European Business Law, the fourth volume in our series, shows how the European authorities simultaneously abolish all restrictions on access to and exercise of economic activities and support the growth of domestic markets, through the harmonization the internal legislation or the enactment of genuinely unified regulations.

European Business Law

Directive No 2004/48 of 29 April 2004 , which is aimed at ensuring a high, equivalent and homogeneous level of protection of intellectual property within the internal market, has only partly reached that objective by reason of its lack of severity with respect to counterfeiters and pirates whose activities have increased  and the existence in certain Member States of less protective provisions. The frequently non-binding nature of the provision is an advantage for the Member States who can then apply their more liberal national provisions. EU law precludes, however, national legislation, under which the owner of an internet connection used for copyright infringements through file-sharing cannot be held liable to pay damages if he can name at least one family member who might have had access to that connection, without providing further details as to when and how the internet was used, since such a rule is not capable of leading to effective and dissuasive sanctions against the perpetrator of that infringement, unless, for the purposes of preventing an unacceptable interference with family life, rightholders had at their disposal another effective remedy, allowing them, in particular, in such a situation, to have the owner of the internet connection in question held liable in tort . 

The directive relates to all intellectual property rights, including patents, initially excluded from the proposal for a directive. It affects neither the substantive law on intellectual property nor the specific provisions on the enforcement of rights and on exceptions concerning copyright and related rights, or the national and international obligations on Member States and relating to criminal procedures and penalties applicable in respect of infringement of intellectual property rights (Article 2).

Directive No 2004/48 concerns the measures, procedures and remedies necessary to ensure the enforcement of intellectual property rights (Article 1) and applies to any infringement of intellectual property rights as provided for by European law and/or by the national law of the Member State concerned (Article 2). Only holders of intellectual property rights and other persons authorized to use them (licensees), intellectual property collective rights-management bodies and professional defense bodies are entitled to seek application (Article 4). The capacity as author is presumed to belong, in accordance with the Berne Convention , to the person whose name appears on the work. The same presumption applies to the holders of rights related to copyright (Article 5).

Regarding evidence, the judicial authorities are given the power to order the disclosure of banking, financial or commercial documents under the control of the opposing party, in the case of infringement committed on a “commercial scale”, subject to the protection of confidential documents (Article 6). The judicial authorities have also the power to order provisional measures to preserve evidence (the taking of samples, of the infringing goods, materials and implements used in the production and/or distribution of these goods and the documents relating thereto). In order to ensure compensation for any prejudice suffered by the defendant, provisional measures may be subject to the lodging of security or an equivalent assurance (Article 7). These measures must further be followed by civil or criminal proceedings on the merits within a reasonable period .

A special interlocutory procedure is created in case of ascertained or imminent infringement of an intellectual property right. In such a case, the judicial authorities may, at the request of the applicant, issue provisional and protective measures (prohibition subject to penalty payment, lodging of guarantees, seizure or delivery up of goods, seizure of movable and immovable property, blocking of bank accounts other assets, communication of bank, financial or commercial documents, etc.) (Article 9). Protection of the right holder is however limited since he can launch that procedure only if he has previously presented “reasonably available evidence sufficient to support its claims”. The national law of certain Member States, more protective, does not subject the implementation of a procedure to that condition but leaves it to the court's discretion. Resorting to that procedure thus enables the right holder to gather necessary evidence, since an abusive seizure is penalized by the possibility offered to the seized party to claim damages. 

Since surprise is indispensable to the success of seizure, Article 9(4) lays down the possibility to take provisional measures without the defendant having been heard. This violation of the defense rights is however accepted only in limited cases - in case any delay would cause irreparable harm to the right holder or in case of demonstrable risk of evidence being destroyed - which limit the rights of the holder, where the seized party has, in return, a right to be promptly informed as well as a right of review.

Directive No 2004/48 establishes a right of information intended to fight infringing networks by allowing victims to ask the competent judicial authorities to give precise information on the origin of infringed goods or services, the distribution networks and the identity of third parties involved in the infringement (Article 8). The exercise of that right may be used to supplement the pieces of information obtained as part of the seizure of infringing material. The right of information laid down in Article 8, which guarantees the right to an effective remedy, is applicable not only in proceedings seeking a finding of an infringement of an intellectual property right, but also in the context of separate proceedings brought after the termination of such an action .

At the civil level, the victim of an infringement found by a judicial decision has the right to ask the court to cause that infringement to cease, if necessary subject to penalty payment (Article 11) , as well as the taking of corrective measures, such as recall or definitive removal from the channels of commerce or destruction (Article 10). The violation of an intellectual property right is traditionally an infringement that incurs the civil liability of its author. The directive further lays down the possibility for the holder of the right harmed by an infringing activity to obtain compensation that is distinct from the civil liability under general law (Article 13). Two alternative calculations of the damages are set. The first one takes account of the lost profits for the right holder, his moral prejudice and unfair profits made by the infringer. The second provides for setting the damages as a lump sum on the basis of elements such as “at least” the amount of royalties or fees which would have been due if the infringer had requested authorization to use the intellectual property right in question. Regardless of the calculation method adopted, it seems rather not dissuasive insofar as it would have been better, in the first case, to take account of all the profits made by the infringer and in the second, to provide for the doubling of the contractual fee, as suggested in the proposal for a directive . The optional character of the right to compensation when the infringing action is involuntary does not go towards greater protection of the holder. In effect, the Member States are not required to order payment of profits or collection of damages when the infringer engaged in an infringing activity without knowing it or without having reasonable cause to have known.

See Communication from the Commission No 2009/67 of 11 September 2009 entitled "Enhancing the enforcement of intellectual property rights in the internal market", which notices the increase in the piracy and counterfeiting phenomena, particularly favored by the Internet.

Case C-149/17 Bastei Lübbe GmbH & Co. KG, Judgement of 18 October 2018, LawLex201800001541JBJ.

Berne Convention of 9 September 1886, Article 15: "1) In order that the author of a literary or artistic work protected by this Convention shall, in the absence of proof to the contrary, be regarded as such, and consequently be entitled to institute infringement proceedings in the countries of the Union, it shall be sufficient for his name to appear on the work in the usual manner. This paragraph shall be applicable even if this name is a pseudonym, where the pseudonym adopted by the author leaves no doubt as to his identity".

If the judicial authority fails to determine that period, such period cannot exceed 20 working days or 31 calendar days, whichever is the longer (Directive No 2004/48, Article 7(3)).

Case C-427/15 New Wave CZ, a.s., Judgment of 18 January 2017, LawLex201700000119JBJ.

Apart from the infringer, an application for an injunction can be brought against intermediaries whose services are used by a third party to infringe an intellectual property right: Case C-494/15 Tommy Hilfiger Licensing LLC, Judgment of 7 July 2016, LawLex201600001266JBJ.  

For an application in line with the proposal for a directive, see Case C-367/15 Stowarzyszenie "Olawska Telewizja Kablowa", Judgment of 25 January 2017, LawLex201700000168JBJ.

284. Means to enforce intellectual property rights