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Baker & McKenzie's regular article tracking developments in EU law relating to IP, IT and telecommunications
Computer Law & Security Report (2005) 21, 384e391
EU UPDATE
Baker & McKenzie’s regular article tracking developments in EU law relating to IP, IT and telecommunications Jonathan Westwell, Miriam Andrews, Carlo Buckley, Sarah Lynam Baker & McKenzie
Abstract This is the latest edition of Baker & McKenzie’s column on developments in EU law relating to IP, IT and telecommunications. This article summarises recent developments that are considered important for practitioners, students and academics in a wide range of information technology, e-commerce, telecommunications and intellectual property areas. It cannot be exhaustive but intends to address the important points. This is a hard copy reference guide, but links to outside web sites are included where possible. No responsibility is assumed for the accuracy of information contained in these links. ª 2005 Baker & McKenzie. Published by Elsevier Ltd. All rights reserved.
A. General intellectual property 1. Commission proposes harmonisation of criminal measures for IP infringements On 12 July 2005 the Commission adopted proposals for a Directive and a Framework Decision (COM (2005)276) aimed at harmonising national criminal law with respect to infringement of intellectual property rights. In April 2004 the IP Enforcement Directive (2004/48/EC) came into force providing for the harmonisation of various civil and administrative measures and remedies to combat counterfeiting and piracy. The current proposals are considered
necessary to supplement the IP Enforcement Directive by providing for the alignment of criminal sanctions. The proposed Directive focuses on the definition of offences and the type of penalties which may be imposed whereas the Framework Decision lays down detailed rules on the level of penalties and other measures to ensure co-operation between Member States. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/ 906&formatZHTML&agedZ0&languageZ en&guiLanguageZen Proposal: http://europa.eu.int/eur-lex/lex/ LexUriServ/site/en/com/2005/com2005_ 0276en01.pdf
0267-3649/$ - see front matter ª 2005 Baker & McKenzie. Published by Elsevier Ltd. All rights reserved. doi:10.1016/j.clsr.2005.08.009
EU update
385
2. EUeUS anti-piracy declaration
C. Patents
On 20 June 2005 the EU and the US released a joint statement declaring their intention to work together to fight against global piracy and counterfeiting. The statement focuses on three areas: promoting strong and effective internal and border enforcement; a strengthening of co-operation; and the fostering of publiceprivate partnerships aimed at protecting intellectual property. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZPRES/05/ 157&formatZHTML&agedZ0&languageZ EN&guiLanguageZen
1. Software Patent Directive rejected
B. Copyright and trade marks 1. New reform proposed for musical licensing over the Internet On 7 July 2005 the Commission published a study on how copyright for musical works is licensed for use on the Internet. The study sets out the Commission’s objectives and options for adapting cross-border collective rights management in order to maximise the potential of music to drive online content services. See article below for further detail. Press Release: http://europa.eu.int/rapid/pressReleasesAction. do?referenceZIP/05/872&formatZHTML&agedZ 0&languageZEN&guiLanguageZen
2. Infringement proceedings against France, Finland, Spain and the Czech Republic for non-implementation of 2001 Copyright Directive On 13 July the Commission announced its intention to take action against four Member States concerning their incomplete implementation of the Copyright Directive (2001/29/EC). It will send ‘‘reasoned opinions’’ under Article 228 of the EC Treaty to France and Finland requesting them to comply immediately with ECJ judgments concerning their implementation of the Directive. It will send the Czech Republic a letter of formal notice under Article 226 EC, the first stage in proceedings and send Spain an informal letter asking how it intends to comply with an existing judgment of the ECJ on its non-implementation. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/ 872&formatZHTML&agedZ0&languageZ EN&guiLanguageZen
On 6 July 2005 the European Parliament was voted by a large majority to reject the Council’s common position for adopting a Directive on the patentability of software and other computer-related inventions (11979/1/2004 e C6-0058/2005 e 2002/0047(COD)). The Commission has said that it will not come forward with more proposals. The vote puts an end to a fierce debate that has raged for three years. Large software suppliers, supporting the proposed Directive, argued that patents would encourage research spending and defend European inventions from US competition. ‘‘Open source’’ supporters and small businesses critical of the Directive claimed that there was sufficient protection already in place and the patenting of software would result in increased legal costs. Press Release: http://www2.europarl.eu.int/ omk/sipade2?PUBREFZ-//EP//TEXTCPRESSCDN20050706-1C0CDOCCXMLCV0//EN&LZ EN&LEVELZ2&NAVZX&LSTDOCZN#SECTION1
2. Commission adopts a second report on biotechnological inventions, covering gene patents and stem cells On 18 July 2005 the Commission adopted a second report (COM (2005)312) to the Council and the Parliament covering developments and implications of patent law in the field of biotechnology and genetic engineering. The report focuses on patents relating to gene sequences and the patentability of inventions relating to stem cells concluding that monitoring needs to continue in these areas. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/ 960&formatZHTML&agedZ0&languageZ en&guiLanguageZen Report: http://www.europa.eu.int/comm/ internal_market/en/indprop/invent/index.htm
D. Data protection/privacy 1. New drive for data retention legislation following London terror attacks On 13 July 2005, in an emergency meeting called by the UK’s Home Secretary in the wake of the London bombings, the Council announced its
386 intention to agree a Framework Decision on retention of communications data as soon as October 2005. Previously, the European Parliament had rejected Member States’ proposals for data retention on 7 June 2005 in line with the views of the Civil Liberties, Justice and Home Affairs Committee of the Council. See article below.
2. EDPS provides guidelines on balancing data protection rights with rights to access information On 12 July 2005 the European Data Protection Supervisor (the ‘‘EDPS’’) issued a paper with guidelines for dealing with requests for access to public documents containing personal data. The EDPS paper highlights the background and importance of both rights concerning data protection and those associated with access to information, and guides the reader through the process of consideration. It includes examples from the EU institutions and a checklist for officials dealing with the possible tension between both rights. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZEDPS/05/ 3&formatZHTML&agedZ0&languageZ EN&guiLanguageZen Paper: http://www.edps.eu.int/publications/ policy_papers/Public_access_data_protection_EN.pdf
3. Decision adopted over transfer of data to Canada On 18 July 2005 the General Affairs and External Relations Council decided to sign an agreement with Canada providing for the transfer of selected passenger data from the EU to the Canadian authorities to help identify passengers who could be a threat to security. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/ 965&formatZHTML&agedZ0&languageZ EN&guiLanguageZen
E. Competition law 1. Commission delivers review of 200th notification by Member States of measures to improve competition On 14 July 2005 the Commission announced that it had completed its 200th assessment of national
J. Westwell et al. regulators to improve competition in the electronic communications market. Since the entry into force of the regulatory framework for electronic communication services in July 2003, Member States must ensure effective competition in their national electronic communications’ markets and notify their analyses and proposed regulatory measures to the Commission for assessment. The Commission’s role in this procedure is to ensure consistency of the EU rules throughout the Single Market. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/ 926&formatZHTML&agedZ0&languageZ EN&guiLanguageZen
F. Telecoms 1. Commission issues Communication on Universal Services Directive ‘Safeguarding E-Communications Services for all in the Internet Era’ On 25 May 2005 the Commission issued a Communication on the review of the scope of universal service in accordance with Article 15 of Directive 2002/22/EC. In the Communication the Commission states that there is no current need for new legal requirements for mobile and high-speed Internet services under the EU’s universal service rules. However, it recognised that in the future, as services traditionally carried by telephone networks become increasingly Internet based, the focus of universal service may evolve towards providing an affordable broadband access link for all. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/ 594&formatZHTML&agedZ0&languageZ EN&guiLanguageZen Communication: http://europa.eu.int/ information_society/topics/ecomm/doc/useful_ information/library/communic_reports/universal_ service/com_2005_203_en.pdf
2. Commission takes action against 11 Member States for failure to implement electronic communications rules On 7 July 2005 the Commission sent letters to 11 Member States for failure to implement properly EU rules on electronic communications. The Member States involved were: the Czech Republic, France, Greece, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia and Finland. The Commission
EU update has already taken action against 10 Member States earlier this year. Action against Poland and Latvia has now reached the stage of ‘Reasoned Opinion’ whilst the others have received ‘Letters of Formal Notice’. This latest round of infringement proceedings tackles issues of direct relevance to users and to the effectiveness of Member States’ regulatory regimes. The main issues surround the independence of national telecoms regulators, the requirement of number portability and of comprehensive subscriber directories, designation of ‘‘universal service’’ providers, and the availability of the European emergency number 112. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/ 875&formatZHTML&agedZ0&languageZ EN&guiLanguageZen
3. Commission decision enables faster wireless access On 14 July 2005 the Commission adopted a Decision on the harmonised use of radio spectrum in the 5 GHz frequency band for the implementation of Wireless Access Systems including Radio Local Area Networks. The decision makes available a substantial amount of radio spectrum throughout the European Union for radio local area networks e commonly known as ‘‘Wi-Fi’’ e and used to provide access on the move to the Internet and private networks. The decision is part of the i2010 initiative to foster growth and jobs in the digital economy. Decision: http://europa.eu.int/information_ society/policy/radio_spectrum/docs/ref_info/ 5ghz_com_decision/5ghz_com_dec_en.pdf Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/ 929&formatZHTML&agedZ0&languageZ EN&guiLanguageZen
G. Information technology 1. Commission takes legal action against eight Member States over electronic waste On 11 July 2005 the Commission formally requested Estonia, Finland, France, Greece, Italy, Malta, Poland and the UK to transpose into their national laws three EU Directives tackling the environmental problems caused by the growing amount of electronic and electrical waste. The three Directives concerned are Directive 2002/96/ EC on waste electrical and electronic equipment,
387 as amended, Directive 2003/108/EC amending Directive 2002/96/EC on waste electrical and electronic equipment and Directive 2002/95/EC on the restriction of the use of certain hazardous substances in electrical and electronic equipment. The deadline for implementation of these Directives was 13 August 2005. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/ 895&formatZHTML&agedZ0&languageZ EN&guiLanguageZen
2. Commission launches ambitious information technology programme On 1 June 2005 the Commission announced that it was launching a five-year strategy aimed at boosting the digital economy. The initiative i2010: European Information Society 2010 has three priorities: to create an open and a competitive single market for information society and media services within the EU, to increase EU investment in research on information and communication technologies (ICT) by 80%, and to promote an inclusive European information society. Member States are asked to define national information society priorities in their national reform programmes in mid-October 2005 to contribute to the objectives of i2010. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/ 643&formatZHTML&agedZ0&languageZ EN&guiLanguageZen
H. E-commerce 1. Commission receives authorisation to open E-contracting negotiations On 7 July 2005 the Commission received authorisation from the Council to open negotiations on behalf of the EU, within the United Nations Commission on International Trade Law (UNCITRAL), on a draft UN Convention aimed at making it easier to conclude international business-tobusiness contracts electronically. The Commission’s aim will be to ensure compatibility between the draft Convention and Directive 2000/31/EC on electronic commerce. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/ 873&formatZHTML&agedZ0&languageZ EN&guiLanguageZen
388
2. New Member States accede to Rome Convention on applicable law On 8 July 2005 all 10 of the EU’s newest Member States signed up to the Convention on the law applicable to contractual obligations opened for signature in Rome on 19 June 1980, and to the First and Second Protocols on its interpretation by the Court of Justice of the European Communities. Convention: http://europa.eu.int/eur-lex/lex/ LexUriServ/site/en/oj/2005/c_169/c_16920050708 en00010009.pdf
3. Directive on unfair commercial practices signed On 12 June 2005 the Directive on unfair business to consumer practices in the internal market (Directive 2005/29/EC) (the ‘‘UCP Directive’’) came into force. It was adopted by the Council on 21 April 2005 and was signed by the European Parliament and the Council on 11 May 2005. It must be implemented by 12 June 2007. In June 2005 the UK’s Department of Trade and Industry commissioned an independent report to provide an analysis of the application and scope of the UCP Directive. Directive: http://www.dti.gov.uk/ccp/topics1/ pdf1/ucpoj110605.pdf Report: http://www.dti.gov.uk/ccp/consultpdf/ final_report180505.pdf
4. Government consults on extending E-commerce Directive to providers of hyperlinks and other services On 8 June 2005 the UK’s Department of Trade and Industry published a consultation document seeking views of UK businesses, consumers and other organisations on whether Articles 12 to 14 of the Electronic Commerce Directive (Directive 2000/31/EC) transposed into UK law by the Electronic Commerce (EC Directive) Regulations 2002, should now be extended to providers of hyperlinks, location tool and content aggregation services. Consultation Document: http://www.dti.gov. uk/consultations/files/publication-1498.pdf Directive: http://europa.eu.int/smartapi/cgi/ sga_doc?smartapi!celexapi!prod!CELEXnumdoc&lg ZEN&numdocZ32000L0031&modelZguichett
J. Westwell et al.
I. Internet 1. Commission opens consultation on broadband gap On 14 July 2005 the Commission opened a consultation on the policy measures needed to bridge the gap between levels of high-speed Internet access across Europe. Comments are invited on the Commission’s working paper ‘Broadband access and public support in under-served areas’. The paper presents the pros and cons of various initiatives to extend broadband coverage, describes alternative technologies and provides examples of publicly-financed broadband projects. The consultation is open until 16 September 2005. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/928&type ZHTML&agedZ0&languageZEN&guiLanguageZen Consultation: http://europa.eu.int/information_ society/eeurope/i2010/digital_divide/index_en.htm
J. Media 1. Final phase in consultations on modernising EU rules for audiovisual content On 12 July 2005 the Commission made subject to public consultation preliminary conclusions drawn from consultations with experts and stakeholders on the future EU rules for audiovisual content. Following this final round of consultations, the Commission will present a proposal for the new EU rules, which will eventually replace the Television Without Frontiers Directive of 1989. These changes to the EU rules for audiovisual content are part of the Commission’s i2010 initiative, launched in June 2005. This consultation ends on 5 September 2005. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/ 908&formatZHTML&agedZ0&languageZ EN&guiLanguageZen
K. Outsourcing 1. Commission publishes guidance on new e-procurement rules On 15 July 2005 the Commission published a document providing interpretation and explanation of
EU update the new rules on e-procurement. The e-procurement rules form part of the two new public procurement Directives (2004/18/EC and 2004/ 17/EC). The new Directives aim to computerise traditional procedures for the award of contracts and to introduce both new purchase techniques and new instruments made possible by the advances in technology and the Internet. Member States must implement the Directives into national law by the end of January 2006. Guidance: http://europa.eu.int/comm/internal_market/publicprocurement/e-procurement_ en.htm Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/ 948&formatZHTML&agedZ0&languageZ EN&guiLanguageZen
2. Draft regulations implementing EU public sector and utilities procurement The Office of Government Commerce (the ‘‘OGC’’) is consulting on regulations to implement the EU public sector and utilities procurement Directives (2004/18/EC and 2004/17/EC). Following last years consultation on the general approach to be adopted in the UK’s implementation, the OGC is now inviting comments from the public sector and utilities and their suppliers and potential suppliers on the detail of the draft regulations. The deadline for responses is 12 September 2005. Consultation Document: http://www.ogc.gov. uk/embedded_object.asp?docidZ1003746
L. Retention of data proposal on the prevention of terrorism In April 2004 the governments of the UK, France, Ireland and Sweden proposed a draft EU Framework Decision (the ‘‘Decision’’) which included pan-European rules for the retention of electronic communications data. The Decision, if adopted, would have meant that all communications location and traffic data, including subscriber and user data would have to be retained by communications service providers for between 12 and 36 months. The aim was to aid the prevention, investigation, detection and prosecution of crime or criminal offences including terrorism. On 7 June 2005 the European Parliament, in line with the views of the Civil Liberties, Justice and Home Affairs Committee of the Council, rejected the Decision on three grounds: the Council’s incorrect choice of legal basis; the disproportionality
389 of the measures and the possible contravention of Article 8 of the European Convention of Human Rights (ECHR).
Choice of legal basis The Decision was proposed under the Treaty on European Union (TEU) which meant that the Council could use its sole legislative power and the Parliament only had a consultative role. The Parliament disagreed with this approach and felt that Community legislation on the obligations of service providers already existed and that the legal basis chosen by the Council was contrary to the TEU, which states that the TEU should make no changes to the Treaties establishing the European Communities (TEC). Accordingly, no provision of the TEU may affect those of the TEC and the failure of the Council to observe the existing legislative framework constituted a contravention of such law. The parliament therefore believed that service providers’ obligation to retain data should fall under the scope of the TEC and that the co-decision procedure should be followed; enabling the Parliament to undertake a more influential role in the implementation of such measures.
Proportionality The Parliament considered that the obligations imposed by the Decision were not justified. It believed that the measures were unfairly harsh and inappropriate in tackling the concerns at hand. In particular, the Parliament highlighted the following issues: The sheer volume of data to be stored would mean that any meaningful analysis of such data would be extremely slow and difficult. Terrorists would easily be able to circumvent the measures. The measures were not compatible with the principle of presumption of innocence. The burdens placed on the European telecommunications industry, particularly on small and medium-sized telecom companies would lead to huge costs which could potentially distort competition.
Article 8 ECHR In line with Article 8(2) of the ECHR a measure must be laid down by law, necessary in a democratic
390 society, and serve one of the legitimate purposes specified in the ECHR. In light of the above arguments the Parliament did not believe that the Decision fulfilled all three criteria. The Parliament believed that in comparison with the proposal for ‘blanket’ data retention under the Decision, storage for a specific purpose, a model laid down by the Council of Europe’s Convention on Cybercrime (ETS No.185, 8 November 2001), could be a more suitable and milder option.
Impact of the recent London attacks On 13 July 2005, the Civil Liberties, Justice and Home Affairs Committee of the Council met, in an emergency meeting to discuss data retention again within the wider context of an EU’s response to the terror attacks on London. The Council announced at this meeting that it intends to agree a Framework Decision on the retention of data and suggested that this will be done by October 2005. Although concerns over data retention proposals still remain, it seems that the London bombings have dispelled some of the concerns about the original proposal raised by member states in the Council. Despite this, the European Parliament could still challenge the legal basis on which these new proposals are being put forward.
M. EU Commission proposes new system for cross-border collective rights management of online music On 7 July 2005 the European Commission published the Study on a Community Initiative on the Crossborder Collective Management of Copyright, in which it proposed a new system for the crossborder collective rights management of online music. The management of copyright protected works by collecting societies in the EU is currently on a country-by-country rather than pan-European basis. Reciprocal agreements between collecting societies in different countries do exist, but commercial users who wish to use copyright works as part of online content must currently obtain clearance from many different societies across the EU. As the online music industry has grown rapidly over the past few years, this is becoming increasingly complex and expensive and is believed to be online music downloading affecting the uptake of online music downloading in the EU. For example, online music downloading was eight
J. Westwell et al. times higher in the US than in Western Europe. The Commission considered that the figure in Western Europe may be higher if improvements were made in the way in which copyright for online music services is cleared. Consequently, the Commission has published this study and is proposing a pan-European licence to overhaul this system. The Commission’s objective in doing this is to encourage legal music downloads, which it regards as a potential driver of e-commerce in the EU, and to increase the confidence of copyright rights-holders that they will be financially rewarded regardless of where their works are exploited. Specifically, the Commission hopes that the proposed changes will: Establish a collective licensing policy that will promote the development of new Internetbased services; Give rights-holders the freedom to choose the best placed collecting society and the ability to switch between different societies if desired; Improve distribution of royalties; and Improve transparency and accountability of societies. The study considers three options for the future of cross-border collective rights management: To allow the industry itself to develop a more efficient system; To remove certain restrictions from the current system, such as territorial restrictions in reciprocal agreements between the collecting societies, and restrictions relating to the distribution of royalties; To permit rights-holders to choose their preferred collecting society to manage their works across the whole of the EU, which would provide legal certainty for commercial users as to the scope of the licence and the territory covered. The Commission provisionally concluded that the third option is the most preferable, as permitting rights-holders to choose their collecting society would create a competitive environment and enhance the earning potential of the rights-holders. This would also provide the collecting societies with an incentive to provide optimal services to their clients. The Commission is also proposing seven core principles that member states must adhere in order to enable the implementation of the new system.
EU update Although it is generally recognised that modernisation is required, the introduction of such a system is not without its opponents. GESAC, which represents European collecting societies, has questioned the effectiveness of the system and would like more examination of the legal security and costs involved. Further comments are welcomed by the Commission until 28 July 2005.
391 For further information on any of the above, please contact Harry Small (harry.small@bakernet. com) of the Intellectual Property and Information Technology Department of the London office of Baker & McKenzie (Tel.: C44 20 7919 1000). Mr Small was assisted in the preparation of this article by Miriam Andrews, Jonathan Westwell, Carlo Buckley and Sarah Lynam.
EU UPDATE
Baker & McKenzie’s regular article tracking developments in EU law relating to IP, IT and telecommunications Jonathan Westwell, Miriam Andrews, Carlo Buckley, Sarah Lynam Baker & McKenzie
Abstract This is the latest edition of Baker & McKenzie’s column on developments in EU law relating to IP, IT and telecommunications. This article summarises recent developments that are considered important for practitioners, students and academics in a wide range of information technology, e-commerce, telecommunications and intellectual property areas. It cannot be exhaustive but intends to address the important points. This is a hard copy reference guide, but links to outside web sites are included where possible. No responsibility is assumed for the accuracy of information contained in these links. ª 2005 Baker & McKenzie. Published by Elsevier Ltd. All rights reserved.
A. General intellectual property 1. Commission proposes harmonisation of criminal measures for IP infringements On 12 July 2005 the Commission adopted proposals for a Directive and a Framework Decision (COM (2005)276) aimed at harmonising national criminal law with respect to infringement of intellectual property rights. In April 2004 the IP Enforcement Directive (2004/48/EC) came into force providing for the harmonisation of various civil and administrative measures and remedies to combat counterfeiting and piracy. The current proposals are considered
necessary to supplement the IP Enforcement Directive by providing for the alignment of criminal sanctions. The proposed Directive focuses on the definition of offences and the type of penalties which may be imposed whereas the Framework Decision lays down detailed rules on the level of penalties and other measures to ensure co-operation between Member States. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/ 906&formatZHTML&agedZ0&languageZ en&guiLanguageZen Proposal: http://europa.eu.int/eur-lex/lex/ LexUriServ/site/en/com/2005/com2005_ 0276en01.pdf
0267-3649/$ - see front matter ª 2005 Baker & McKenzie. Published by Elsevier Ltd. All rights reserved. doi:10.1016/j.clsr.2005.08.009
EU update
385
2. EUeUS anti-piracy declaration
C. Patents
On 20 June 2005 the EU and the US released a joint statement declaring their intention to work together to fight against global piracy and counterfeiting. The statement focuses on three areas: promoting strong and effective internal and border enforcement; a strengthening of co-operation; and the fostering of publiceprivate partnerships aimed at protecting intellectual property. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZPRES/05/ 157&formatZHTML&agedZ0&languageZ EN&guiLanguageZen
1. Software Patent Directive rejected
B. Copyright and trade marks 1. New reform proposed for musical licensing over the Internet On 7 July 2005 the Commission published a study on how copyright for musical works is licensed for use on the Internet. The study sets out the Commission’s objectives and options for adapting cross-border collective rights management in order to maximise the potential of music to drive online content services. See article below for further detail. Press Release: http://europa.eu.int/rapid/pressReleasesAction. do?referenceZIP/05/872&formatZHTML&agedZ 0&languageZEN&guiLanguageZen
2. Infringement proceedings against France, Finland, Spain and the Czech Republic for non-implementation of 2001 Copyright Directive On 13 July the Commission announced its intention to take action against four Member States concerning their incomplete implementation of the Copyright Directive (2001/29/EC). It will send ‘‘reasoned opinions’’ under Article 228 of the EC Treaty to France and Finland requesting them to comply immediately with ECJ judgments concerning their implementation of the Directive. It will send the Czech Republic a letter of formal notice under Article 226 EC, the first stage in proceedings and send Spain an informal letter asking how it intends to comply with an existing judgment of the ECJ on its non-implementation. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/ 872&formatZHTML&agedZ0&languageZ EN&guiLanguageZen
On 6 July 2005 the European Parliament was voted by a large majority to reject the Council’s common position for adopting a Directive on the patentability of software and other computer-related inventions (11979/1/2004 e C6-0058/2005 e 2002/0047(COD)). The Commission has said that it will not come forward with more proposals. The vote puts an end to a fierce debate that has raged for three years. Large software suppliers, supporting the proposed Directive, argued that patents would encourage research spending and defend European inventions from US competition. ‘‘Open source’’ supporters and small businesses critical of the Directive claimed that there was sufficient protection already in place and the patenting of software would result in increased legal costs. Press Release: http://www2.europarl.eu.int/ omk/sipade2?PUBREFZ-//EP//TEXTCPRESSCDN20050706-1C0CDOCCXMLCV0//EN&LZ EN&LEVELZ2&NAVZX&LSTDOCZN#SECTION1
2. Commission adopts a second report on biotechnological inventions, covering gene patents and stem cells On 18 July 2005 the Commission adopted a second report (COM (2005)312) to the Council and the Parliament covering developments and implications of patent law in the field of biotechnology and genetic engineering. The report focuses on patents relating to gene sequences and the patentability of inventions relating to stem cells concluding that monitoring needs to continue in these areas. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/ 960&formatZHTML&agedZ0&languageZ en&guiLanguageZen Report: http://www.europa.eu.int/comm/ internal_market/en/indprop/invent/index.htm
D. Data protection/privacy 1. New drive for data retention legislation following London terror attacks On 13 July 2005, in an emergency meeting called by the UK’s Home Secretary in the wake of the London bombings, the Council announced its
386 intention to agree a Framework Decision on retention of communications data as soon as October 2005. Previously, the European Parliament had rejected Member States’ proposals for data retention on 7 June 2005 in line with the views of the Civil Liberties, Justice and Home Affairs Committee of the Council. See article below.
2. EDPS provides guidelines on balancing data protection rights with rights to access information On 12 July 2005 the European Data Protection Supervisor (the ‘‘EDPS’’) issued a paper with guidelines for dealing with requests for access to public documents containing personal data. The EDPS paper highlights the background and importance of both rights concerning data protection and those associated with access to information, and guides the reader through the process of consideration. It includes examples from the EU institutions and a checklist for officials dealing with the possible tension between both rights. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZEDPS/05/ 3&formatZHTML&agedZ0&languageZ EN&guiLanguageZen Paper: http://www.edps.eu.int/publications/ policy_papers/Public_access_data_protection_EN.pdf
3. Decision adopted over transfer of data to Canada On 18 July 2005 the General Affairs and External Relations Council decided to sign an agreement with Canada providing for the transfer of selected passenger data from the EU to the Canadian authorities to help identify passengers who could be a threat to security. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/ 965&formatZHTML&agedZ0&languageZ EN&guiLanguageZen
E. Competition law 1. Commission delivers review of 200th notification by Member States of measures to improve competition On 14 July 2005 the Commission announced that it had completed its 200th assessment of national
J. Westwell et al. regulators to improve competition in the electronic communications market. Since the entry into force of the regulatory framework for electronic communication services in July 2003, Member States must ensure effective competition in their national electronic communications’ markets and notify their analyses and proposed regulatory measures to the Commission for assessment. The Commission’s role in this procedure is to ensure consistency of the EU rules throughout the Single Market. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/ 926&formatZHTML&agedZ0&languageZ EN&guiLanguageZen
F. Telecoms 1. Commission issues Communication on Universal Services Directive ‘Safeguarding E-Communications Services for all in the Internet Era’ On 25 May 2005 the Commission issued a Communication on the review of the scope of universal service in accordance with Article 15 of Directive 2002/22/EC. In the Communication the Commission states that there is no current need for new legal requirements for mobile and high-speed Internet services under the EU’s universal service rules. However, it recognised that in the future, as services traditionally carried by telephone networks become increasingly Internet based, the focus of universal service may evolve towards providing an affordable broadband access link for all. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/ 594&formatZHTML&agedZ0&languageZ EN&guiLanguageZen Communication: http://europa.eu.int/ information_society/topics/ecomm/doc/useful_ information/library/communic_reports/universal_ service/com_2005_203_en.pdf
2. Commission takes action against 11 Member States for failure to implement electronic communications rules On 7 July 2005 the Commission sent letters to 11 Member States for failure to implement properly EU rules on electronic communications. The Member States involved were: the Czech Republic, France, Greece, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia and Finland. The Commission
EU update has already taken action against 10 Member States earlier this year. Action against Poland and Latvia has now reached the stage of ‘Reasoned Opinion’ whilst the others have received ‘Letters of Formal Notice’. This latest round of infringement proceedings tackles issues of direct relevance to users and to the effectiveness of Member States’ regulatory regimes. The main issues surround the independence of national telecoms regulators, the requirement of number portability and of comprehensive subscriber directories, designation of ‘‘universal service’’ providers, and the availability of the European emergency number 112. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/ 875&formatZHTML&agedZ0&languageZ EN&guiLanguageZen
3. Commission decision enables faster wireless access On 14 July 2005 the Commission adopted a Decision on the harmonised use of radio spectrum in the 5 GHz frequency band for the implementation of Wireless Access Systems including Radio Local Area Networks. The decision makes available a substantial amount of radio spectrum throughout the European Union for radio local area networks e commonly known as ‘‘Wi-Fi’’ e and used to provide access on the move to the Internet and private networks. The decision is part of the i2010 initiative to foster growth and jobs in the digital economy. Decision: http://europa.eu.int/information_ society/policy/radio_spectrum/docs/ref_info/ 5ghz_com_decision/5ghz_com_dec_en.pdf Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/ 929&formatZHTML&agedZ0&languageZ EN&guiLanguageZen
G. Information technology 1. Commission takes legal action against eight Member States over electronic waste On 11 July 2005 the Commission formally requested Estonia, Finland, France, Greece, Italy, Malta, Poland and the UK to transpose into their national laws three EU Directives tackling the environmental problems caused by the growing amount of electronic and electrical waste. The three Directives concerned are Directive 2002/96/ EC on waste electrical and electronic equipment,
387 as amended, Directive 2003/108/EC amending Directive 2002/96/EC on waste electrical and electronic equipment and Directive 2002/95/EC on the restriction of the use of certain hazardous substances in electrical and electronic equipment. The deadline for implementation of these Directives was 13 August 2005. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/ 895&formatZHTML&agedZ0&languageZ EN&guiLanguageZen
2. Commission launches ambitious information technology programme On 1 June 2005 the Commission announced that it was launching a five-year strategy aimed at boosting the digital economy. The initiative i2010: European Information Society 2010 has three priorities: to create an open and a competitive single market for information society and media services within the EU, to increase EU investment in research on information and communication technologies (ICT) by 80%, and to promote an inclusive European information society. Member States are asked to define national information society priorities in their national reform programmes in mid-October 2005 to contribute to the objectives of i2010. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/ 643&formatZHTML&agedZ0&languageZ EN&guiLanguageZen
H. E-commerce 1. Commission receives authorisation to open E-contracting negotiations On 7 July 2005 the Commission received authorisation from the Council to open negotiations on behalf of the EU, within the United Nations Commission on International Trade Law (UNCITRAL), on a draft UN Convention aimed at making it easier to conclude international business-tobusiness contracts electronically. The Commission’s aim will be to ensure compatibility between the draft Convention and Directive 2000/31/EC on electronic commerce. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/ 873&formatZHTML&agedZ0&languageZ EN&guiLanguageZen
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2. New Member States accede to Rome Convention on applicable law On 8 July 2005 all 10 of the EU’s newest Member States signed up to the Convention on the law applicable to contractual obligations opened for signature in Rome on 19 June 1980, and to the First and Second Protocols on its interpretation by the Court of Justice of the European Communities. Convention: http://europa.eu.int/eur-lex/lex/ LexUriServ/site/en/oj/2005/c_169/c_16920050708 en00010009.pdf
3. Directive on unfair commercial practices signed On 12 June 2005 the Directive on unfair business to consumer practices in the internal market (Directive 2005/29/EC) (the ‘‘UCP Directive’’) came into force. It was adopted by the Council on 21 April 2005 and was signed by the European Parliament and the Council on 11 May 2005. It must be implemented by 12 June 2007. In June 2005 the UK’s Department of Trade and Industry commissioned an independent report to provide an analysis of the application and scope of the UCP Directive. Directive: http://www.dti.gov.uk/ccp/topics1/ pdf1/ucpoj110605.pdf Report: http://www.dti.gov.uk/ccp/consultpdf/ final_report180505.pdf
4. Government consults on extending E-commerce Directive to providers of hyperlinks and other services On 8 June 2005 the UK’s Department of Trade and Industry published a consultation document seeking views of UK businesses, consumers and other organisations on whether Articles 12 to 14 of the Electronic Commerce Directive (Directive 2000/31/EC) transposed into UK law by the Electronic Commerce (EC Directive) Regulations 2002, should now be extended to providers of hyperlinks, location tool and content aggregation services. Consultation Document: http://www.dti.gov. uk/consultations/files/publication-1498.pdf Directive: http://europa.eu.int/smartapi/cgi/ sga_doc?smartapi!celexapi!prod!CELEXnumdoc&lg ZEN&numdocZ32000L0031&modelZguichett
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I. Internet 1. Commission opens consultation on broadband gap On 14 July 2005 the Commission opened a consultation on the policy measures needed to bridge the gap between levels of high-speed Internet access across Europe. Comments are invited on the Commission’s working paper ‘Broadband access and public support in under-served areas’. The paper presents the pros and cons of various initiatives to extend broadband coverage, describes alternative technologies and provides examples of publicly-financed broadband projects. The consultation is open until 16 September 2005. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/928&type ZHTML&agedZ0&languageZEN&guiLanguageZen Consultation: http://europa.eu.int/information_ society/eeurope/i2010/digital_divide/index_en.htm
J. Media 1. Final phase in consultations on modernising EU rules for audiovisual content On 12 July 2005 the Commission made subject to public consultation preliminary conclusions drawn from consultations with experts and stakeholders on the future EU rules for audiovisual content. Following this final round of consultations, the Commission will present a proposal for the new EU rules, which will eventually replace the Television Without Frontiers Directive of 1989. These changes to the EU rules for audiovisual content are part of the Commission’s i2010 initiative, launched in June 2005. This consultation ends on 5 September 2005. Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/ 908&formatZHTML&agedZ0&languageZ EN&guiLanguageZen
K. Outsourcing 1. Commission publishes guidance on new e-procurement rules On 15 July 2005 the Commission published a document providing interpretation and explanation of
EU update the new rules on e-procurement. The e-procurement rules form part of the two new public procurement Directives (2004/18/EC and 2004/ 17/EC). The new Directives aim to computerise traditional procedures for the award of contracts and to introduce both new purchase techniques and new instruments made possible by the advances in technology and the Internet. Member States must implement the Directives into national law by the end of January 2006. Guidance: http://europa.eu.int/comm/internal_market/publicprocurement/e-procurement_ en.htm Press Release: http://europa.eu.int/rapid/ pressReleasesAction.do?referenceZIP/05/ 948&formatZHTML&agedZ0&languageZ EN&guiLanguageZen
2. Draft regulations implementing EU public sector and utilities procurement The Office of Government Commerce (the ‘‘OGC’’) is consulting on regulations to implement the EU public sector and utilities procurement Directives (2004/18/EC and 2004/17/EC). Following last years consultation on the general approach to be adopted in the UK’s implementation, the OGC is now inviting comments from the public sector and utilities and their suppliers and potential suppliers on the detail of the draft regulations. The deadline for responses is 12 September 2005. Consultation Document: http://www.ogc.gov. uk/embedded_object.asp?docidZ1003746
L. Retention of data proposal on the prevention of terrorism In April 2004 the governments of the UK, France, Ireland and Sweden proposed a draft EU Framework Decision (the ‘‘Decision’’) which included pan-European rules for the retention of electronic communications data. The Decision, if adopted, would have meant that all communications location and traffic data, including subscriber and user data would have to be retained by communications service providers for between 12 and 36 months. The aim was to aid the prevention, investigation, detection and prosecution of crime or criminal offences including terrorism. On 7 June 2005 the European Parliament, in line with the views of the Civil Liberties, Justice and Home Affairs Committee of the Council, rejected the Decision on three grounds: the Council’s incorrect choice of legal basis; the disproportionality
389 of the measures and the possible contravention of Article 8 of the European Convention of Human Rights (ECHR).
Choice of legal basis The Decision was proposed under the Treaty on European Union (TEU) which meant that the Council could use its sole legislative power and the Parliament only had a consultative role. The Parliament disagreed with this approach and felt that Community legislation on the obligations of service providers already existed and that the legal basis chosen by the Council was contrary to the TEU, which states that the TEU should make no changes to the Treaties establishing the European Communities (TEC). Accordingly, no provision of the TEU may affect those of the TEC and the failure of the Council to observe the existing legislative framework constituted a contravention of such law. The parliament therefore believed that service providers’ obligation to retain data should fall under the scope of the TEC and that the co-decision procedure should be followed; enabling the Parliament to undertake a more influential role in the implementation of such measures.
Proportionality The Parliament considered that the obligations imposed by the Decision were not justified. It believed that the measures were unfairly harsh and inappropriate in tackling the concerns at hand. In particular, the Parliament highlighted the following issues: The sheer volume of data to be stored would mean that any meaningful analysis of such data would be extremely slow and difficult. Terrorists would easily be able to circumvent the measures. The measures were not compatible with the principle of presumption of innocence. The burdens placed on the European telecommunications industry, particularly on small and medium-sized telecom companies would lead to huge costs which could potentially distort competition.
Article 8 ECHR In line with Article 8(2) of the ECHR a measure must be laid down by law, necessary in a democratic
390 society, and serve one of the legitimate purposes specified in the ECHR. In light of the above arguments the Parliament did not believe that the Decision fulfilled all three criteria. The Parliament believed that in comparison with the proposal for ‘blanket’ data retention under the Decision, storage for a specific purpose, a model laid down by the Council of Europe’s Convention on Cybercrime (ETS No.185, 8 November 2001), could be a more suitable and milder option.
Impact of the recent London attacks On 13 July 2005, the Civil Liberties, Justice and Home Affairs Committee of the Council met, in an emergency meeting to discuss data retention again within the wider context of an EU’s response to the terror attacks on London. The Council announced at this meeting that it intends to agree a Framework Decision on the retention of data and suggested that this will be done by October 2005. Although concerns over data retention proposals still remain, it seems that the London bombings have dispelled some of the concerns about the original proposal raised by member states in the Council. Despite this, the European Parliament could still challenge the legal basis on which these new proposals are being put forward.
M. EU Commission proposes new system for cross-border collective rights management of online music On 7 July 2005 the European Commission published the Study on a Community Initiative on the Crossborder Collective Management of Copyright, in which it proposed a new system for the crossborder collective rights management of online music. The management of copyright protected works by collecting societies in the EU is currently on a country-by-country rather than pan-European basis. Reciprocal agreements between collecting societies in different countries do exist, but commercial users who wish to use copyright works as part of online content must currently obtain clearance from many different societies across the EU. As the online music industry has grown rapidly over the past few years, this is becoming increasingly complex and expensive and is believed to be online music downloading affecting the uptake of online music downloading in the EU. For example, online music downloading was eight
J. Westwell et al. times higher in the US than in Western Europe. The Commission considered that the figure in Western Europe may be higher if improvements were made in the way in which copyright for online music services is cleared. Consequently, the Commission has published this study and is proposing a pan-European licence to overhaul this system. The Commission’s objective in doing this is to encourage legal music downloads, which it regards as a potential driver of e-commerce in the EU, and to increase the confidence of copyright rights-holders that they will be financially rewarded regardless of where their works are exploited. Specifically, the Commission hopes that the proposed changes will: Establish a collective licensing policy that will promote the development of new Internetbased services; Give rights-holders the freedom to choose the best placed collecting society and the ability to switch between different societies if desired; Improve distribution of royalties; and Improve transparency and accountability of societies. The study considers three options for the future of cross-border collective rights management: To allow the industry itself to develop a more efficient system; To remove certain restrictions from the current system, such as territorial restrictions in reciprocal agreements between the collecting societies, and restrictions relating to the distribution of royalties; To permit rights-holders to choose their preferred collecting society to manage their works across the whole of the EU, which would provide legal certainty for commercial users as to the scope of the licence and the territory covered. The Commission provisionally concluded that the third option is the most preferable, as permitting rights-holders to choose their collecting society would create a competitive environment and enhance the earning potential of the rights-holders. This would also provide the collecting societies with an incentive to provide optimal services to their clients. The Commission is also proposing seven core principles that member states must adhere in order to enable the implementation of the new system.
EU update Although it is generally recognised that modernisation is required, the introduction of such a system is not without its opponents. GESAC, which represents European collecting societies, has questioned the effectiveness of the system and would like more examination of the legal security and costs involved. Further comments are welcomed by the Commission until 28 July 2005.
391 For further information on any of the above, please contact Harry Small (harry.small@bakernet. com) of the Intellectual Property and Information Technology Department of the London office of Baker & McKenzie (Tel.: C44 20 7919 1000). Mr Small was assisted in the preparation of this article by Miriam Andrews, Jonathan Westwell, Carlo Buckley and Sarah Lynam.