European Union: Intellectual Property Under The Charter: Are The Court's Scales Properly Calibrated?

Co-authored by Peter Oliver*

Abstract

Unusually, the Charter of Fundamental Rights of the EU contains a provision (Art. 17(2)) expressly recognizing the right to the protection of intellectual property. With the notable exception of Luksan, the ECJ case law on this provision relates to cases in which the right to IP is pitted against other Charter rights. The Court has been driven to seek a "fair balance" between the rights at stake, an exercise which can only be carried out on a case-by-case basis, thus engendering considerable legal uncertainty. What is more, in several cases the Court has given more limited guidance than it might have done; the recent ruling in McFadden is encouraging, however. But the Court by no means bears sole responsibility for this legal uncertainty: courts are ill equipped to solve such complex policy issues; and, had it not been for the numerous gaps and ambiguities in the relevant EU legislation, the Court would not have had to step in so frequently.

1. Introduction

Recent years have seen a raft of landmark judgments on intellectual property ("IP") decided by the Court of Justice, in which the Charter of Fundamental Rights of the EU¹ has been raised.² The occasion is therefore ripe to explore the Court's approach to IP as a fundamental right, and in particular to consider whether that approach diverges from its position regarding other forms of property.

The benefits of IP cannot be seriously contested.³ In a recent Communication, the Commission has written: "Intellectual property-intensive sectors account for 39% of GDP and for 35% of jobs in the EU...A recent study by the Office for Harmonisation in the Internal Market (OHIM) has shown that only 9%of SMEs in Europe own IP rights, but that – on average – those SMEs that do own such rights generate 32% more revenue per employee than those that do not."⁴ On the other hand, there is a school of thought which advocates paring back the scope of IP, especially when it comes to copyright.⁵ One leading exponent of this view is Harvard Professor Lawrence Lessig.⁶ In Europe, this movement has led to the establishment of Pirate Parties, which have enjoyed some success in Germany and Sweden and led to the election of one Member of the European Parliament.⁷ This is part of a much broader debate about how far-reaching fundamental rights of an economic nature are or should be.

At all events, as we shall see, under the ECHR and in EU law, there is no room for the claim made by the United Nation's Special Rapporteur on Cultural Rights that "intellectual property rights are not human rights":⁸ the Grand Chamber of the European Court of Human Rights has held that Article 1 of Protocol 1 ("A1P1") to the ECHR on the right to property covers IP;⁹ and Article 17(2) of the EU Charter of Fundamental Rights ("the Charter") states: "Intellectual property shall be protected."

Every Bill of Rights worthy of the name recognizes the right to property. At the same time, by definition this right can never be absolute like hard-core rights such as the rights to human dignity¹⁰ and freedom from torture.¹¹ Most fundamental rights are subject to exceptions, but the right to property is "relative" par excellence. That is not least because "in this world nothing can be said to be certain, except death and taxes" (thus quoth Benjamin Franklin). This could explain the unusually broad public interest exceptions built into the provisions laying down the right to property in A1P1 and Article 17(1) of the Charter. As one would expect, IP is generally subject to these exceptions like other forms of property.¹²

The structure of the present article reflects the fact that the right to IP is so closely intertwined with the right to property generally – both under A1P1 and under Article 17 – that it is impossible to consider the former without the latter. Before considering Article 17 of the Charter, which concerns the right to property, we must first focus our attention on the close links between the ECHR and the Charter (section 2); and then we shall examine A1P1 (section 3). Only after that will we turn to Article 17 itself (section 4). In section 5, we shall consider very briefly whether IP is treated differently from other forms of property. Our conclusions are set out in section 6.

2. The close links between the Charter and the ECHR

As the reader will be aware, the Court of Justice first alluded to the ECHR in Nold¹³ back in 1974, just eleven days after it was ratified by the last Member State, namely France; and since then the Court has repeatedly held that the ECHR enjoys "special significance" in the European Union.¹⁴ Consequently, until the Charter came into its own, the case law of the Court of Justice on the right to property was drawn in particular from the jurisprudence of its counterpart in Strasbourg on A1P1.

Moreover, according to Article 52(3) of the Charter, insofar as rights enshrined in that instrument correspond to rights guaranteed by the ECHR, "the meaning and scope" of those rights are the same, although that does not prevent Union law "providing more extensive protection". Finally, Article 6(3) TEU now provides: "Fundamental rights, as guaranteed by the [ECHR] and as they result from the constitutional traditions common to the Member States, shall constitute general principles of the Union's law." Accordingly, the ECHR must necessarily be the starting-point for an examination of the right to property (intellectual and otherwise) in Union law.

As we shall see in section 4.3 below, there is at least one judgment of the ECJ which appears to run counter to the case law of its counterpart in Strasbourg. Moreover, the ECJ has frequently decided cases in this field without referring to that case law, and sometimes without any mention of A1P1 itself. Especially since the entry into force of the Treaty of Lisbon, that is scarcely surprising; and it does not follow necessarily that in all the judgments concerned the Court has disregarded the case law of the ECtHR.

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Originally published by Common Market Law Review, Wolters Kluwer.

Footnotes

* Respectively: visiting Professor, Université Libre de Bruxelles, and Barrister, Monckton Chambers; and Partner,Arnold & Porter (UK) LLP, and visiting Professor, University College London. The authors wish to thank Thomas Bombois, Enrico Bonadio, Jonathan Griffiths and Philippa Watson for their advice and comments on an earlier version of this article, but responsibility for any errors rests with the authors alone. All websites last visited 29 Jan. 2017.

1. The current version of the Charter is published in O.J. 2007, C 303/1 and again in O.J. 2012, C 326/391.

2. E.g. Case C-275/06, Promusicae v. Telefónica, EU: C:2008:54; Case C-70/10, Scarlet Extended, EU: C:2011:771; Case C-277/10, Luksan v. van der Let, EU: C:2012:65; Case C-360/10, SABAM v. Netlog NV, EU: C:2012:85; Case C-510/10, DR and TV2 Danmark A/S v. NCB – Nordisk Copyright Bureau, EU: C:2012:244; Case C-283/11, Sky Österreich, EU: C:2013:28; Case C-314/12, UPC Telekabel Wien v. Constantin Film Verleih, EU: C:2014:192; Case C-201/13, Deckmyn v. Vandersteen, EU: C:2014:2132; Case C-580/13, Coty Germany v. Stadtsparkasse Magdeburg, EU: C:2015:485; Case C-170/13, Huawei Technologies Co v. ZTE Corp, EU: C:2015:477; Case C-484/14, McFadden v. Sony Music, EU: C:2016:689.

3. IP covers a broad range of rights, but the cases primarily consider patents (Case 15/74, Centrafarm v. Sterling Drug, EU: C:1974:114), trade marks (Case 16/74, Centrafarm v. Winthrop, EU: C:1974:115), copyright (Case 55/80, Musik-Vertrieb Membran v. GEMA, EU: C:1981:10), design rights (Case 144/81, Keurkoop v. Nancy Kean Gifts, EU: C:1982:289) and geographical denominations (Case C-47/90, Delhaize v. Promalvin, EU: C:1992:250 and Case C-3/91, Exportur v. LOR, EU: C:1992:420). Whether business secrets should be regarded as intellectual property is the subject of some controversy. For the purposes of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS, O.J. 1994, L 336/214), they are treated as such: Arts. 1(2) and 39. On the other hand, recitals 1, 2 and 39 in the preamble to Directive 2016/943 of the European Parliament and the Council on the protection of trade secrets (O.J. 2016, L 157/1) clearly suggest that for the purposes of that instrument the contrary applies. Considerations of space preclude an examination of the case law on business secrets within the confines of this article.

4. Communication on Upgrading the Single Market, COM(2015)550 final, pp. 14–15.

5. See generally Torremans, para 17(2).05 in Peers, Hervey, Kenner and Ward (Eds.), The EU Charter of Fundamental Rights – A Commentary (Beck/Hart Publishing/ Nomos, 2014).

6. E.g. Code Version 2.0 (Basic Books, 2006), especially Chs. 1 and 10, Remix: Making Art and Commerce Thrive in the Hybrid Economy (Bloomsbury Academic, 2008), especially the Conclusion, and "In Defense of Piracy", Wall Street Journal 11 Oct. 2011 ( www.wsj.com/ articles/SB122367645363324303). See also Landes and Posner, The Economic Structure of Intellectual Property Law (Harvard University Press, 2003).

7. The MEP in question, Julia Reda, was the rapporteur for the Parliament's resolution of 9 July 2015 on the reform of EU copyright law ( www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P8-TA-2015-0273) Particularly heated controversy surrounded the "freedom of panorama" (i.e. the right of third parties to disseminate photographs or other images of buildings or works of art permanently located in public places) which some MEPs have sought to remove: ( juliareda.eu/2015/06/fop-under-threat). See Politico 3 July 2015 ( www.politico.eu/article/aldes-panorama-drama-reda-copyright-report). In view of the controversy surrounding this issue (together with some other copyright issues), the Commission launched a public consultation on 23 Mar. 2016, ( ec.europa.eu/digital-single-market/en/news/commission-seeks-views-neighbouring-rights-and-panorama-exception-eu-copyright), which attracted 6203 replies ( ec.europa.eu/digital-single-market/en/news/synopsis-reports-and-contributions-results-public-consultation-role-publishers-copyright-value). This ultimately led to the adoption of a Commission proposal for a new directive on copyright in the information society COM(2016)596 final; see the accompanying press release of 14 Sept. 2016 ( europa.eu/rapid/press-release_IP-16-3010_en.htm), although this does not mention "freedom of panorama".

8. Statement made on 11 Mar. 2015 at the 28th session of the Human Rights Council ( www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=15764&LangID=E).

9. ECtHR, Anheuser-Busch v. Portugal, Appl. No. 73049/01, judgment of 11 Jan. 2007.

10. This follows clearly from Art. 1 of the Charter, according to which human dignity is "inviolable".

11. Case C-404/15, Aranyosi, EU: C:2016:198, para 86.

12. Put another way, as the Delhi High Court recently held, "copyright, specially in literary works, is thus not an inevitable, divine, or natural right that confers on authors the absolute ownership of their creations." (Oxford University v. Rameshwari Photocopy Services, 16 Sept. 2016, para 80) ( www.worldipreview.com/news/copyright-not-a-divine-right-says-delhi-hc-12256).

13. Case 4/73, Nold v. Commission, EU: C:1974:51, para 13.

14. E.g. Case C-274/99 P, Connolly v. Commission, EU: C:2001:127, para 37; Case C-94/00, Roquette Frères v. Directeur général de la concurrence, EU: C:2002:603, para 25; Joined Cases C-20 &64/00, BookerAquaculture v. Scottish Ministers, EU: C:2003:397, para 65 and Joined Cases C-402 &415/05 P, Kadi andAl Barakaat International Foundation v. Council and Commission (Kadi I), EU: C:2008:461, para 283.

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