This is the latest edition of Baker & McKenzie’scolumn on developments in EU law relating to IP,IT and Telecommunications. This articlesummarises recent developments that areconsidered important for practitioners, studentsand academics in a wide range of informationtechnology, E-commerce, telecommunications andintellectual property areas. It cannot be exhaustivebut intends to address the important points.Additional commentary is also provided in relationto a few select areas of particular interest. This is ahard copy reference guide, but links to outside websites are included where possible. No responsibilityis assumed for the accuracy of informationcontained in these links.

A. Copyright and trademarks

(a) European Parliament adopts resolutionon the protection of audio-visual performersOn 15 May 2003 the European Parliament adopteda resolution calling on the Commission to informthe Parliament on the state of WIPO negotiationson audio-visual performances and take action toachieve the adoption of an effective WIPOPerformers and Phonograms Treaty (“WPPT”) infavour of audio-visual performers’ rights. Thetiming reflects WIPO’s organisation of an informalmeeting in June 2003 intended finally to reachagreement on the inclusion of audio-visualperformance rights within the WPPT.

Adopted Resolution:

http://www3.europarl.eu.int/omk/omnsapir.so/pv2?PRG=CALDOC&FILE=030515&LANGUE=EN&TPV=PROV&LASTCHAP=14&SDOCTA=10&TXTLST=1&Type_Doc=FIRST&POS=1

(b) European Council amends the range ofgeographical indicationsOn 8 April 2003 the European Council adopted byqualified majority Regulation (EC) No 692/2003,amending Regulation (EC) No 2081/92 on theprotection of geographical indications anddesignations of origin for agricultural products

and foodstuffs. The amending Regulation excludesmineral and spring waters from the scope of theRegulation, after a transitional period of ten yearswith a progressive phasing out. It includes newproducts such as mustard, pasta, wool, and wicker.It also includes set provisions for ending the co-existence between a registered designation and anidentical geographical name after a 15 year period.See article below.

Council press release:

http://ue.eu.int/newsroom/makeFrame.asp?max=&bid=100&did=75376&lang=1&File=/pressData/en/agricult/75376.pdf&Picture=0

Regulation:

http://europa.eu.int/eur-lex/en/dat/2003/l_099/l_09920030417en00010007.pdf

(c) Commission Regulation amendsspecification of 16 geographical indicationsOn 14 May 2003 Regulation (EC) No 828/2003amended the specification of 16 names previouslyregistered in accordance with Regulation (EC) No2081/92 on the registration of geographicalindications and designations of origin.

Regulation:

http://www.europa.eu.int/eur-lex/en/dat/2003/l_120/l_12020030515en00030011.pdf

(d) UK Patent Office releases Consultationpaper on proposed amendments to theCommunity Trade Mark RightThe Office for Harmonisation of the InternalMarket has concluded that improvements in theCommunity Trade Mark system can be made, andthe Commission has submitted a report to theCouncil of Ministers to consider. The UK PatentOffice has therefore recently released aconsultation paper to feed UK views into thisprocess. Responses should be addressed to the UKPatent Office and are required by 18 July 2003.Some of the more significant proposals are:

■ Abolishing the requirement for imposingreciprocity requirements on applicants for the

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Baker & McKenzie’s regular article trackingdevelopments in EU law relating to IP, IT &telecommunications David Halliday, Rebecca Peer, Peter O’Byrne and Jonathan Westwell, Baker &McKenzie

321Computer Law & Security Report Vol. 19 no. 4 2003 ISSN 0267 3649/03 © 2003 Elsevier Science Ltd. All rights reserved

CTMR, on the basis that the process isexcessively complex (Art 5);

■ Abolishing the searches conducted by someNational Offices and the OHIM of its ownregister (Art 39);

■ Including new articles to provide for dividingan application or registration (Arts 44a &48a);

■ Including a new article to provide for acontinuation in proceedings where a party hasfailed to observe a time limit set by the OHIM(Art 78a);

■ In certain circumstances, empowering somemembers of the Boards of Appeal to takedecisions to speed up the process. In othercircumstances an enlarged board may takedecisions to ensure consistency (Art 130-131).

Consultation Paper:http://www.patent.gov.uk/about/consultations/communitytm/index.htm

Report from Commission to Council of Ministers:

http://europa.eu.int/eur-lex/en/com/cnc/2002/com2002_0766en01.pdf

B. Patents

(a) Commission revised Proposal to amendmedicinal products Directive releasedOn 3 April 2003 the Commission published arevised proposal to amend Directive 2001/83/EC onthe Community Code relating to the regulation ofmedicinal products for human use. See articlebelow.

Revised Proposal:

http://www.europa.eu.int/eur-lex/en/com/pdf/2003/com2003_0163en01.pdf

(b) Revised text of Proposal for CommunityPatent released.Following the Council of Ministers’ agreementwith the common political approach to theCommunity Patent settled by the CompetitivenessCouncil in March 2003, a revised Proposal wasreleased on 16 April 2003. It takes into account theagreed common political approach.

Revised Proposal:http://register.consilium.eu.int/pdf/en/03/st08/st08863en03.pdf

Press release of Competitiveness Council:

http://europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=PRES/03/59|0|RAPID&lg=EN&dislay=

C. Data protection/privacy

(a) Commission Report on implementationof the Data Protection Directive. On 16 May 2003 the Commission reported on theimplementation of the Data Protection Directive(95/46/EC). The Report concludes that the aim ofensuring strong protection for privacy whilemaking it easier for personal data to be movedwithin the EU has been broadly achieved, but thatthere is clear room for improvement andrefinement. Late implementation by manyMember States and divergences of implementationhas hindered benefits to date, as has a failure bythe relevant authorities to enforce implementinglegislation with sufficient vigour. A work plan isproposed of dialogue between the Commission,the Member States, and their data protectionauthorities, leading to a review in 2005 of whetheramendments to the Directive are necessary.

Press Release:

http://europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=IP/03/697|0|RAPID&lg=EN&display=

Report:http://www.europa.eu.int/comm/internal_market/privacy/lawreport_en.htm

(b) Protection of databases extended to theIsle of ManOn 18 February 2003 a Council Decision approvedthe agreement between the UK and the EuropeanCommunity extending the legal protection ofdatabases as provided for in Chapter III ofDirective 96/9/EC to the Isle of Man.

Council Decision:

http://europa.eu.int/eur-lex/en/dat/2003/l_089/l_08920030405en00110011.pdf

D. Competition lawNo developments.

E. Telecoms

(a) Commission adopts Communicationsetting out EU priorities for the WorldRadiocommunication Conference 2003On 16 April 2003 the European Commissionadopted a Communication setting out the EUpriorities and objectives for the WorldRadiocommunication Conference 2003 (WRC-03).

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This Conference, organised periodically by theInternational Telecommunication Union, will nexttake place in Geneva from 9 June to 4 July 2003.The main EU objectives to be reached in WRC-03are: (i) protecting the spectrum allocations grantedby WRC-2000 to 3rd generation mobilecommunications, and confirming the spectrumusage conditions for the Galileo satellite radio-navigation system; (ii) making progress towardsregionally and globally harmonised frequencies forPublic Protection and Disaster Relief systems; and(iii) supporting the spectrum needs of alternativewireless infrastructure platforms.

Press Release:

http://europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=IP/03/548|0|RAPID&lg=EN&display=

(b) Oftel consults on application of theelectronic communications codeOn 2 April 2003 Oftel issued a consultation on theproposed new electronic communications coderegime. The proposed revised procedures for thegranting of the electronic communications code,will replace the existing telecommunications codepowers when the new regulatory EU Directives(Directives No 2002/19 to 2002/22) come into forceon 25 July 2003. The existing telecommunicationscode applies to telecoms licence holders and makesprovision for them to have access to public andprivate land for the purpose of developingcommunications networks. This will not change,but the new code will extend to allcommunications providers. The deadline forcomments is 28 May 2002.

Press Release:http://www.oftel.gov.uk/press/releases/2003/pr16_03.htm

Consultation:

http://www.oftel.gov.uk/publications/Infrastructure/2003/elecode0303.htm

F. E-commerce

(a) Commission urges Member States toreview e-business policies for small tomedium enterprisesOn 27 March 2003 the Commission adopted a

communication calling upon Member States toreview their e-business strategies in support ofsmall and medium-sized enterprises to help themadapt to a continuously changing e-businessenvironment.

Press Release:

http://europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=IP/03/451|0|RAPID&lg=EN&display=

Communication: http://europa.eu.int/eur-lex/en/com/cnc/2003/com2003_0148en01.pdf

(b) Council agreement on Proposal for aneEurope DecisionThe Council reached political agreement on thetext of the proposal for a Decision adopting amulti- annual program (2003-2005) for themonitoring of eEurope, dissemination of goodpractices, and the improvement of network andinformation security. After final verification, thetext will be adopted as the Council’s commonposition on this Directive at one of theforthcoming Council sessions.

Council press release:http://ue.eu.int/pressData/en/trans/75264.pdf

Modified proposal for Decision:

http://europa.eu.int/eur-lex/en/com/pdf/2003/com2003_0160en01.pdf

(c) Commission report on implementation ofthe Directive on the legal protection ofelectronic pay servicesOn 24 April 2003 the Commission released its firstreport on the implementation of Directive98/84/EC, which aims to provide a minimum levelof legal protection within the EU of electronic payor “conditional access” services (including pay TV,radio and Internet services) against piracy. Seearticle below.

Report:http://europa.eu.int/comm/internal_market/en/media/condac/functioning/

G. Internet

(a) Proposal for a Decision on promotingsafer use of the Internet revisedOn 28 March 2003 the European Presidencyreleased a revised text for the Proposal for aDecision of the European Parliament and of theCouncil amending Decision No 276/1999/ECadopting a Community action plan on promotingsafer use of the Internet by combating illegal andharmful content on global networks. The revisedtext incorporates negotiations with the EuropeanParliament in January 2003.

Proposal revised text: http./registerconsilium.eu.int/pdf/en/03/st06/st06923en03.pdf

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H. Information systems

(a) Proposal for a Decision on attacksagainst information systemsOn 12 May 2003 the European Council released aProposal for a Council Framework Decision onattacks against information systems. The objectiveis to improve cooperation between judicial andother authorities through approximating rules oncriminal law in Member States in the area ofattacks against information systems.

Proposal:http://register.consilium.eu.int/pdf/en/03/st08/st08687en03.pdf

I. Commission report onimplementation of ConditionalAccess Directive On 24 April 2003 the Commission published itsfirst report on the implementation of Directive98/84/EC of 20 November 1998. The “ConditionalAccess Directive” aims to provide a minimum levelof legal protection for electronic pay serviceswithin the EU against piracy and is part of anInternal Market strategy to remove barriers toservices.

The Directive was adopted after a survey in1995 revealed the differences in scope of the legalprotections across the Community and lobbyingfrom the Digital Video Broadcasting Project forlegal protection of encrypted broadcasting signals.Provision of and technical requirements forconditional access services and devices are coveredby Directives 2002/19/EC (Access Directive) and2002/22/EC (Universal Service Directive)respectively.

‘Protected services’ are those using conditionalaccess technologies and are offered by commercialcompanies whose finances derive from advertisingand sponsorship as well as fees and subscriptionsand include satellite-based pay TV stationsoffering premium content such as movies orsporting events - the Directive is broadly draftedand will cover traditional broadcast content,whether by cable or satellite, as well as, forexample, video and audio content, and videogames, available over the Internet. Conditionalaccess technologies are used by content providersto ensure payment for their services. The objectiveis of course that viewers/listeners/users who havepaid for either a special decoder, smart card orother security device, may watch widely receivablecontent in an intelligible form. Conditional access

technology is also used to restrict audiences byterritory or class to avoid copyright infringement,or to protect minors.

The legal protections enshrined in the Directiveare necessary as the piracy against these ‘protectedservices’ undermines their economic viability. Thetechnologically neutral approach protects contentirrespective of the technical means of transmissionand aims to make the Directive ‘future proof’ andless ‘maintenance prone’ by using this functionaldefinition. Technology such as cryptography,commonly used by pay TV, and user-ID/passwordschemes, often used over the Internet, is caught.

The essential thrust of the Directive is that itintroduces a prohibition on commercial activityrelating to ‘illicit devices’. “Illicit devices” aredevices designed or adapted to give intelligibleaccess to a protected service without thepermission of the provider. The range ofinfringing activities in relation to such deviceswhich must be protected against is very broad,ranging from manufacture to distribution, andafter-sales maintenance or repair. Only commercialactivities, however, are prohibited under theDirective: there is no requirement for a sanctionagainst unauthorised reception for private use

Member States are free to choose sanctionsagainst the prohibited activities but remedies mustbe appropriate i.e. as a minimum damages,injunctions or the possibility of disposal of theillicit devices in question. A significant periodelapsed between the coming into force of theDirective in 1998 (during which year only Franceand the Netherlands created implementinglegislation) and implementation by most MemberStates in 2000. Greece and Spain, as at the date ofthe notice, have been referred to the EuropeanCourt of Justice for failure to notify, and theCommission will bring proceedings under Article226 against infringers. Monitoring of the adequacyof implementation by those countries which havealready introduced legislation is ongoing. The 10countries that are anticipated to accede to the EUin May 2004 have indicated they will adoptnecessary measures by 2004 at the latest.

The Commission continues to believe that thebest way forward is to target commercial activitiesbut most market players feel there should bepenalties for the acts of private individuals, such aspossession or use of an illicit device. WhereMember States have chosen to implementmeasures against individuals relating to privateuse, such as in the Nordic countries, it is noted

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that they appear to be effective in repressing piracy.The report identifies three broad forms of piracyin this area. Professional pirates are well-equipped,have quasi-industrial production of illicit devicesand are often allied to organised crime. A ‘cottageindustry’ type piracy uses publicly available smartcards and ‘diy’ hardware and information freelyavailable on hacker sites on the Internet, and issometimes exploited as a channel to access themarket by professional pirates. Increasinglyindividuals are taking part for themselves orfriends and colleagues. Two new technologicalforms of piracy are developing: (i) powerfulsoftware decoders which can emulate theconditional access hardware and smart card; and(ii) specialised software ‘patches’, obviating theneed for smart cards, applied to commerciallyavailable common interface conditional accessmodules. These forms rely on distribution over theInternet.

It is of note that the Report identifies inabilityto obtain legitimate access to protected services, byreason of place of residence, as a major cause ofpiracy: it is believed that many who wouldotherwise be happy to pay for services have toresort to illicit devices because they cannotpurchase access due to geographical location. TheReport encourages providers actively to seek waysto develop contracts and solutions with the holdersof the rights in the content, with a view toproviding subscriber access to the protectedservices regardless of place of residence.

The Report does not recommend anyamendments to the Directive as it feels that anychanges should be in the context of a streamlinedset of measures against all potential piracy. TheCommission will continue to monitor the progressof implementation and commence infringementproceedings if necessary. Industry and nationalauthorities are encouraged to fight piracy jointlyand the Commission will cooperate with otherEuropean countries and internationalorganisations to enforce the coherent applicationof European rules against piracy.

J. European Council amends therange of geographicalindicationsOn 8 April 2003 the European Council adopted byqualified majority a Regulation amendingRegulation (EEC) No 2081/92 on the protection ofgeographical indications and designations oforigin for agricultural products and foodstuffs.

Denmark voted against the amending Regulationand the UK abstained.

The 1992 Regulation (the “Regulation”)established the rules on agricultural products forhuman consumption as laid out in the Treaty atAnnex II. The Regulation allows for the registrationof goods with protected designations of origin(PDO’s) and protected geographical indications(PGI’s) at Community level. The Regulation definesPGI’s as covering “the name of a region, a specificplace or, in exceptional cases, a country used todescribe an agricultural product or foodstufforiginating in that region, specific place or countryand which possesses a specific quality, reputation orother characteristics attributable to thatgeographical origin”.1 Generic names cannot beregistered2 and the Regulation must be applied inaccordance with Article 28 of the Treaty whichenshrines the principle of the free movement ofgoods. The Regulation notes the need fordiversification of agricultural production, promotingthe rural economy in line with the commonagricultural policy, and recognises the growingpreference of consumers for the quality rather thanquantity of foodstuffs and their need for properinformation regarding the origin of products.

Article 1(1) has been amended to include newfoodstuffs (mustard paste and pasta) and newagricultural products (cork, cochineal, flowers andornamental plants, wool and osier). Wine vinegaris to be added to the scope of Article 1 aspreviously neither the Regulation nor the winesand spirits regulation had protected it.3 As mineraland spring waters are regulated by Directive80/777/EC and the registration procedure hasrevealed difficulties, such as the use of identicalnames for different waters and invented names notbeing covered by the Regulation, they are removedfrom the scope of 2081/92. The rules onhomonyms are clarified to regulate cases whereregistrations are sought for homonyms of priorregistrations.

Significantly, there are several changes to reflectobligations arising because of membership of theWTO and the TRIPs Agreement which is annexedto GATT. It is made clear that the Article 7objection procedure is open to those nationals ofWTO member countries who have a legitimateinterest within the terms set out in Article 7(4).This is to satisfy the obligation imposed by Article22 of the TRIPs Agreement.4

Article 12 of the Regulation, which providesfor protection to be given to the foodstuffs of

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countries outside the Community where equivalentprotections are offered to foodstuffs originatingfrom the Community by that third country is nowstressed to be without prejudice to internationalagreements. It is also amended to provide detailedprocedures for the registration of designationsfrom non Member States by means of registrationwith relevant authorities in country of origin, thenapplication to register within the EU.

Australia and the US are vocal opponents ofthe changes. Australia’s Trade Minister, MarkVaile, believes the new rules impact upon theability of Australian producers to market productsin the EU and is inconsistent with WTO rules. TheUS has added to a complaint made in 1999. Apress release issued by its trade representative on 4April 2003 outlines the US assertion that the EU, infailing to protect US GI’s such as Idaho Potatoesand Florida Oranges, contravenes the coreprinciples of ‘national treatment’5 and ‘mostfavoured nation’6 at the heart of GATT. Bothnations have requested consultations and after 60days7 (16 June 2003) they can ask the DisputeSettlement Body of the WTO to convene a panelto rule on the dispute.

The context of the controversy is the deadlockover the Doha round of talks on agriculture inrelation to the liberalisation of farm trade. Europegenerally wants broader protection for GI’s,including a global register of PDOs and PGIs, inorder to sell liberalisation to European producerswho will probably lose subsidies as a result.

K. Harmonisation of the dataexclusivity periodThe European Commission published a revisedproposal to amend Directive 2001/83/EC on theCommunity Code relating to medicinal productsfor human use on 3 April 2003.

The proposals are aimed at striking a balancebetween innovation, and the need to boostcompetitiveness in the European pharmaceuticalindustry, and are part of a larger programmeconsisting of one Regulation and two Directives,to reform European legislation on pharmaceuticalproducts.

Data exclusivity (“DE”) is one of themechanisms by which the investments of drugcompanies into research and development ofimportant medicinal products is protected inEurope. Other mechanisms include patenting andsupplementary protection certificates (“SPC”). A

patent offers a monopoly protection for 20 yearsbut this period, which runs from the date of filing,is usually significantly eroded by the time taken todispose of any patent validity challenges andreceive a marketing authorisation (“MA”) for theproduct sale.

DE provides a period during which third partyapplicants for MA cannot rely on data filed by theoriginal applicant for the MA, and must producetheir own clinical data to support the safety andefficacy of a product. The current proceduresavailable to ensure DE within the EU are diverse:(i) central authorisation through the EuropeanAgency for the Evaluation of Medicinal Productswhich provides DE for 10 years, but is seen as anoverly bureaucratic and lengthy process ; (ii) localauthorisation for products which will be marketedin that Member State alone where the DE periodvaries between 6 to 10 years; and (iii) mutualrecognition procedures where locally authoriseddrugs are introduced into new Member States.

The Commission believes that the lack ofstrong uniform DE protection may impact on thedegree of funding into innovation and researchwithin the EU. It wants to standardise the DEperiod at 10 years, with an extra year’s protectionwhere new therapeutic indications bringingsignificant clinical benefits to patients areauthorised during the first eight years. It alsowants to make the central authorisation procedurecompulsory for all products containing new activesubstances. These are the central objectives of theproposed amending Directive.

The European Parliament had made certainkey proposals which have been rejected by theCommission. The most controversial relates to theextent to which an exception would be made to therestriction on use of the data, by suppliers ofgeneric medicinal products, during the protectionperiod. The difficulty faced by the manufacturersof generic products which are similar in substanceto the first marketed product is that the DE periodimposes a de facto restriction not only during theDE period, but effectively for some timeafterwards. Since they cannot apply for MA for thegeneric product during the DE period, there is atime lag in getting MA for the generic productafter expiry of DE. Derogation from the DErestrictions to permit application for MA bygeneric manufacturers during the DE period iscommonly known as a “Bolar provision”.

The Commission’s proposal for a Bolarprovision was essentially to permit only trialling of

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the generic product before expiry of the DEperiod. The European Parliament had proposed amuch wider Bolar exemption which would permitgeneric manufacturers to apply for and completeMA for the generic product during the DE period.The Commission has rejected this, stressing thatthe balance must be struck between thecompetitiveness of the generics market and theprotection of investment into innovation.

The legislation is undergoing the co-decisionprocedure with the next step being the Councilissuing a common position, expected in the weekcommencing 2 June 2003.

For further information on any of the above,please contact Harry Small(harry.small@bakernet.com) or Don Jerrard(don.jerrard@bakernet.com) of the IntellectualProperty & Information Technology Departmentof the London office of Baker & McKenzie (tel: +44 20 7919 1000). Mr Small and Mr Jerrard wereassisted in the preparation of this article byRebecca Peer, Peter O’Byrne, David Halliday andJonathan Westwell.

FOOTNOTES1 Article 2(2).

2 Article 3.

3 Regulation (EC) No 1493/1999.

4 This Article deals with the protection of GI’s at WTOlevel.

5 The principle of national treatment requires that, atleast with respect to entry of goods onto the market,foreigners and nationals should be treated equally,Article 3, 17 GATT.

6 The most favoured nation principle requires that allnationals of the WTO trading partners should be treatedequally. In other words, any allowance of benefit to aparticular country should be offered to all tradingpartners. There are exceptions for free trade agreementsin a region, barriers against a product from a specificcountry which is being traded unfairly, and services.

7 i.e. any time after 16 June 2003.

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