1. ADVICE
ON
DRAFT
“GALLO
REPORT”
(
While
the
report
2009/2178(INI)
looks
at
counterfeiting
in
general,
this
text
merely
looks
at
this
report
as
a
reaction
from
the
European
Parliament
to
the
Anti-­Counterfeiting
Trade
Agreement
(‘ACTA’)
and
the
implications
for
Internet
)
EXECUTIVE
SUMMARY
The
Report
2009/2178(INI),
proposed
by
Rapporteur
Marianne
Gallo
(‘Gallo
report’),
claims
that
counterfeiting
through
peer
to
peer
(‘p2p’)
networks
is
one
of
the
major
causes
for
job
losses
and
loss
of
net
revenue
for
the
European
industry.
It
proposes
measures,
in
particular
the
control
of
Internet
Service
Providers
(‘ISP),
to
protect
Intellectual
Property
Rights
(‘IPR’).
It
sees
control
of
IPR
infringements
as
necessary
for
the
creation
of
a
single
European
market.
The
measures
proposed
in
the
report
do
not
provide
a
solution
to
the
problem
of
IPR
infringements,
as
they
do
not
guarantee
the
principle
of
Net
Neutrality.
There
is
a
clear
mismatch
between
current
IPR
laws
and
online
demand,
which
asks
for
an
assessment
of
previous
directives
and
new
data
on
the
influence
of
legal
and
illegal
file
sharing
on
the
European
economy.
(1-­15)
(16-­20)
EUROPEAN
OBSERVATORY
ON
COUNTERFEITING
AND
PIRACY
The
Gallo
report
calls
for
sanctions
to
counterfeiting
and
IPR
infringements
to
minimize
job
losses
and
loss
of
net
revenues,
but
lacks
exact
data
of
the
negative
effect
of
online
illegal
file
sharing
(‘piracy’)
on
the
European
economy
as
such.
Counterfeiting
of
products
and
distribution
of
copied
multimedia
might
both
constitute
illegal
activities,
it
is
however
necessary
to
differentiate
between
them
as
well
as
to
keep
the
context
in
mind:
the
Internet.
The
problem
needs
to
be
defined
better:
not
all
file
sharing
through
p2p
on
the
internet
is
illegal
and
should
thus
not
be
continuously
referred
to
as
piracy.
The
available
data
is
not
consistent:
there
is
no
scientific
data
that
clearly
shows
the
effect
of
file
sharing
and
/
or
piracy
on
the
European
Economy;
while
some
research
suggests
the
impact
is
negative,
other
research
shows
a
positive
impact
of
(illegal)
downloading
and
file
sharing
on
the
European
economy.
i
There
is
a
clear
need
for
objective
data
on
the
size,
scale
and
effects
of
piracy,
and
more
general
of
legal
and
illegal
file
sharing.
The
recently
created
European
Observatory
on
Counterfeiting
and
Piracy
is
in
the
best
position
to
head
an
objective
investigation
on
this
matter
to
clearly
outline
the
problems
and
define
possible
solutions.
This
needs
to
be
done
in
collaboration
with
other
national
and
EU
statistics
gathering
bodies
that
are
already
in
place
to
avoid
doubling
the
work.
In
particular,
the
Directive
2004/48/EC
of
the
European
Parliament
and
of
the
Council
of
29
April
2004
on
the
enforcement
of
intellectual
property
rights,
also
known
as
Intellectual
Property
Rights
Enforcement
Directive
(‘IPRED’),
needs
to
be
assessed
before
new
steps
can
be
taken.
(21-­24)
CULTIVATING
CONSUMER
AWARENESS
There
is
a
demand
for
content,
which
is
not
currently
being
met
by
content
owners,
resulting
in
illegal
file
sharing.
More
than
a
quarter
of
all
recorded
music
industry
revenues
worldwide
come
from
digital
channels,
however,
according
to
the
2010
International
Federation
of
the
Phonographic
Industry
(‘IFPI’)
digital
music
report,
there
were
only
50
licensed
online
music
services
in
2003.
ii
A
competitive
content
market
and
an
appropriate
legal
framework
will
enable
easy
legal
access
to
content.
These
are
essential
preconditions
to
the
creation
of
a
culture
of
legal,
rather
than
illegal,
consumption.
While
there
is
the
issue
of
IPR
infringement,
one
should
look
at
this
as
a
consequence
of
current
legislation
not
meeting
current
demand.
iii
The
idea
of
a
levy
on
Internet
connections
as
a
way
of
funding
artists
or
somehow
“compensating”
them
for
illegal
downloads
is
not
targeted
at
those
who
download
illegally,
it
justifies
illegal
behaviour
and
destroys
any
chance
of
creating
legal
ways
of
consuming
content,
and
is
very
unlikely
to
accurately
compensate
artists
in
the
right
way.
It
is
important
to
establish
a
dialogue
on
practical
measures
to
raise
awareness
of
the
current
online
IPR
infringements
between
all
concerned
parties,
including
ISPs,
rights-­‐holders
and
consumers'
organisations.
While
cultivating
consumer
awareness
to
reduce
IPR
infringements
is

2. ADVICE
ON
DRAFT
“GALLO
REPORT”
important,
there
also
is
a
need
to
look
at
other
problems,
including
pricing,
availability
of
legal
files,
etc.
This
again
calls
for
new
research.
(25-­38)
TACKLING
ON-­LINE
INFRINGEMENT
AND
PROTECTING
IPRS
ON
THE
INTERNET
Holding
Internet
intermediaries
liable
for
misuse
of
their
services
by
third
parties
violates
the
principle
of
Net
Neutrality,
the
core
principle
for
the
functioning
of
the
Information
Society
that
was
enacted
in
the
2000
Electronic
Commerce
Directive.
It
sets
the
legal
framework
for
ISP
liability
and
prevents
Member
States
from
requiring
ISPs
to
carry
out
surveillance
of
their
services.
iv
The
protection
of
fundamental
rights
must
be
taken
into
account
in
all
policy
proposals
or
legislative
initiatives.
These
aspects
also
need
to
be
considered
in
all
processes
relating
to
impact
assessments
of
previous
proposals.
v
Any
voluntary
measures
must
take
place,
in
any
case,
within
the
boundaries
of
the
legal
framework
and
with
the
respect
of
the
fundamental
rights
of
citizens,
including
privacy.
Any
measures
taken
to
enforce
IPRs
must
respect
the
European
Convention
for
the
Protection
of
Human
Rights
and
Fundamental
Freedoms,
as
stated
in
Article
1.3.a
of
the
Framework
Directive.
vi
In
particular,
they
must
respect
the
presumption
of
innocence
and
the
right
to
privacy.
With
regard
to
any
measures
of
Member
States
taken
on
their
Internet
access
(e.g.
to
fight
child
pornography
or
other
illegal
activities),
citizens
in
the
EU
are
entitled
to
a
prior
fair
and
impartial
procedure,
including
the
right
to
be
heard.
(39-­46)
INTERNATIONAL
DIMENSION
Protection
and
enforcement
of
intellectual
property
are
crucial
for
the
EU's
ability
to
compete
in
the
global
economy.
However,
as
stated
before,
the
legislation
in
place
does
not
meet
consumer’s
demand,
which
leads
to
illegal
file
sharing
online.
For
European
citizens
and
industry
alike,
the
harmonisation
of
exceptions
is
a
necessary
step
in
order
to
facilitate
cross-­‐border
trade,
and
create
equality
and
clarity
before
the
law.
vii
The
creation
of
a
single
European
online
market
would
be
an
important
step
forward
for
the
growth
of
the
single
market
in
general.
The
problem
of
online
IPR
infringements
is
a
cross-­‐border
issue:
any
agreement
that
will
be
made
on
the
issue
of
IPR
needs
to
involve
national
and
multilateral
actors
and
agreements.
Copyright
regulates
the
flow
of
consumer
as
well
as
knowledge
goods
in
the
single
market.
This
flow
can
easily
be
hampered
by
inadequate
IPR
legislation.
The
negotiations
on
the
multilateral
agreements,
such
as
ACTA,
thus
need
to
continue.
Negotiations
need
to
be
conducted
in
a
transparent
way,
according
to
the
Treaty
of
Lisbon.
Before
voting
on
a
particular
agreement,
it
needs
to
be
assessed
if
they
respect
Resolution
2007/2153/EC
viii
and
are
in
line
with
EU
and
national
rules
on
IPR
that
are
already
in
place.
RECOMMENDATION
There
is
a
clear
mismatch
between
current
international
IPR
laws
and
the
demand
of
multimedia
online,
which
requires
new
data
to
understand
the
relationship
between
piracy
and
the
European
economy.
The
European
Observatory
on
Counterfeiting
and
Piracy
should
be
tasked
with
conducting
an
objective
and
independent
research
in
collaboration
with
(trans-­‐)
national
institutional
organizations.
The
data
can
serve
as
basis
to
propose
other
measures
to
reduce
the
IPR
infringements,
while
protecting
online
file
sharing
to
assure
creativity
and
respecting
the
eCommerce
agreement
on
Net
neutrality
and
the
EU
Conventions.
A
response
to
this
problem
requires
a
dialogue
between
all
actors,
from
ISPs
to
transnational
organizations.
Action
needs
to
be
taken
on
national,
European
and
international
level
–
respecting
the
role
of
national
governments
and
their
IPR
enforcing
institutions.

3. ADVICE
ON
DRAFT
“GALLO
REPORT”
FOOTNOTES
i
La
Quadrature.
Internet.
http://www.laquadrature.net/wiki/Etudes_sur_le_partage_de_fichiers
ii
IFPI.
Internet.
http://www.ifpi.org/content/section_resources/dmr2010.html
iii
European
Union
adopting
regulations
that
will
penalize
Internet
users,
RSF
(2009).
Internet.
http://en.rsf.org/european-­‐union-­‐european-­‐union-­‐adopting-­‐21-­‐10-­‐2009,34794
iv
Reporters
without
borders.
Idem.
v
Françoise
Castex,
Christian
Engström.
Amendments
on
Directive
2009/2178
(INI)
on
enhancing
the
enforcement
of
intellectual
property
rights
in
the
internal
market.
vi
Article
1.3.a
of
the
Framework
Directive:
“Measures
taken
by
Member
States
regarding
end-­‐
users'
access
to
or
use
of
services
and
applications
through
electronic
communications
networks
shall
respect
the
fundamental
rights
and
freedoms
of
natural
persons,
as
guaranteed
by
the
European
Convention
for
the
Protection
of
Human
Rights
and
Fundamental
Freedoms
and
general
principles
of
Community
law.”
vii
Copyright
for
Creativity.
Internet.
http://www.copyright4creativity.eu
viii
Resolution
2007/2153/EC
calls
on
Member
States
to
avoid
adopting
measures
conflicting
with
civil
liberties
and
human
rights
and
with
the
principles
of
proportionality,
effectiveness
and
dissuasiveness,
such
as
the
interruption
of
Internet
access.