You might imagine that counterfeiting and piracy were a thing of the past, particularly in the EU, but sadly this is not the case for most industries, including the technology and software sectors.  For business software alone, the software piracy rate in western Europe stands at about 34%, one in three copies of business software in use in Europe is counterfeit or pirated.  In our sector in particular, this has not only a dampening effect on innovation, but also supports criminals and puts users computers and data at risk of corruption and compromise:

• Recent news reports have described how criminal syndicates are now involved in the business of software counterfeiting. 
• An IDC study showed that more than 50% of counterfeit software contained spurious code or malware, or could not even be installed.  One in four web sites offering counterfeit software attempted to install unwanted or malicious code when the software was downloaded or run.
• A Harrison Group study found that companies using pirated or counterfeit software were 73 % more likely to experience loss of or damage to sensitive data and 43% more likely to have critical computer failures lasting 24 hours or longer. 
• In a 2010 TNS market survey of 38,000 consumers in 20 countries, one in two consumers (49%) reported they were concerned about the risks to themselves and their businesses – the data loss or identity theft that can result – from using pirated or counterfeit software.
• These consumers reported that both governments and industry need to do more to curb the problem, 72% calling on industry, and 65% calling on governments, to deal with counterfeiting and piracy better. 

One of the many things that the EU is doing at present to address counterfeiting and piracy problems like these is by reviewing the 2004 IPR Enforcement Directive, to make sure it provides adequate mechanisms for enforcing the intellectual property rights (copyrights, trademarks and the like) that protect all kinds of innovations. 

As the Commission’s study of the matter reported, “The Directive has provided a solid basis for the enforcement of intellectual property rights in the internal market and led to considerable improvements of the legal frameworks in place in the Member States.  However,  […]  some of the provisions of the Directive have led to diverging interpretations by the Member States, […] and some of these provisions have not fully reached the objectives pursued by the Directive.  At the same time, infringements of intellectual property rights have reached a significant level. The provisions concerned could therefore be clarified.”

More than 300 associations, individuals and companies (including Microsoft) have responded to the Commission’s consultation. We in particular are suggesting ways in which the procedures and remedies for IP cases could be clarified to be made more consistent and effective throughout the EU, consistent with appropriate data protection and proportionality requirements.

The Commission itself has outlined the importance of this initiative: “Effective means of enforcing intellectual property rights are essential for promoting innovation and creativity.”  This review of the Enforcement Directive over the weeks and months ahead should help to clarify how this can best be done.

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