As the European Commission pushes forward with proposals for pan-European intellectual property laws, June O'Keeffe says that it may well be left to the European Court of Justice to iron out challenges from member states

While many may think there is nothing criminal (other than from a style point of view) in toting a fake Louis Vuitton handbag, Europe's legislators take a different view.


With piracy and counterfeiting often viewed in a very different light from everyday offences such as shoplifting, they are not victimless crimes. In fact, these days trade in counterfeit goods is much more likely to affect everyday purchases in our shopping baskets such as food, including baby food, and consumer goods, rather than the traditional luxury fakes that have been around for years.


All EU countries already have penalties - although they range considerably - for those found guilty of either producing or trading in counterfeit goods.


The European Commission nonetheless decided it was time to come forward with a pan-European solution to the problem to ensure that intellectual property (IP) rights are subject to the same level of protection throughout the EU. In July 2005, the commission first brought forward proposals aimed at ensuring enforcement of IP rights. These proposals have now been resubmitted in the light of a European Court judgment last September, which held that the commission had powers to impose criminal penalties for the effective implementation of community law.


While the case was essentially concerned with safeguarding the environment, its reach went much further. The decision caused a media furore at the time and led to a series of headlines about Europe having the power to jail Britons. There was a great deal of column inches dedicated to Britain's erosion of sovereignty in the sensitive area of criminal law.


The reality is, as ever, more prosaic. While there certainly has been more and more activity in the field of criminal law, it has largely been on an incremental basis and initially restricted to consultations on a range of issues, with a few notable exceptions such as the European arrest warrant adopted hot on the heels of the 11 September 2001 attacks.


One current initiative is the discussion document on the presumption of innocence, with further consultations expected later this year on in absentia judgments and evidence safeguards. There is barely any further talk on proposals to create a European public prosecutor whose remit would be restricted to fighting fraud against the community budget.


What is interesting about the IP proposals is that they are being adopted under what is known as the first pillar of the EC Treaty, which deals with the internal market and related issues, as opposed to the third pillar which deals with justice and home affairs.


The practical consequences of this are that the UK cannot veto the proposals, as they will be adopted by majority voting, while they will be subject to the jurisdiction of the European Court of Justice. They also stipulate the penalties to be applied, rather than adopting the wording of previous decisions, which permitted member states some leeway to 'take the measures necessary to ensure that the measures referred to are subject to effective, proportionate and dissuasive sanctions'.


The penalties include confiscation of equipment and goods, fines, and even custodial sentences when infringements are committed under the aegis of a criminal organisation, or when the infringement poses a health and safety risk. The proposals are wide ranging in that they cover all IP rights and provide that attempting, aiding or abetting and inciting such infringements are treated as criminal offences.


The incitement provisions are particularly problematic and open to interpretation. It has been suggested that this could cover advice given to developing countries on the production of generic drugs.


Although enforcement will be left to national judges, the very idea that criminal sanctions are being proposed by the European Commission, rather than the Houses of Parliament in the UK, has led to objections in political circles. UK solicitor MEP Timothy Kirkhope was quoted in The Times on 27 April 2006 as saying: 'I am very, very disturbed by it. Criminal law has to remain under the control of nation states. The penalties - deciding when people go to prison - have got to be dealt with by our own legislators.'


The counter-argument being put forward by the commission is that it will only revamp existing laws applying a strict necessity test. In other words, a decision to criminalise a particular aspect of community law would not be taken lightly in view of the serious concerns to member state sovereignty and potential stalemate in the Council of Ministers.


The commission has had to adopt a cautious line, particularly given its previous experience with regard to proposals to provide for Europe-wide safeguards in criminal proceedings. These proposals, which would have provided suspects and defendants with a standard EU-wide letter outlining their rights - including the right to legal advice, the right to interpretation and translation and the right to consular assistance - have not met with a favourable response from national governments.


So where do we go from here? The EU will continue to seek pan-European solutions to resolve cross-border issues and the member states will continue to assert their rights to deal with national problems as they best see fit. The boundaries between the two will become increasingly blurred, which will make for some interesting tussles in the future.


Challenges to European legislation, such as the one brought by the UK government against the Working Time Directive, may become a more prominent feature of the EU dynamic, with the European Court of Justice as the ultimate arbiter of where the lines should be drawn.


June O'Keeffe is head of the Law Society's Brussels office; e-mail: june.o'keeffe@lawsociety.org.uk