MoU on the sale of Counterfeit Goods over the Internet

MOU on the SALE OF COUNTERFEIT GOODS VIA E-COMMERCE PLATFORMS OVER THE INTERNET  - Updated in 2014

 After nearly two years of negotiations, various right holders - including BIEM - and internet companies (Amazon, eBay, Price Minister and MIH) signed a Memorandum of Understanding on 4 May 2011 in Brussels, to reduce the sales of counterfeit products online. The MoU aims at collaboration between right holders - including BIEM - and e-commerce platforms in the reduction of the sale of counterfeits.The negotiations concentrated on the most important problems related to the sale of infringing IPR products over the internet, through the use of intermediaries established within the EU. It was agreed on forehand that only the sale of physical items should be included into this MoU.

The MoU sets out a series of joint principles including notice and take down procedures and effective measures to prevent offers of counterfeit goods from being listed on internet platforms. The MoU will have an assessment period of one year to review and measure progress, under the auspices of the Commission services. The MoU neither interprets the current legal framework, nor can it be used in any court proceedings, nor does it pre-empt future legislation. A press release on the MoU will be issued soon by DG Internal Market.

The Internet Stakeholders Dialogue (ISD) took place under the supervision of DG Internal Market and was attended by a variety of right holders. From the copyright owner’s side the MoU was signed by the Motion Picture Association (MPA), the Interactive Software Federation of Europe (ISF), the International Video Federation (IVF), Microsoft and BIEM.

Since  May 2011, DG MARKT organizes a meeting twice a year between right holders and commercial Internet platforms on the functioning of the MoU.

Participation of consumer representatives into the MoU has always been an important topic. In the past there have been contacts with the consumer associations, including BEUC. One of the problems BEUC mentioned initially was the issue of consumer reimbursement or compensation. However, it seemed that this was not the main problem, but no clarification on the existing obstacles had been forthcoming. It was confirmed that if the consumer body were not interested, this would hinder advancement as regards other stakeholders. The Commission has sent a letter to BEUC asking for their suggestions and informing them that direct contacts with national member consumer associations would be made.

The benefits of reporting on Key Performance Indicators (KPIs) as a way of measuring the progress made was also discussed in the year under review. Right owners agreed that the KPIs must be clearly measurable over time in order to judge the success of the MoU. The MoU, as a code of practice designed to facilitate cooperation between right owners and internet platforms, covers both notice and take down procedures and preventive and proactive measures, both of which are of great importance for right owners. Both rights-holders and Internet platforms proposed a set of KPI’s. Right owners declared that they thought the KPIs suggested by the Internet platforms were insufficient. With reference to both proposals the Commission will prepare a proposal in an informal paper.

On the subject of voluntary measures regarding advertising on infringing sites, the Commission briefly explained the “follow the money” approach and outlined the ideas for stakeholders’ dialogues and a possible future MoU bringing together right owners, media and the advertising industry. It is not to be expected that many right holders will be in favour starting up new negotiations for a MoU regarding this issue.

A possible future initiative involving payment service providers was also discussed.

NOVEMBER 2012 - Report on the Functioning of the Memorandum of Understanding on the Sale of Counterfeit Goods via the Internet

Since the MoU with the Internet Platforms was signed in May 2011, the European Commission organized various meetings during the year 2012 between right holders and commercial Internet platforms in order to produce a full report on the functioning of the MoU during the one-year test period.

While the initial assessment period had been fixed at 12 months, signatories unanimously concluded to extend this period by an additional six months in order to allow for more pronounced testing of all measures provided for in the MoU.

The Report on the Functioning of the MoU, that was released by the Commission in December 2012, contains an analysis of the progress, implementation and functioning of this process. It also discusses and proposes appropriate follow-up actions. Based on the current version of the MoU, signatories are committed to continue to apply the MoU for another two years. During this period, signatories would wish to meet twice a year under the auspices of the European Commission.

 It is a general feeling by right holders that the process to get to the MoU was certainly beneficial in creating collaboration with platforms but there have been few substantial changes as regards the litmus test of whether there are fewer counterfeits for sale online. This expresses the opinion by most of the trademark holders. Copyright holders like MPAA, IVF and ISSFE as well as BIEM have experienced fewer problems on the sale of counterfeited good via the commercial platforms. The sincere problems are most likely to be found in the online environment rather than in the off line environment. A survey amongst mechanical rights societies, carried out by the Secretariat last November, confirmed this last finding. No trade in illegal sound carriers via the platforms was reported; although there are some sites offering bootleg recordings.

OCTOBER 2012

EBAY's COMMITMENTS TO THE MOU on the sales of counterfeited goods on the Internet

(Web-Conference, 17 October 2012)

Stefan Krawczyk, Associate General Counsel and Head of Government Relations Europe for eBay Inc., delivers a presentation on their IPR enforcement policies, including comments on certain measures to combat counterfeit sales and on collaboration with right holders.