[DMCA-Activists] Electronic Frontier Finland on EU Patents

[Seth Johnson]

(Forwarded from Patents list)

-------- Original Message --------
Subject: [Patents] Electronic Frontier Finland criticizes EU on patents
Date: Tue, 27 May 2003 18:08:05 +0200
From: "Sylvain Perchaud" <address@hidden>
Organization: Europe Shareware
To: Brevets <address@hidden>

<http://www.effi.org/julkaisut/lausunnot/ipr_enforcement_lausunto.en.html>

EFFI: STATEMENT ON THE PROPOSED IPR ENFORCEMENT DIRECTIVE


Abstract:

The EU Commission proposes a new directive that would increase the
monitoring of copyrights and patents. The proposed directive is based quite
unilaterally on studies made for the media industry. For example, the
proposal compares piracy to drug trade and terrorism, punitive damages are
proposed and it is proposed that defendants should pay the publication of
judgements in the newspapers. Electronic Frontier Finland ry (EFFI) has
submitted a statement on the proposed directive.

**********

[Translated to English on 27th May 2003.]

To the Ministry of Transport and Communications

Statement on the proposed IPR enforcement directive

Electronic Frontier Finland - EFFI ry

General remarks

EFFI considers the proposed directive mainly unnecessary since the current
legislation on intellectual property rights requires already that
sufficiently efficient judicial protection is incorporated into national
legislations (e.g. TRIPS). However, because it seems apparent that the
directive is really attempted to be made into force we want to comment some
parts of it.

We are especially concerned of digital products, which the directive
compares to e.g. medicines, alcohol, toys and car parts. We naturally wish
that piracy and counterfeits are efficiently weeded out when it is a matter
of safety and the health of individuals. However, we cannot agree with the
assumption that the same rules should apply also to digital products.

Notably the "studies" behind the proposed directive are not about safety or
health but of digital products. The most used source seems to be the
statistics of the Business Software Alliance (BSA) regarding the possible
markets and employing effects of computer software. Generally speaking,
using material produced by various interest groups indicates bad
administrative practice. EFFI thinks the commission should have first
conducted politically neutral background studies with impartial research
institutions.

The BSA statistics have among other things severe methodological problems.
For example, the alleged loss figures of software and media industries are
based on assumptions that one pirated copy would correspond to one purchased
copy and that these imaginary profits would be used to hire new employees.
In reality the media industry also benefits significantly from piracy in
Eastern Europe e.g. because of network effects and brand dispersion. On the
other hand, the media industry does not really employ directly others than
administrative people and lawyers lobbying new laws like this one. Moreover,
alternative business models for digital products that are not based on
license fees (e.g. open source computer software, various marketing
strategies) have not been taken into account when calculating the alleged
losses.

Law making cannot be word play

The language used in the proposed directive is especially worrying. The
official documents are widely referenced and they should therefore be
written using appropriate language and claims should be supported with
references to neutral studies. If the only available statistics and studies
are from various interest groups (for example because of monopoly situation)
one should be especially careful with the source critique.

This directive does not fulfill these minimum requirements. The strangest
thought in this proposal is connecting piracy to organized crime and
terrorism. A word play like this is nothing new to the media industry
interest groups. The proposed directive claims without any reference (p. 12)
that e.g. "piracy - - goes hand-in-hand with organized crime",
"...laundering earnings", "...are even said to have become more attractive
nowadays than drug trafficing" and "...factor in promoting crime, including
terrorism". These allegiations have not been accounted for in any way. We
can only wonder the courage of the drafters of the proposed directive to
rely so strongly on the political rhetorics of only one party.

To exaggerate a bit, we could argue that one should have more severe
penalties for travelling without a valid ticket in public transports since
the current small penalties for free riding encourages crime. Let us also
remember that drug trade and terrorism are crimes and see: travelling
without a ticket is connected to terrorism and drugs! With this kind of
reasoning it is of course easier to gain political support for the
legislative initiative. Of course, it was not mentioned that if the price of
the ticket is too high and if the penalties are unreasonable a part of the
passengers will walk or cycle - which might have beneficial health effects
for the society as a whole.

The choice of words create impressions and impressions become in time
"truths" unless they are questioned. Even though the language of the
directive is in some parts quite humorous it is still a serious and far
reaching matter. Therefore EFFI thinks that Finland should point out the
language and at least suggest that the flagrancies in pages 12-13 are
written anew.

Detailed comments

Punitive damages (article 17)

Finland and other EU countries have so called full compensation principle.
The occured damage is compensated fully, no more and no less, unless there
are special reasons to settle down the compensation. For example in
copyright violations the starting point has been the normal licenced price
of the product and the damages have been settled down if the compensation
would have been unreasonably high (e.g. piracy BBS cases). It is also
important to remember that the copyright holder benefits more from
compensation than license sales since in the case of compensation there has
been no need to pay the production costs or taxes.

The proposed directive diverges from this principle significantly. According
to article 17 the basis for compensation should be two times the regular
licensing fee. There is no mentioning of any settling principles.
Alternatively the article proposes a compensation that would be based in
addition to the licensing fees to the incomes that would possibly have been
earned without the copyright violation. A proposal like this would lead to
the strange situation that opposing piracy could become a profitable
business. In this form article 17 would "legalize" the calculations of BSA
that could apparently be used as such for the basis of compensation in legal
judgements.

The idea of punitive damages is therefore not only unreasonable but also
possibly against the principles of the criminal law. EFFI proposes the
article to be written totally anew.

Publication of judgements paid by defendant (article 19)

Article 19 introduces a questionable punitive method: the one who infringes
intellectual property rights should pay for the publication of the judgement
in a newspaper selected by the rights owner. As a punitive method this
conviction of shame is most likely against the principles set in human
rights treaties. The proposed article does not define how severe the
infringement must be and how expensive the publication may be. Obviously the
rights owner has the power to decide these details. This can not be said to
be neither fair nor according to the principles of criminal law (it must be
clear what kind of penalty follows from particular crimes)

Patented technical protection measures (article 21)

Article 21 would create without sufficient justification one more legal
protection layer to digital products. We don't see any category of digital
works which would need this new protection layer. At the moment copyright,
technical measures (as in copyright directive) and patents cover digital
products and computer programs. With the proposed article 21 the
circumvention of technical protection systems could be intrepreted once
again as criminal activity without any defense options left to those who
circumvent.

Obviously the legislator does not understand what technical protection
measures are. In practise e.g. different file formats (Microsoft Office) and
security algorithms (DVD and CD copy protections) include a number of
patents. There is a lively and ongoing EU-wide debate on e.g. when a private
person may circumvent technical protection if legal use of a work is not
possible. Copyright directive and national legislation has currently
defenses to hackers though the legislator tried a same kind of trick: it is
allowed to circumvent DVD- and CD-protections if it is not possible to play
the record legally in e.g cars and portable devices. It is also legal to
decompile a file format if the aim of decompilation is for example
interoperability. What happens to these important exemptions if the proposed
article 21 is accepted?

In essence, does article 21 mean that DVD- and CD-copy protections may not
be hacked just because they include patents? In that case article 21 would
be in conflict with the basic principle that this directive would have
nothing to do with the contents of patent and copyright laws. EFFI thinks
that Finland should first and foremost demand the dropping of article 21.
Second, and at the minimum, Finland should require the clarification of the
criteria for circumvention of patented technical protection for legal
purposes. In addition, we can only understand that particular uses of
hacking devices may be in some circumstances illegal but the possession and
manufacturing should be always allowed since they have also legal uses
(compare to guns and regarding copyright photocopying machines, videos and
peer-to-peer networks).

Summary

Finally, we stress that the directive proposal is extremely political
instead of its technical harmonizing goals. Its implications are not limited
to "industry" but it also affects individuals, small and medium size firms
and all kinds of hobby activity.

It is hardly a coincidence that the directive proposal comes out just before
EU enlargement to Eastern Europe is completed. The requirements set in this
directive concern mostly the new member states, which have not been
negotiating on the contents of the directive. To compare, the beneficiaries
of the proposed directive are mostly multinational companies whose domicile
is either within the current EU or North America.

In the EU parliament the directive is unfortunately on the table of only the
committees of industrial and legal affairs. The draft by Janelly Fourtou,
chairman of the legal affairs committee, reflects quite to the point where
the directive aims at. Fourtou repeats media industry arguments and
concludes in her draft that the proposal would be "too soft to some forms of
piracy". EFFI's stand is exactly the opposite: the directive proposal is
first of all too strict and too inaccurate. Therefore it should be
dismissed. At the minimum we require that a substantial part of the proposal
is written anew without promoting any particular interest group.

Helsinki 9th May 2003

Mikko Välimäki
Chairman
Electronic Frontier Finland - EFFI ry
phone +358 50 598 0498
address@hidden
fax. +358 9 694 9768

Ville Oksanen
Vice-chairman
phone +358 40 536 8583
address@hidden

Electronic Frontier Finland - EFFI ry was founded in 2001 to defend
active users and citizens of the Finnish society in the electronic
frontier. EFFI influences legislative proposals concerning e.g.
personal privacy, freedom of speech and fair use in copyright law. We
make statements, press releases and participate actively in actual
public policy and legal discussions. EFFI has been featured in the
national media including TV, radio and leading newspapers. EFFI also
works in close cooperation with organizations sharing the same goals
and values in the Europe, United States and elsewhere. EFFI is a
founding member of the European Digital Rights and a member of Global
Internet Liberty Campaign. More information from EFFI's home pages:
http://www.effi.org/

-- 

Sylvain Perchaud
Tel : +33 (0) 674 758 551
http://www.europe-shareware.org