Problems relating to Trade and Investment on EU

 
17. Implementation of intellectual property rights ("IPRs")
Issue
Issue details
Requests
Reference
(1) Problems concerning Private Copying Remuneration (PCR) Schemes - It is said that quite a number of enterprises do no pay surcharge under Private Copying Remuneration Schemes on Device or Storage Medium (PCRS) that they are obligated to pay. It means that those who pay in good faith must stand on the competitive disadvantage.
- Directive Chapter II, Article 5(2) directs: "the rightholders receive fair compensation which takes account of the application or non-application of technological measures". However, some Member States fail to reflect expressly the thrust of this Directive into the provisions of their domestic laws.
- Numerous problems are pointed out over private copying remuneration schemes: in the case of coverage under the non-use for private copying [Existence of general purpose products, the question of how to properly exclude business use of media from private use], double payment in addition to the consideration for licence, existence of copyright owners not asserting copyright, problems over distribution, etc. On the other hand, with the development of the digital technology world, it should be possible to pass on the consideration to the creator without relying upon the PCRS.
In light of the foregoing, variances in the private copying remuneration schemes (PCRS) by each member state, double payment of private copying remuneration (PCR) on cross border transactions, enterprises with cheaper or no compensation standing on a more favourable competitive position, etc. will end up by contravening the product planning and distribution, as well as formation of the single market in the European Community. On the other hand enterprises must put up with the excessive clerical burden, having to research and study the complex PCRS in each Member State.
- Many EU Member States have introduced PCR as compensation to rightholders arising from private copying. However, the rates are not harmonised among the Member States, barring achievement of the Community Market.
- In October 2010, the EU Court of Justice handed down its decision (C-467/08):
(1) Excluding the use by natural person, PCR levy on business use products contravenes the EC Directive.
(2) PCR serves as compensation for legitimate private copying which is permitted as an exceptional measure.
(3) PCR is to be borne in the end by the user, being beneficiary of private copying.
However, it is not necessarily materialised in each Member State so that in many Member States, PCR levy on business use products continues to this day. Certain Member States have introduced the system of once levying PCR on all private copying equipment including business use products and thereafter execute ex post refund of PCR, However, this system heavily burdens business operators, who must first make payment which is by nature not necessary and for the costs incurred for receipt of refund.
- It is clear from the Directive and the Court of Justice Decision (C-467/08, etc.) that the final PCR payer is the user that makes private copying. However, in many Member States that implement compensation scheme, users are not noticed the price of the equipment user purchases includes how much compensation. Therefore, the users are unaware that they pay unjustifiable high amount of compensation.		 - On the assumption of the going implementation of the System, it is requested that EU promulgates a measure to ensure fairness between the enterprises that discharge their payment obligations and the enterprises that do not honour their payment obligations.
- It is requested that each Member State includes in the respective Domestic Law the requirement for "taking full account of the application or non-application of technological measures."
- [Institutional Issue]It is requested that EU takes steps to:
-- repeal PCRS, and employs a method other than PCRS to pass-on to creators the consideration for their creative work.
-- implement as soon as possible Antonio Vitorino's recommendations resulting from the mediation on private copying and reprographic levies submitted to EC in order to reform the going PCRS, should early repeal be impracticable.
- [Practical Issue]
-- On the assumption that the going system continues to apply, it is requested EU releases on its own website in English, "information on the subject products/media, amount or royalty percentage for each Member States" that faithfully reproduces the regulations of each Member State.
-- In the event each member state releases such information in English, from the viewpoint of reliability, each Member State releases or each Member State website, and for the sake of easy access to each Member State's website, it is requested that EU's website includes "click here" hyperlink in each Member State's website.
- It is requested that EU:
-- harmonises the PCRS among the Member States as soon as possible,
-- replaces the current system with a system that rightholders directly collect compensation from infringing parties in long-term.
- It is requested that the EU takes the leadership in assuring the decision in the left column will be materialized soon by making some guidelines based on Vitorino Recommendations.
- It is requested that EU takes steps to mandate the EU Member States levying compensation, to expressly mark the compensation amount for the benefit of the users of copying equipment/media.		 - Directive 2001/29/EC
- ECJ (C-467/08 - "Padawan"
- EU Private Copying Remuneration Schemes (PCRS)
  (Info)
- Most of the EU member states have introduced the levy for fair compensation for private copying, excepting U.K., Ireland, Cyprus and Malta. Directive 2001/29/EC on the harmonisation of certain aspects of copyright and related rights in the information society (Copyright Directive) under Article 5.2(b) directs the member states to assess "a fair compensation which takes account of the application or non-application of technological measures referred to in Article 6 to the work or subject-matter concerned". However, despite the advent of the copy protection technology in recent years, incorporation of the Copyright Directive into the domestic acts as they now stand do not seem to fully reflect the thrust of the levy system under Article 5.2(b) of Copyright Directive.
  (Action)
- European Commission incorporated private copying levy reform in its 2006 Work Programme, inviting comments of stakeholders. However, the Commission's planned reform of the copyright levy system has hardly made any progress at all and in 2007, the renovation programme was scrapped.
- On 21 November 2010, Court of Justice of EU handed down its decision on the concept of "fair compensation" within the meaning of EC Copyright Directive in a litigation ordering PADAWAN SL payment of Private Copying Levy on Spanish business equipment: that 'fair compensation' must be interpreted uniformly in all the Member States, fair compensation must be calculated on the basis of the criterion of the harm caused to authors of protected works, and that application of the private copying levy, in particular with respect to digital reproduction equipment, devices and media not made available to private users and clearly reserved for uses other than private copying, (business equipment at government offices and private enterprises) is incompatible with the Directive.
(Ref: http://curia.europa.eu/jcms/upload/docs/application/pdf/2010-10/cp100106en.pdf)
- In July 2012, the European Commission released Proposed Directive on Collective Management of Copyright and Related Rights and Multi-Territorial Licensing. It compels the collecting societies to develop/attain technical competency and to expedite payment of royalty on copyright.
(2) Delays in Patent Issuance - Compared to other countries, EU takes a longer period for examination of patent application. For example, in the case of 2011 EU registrations, the distribution peak from filing of application to registration was about 6-years, compared to 3 to 4-years, in the case of the U.S.
- There is a considerable gap in the final disposal period of the patent applications among the Patent Offices of Japan, USA and EU, where EU's 4-years makes quite a gap compared to 2+Alpha of Japan and USA. Delays and the high cost of maintenance/renewal fees, annual or otherwise, of the pending patent applications put heavy burdens on the applicants. It is hoped that the pilot program began in January 2010 on Trilateral PCT-Patent Prosecution Highway (PCT-PPH) proves effective in speeding up patent examination period and in cost reduction.		 - It is requested that EU expedites not only on specified cases under the PACE accelerated procedures, etc. but cuts down the total examination period by increasing examiners, etc.
- It is requested that the European Patent Office will:
-- speed up final disposal period,
-- reduce maintenance cost of patent applications, and
-- take measures to cut down the period of time before the patent is issued.		 - Examination and Employment
- European Patent Convention (EPC)
  (Action)
- A Comprehensive Patent Prosecution Highway (Pilot) Programme between Japan and U.K. are being worked in full-fledged basis, and as a pilot programme, between patent offices of Japan vs. Denmark, Finland, Austria, Hungary, The European Patent Office (EPO), Spain, Sweden, Nordic Patent Institute, Norway, Portugal and Poland.
(3) EU's High Cost of Patent Acquisition and Complexity of the Litigation System - In the EU, after patent is issued, the patentee incurs substantial cost of translation into various languages as required pushing up the total cost of filing a patent application by far exceeding the cost incurred in the U.S., etc. This is a factor that slows down research and development in the EU. A varied litigation procedure in each Member State also makes it difficult for the patentee to utilise. - In December 2012, the European Parliament approved draft regulations on unitary patent protection (UPP) and the unified patent court. It is requested that EU advances its design in the form and manner that facilitate the users in quality and cost. - European Patent Convention (EPC)
  (Improvement)
- Draft Partial Agreement of Single EU Patent System: Council of the EU, agreed in December 2009, on an Enhanced Patent System In Europe, is a big step forward for the purpose of establishing the Single Patent System in Europe (SPSE), including one of the core arguments at the Council, establishment of the European and Community Patents Court (EEUPC) that adjudicates exclusively all litigations related to patents.
- "Proposal for a Council Regulation (EU) on the translation arrangements for the European Union patent" released in July 2010, deals with a proposal for the final element of SPSE, namely, translation languages. It proposes patent examination and issuance based on one of the three official languages of the European Patent Office (EPO) (English, French and German), pursuant to the existing European Patent System. The conclusions confirmed that in order for the EU patent to become operational, the necessity inter alia for arrangements concerning the rolling out of the high quality automated machine translation programme that covers all EU official languages.
- In December 2012, Council Regulation CREU-Translation was adopted. In March 2013, Spain filed complaint to Court of Justice of the European Union (CJEU) for voiding the Regulation. In November 2014, CJEU dismissed the Spanish complaint.
- As regards the court location to adjudicate the patent issues under the EU Single Patent System (EU Single Patent System (EUSPS)), The Headquarters' Function will be placed in Paris, while Special Technical Issues will be tackled in London and Munich. EUSPS will function beginning from 2014.
(4) Discrepancies between the Unitary Patent Protection and the going European Patent Convention (EPC) - While Unitary Patent Protection System (UPPS) is due for enforcement in the beginning of January 2014, it does not repeal the going EPC, which continues to exist for the predetermined transfer period, complete with the provisional period (the period for filing Exclusionary Application) for expressing the applicant's choice from the available systems. While EPC allows 4-months for response (a period for deciding in what patents obtain countries) on prior notice of permission, under UPPS, it is very short, only 1-month is available for filing exclusionary application. The choice between UPPS and EPC is closely related to the selection of the designated country in deciding the country in which patent protection is sought. It is the applicant's desire to have the period synchronised to the 4-months between the period for filing exclusionary application and the period for Prior Notice of Permission under EPC.
- The current EPC will continue to operate in parallel with the Unitary Patent Protection System (UPPS) during the transfer period upon expiry of which it will cease to operate so that UPPS will operate as the Unitary Patent Protection System in the EU. Nevertheless, despite its due enforcement in January 2014, the fees remain undecided under the UPPS. As it stands, patent applicants are unable to determine whether to opt for UPPS, in the absence of the information on the economic benefits from opting for UPPS.		 - It is requested that EU synchronises the period between the period for filing exclusionary application and the period for prior notice of permission under EPC for enhancement of the applicants' convenience.
- It is requested that EU:
-- determines the fees under UPPS as soon as possible, and
-- establishes the fees in such a way that UPPS is more beneficial in cost as well, for example, at the fee levels for the 3-languages (English, German, and French) under the going EPC scheme.
(5) Excluded Patent Protection of Programmes for Computers - Convention on the Grant of European Patents does not protect programmes for computers per se as invention. Therefore it does not protect patent holders from the counterfeit programmes available on the internet, which is not equipped with recording media. - It is requested that EU modifies the Convention on the Grant of European Patents so that it protects programmes for computers themselves. - Convention on the Grant of European Patents, Article 52(2)(c)
(6) Continued Payment of Renewal Fees - As it stands, renewal fees are payable by the year. The past payments up to the date of withdrawal of patent application are wasted in case the patent application is withdrawn in the end.
- Under the Japan or the U.S. scheme, payment of "Patent Maintenance Annuity" (PMA) begins after completion of Patent Registration, whereas in EU, PMA payment obligations begin even before the start of registration or examination. Compared to Japan/the U.S., it takes longer time before the patent gets registered in EU, which means PMA burden is heavier in EU than in Japan/the U.S.		 - It is requested that EU takes steps to amend the law: renewal fees are payable:
-- after the patent issue, or
-- in lump sum for all the past renewal fees upon the patent issue.
- It is requested that EU dispenses with the PMA payment requirement, preceding the Patent Registration.		 - The European Patent Convention Article 86
(7) Efficiency is Procrastinated to Combat Counterfeit Goods in EU - EU Council Regulation No.1383/2003, a Uniform Rule for Suspension of Counterfeit Goods, does have positive factors in that a single filing of application for Customs Registration Procedure, etc. Will suffice for the entire Member States, obviating the need for Bond Posting for Detention of Counterfeit Goods, consignee's positive consent on confiscation / destruction of the IPRs infringing products, etc.
However, certain Member States have not yet adopted this Directive, so that separate filings of applications are necessary. It makes the Directive partially ineffective in the absence of the Consignee's Positive Consent or Response on confiscation / destruction of the IPRs infringing products, etc. Therefore, it requires a fresh institution of Civil Proceeding, even where the infringement is apparent. The procedures are onerous and inefficient for the IPRs holders.		 - It is requested that EC causes all Member States to adopt this Directive. - EU Council Regulations (1383/2003)
  (Action)
- In January 2012, EU and its 22-member states signed the Anti-Counterfeiting Trade Agreement (ACTA), whereas the European Parliament denied the ratification of ACTA with the overwhelming majority. The European Commission takes the position that it would seek the decision of the Court of Justice of the European Union (CURIA) on the ACTA's compatibility with the EU Laws, before deciding upon the responsive measures. However, in December, the European Commission withdrew its reference to CURIA , concerning ACTA's compatibility with the EU Laws.

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