Category: Article

The modernised Professional Qualifications Directive – The end of crisis-induced unemployment in the EU?

Andrea Redondo

LL.M in European Law and Economic Analysis, College of Europe; BSc in Economics and Finance, LSE; LLB, Université Paris 1 Panthéon-Sorbonne and Universidad Complutense of Madrid

 

On 20 November 2013 the Council of the European Union adopted Directive 2013/55/EU on the modernisation of Directive 2005/36/EC on the recognition of professional qualifications.[1] As Commissioner Barnier had predicted,[2] the Council adopted the Directive at first reading, following an agreement with the European Parliament which had itself voted in favour of the text at its plenary session of 9 October 2013. This article analyses the historical background and key features of the modernised Professional Qualifications Directive and provides an answer to the question of whether this modernised Directive will bring an end to crisis-induced unemployment in the EU.

 

Historical background

Long have the days passed where a fully-qualified professional of one Member State was strongly dissuaded from moving to a different country as they would most likely fail to satisfy the requirements to practice their profession in the host Member State and would, consequently, have had to complete, again, an entire training course in the host country. Proof of this blatant restriction to free movement of persons and services is the abundant case law of the Court of Justice in this respect, like the Vlassopoulou,[3] Klopp[4] and Gebhard[5] cases, just to name a few.

In order to overcome this serious hurdle to the achievement of the internal (then common) market, Member States introduced, and subsequently enhanced, rules on mutual recognition of qualifications to reduce the burden for professionals wishing to work in a Member State different from the one where they had acquired their professional qualification.

In 2005, the Professional Qualifications Directive entered into force,[6] which consolidated the acquis communautaire – composed of 15 Directives – in this field of EU law and included some additional innovative aspects. This Directive provided for the following:

  • Automatic recognition for a limited number of professions on the basis of harmonised minimum training requirements. This automatic recognition entailed that the host Member State could only check whether the qualifications were in line with the minimum required by the Directive. Automatic recognition applied to doctors, dentists, nurses, midwives, pharmacists, veterinary surgeons and architects.
  • A general system for the recognition of evidence of training, applicable to a large majority of professions. On this basis, access to regulated professions was granted to any professional demonstrating that s/he is a fully-qualified professional in the Member State where he or she obtained the professional qualification. It is only in the cases where the qualifications of a professional substantially differ from those required by the host Member State or in those cases where the length of the time spent in the profession falls short of those of the host Member State that the latter may impose compensatory measures in order to close the gap and thus grant the professional full access to the relevant field of expertise. These compensatory measures can be of two kinds: (i) an adaptation period which takes the form of a period of supervised practice; or (ii) an aptitude test.
  • A new system of free provisions of services on a temporary and/or occasional basis. With the exception of professionals involved in the public health and safety sector, professionals can, in principle, provide their professionals on a temporary and/or occasional basis without a prior check of professional qualifications.  In this respect, Member States can only gather information on the status of the temporary or occasional workers in an annual declaration which covers detailed information about the establishment, insurance and professional competences in another Member State.

Given that the 2005 Professional Qualifications Directive already seemed like a big step forward, it is legitimate to ask the following question: why did the Directive require a modernisation so shortly after its entry into force? The answer, which was already identified in the Single Market Act of April 2011,[7] is that modernisation is required to reflect the changes and evolutions that have occurred recently in EU labour markets, to bring the Directive into the twenty-first century – in particular in light of the great importance of modern technologies – and to respond to the need of simplification by having a smoother system of recognition of qualifications supporting the mobility of professionals across the EU. According to the Single Market Act, modernising the legislation applicable to the system of recognition of professional qualifications was the key action to improve mobility of EU citizens in the single market. And this is precisely what the modernised Professional Qualifications Directive seeks to achieve.

 

Key features of the modernised Professional Qualifications Directive

Whilst the modernised Directive builds on the achievements of the existing Directive, it also incorporates new features. As the European Commission very elegantly puts it, “the modernisation of the Directive reaffirms the underlying philosophy of mutual recognition and mutual trust between Member States, whilst exploring innovative ways to better reflect it in practice”.[8]

In a nutshell, the key features of the modernised Professional Qualifications Directive are as follows:

  • Creation of the European Professional Card (“EPC”):[9] this is actually one of the major features of the modernised Directive. The EPC, which will not take the form of a physical card due to the risk of falsification or outdating, will be an electronic certificate to allow the cardholder to obtain the recognition of his or her qualifications in a simplified and accelerated manner. In particular, this electronic certificate will be exchanged between competent national authorities through the Internal Market Information System “(IMI”).[10] The competent authority of the home Member State will communicate any requisite information about the professional at stake to the competent authority of the host Member State via IMI, thereby significantly reducing the administrative burden and costs for professionals.
  • Modernisation of the definition for harmonised minimum training requirements for the professions which benefit from automatic recognition. For example, for doctors, the modernised Directive clarifies that the basic medical education ought to be based on 5,500 training hours done within a minimum of 5 years.
  • Mutual evaluation of regulated professions: in order to limit as much as possible the number of regulated professions, Member States will have to provide a detailed list of the professions that are regulated and the activities that are exclusively reserved to these professionals, as well as to justify the need to regulate these professions. There shall be a subsequent mutual evaluation of these professions which shall be facilitated by the European Commission.[11]
  • Common training principles: the currently existing system of automatic recognition will be further extended to new professions on the basis of the common training framework or tests. If in at least one third of Member States access to a particular profession is regulated, a common training framework or test can be established. The qualifications obtained under such frameworks or tests would then be automatically recognised in all the participating Member States.
  • Language skills: the verification of language skills at the host Member States can only take place once the latter has recognised the professional qualification of the individual concerned, although it can, however, take place before the professional accesses the profession. Quite importantly, language verifications – which must be proportionate to the activity pursued and free of charge for the professional – must be limited to the knowledge of only one official language of the host Member State, the choice of which is left to the person concerned in case of multilingual Member States.
  • Training abroad: young professionals wanting to access regulated professions will have the opportunity to do part – or even the entirety – of the traineeship in another Member State.
  • Alert mechanism: the modernised Professional Qualifications Directive is not only intended to enhance the free movement of professionals. It also aims to strengthening the protection of patients and consumers by means of an alert mechanism for education and health professions. More concretely, the competent authority of the home Member States must inform the competent authorities of all other Member States via IMI of any identified professional from these specific sectors who has been – temporarily or permanently – suspended or prohibited from practising his or her professional activity, or who has made use of falsified documents.

 

Conclusion

It is undeniable that the modernised Professional Qualifications Directive is a very important step forward in reducing – perhaps even significantly – unemployment in the EU as an enhanced mobility of professional will allow labour markets to work more efficiently. The new features contained in the modernised Directive are so far-reaching that new generations of professionals will enjoy from a greater exposure to foreign potential employers which will undoubtedly reduce the currently exorbitant levels of youth unemployment. This will have positive consequences not only on professionals, but also on customers and patients who will equally benefit from the internationalisation of free movement of professionals.

However, whether the modernised Professional Qualifications Directive will have specifically such a positive impact on crisis-induced unemployment is much more questionable. In particular, crisis-induced unemployment has most severely affected people in a difficult age range who, following a long period of unemployment, have seen their employability drastically plummet. Furthermore, and rather unfortunately, these people may lack the necessary linguistic skills and have too strong ties holding them back for them to seek job opportunities outside their national borders. This is a reality which Member States and EU institutions seem to have deliberately obviated in order not to face the cruel reality which results from such a floor-shaking crisis as the one we have been experiencing in the European Union for over 5 years now.

Consequently, this modernised Professional Qualifications Directive is certainly to be applauded as it gives a great leeway to future generations of professionals and enhances the protection of consumers and patients, but this does not mean that Member States and EU institutions – and, in particular, the European Commission – can feel relieved from their obligations vis-à-vis current generations of professionals. They must still work hard to put forward tangible and palatable initiatives which will alleviate the current unsustainable situation.

[1] Directive 2013/55/EU of the European Parliament and of the Council of 20 November 2013 amending Directive 2005/36/EC on the recognition of professional qualifications and Regulation (EU) No 1024/2012 on administrative cooperation through the Internal Market Information System (“the IMI Regulation”), available here: http://www.parlament.gv.at/PAKT/EU/XXV/EU/00/29/EU_02996/imfname_10423779.pdf

[2] Statement by Commissioner Barnier, available here: http://europa.eu/rapid/press-release_MEMO-13-866_en.htm?locale=en

[3] Case C-340/89, Irène Vlassopoulou v Ministerium für Justiz, Bundes- und Europaangelegenheiten Baden-Württemberg, [1991] ECR I-2357.

[4] Case 107/83, Ordre des avocats au Barreau de Paris v Onno Klopp, [1984] ECR 2971.

[5] Case C-55/94, Reinhard Gebhard v Consiglio dell’Ordine degli Avvocati e Procuratori di Milano, [1995] ECR I-4165.

[6] Directive 2005/36/EC of the European Parliament and of the Council of 7 September 2005 on the recognition of professional qualifications (OJ L 255, 30.9.2005, p. 22), available here: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:255:0022:0142:EN:PDF

[7] Single Market Act – Twelve levers to boost growth and strengthen confidence, SEC(2011) 467 final,  available here: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0206:FIN:EN:PDF

[8] Modernisation of the Professional Qualifications Directive – frequently asked questions (point 5), available here: http://europa.eu/rapid/press-release_MEMO-13-867_en.htm?locale=en

[9] It should be noted, however, that although the Directive creates the EPC as a concept, the introduction of the EPC for a particular profession requires the adoption of further implementing acts by the European Commission.

[10] More information concerning IMI is available here: http://ec.europa.eu/internal_market/imi-net/index_en.html

[11] In this respect, see the Communication of the Commission of 2 October 2013 on evaluating national regulations on access to professions, SWD(2013) 402 final, available here: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2013:0676:FIN:EN:PDF

Commission Proposal for a Directive on actions for damages revealed – tout pour le peuple, rien par le peuple?*

Jose Manuel Panero Rivas

MA and PGD in Economics for Competition Law, King’s College London; LL.M in European Law, College of Europe

 

On 11 June 2013, the Commission issued its much expected[1] Proposal for a Directive concerning damages claims by victims of antitrust violations (‘the Proposal’).[2] This post aims to examine what the Commission has finally done in an area in which it has never felt too comfortable. The obvious reason for this is that, contrary to what happens with the vast majority of its legislative proposals, depending on its content the Directive could have a potentially detrimental impact on the crown jewel: public enforcement by the Commission of EU competition Rules.[3]

This is a controverted area of EU competition law. Therefore, rather than aseptically describe what the content of the Proposal is, this post rather begins with an explanation of several elements the Commission considered when drafting the Proposal. This will be followed by a description of the solution retained by this institution.

A final word of caution in this introduction: this is a long-waited and matured legislative proposal. However, it is still for the Council and the Parliament to intervene in the legislative procedure. At this stage it is still unclear if amendments will be introduced by any of the two institutions. Nevertheless, what is already known is that some Member States have distinguished themselves by putting spokes in the wheels of this project, in a perceived defence of ‘their’ large corporations potentially exposed to this kind of actions – although one may think they should also consider the interests of, at least domestic, consumers.

 

(i)                 Some background elements for understanding the Proposal

It is worth recalling that the right of compensation for parties suffering the consequences of infringements of EU competition rules is well established in the case law of the Court of Justice of the European Union (‘CJEU’).[4] Nevertheless, absent any EU rule governing this type of actions, it has been for the legal systems of the Member States to lay down detailed rules governing these claims. The limits of this autonomy were identified by the Court when proclaiming the principle of effectiveness (the national rules should not make the exercise of the rights excessively difficult or practically impossible) and the principle of equivalence (the rules may not be less favourable than those governing damages actions for breaches of similar rights conferred by domestic law).[5]

However, the Commission has always been reluctant to introduce US-type actions for damages in the toolbox of competition law enforcement mechanisms.[6] It is no secret that the star tool for the Commission with regard to its fight against cartels is its leniency programme. However, the incentives for an undertaking to apply for leniency (thereby escaping without a fine a prisoner’s dilemma-type situation) could be drastically reduced if the applicant could be subject to follow-on actions for damages by affected.[7] This incentive could be further reduced if the documents which the leniency applicant provided to the Commission could subsequently be requested by a national court, as is now permitted in accordance with the Pfleiderer case law,[8] in order to prove the existence of an infringement. In other words: one might expect that if actions for damages were to be made available to affected parties by a participant in a cartel which applies for leniency – as the principle of compensation of the harm suffered would require – then less applications for leniency would be made. Also companies would perceive less pressure to apply for leniency as they might consider that other undertakings would also be less likely to reveal the existence of the practice.

Determining what the actual damage suffered by a customer of those practices infringing antitrust rules is another essential element of actions for damages, but it is not an easy task.[9] One reason for that is that some of the overcharges incurred could have been passed on to final consumers or other downstream actors in the supply chain. However, it is not uncommon that those indirect purchasers could face procedural hurdles for claiming compensation from the damage they actually suffered. It is also worth noting that the actual damage for some types of antitrust infringements are far from being evident, consider for instance certain infringements of Article 102 TFEU or even infringements of Article 101 TFEU which, despite being classified as infringements “by object”, do not have an actual impact on prices or output.[10]

 

(ii)               Main elements of the Proposal

Bearing in mind the above, the Commission issued its Proposal, which contains the following key elements:

  1. It contains the principle of full compensation. In Article 2, the Proposal states that ‘full compensation shall place anyone who has suffered harm in the position in which that person would have been, had the infringement not been committed. It shall therefore include compensation for actual loss and for loss of profit, and payment of interest from the time the harm occurred until the compensation in respect of that has actually been paid’.
  2. In Article 5, the Proposal establishes the rules on disclosure of evidence, which should allow affected parties to obtain the necessary evidence for presenting their case to a court when the claimant presents reasonably available facts and evidence showing plausible grounds for suspecting it has suffered harm from an infringement of antitrust rules. However, Article 6 offers absolute protection to leniency and settlement applications (for both leniency corporate statements and settlement submissions), also limiting access to other kind of documents needed for the purposes of public enforcement of competition rules.
  3. In Article 11, the Proposal establishes the joint and several liability of participants in collective infringements of competition rules (typically cartels). However, this Article makes an exception for leniency applicants having received immunity, which could only be forced to compensate damages caused by other participants in the infringement after the injured parties have shown they are unable to obtain full compensation from the other undertakings involved in the prohibited practice.
  4. The Proposal expressly recognises the possibility for infringing undertakings to invoke a passing-on defence (Article 12.1 of the Proposal) except in those cases in which it is legally impossible for indirect purchasers to claim compensation for their harm (Article 12.2 of the Proposal). However, this also establishes that indirect affected parties (those suffering harm because of the passing-on of the extra costs) should have at their disposal effective mechanisms of redress (Article 13 of the Proposal).
  5. On quantification of harm, Article 16 establishes the rebuttable presumption that, in case of cartel infringements, it shall be presumed that the infringement caused harm.

 

(iii)             A foreseeable long and winding road until its adoption

The Proposal is now in the hands of the Parliament and the Council. Although the Proposal is a mature piece of legislation, the first reactions of these two institutions suggest that the Proposal is not likely to remain untouched in its final wording and that it will face a rocky ride in the course of the ordinary legislative procedure.

First reactions from various different actors within the Parliament suggest inter alia that (i) collective redress mechanisms should be part of the proposal; (ii) there should be changes in the rules concerning discovery of evidence (with contradictory views with regards to the direction in which the change should go); and (iii) limitation periods – five years in the wording of the Proposal – should be shortened. However, the final vote on the issue is scheduled for 5 December 2013.[11]

At its turn, the Council seems to seek a tightened of disclosure rules, and also a shortening of the limitation period (to three years). It also seems to water down the possible fines a national court could impose to defendants in case they refuse to comply with disclosure orders or destroy evidence (provided by Article 8 of the Proposal).[12]

Apparently, the Council is even contesting the legal basis used by the Commission. The Proposal has used a dual legal basis, namely Articles 103 and 114 TFEU. However, it seems that the Council – against the opinion of the Commission – is trying to avoid the use of Article 114 TFEU. In practical terms, this would mean depriving the Parliament from exercising effective legislative powers with regards to the Proposal.[13]

 

(iv)              Conclusion

The Proposal shows a complex equilibrium. The Commission has tried to genuinely foster actions for damages in the antitrust field while at the same time avoiding undermining a key element of its public enforcement of antitrust rules as is its successful leniency policy.

It is not for this post to determine if the Commission has been too zealous in its protection of public enforcement of competition rules or not.  It is neither for this author to consider if, given the direct impact of the issue on a key competence of the Commission, this institution is the most appropriate actor to issue the Proposal (although, in any event, no other possible actor could have started the legislative procedure). However, the first reactions from the Council seem to point out that Member States would like an even less litigation-friendly environment than the one envisaged by the Proposal. At its turn, voices in the Parliament are claiming for the introduction of collective redress mechanisms. It is worth recalling that the Proposal enters into a field (actions for damages) in which there are significant divergences between Member States. It is possible that its content (for instance with regard to joint and several liability or passing-on defence) could potentially shock well-established principles of civil or commercial statutes or judicial practices in certain Member States.

The final Directive would be a major piece of legislation for EU antitrust policy. Because of the compensation to be awarded under it, it is also of vital importance for undertakings and consumers. Finally this is likely to have an impact on general EU law concerning judicial procedures in Member States. Time will tell what the final result is and if the Directive has the ability to close the gap between antitrust and civil and commercial law rules in several Member States, which may have the impression that competition rules are from Venus while tort liability is from Mars.

 

*’Everything for the people, nothing by the people’. As the learned readers of this blog know, this motto corresponds to the age of Enlightened absolutism having been attributed to some of the European kings of the 18th century.

[1] Precedent works from the Commission in the field include (1) the European Commission, White Paper on Damages Actions for Breach of the EC Antitrust Rules, COM (2008) 165; and (2) the Commission Staff Working Paper Accompanying the White Paper on Damages Actions for Breach of the EC Antitrust Rules, SEC (2008) 404.

[2] Proposal for a Directive of the European Parliament and of the Council on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union, COM(2013) 404, 11.6.2013. But the Proposal does not come alone. The documents issued by the Commission on 11 June 2013 are the following: (i) Proposal for a Directive of the European Parliament and of the Council on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union, COM(2013) 404, 11.6.2013 (‘the Proposal’); (ii) Communication from the Commission on quantifying harm in actions for damages based on breaches of Article 101 or 102 of the Treaty on the Functioning of the European Union, C(2013) 3440, 11.6.2013 (‘the Communication’); (iii) Commission Staff Working Document – Practical Guide on Quantifying Harm in Actions for damages based on breaches of Article 101 or 102 of the Treaty on the Functioning of the European Union, SWD(2013) 205, 11.6.2013 (‘the SWD’); (iv) the Impact Assessment Report, SWD(2013) 203 final, 11.6.2013 (the ‘RIA’); (v) Executive Summary of the Impact Assessment Report, SWD(2013) 204 final, 11.6.2013; (vi) a Frequently Asked Questions document; and (vii) a Citizens summary.

[3]  See W.P.J.Wils, “Should Private Antitrust Enforcement be Encouraged?” in W.P.J. Wils, Principles of European Antitrust Enforcement, 2005 pp.111-127.

[4] See Case C-453/99 Courage and Crehan [2001] ECR I-6297; Joined Cases C-295 to298/04 Manfredi [2006] ECR I-6619; and Case C-360/09 Pfleiderer [2011] ECR I-5161.

[5] See Case C-453/99 Courage and Crehan [2001] ECR I-6297; and Joined Cases C-295 to 298/04 Manfredi [2006] ECR I-6619.

[6] Section 4 of the Clayton Act empowers private parties injured by violations of the Act to sue for treble  damages. For a comparison of several aspects of both systems (including the role played in the US by actions for damages and the interface between the different tools) see J. Panero Rivas Criminalisation of EU Competition Law enforcement: the long and winding road in Derecho de la Competencia Europeo y Español, vol  Dykinson Vol XI, 2013, pp. 139-185.

[7] Nonetheless, it is worth noting that those parties, independently from subsequent decisions of the participant in the cartel, have effectively suffered the harm.

[8] Case C-360/09 Pleiderer [2011] ECR I-5161. In that case, the CJEU stated that, in absence of EU Law, it is for the national court to decide on the basis of national law and on a case-by-case basis whether to allow the disclosure of documents, including leniency documents.

[9] On that issue see S. Bishop and M. Walker, The Economics of EC Competition Law: Concepts, Application and Measurement, Sweet & Maxwell, 2010, pp. 699 to 721.

[10] A good example could be information sharing practices that are traditionally considered infringements of Article 101 TFEU by object but whose impact on prices in not evident.

[11] MLex Lawmakers face scrap over ‘group claims’ in damages law, 17 October 2013.

[12] MLex EU States may seek tighter disclosure rules in draft damages law. 10 October 2013. For the initial position of the different Member States see MLex EU Governments size up draft damages claims-law, 3 September 2013.

[13] MLex Legal advice casts doubt on EU damage-claim law, 31 October 2013.

 

There will be fireworks on Bonfire Night: a quick look at the EU’s Pyrotechnic Directive

Alice Vranch

LLB student at Bucks New University

 

It is November, the month in which many of us will attend a fireworks display, be it to celebrate Diwali or Bonfire night. Whether you take part in an organised event or simply let off a few fireworks in your garden, the safety of everyone at the event will be of paramount importance. We all remember the adverts shown annually on television during the first week of November, warning us of the dangers of returning to check a firework. However, have you ever given much thought to what fireworks are made of? Have you read what was written on the side of the fireworks or on their box? Were the instructions even in a language that you could understand? Often in a moment of excitement these things can be overlooked. This article concerns the law surrounding the manufacturing of fireworks in Europe.

The manufacturing and use of fireworks in the UK is primarily governed by the Fireworks Regulations 2004 (under powers delegated from the Fireworks Act 2003), the Pyrotechnic Articles (Safety) Regulations 2010, and the British Standards BS 7114 and BSEN 14035. However, on 22nd May 2013 the European Commission proposed the Pyrotechnic Directive 2013/29/EU that was adopted on the 12th June 2013. All the Member States have to transpose the Directive by 30th June 2015 and apply it from 1st July 2015.

Amongst other things, a number of measures are now in place to protect consumers who buy fireworks. Articles 8-15 of the Directive contain obligations to manufacturers, distributors and importers of pyrotechnic products in the European Union. Some of these obligations include the following:

  • Fireworks must carry a CE marking (Articles 19-20 of the Directive).
  • Manufacturers must keep all related documentation for ten years to ensure that the composition details of the fireworks are available on request.
  • The writing and instructions must be in the language of the Member State in which it is being sold and used.

Fireworks will be categorised according to the risk of injury associated with the particular firework; there will be four classifications as detailed in Article 6(1)(a) of the Directive. Indoor fireworks used in theatres will have their own classifications, as per Article 6 (1)(b)(i)(ii). The purchase age will differ according to which category the purchased firework falls into (see Article 7(1)(a)). The operator’s skill levels will be taken into account: an adult with specialist knowledge of fireworks will be able to buy and use fireworks from the highest, F4 category. Article 7(2) informs us that under certain circumstances Member States are at liberty to raise the firework-purchasing age limit on grounds of public order, security or health and safety. Member States may also lower the age limits for people who have been trained to handle fireworks or those who are completing their pyrotechnic training. Member States need to let the Commission know what procedures they have in place to identify and authorise persons with specialist knowledge.

When the autumn sky is illuminated with fireworks that have hopefully been CE marked, remember (remember) to buy pyrotechnic products that adhere to safety guidelines and ensure that your friends, family and pets are safe.

Given that firework manufacturers, distributors and importers begin observing the Directive from today, we can all enjoy the safer big bangs much earlier than July 2015.

 

This article has been reposted from the Bucks New University Law Blog

Should We Be Able To Modify Nintendos? A Note On Nintendo v PC Box

Justin Koo LLB, LLM

PhD student, Dickson Poon School of Law, King’s College London

 

For the avid gamers out there, you would no doubt be aware that playing video games can be quite an expensive hobby. On average one video game costs about £30-£45,[1] whereas, the cost of buying a mod chip to ‘modify’ your console is about £70-£100.[2] Therefore, one can see the obvious allure in purchasing a mod chip as it provides a cheap albeit illegal alternative to buying new games. However, the legality of mod chips for video game consoles has always been in question because its usage normally implies the playing of unauthorised or illegitimate copies of video games.[3]

Without a mod chip these illegitimate copies of games will not work given that video game hardware and software are both encoded with technological protection measures (TPM) in order to prevent such acts. Regardless of this major purpose, there are other ways in which mod chips can be used. Mod chips also allow the use of ‘homebrew’ software, which in lay-man terms, allows users to run applications and processes that ordinarily are not available on a non-modified console. For example, homebrew software would allow: emulator programs to run – these enable the playing of video games from other platforms (normally older discontinued consoles),[4] playing licensed video games from other regions and playing other non-video game media such as DVDs and MP3s (where previously unavailable).[5]

These very mod chips are the subject of dispute in the Nintendo v PC Box[6] case that has been referred by the Tribunale di Milano to the Court of Justice of the European Union (CJEU). In short, Nintendo argued that PC Box’s mod chips circumvent the TPMs designed to prevent the playing of unauthorised video games on their Wii and DS consoles. However, PC Box argues that the true purpose of Nintendo’s TPMs is to prevent the use of independent software and to geographically segment markets by restricting the use of games according to region. Therefore, the Italian district court referred two questions to the CJEU concerning the circumvention of Nintendo’s TPMs on their Wii and DS video game consoles by PC Box’s mod chips:

1)    The first question concerns the application of Article 6(1) of the Information Society Directive 2001[7] to the TPMs contained in Nintendo’s hardware and software. Basically, the first part of the question asks whether Article 6(1) is applicable to Nintendo’s consoles (hardware) that have TPMs although they are not copyright works but merely facilitate the use of them. Secondly, it asks whether Article 6(1) still applies even though the purpose of Nintendo’s TPMs is not only to restrict the infringement of their copyright works (namely reproduction of their video games) but also to preclude interoperability.

2)    The second question focuses on the application of Article 6(2) to the supply of PC Box’s mod chips. The district court asks the question of how the purpose of a device (mod chip) is to be decided in determining whether there are any other commercially significant uses.

In a more general sense there are two major issues that can be inferred from the above questions. In the first place, the validity of video game mod chips is in the spotlight as it is being questioned whether they have any other commercially legitimate purposes that do not involve the infringement of copyright works. And secondly, to what extent will Article 6(1) protect TPMs that go further than merely preventing the infringement of copyright works especially in instances that involve the prevention of acts that do not require the authorisation of the copyright owner.

 

The Opinion

Advocate General Sharpston in her opinion suggested that the CJEU should answer the first part of the first question in the affirmative. Article 6(1) should be applicable to Nintendo’s hardware on the grounds that Article 6(3) details a wide range of access controls or protection processes including copy control mechanisms. If TPMs not contained in the copyright material itself were exempted from protection, then a broad range of TPMs would be excluded contrary to the objective of the provision. However, the TPM used must be proportional. It will be a matter for the domestic court to determine whether the acts requiring authorisation can be restricted without also restricting acts that do not require authorisation based on the current state of technology. What this means is that TPMs that are disproportionate to the purpose of preventing copyright infringement will not be protected under Article 6(1) as it will not be an ‘effective technological measure’.

Regarding the second question, AG Sharpston suggested that the relevant criteria for determining whether Nintendo should gain protection against the supply of PC Box’s mod chips was Article 6(2)(b). In other words, if the mod chips have no other commercially significant purpose than infringing copyright in video games then its supply will be subject to legal repercussions. However, in reaching this conclusion she did note that if the mod chip can be used for legitimate purposes, then it should influence the decision regarding whether Nintendo’s TPMs are proportional. As such if the mod chips can be used for commercially significant legitimate means, then there is the possibility that Nintendo’s TPMs are overly (and unnecessarily) broad and as such may not qualify as ‘effective’.[8] The consequence of this is that Nintendo’s TPMs may fall outside the scope of protection provided by Article 6(1).

Considering all the evidence at hand and the opinion of AG Sharpston it would seem that the decision of the case turns on the finding of any other commercially significant purposes for the mod chip. However, it is this writer’s opinion that even in the instance of other legitimate uses being found, the primary purpose of the mod chip to facilitate the playing of unauthorised or illegitimate video games outweighs any other use. Therefore, Nintendo should receive protection for its TPMs as well as protection against the supply of PC Box’s mod chips.

 

Interesting Issues

Although the Nintendo v PC Box case is interesting in its own right, it does raise some further issues and questions which are as interesting as the case itself. One of the first issues discussed in the case at the domestic level concerned what the applicable law should be, that is the Computer Programs Directive 2009[9] or the Information Society Directive 2001. The decision to choose the Information Society Directive as the applicable law is a significant one because it meant categorising video games as more than software. In fact, the court held that video games cannot simply be regarded as computer programs but instead are “complex multimedia works.”[10] The implication of this is that video games are afforded a broader range of protection than it would be entitled to if were categorised as a mere computer program.

A second interesting point to note is the manner in which the referring court addressed the second question in Nintendo v PC Box. In applying Article 6(2) the court was only concerned with subsection (b), ignoring subsections (a) and (c). It would be desirable to apply Article 6(2) in a cumulative manner for the purpose of determining whether the supply of a device should be protected against opposed to singling out an individual criterion.[11] The consequence of this is that the Italian district court could have avoided the hard question of determining whether PC Box’s mod chips had any other commercially significant purposes by merely looking at the reason the device was designed and its marketing. The rationale behind this criticism is that the marketing and design of PC Box’s mod chips would give insight into the primary purpose of the mod chips as well as any other commercially significant purposes. Thus, answering the question posed by the district court anyway.

But more generally, this case raises the issue of whether TPMs belong in copyright law. Although there is virtue in protecting TPMs given that they serve the purpose of preventing copyright infringements, the reality is that there is nothing inherently copyright-esque about TPMs or anti-circumvention protection. It can be argued that Article 6(1) is a black sheep in the copyright flock.

 

 

 

[1] Price range as found on www.game.co.uk.

[2] This price range is based on my own research of websites selling such devices.

[3] The illegitimate copies of video games are normally downloaded from torrent sites and then copied to DVDs or mass storage devices such as external hard drives.

[4] Note this would most likely also involve copyright infringement – reproduction of video games

[5] See http://www.consoleunlock.com/?hop=mattmartin for the ways in which a mod chip can be used on a Nintendo Wii.

[6] Case C-355/12

[7] Directive 2001/29

[8] Of course the opposite applies, in that, if the mod chip has no other commercially legitimate purpose(s) then the TPM used by Nintendo will likely be proportional and subject to protection under Article 6(1).

[9] Directive 2009/24

[10] Case C-355/12 para 25

[11] Article 6(1) (a), (b) and (c) should be considered together.

UKAEL Annual Lecture 2013 – Sir Nigel Sheinwald on ‘Britain and Europe: A New Stage in an Old Debate’

Adrienne Yong

PhD Candidate at King’s College London

 

A year ago I wrote on the Annual Lecture Lady Justice Arden gave on proportionality. This year I had the pleasure of attending the UK Association of European Law (UKAEL)’s Annual Lecture chaired by Prof. Sir Francis Jacobs (President, soon to be succeeded by Prof. Sir Alan Dashwood) and presented by Sir Nigel Sheinwald, the previous British Ambassador to the United States and British Permanent Representative to the EU. Needless to say, his ex-civil servant status under the auspices of the Foreign and Commonwealth Office held him in good steed to be discussing the relevant pros and cons of Britain remaining a EU Member State (MS) in light of the proposed referendum by the Conservative Party (should they remain in government come 2017).

 

Sir Nigel began with the caveat that his background was not in law therefore the talk would be on Europe, as opposed to European law. For a European law researcher, this political aspect was a refreshing break from the convoluted doctrinal analysis that takes up most of a legal researcher’s time. He explained that whilst recognising the Britain-Europe discussion was not novel, the stage the discussion is reaching now is becoming more so. The EU is changing, and these changes are affecting British membership. Sir Nigel broke his argument down into first discussing British exceptionalism, the changes the EU is facing, the international reaction to the UK and his conclusions on British membership of the EU.

 

British exceptionalism

The main event that Britain found itself lucky to have escaped was the Eurocrisis. It had always been “stubbornly negative” about the EU, but the choices made in regards to opting out of the single currency seemed to bear fruit in terms of escaping the main crisis befalling the EU at present. Its strong sense of Parliamentary sovereignty as well as common law traditions in Britain were two reasons it opted out to begin with.

 

However, Britain did sign up to membership of the EU for a good reason. Sir Nigel cites Dean Acherson, ex-US Secretary of State, and his lesser known quote about the UK’s roles in both the USA and commonwealth nations. He stated that in both areas, the UK’s role was “about played out.”[1] It would seem that the EU would have been the best next course for the UK, remaining in the mainstream but negotiating special arrangements for themselves considering their relative uncertainty at the outset. Membership was thus “conditional”. Modern EU conditions should seem more acceptable to the UK now, however, one must nonetheless tread lightly given the changes it is undergoing presently.

 

Changes in the EU

As mentioned, the Eurocrisis is the most obvious change the EU has gone through, which has severely impacted many opinions in the UK as to the value of the remaining in the EU. There is a close relationship between monetary integration, democratic legitimacy and national Member State control, rendering upholding the Eurozone and single market a more difficult task. Sir Nigel toyed with the idea that perhaps now it is not credible to be excluded from the euro given the solidarity demonstrated therein. However, the Eurocrisis left a bad impression on the UK. The EU will have to do the most they can to stabilise the crisis, with efforts focused there rather than with any other issues the UK has prioritised. Being excluded from these crucial tasks and discussions will have the negative effect of widening gap between the UK and its allies.

 

He also argues that it is unclear if eurosceptics have reflected the population’s sentiments accurately, leading onto the international reaction to the UK’s apparent disdain. Clearly, given the changes the EU is undergoing, stakes are higher if Britain decides to withdraw. However, the more important issue remains that the potential is more real now of this withdrawal. Interestingly, for governments in the Eurozone, survival is most important. The risk of withdrawal of the UK is peripheral in comparison. However, there is still time before this exit is decided with both European Parliament and UK elections a way off. Sir Nigel highlights that the EU may want to consider certain reforms, with the Working Time Directive and tougher action on benefit fraud given the growth of free movement of persons among his suggestions. However, convening an Intergovernmental Conference (IGC) which would be necessary to make the changes the UK so desperately wants, cannot feasibly be done in the time before the referendum.

 

International Reaction to the UK

The most poignant reaction comes from President Obama of the USA, and his piece of advice to David Cameron as to the UK’s membership, stating that it would be a mistake for the UK to leave the EU.[2] Similarly, the Australian government wrote to William Hague, Foreign Secretary of the UK, on this very topic on February 14 also urging reconsidering leaving the EU. These strong sentiments came off the back of David Cameron’s own speech on January 23 where he asserted that the EU was to ‘secure prosperity’[3] and that there should be a maintained role for the UK. Additionally Sir Nigel emphasised that the Japanese memo to the UK reviewing the UK’s balance of competence between itself and the EU[4] also strongly discouraged leaving, for it would negatively affect the Japanese’s entry to the EU market. Germany has begun to overtake the UK in being the key location for new inward investment projects especially from Japan, thereby incentivising the UK to consider remaining in the EU for trade reasons.[5]

 

Value of British Membership to the EU

If these compelling arguments in terms of the international reaction were not enough, Sir Nigel continued on to state his position believing in the benefits of the UK remaining the EU. Though quality of membership would diminish as the euro diminishes in importance, many other areas would remain unchanged. The single currency is but one of the EU’s projects. He described it as a long and winding road. The Eurocrisis may accelerate, but otherwise development in the EU will benefit the UK. The arguments to stay in are compelling and even on a business level, institutions such as the Confederation of British Industry (CBI) agree that withdrawal would be detrimental. Exports to the EU are even larger than those of growing emergent economies.

 

Sir Nigel thus emphatically put his position across that the UK should remain in the EU, and whilst the old debate has seen certain quite significant changes, the position – both in terms of the UK’s membership and one’s opinion as to the benefits of the UK’s membership – should remain unchanged.