Year 
N 

Year 
N+1 

Year 
N+2 

Year 
N+3 

… enter as many years as necessary to show 
the duration of the impact (see point 1.6) 

TOTAL 

OUTPUTS 

Commitment appropriations in EUR million (to 3 decimal places) 

Cost 

r
e
b
m
u
N

s
t
u
p
u
o

f
o

Cost 

r
e
b
m
u
N

s
t
u
p
u
o

f
o

Cost 

r
e
b
m
u
N

s
t
u
p
u
o

f
o

Cost 

r
e
b
m
u
N

s
t
u
p
u
o

f
o

Cost 

r
e
b
m
u
N

s
t
u
p
u
o

f
o

Cost 

r
e
b
m
u
N

s
t
u
p
u
o

f
o

Cost 

Total 
numbe
r of 
ouputs 

Total  
cost 

(cid:216) 

Type 
of 
output
55 

Avera
ge 
cost  
of the 
ouput 

r
e
b
m
u
N

s
t
u
p
u
o

f
o

SPECIFIC OBJECTIVE No 156… 

- Output 

- Output 

- Output 

Sub-total for specific objective N°1 

SPECIFIC OBJECTIVE No 2… 

- Output 

Sub-total for specific objective N°2 

TOTAL COST 

0 

0 

0 

0 

0 

0 

0 

0 

55 
56 

Outputs are products and services to be supplied (e.g.: number of student exchanges financed, number of km of roads built, etc.). 
As described in Section 1.4.2. "Specific objective(s)…". 

EN 

30 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.3.  Estimated impact on appropriations of an administrative nature 

3.2.3.1.  Summary  

–  (cid:51)  The  proposal/initiative  does  not 

require 

the  use  of  administrative 

appropriations  

–  (cid:133)  The  proposal/initiative  requires  the  use  of  administrative  appropriations,  as 

explained below: 

EUR million (to 3 decimal places) 

Year 
N 57 

Year 
N+1 

Year 
N+2 

Year 
N+3 

… enter as many years as necessary 
to show the duration of the impact 
(see point 1.6) 

TOTAL 

HEADING 5 
of the multiannual 
financial framework 

Human resources  

Other administrative 
expenditure  

Subtotal HEADING 5 
of the multiannual 
financial framework  

Outside HEADING 558 
of the multiannual 
financial framework  

Human resources  

Other expenditure  
of an administrative 
nature 

Subtotal  
outside HEADING 5 
of the multiannual 
financial framework  

TOTAL 

57 
58 

Year N is the year in which implementation of the proposal/initiative starts. 
Technical  and/or  administrative  assistance  and  expenditure  in  support  of  the  implementation  of  EU 
programmes and/or actions (former "BA" lines), indirect research, direct research. 

EN 

31 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.3.2.  Other expenditure of an administrative nature freed  

(in Mio€)  

Type of expenditure 

Other expenditure of an 
administrative nature freed 

12 01 02 11 02 - Conferences and 
meetings 

from 2013 

0.040 

TOTAL administrative 
expenditure freed 

0.040 

The costs of the meetings of the Observatory would not have to be borne by the EU budget 
anymore as these costs would be financed from the separate budget of the OHIM. 

On the basis of 2010 expenditure, EUR 40,000 will be freed. 

EN 

32 

   EN 

 
 
 
 
 
 
 
3.2.3.3.   Estimated requirements of human resources  

–  (cid:51)  The proposal/initiative does not require the use of human resources  

–  (cid:133)  The  proposal/initiative  requires  the  use  of  human  resources,  as  explained 

below: 

Estimate to be expressed in full amounts (or at most to one decimal place) 

Year 
N 

Year 
N+1 

Year 
N+2 

Year 
N+3 

… enter as many years as 
necessary to show the 
duration of the impact 
(see point 1.6) 

(cid:121) Establishment plan posts (officials and temporary agents) 

XX 01 01 01 (Headquarters and Commission’s 
Representation Offices) 

XX 01 01 02 (Delegations) 

XX 01 05 01 (Indirect research) 

10 01 05 01 (Direct research) 

(cid:121) External personnel (in Full Time Equivalent unit: FTE)59 

XX 01 02 01 (CA, INT, SNE from the "global 
envelope") 

XX 01 02 02 (CA, INT, JED, LA and SNE in 
the delegations) 

XX 01 04 yy 60 

- at Headquarters61 

- in delegations  

XX 01 05 02 (CA, INT, SNE - Indirect 
research) 

10 01 05 02 (CA, INT, SNE - Direct research) 

Other budget lines (specify) 

TOTAL 

XX is the policy area or budget title concerned. 

The human resources required will be met by staff from the DG who are already assigned to 
the  management  of  the  action  and/or  have  been  redeployed  within  the  DG,  together  if 
necessary with any additional allocation which  may be granted to the  managing DG under 
the annual allocation procedure and in the light of budgetary constraints. 

Description of tasks to be carried out: 

Officials and temporary agents 

External personnel 

59 

60 
61 

CA= Contract Agent; INT= agency staff ("Intérimaire"); JED= "Jeune Expert en Délégation" (Young 
Experts in Delegations); LA= Local Agent; SNE= Seconded National Expert;  
Under the ceiling for external personnel from operational appropriations (former "BA" lines). 
Essentially  for  Structural  Funds,  European  Agricultural  Fund  for  Rural  Development  (EAFRD)  and 
European Fisheries Fund (EFF). 

EN 

33 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.3.4.  Number and type of human resources freed  

Type of post 

Human resources freed and to be 
assigned to other priorities  
(by redeployment to other 
Commission services) 

Officials and temporary 
agents  

Total posts 

External personnel  

AD 

AST 

Contract 
agents 

Seconded 
National 
Experts 

Total external personnel 

TOTAL Full Time Equivalent (FTE) 
units 

2013 

0 

0 

0 

0 

0 

0 

One current AST staff member currently occupied with the organisation of the Observatory is 
on secondment from the OHIM. Its assistance will in future no longer be required in the 
Commission and the post will be returned to the Office. 

EN 

34 

   EN 

 
 
 
 
 
 
 
3.2.4.  Compatibility with the current multiannual financial framework  

–  (cid:51)  Proposal/initiative is compatible the current multiannual financial framework. 

–  (cid:133)  Proposal/initiative  will  entail  reprogramming  of  the  relevant  heading  in  the 

multiannual financial framework. 

Explain what reprogramming is required, specifying the budget lines concerned and the corresponding 
amounts. 

–  (cid:133)  Proposal/initiative requires application of the flexibility instrument or revision 

of the multiannual financial framework62. 

Explain what is required, specifying the headings and budget lines concerned and the corresponding 
amounts. 

3.2.5.  Third-party contributions  

–  The proposal/initiative does not provide for co-financing by third parties  

–  The proposal/initiative provides for the co-financing estimated below: 

Appropriations in EUR million (to 3 decimal places) 

Year 
N 

Year 
N+1 

Year 
N+2 

Year 
N+3 

… enter as many years as 
necessary to show the duration 
of the impact (see point 1.6) 

Total 

Specify  the  co-financing 
body  

TOTAL appropriations 
cofinanced  

62 

See points 19 and 24 of the Interinstitutional Agreement. 

EN 

35 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.3. 

Estimated impact on revenue  

–  (cid:51)  Proposal/initiative has no financial impact on revenue. 

–  (cid:133)  Proposal/initiative has the following financial impact: 

– 

– 

(cid:133) 

(cid:133) 

on own resources  

on miscellaneous revenue  

Appropriation
s available for 
the ongoing 
budget 
exercise 

Budget revenue line: 

Article …………. 

EUR million (to 3 decimal places) 

Impact of the proposal/initiative63 

Year 
N 

Year 
N+1 

Year 
N+2 

Year 
N+3 

… insert as many columns as necessary 
in order to reflect the duration of the 
impact (see point 1.6) 

For miscellaneous assigned revenue, specify the budget expenditure line(s) affected. 

Specify the method for calculating the impact on revenue. 

63 

As regards traditional own resources (customs duties, sugar levies), the amounts indicated must be net 
amounts, i.e. gross amounts after deduction of 25% for collection costs. 

EN 

36 

   EN