Europe Considers Harsh Piracy Law

PARIS -- The European Parliament approved a controversial piracy law that would allow local police to raid the homes and offices of suspected intellectual-property pirates, search their financial records and even freeze suspects' bank accounts.

The European Union's directive covers selling everything from pirated CDs and counterfeit toys to fake Chanel and Viagra.

Organizations that suspect their intellectual property has been violated can obtain search-and-seizure orders and injunctions. The measure passed last week by a vote of 330 to 151, but not without some last-minute brokering by European Parliament President Pat Cox. Various industry groups had pushed for a tougher directive that would have included the threat of criminal sanctions. Consumer-rights groups such as the European Consumers' Organization charged that the law was overly broad and would re-create the Digital Millennium Copyright Act in Europe.

As passed, the measure includes civil and administrative penalties for commercial piracy. Criminal penalties were dropped. Individual member countries are still free, however, to punish intellectual-property theft with criminal sanctions.

Parliament was under the gun to pass legislation before its May recess, June Parliament elections and the imminent expansion of the EU from 15 to 25 countries, particularly in Eastern Europe.

Beyond expediency, "some of the new countries have some high degrees of piracy, especially for music, so it's important to have this European framework adopted by all the member states," said Gianluca Monte, European affairs adviser for the Independent Music Companies Association. "Of course, there are also problems now with existing member states and high levels of piracy."

Spain and Poland -- one an EU member, one about to be -- make the International Federation of the Phonographic Industry's list of the top 10 countries with piracy problems, which also includes Russia, Mexico and China.

Some parliament members questioned whether fellow member Janelly Fourtou, who shepherded the bill, had a conflict of interest. Her husband is Jean-Rene Fourtou, head of Vivendi Universal, one of the biggest media companies in the world.

Her assistant, Sarah Cuvellier, dismissed those charges, saying Fourtou's work on intellectual property dates to 1999, before her husband assumed the Vivendi post.

Cuvellier also said the measure doesn't target private use. "It's not the DMCA." Rather, she said, "you have three pillars in intellectual-property rights: how to recognize the right, how to protect the right and how to manage the right. This is only to protect -- not to recognize."

The directive defers rights of the individual to the EU's previous copyright directive, but there's a wrinkle.

"In principle, the proposal adopted this week should not affect existing law, but we don't know so far what existing law is, because the copyright law is not yet implemented," said Victoria Villamar, legal adviser for the European Consumers' Organization. "Less than half the EU has implemented the copyright directive, passed two years ago."

The directive now goes to the Council of Ministers, which is expected to approve it by April.

The debate then shifts to the member states, which technically have 18 months to implement the directive, though observers say twice that long would be likely.

One sticking point is: What constitutes commercial piracy? In the current directive, "even though there were some limitations built into various enforcement provisions to make them apply to only commercial piracy," what's "commercial" isn't defined, said Gwen Hinze, a staff attorney with the Electronic Frontier Foundation. "It's important that members states build in strong procedural safeguards for their citizens."

The International Federation of the Phonographic Industry estimates worldwide music piracy totaled $4.6 billion in 2002, with one in three CDs sold being counterfeit.

Legal experts say the EU directive, as passed, differs little from existing EU legislation. Still, media companies are claiming symbolic victory.

"This directive shows that intellectual-property protection is still on the agenda," said Martin Selmayr, head of the Brussels office of Bertelsmann, one of the largest media companies in the world. In addition, it rearticulates existing intellectual-property law. "The issue is to get it in people's minds that stealing intellectual property is like stealing a shirt."

Industry groups say they will continue to push for criminal sanctions against intellectual-property thieves at the national level.