Tuesday, October 04, 2005

FIPR response to 2nd IPR Enforcement Proposal

FIPR have produced a considered response to the UK government's consultation on the latest EU proposal for a second intellectual property rights enforcement directive. (The original was passed in the Spring of 2004). I hope Ross Anderson, the chairman of FIPR and author of the response, won't mind me quoting large chunks here:

"The Foundation for Information Policy Research strongly opposes the new enforcement directive.

I will focus on the main issues.

Until now, large-scale copyright or trademark infringement has been a crime here, while patent infringement has been a matter for civil litigation. The new proposal will force the UK to make patent infringement a crime, and to criminalise incitement to infringement.

First, the criminalisation of patent infringement will damage competition, resulting in higher prices for consumers. For example, companies who make generic drugs once the molecule patent has expired are often harrassed by the original patent holder with lawsuits over secondary patents - which have a low probability of success but which are used cynically to delay competition by a year or two...

Second, new business formation and economic growth will also be hit, especially if patent infringement remains a civil matter in America. At present, all technology entrepreneurs take risks with intellectual property. There are so many patents, written so obscurely, that it's impractical to read them all; and many patents don't stand up in court once people dig hard for prior art. So a sensible entrepreneur will just start a business, and if it's successful she will have the money to pay royalties if she has to. Making patent infringement a crime rather than a civil matter will undermine this - especially as it will happen only in Europe, not in the USA. The natural reaction of European entrepreneurs will be to move to America and start their businesses there. (It's particularly interesting to note that while Microsoft is lobbying for IPRED 2 in Brussels, it's lobbying in the USA for less severe civil damages there - see here.)

Third, the criminalisation of aiding and abetting will create pressures for censorship. Phone companies and ISPs will be asked to filter Internet traffic for potentially infringing material...

Fourth, the UK software industry will be particularly vulnerable, as will people who rely on free and open-source software platforms. The Software Directive permits EU companies to reverse engineer their competitors' products in order to produce compatible, competing products. This is a historic compromise, worked out 17 years ago to promote enterprise and competition while still respecting the rights of incumbents. IPRED 2 will undermine it...

A particularly pernicious threat to free and open source software will come from the predatory abuse of IP by its enemies. At present Microsoft is reported to be funding SCO to bring civil cases against firms such as IBM that use GNU / Linux in their products...

Fifth, the disabled could be hit as the tools necessary to read copy-protected books, in order to make lawful `talking' versions of them under fair-use provisions of copyright law, could be criminalised.

Sixth, librarians already have a lot of trouble complying with copyright. For example, in the UK there are about fifty different durations of copyright, depending on whether the material is published and in what media. With electronic publications, there are often contract terms too: a library typically has dozens of contracts, all with different conditions. The current proposals will make this worse by making librarians criminally liable for aiding and abetting, unless they become more active enforcers of copyright law in their libraries. And since copyright infringements are not necessarily black and white, and librarians' employers are risk-averse, libraries will err on the safe side and discourage practices which would not actually be deemed infringements by a court. This will reduce, in practice, the freedoms to copy that UK citizens enjoy in theory.

Seventh, universities will also feel the squeeze. Academics often put preprints of papers on our web sites, which can be a technical infringement if the papers are subsequently published in a journal whose contract restricts it. Also, we suffer increasing harrassment by the record industry over students swapping songs. If university managers can be jailed as accessories for all copyright infringement that is claimed to have a commercial effect, then they will be much more aggressive at policing the content that passes over their networks - which will be profoundly contrary to academic values.

There is a specific concern for people who engage in security research. The Directive does not contain any exemption for research; it may become technically illegal to possess a laser (as it can be used to forge a hologram), or a magnetic-card reader-writer (as it can be used to forge a credit card)...

Finally, there are issues of justice. Previously most companies preferred to sue over copyright infringement rather than to bring criminal charges, because they could get discovery, injunctions and damages (see, for example, Cornish's textbook `Intellectual Property'). By insisting that Member States make such remedies available to the injured parties in criminal cases about intellectual property, the Directive will distort the system of justice itself. The police will be able to demand information from defendants in copyright cases that they are not allowed to demand even in terrorism cases (see `Brown gets tough on France, Italy over trade', Evening Standard, 9 September 2005 p 10). This will lay ministers open to ridicule from both the IP-rights lobby and the law-and-order lobby at the same time. Is that what you want to achieve?

The UK's interests are not at all well served by this directive, and I strongly urge you and your colleagues to use the opportunity of the UK Presidency to kick it into touch."

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