International and European Criminal Measures on Intellectual Property Rights


On October 2, 2010, the 11th and final round of the negotiations for the Anti-Counterfeiting Trade Agreement (ACTA) was concluded successfully in Tokyo, Japan. The Government of Japan hosted the negotiations. Participants in the negotiations included Australia, Canada, the European Union (EU) - represented by the European Commission and the EU Presidency (Belgium) and the EU Member States- , Japan, Korea, Mexico, Morocco, New Zealand, Singapore, Switzerland and the United States of America.

ACTA aims to establish a comprehensive international framework which will assist Parties to the agreement in their efforts to effectively combat the infringement of intellectual property rights, in particular the proliferation of counterfeiting and piracy. The draft of the agreement includes state-of-the-art provisions on the enforcement of intellectual property rights. This includes provisions on civil, criminal, and border enforcement measures, robust cooperation mechanisms among ACTA Parties to assist in their enforcement efforts, and establishment of best practices for effective intellectual property rights enforcement.

EU criminal measures and competence

The Presidency of the Council, representing the Member States, negotiated the criminal measures. It is uncertain whether the Presidency is competent to do so. According to art. 3.1 of the Treaty on the functioning of the European Union (TFEU), the European Union has exclusive competence in the area of common commercial policy. In this case, ACTA negotiations should possibly have been conducted by the European Commission. The Presidency of the Council may not be competent to initial criminal measures in trade agreements.

Until September 2005 it was commonly understood that the Treaty establishing the European Community conferred no power to define criminal offences or prescribe criminal sanctions. The extent of the European Union’s legislative competence in relation to criminal law and procedure was generally considered to be limited to title VI (provisions on Police and Judicial Cooperation in criminal matters, commonly referred to as the third pillar) of the treaty on European Union.

The Treaty of Lisbon entered into force on 1 December 2009. The EU is competent to make criminal law. Criminal measures on intellectual property rights have to be based on art 83.2 TFEU: “If the approximation of criminal laws and regulations of the Member States proves essential to ensure the effective implementation of a Union policy in an area which has been subject to harmonisation measures, directives may establish minimum rules with regard to the definition of criminal offences and sanctions in the area concerned. Such directives shall be adopted by the same ordinary or special legislative procedure as was followed for the adoption of the harmonisation measures in question, without prejudice to Article 76.” Furthermore, the criminal measures have to comply with the Treaties, and measures have to be “essential” and comply with the principle of proportionality (see also the controversy competence cases of the European court of justice, case C-176/03 and case C-440/05, European Commission vs European Council).

The ACTA agreement's appropriateness should match the EU principle of proportionality. As a consequence of that EU principle, the qualification characteristics of the elements of a crime must be defined as clearly and narrowly as possible. The Max Planck Institute concluded in its statement on the proposal of the Criminal Measures IP Directive by the European Commission (COM/2005/276/FINAL), that harmonisation of criminal law in the field of intellectual property, must remain confined to cases of clear piracy and counterfeiting:

“14. Restricting the application of the directive to infringements carried out “on a commercial scale” fails to provide for an appropriate and sufficiently precise definition of the elements of a crime, all the more as it would practically only exclude acts undertaken in good faith by consumers. An example of a more precise definition of what constitutes counterfeiting and piracy can be found in Council Regulation (EC) No 1383/2003.
15. Indeed, when proper account is taken of the proportionality principle, harmonisation of criminal penalties can only be justified in relation to acts fulfilling the following elements cumulatively:
- Identity with the infringed object of protection (the infringing item emulates the characteristic elements of a protected product or distinctive sign in an unmodified fashion [construction, assembly, etc.]).
- Commercial activity with an intention to earn a profit.
- Intent or contingent intent (dolus eventualis) with regard to the existence of the infringed right.”

Since the broad definition of commercial scale in ACTA with “Commercial activity with an intention to earn a profit”, one can only conclude ACTA’s criminal measures fail to meet the EU principle of proportionality. According to an analysis of the FFII (Foundation for a Free Information Infrastructure) the Anti-Counterfeiting Trade Agreement is not in line with present EU laws.
An opinion of the European Court of Justice as to whether ACTA is compatible with the EU Treaties and laws should be obtained.