Intellectual Property and EU Law. Has the expansion of intellectual property rights by the EU courts reduced the free movement of goods and services?

Essay, 2013

20 Pages


Table of Contents


Intellectual Property

Free movement of goods and services

European Regulations on free movement of goods and intellectual property




«Ιntellectual property is the right the law confers upon the creator of an intellectual work on the project. Intellectual property is called the entire relevant institution, ie the set of rules that regulate this right.[1] " The intellectual property law is a branch of private law and regulates the protection of an object with intangible nature. The distinction between an intangible asset and the material carrier is known and runs around the law of intellectual property. The album as a physical body is a corporeal object is outside the field of intellectual property, as opposed to composing music recorded over it. The same applies for the printed versions. Intellectual property does not protect the material itself but the scientific work that is reflected on it.

A fundamental principle of the intellectual property right law is the protection of independence of the value and purpose of the project. This work is protected regardless of its illegal or immoral character. This rule is now expressly enshrined in Article 2 § 4 of the Act and applies to all projects.

On the other hand, the free movement of goods is the first in the order listed in the Treaty of the four fundamental freedoms of the EU and is regulated by Articles 28-37 TFEU as Title II of its Part Three ("Internal policies and action Union ").

From these articles, the first two, namely Articles 28 and 29, seem to have introductory nature and general scope of implementation, while the remaining eight are divided into three chapters as follows: Chapter 1, Articles 30-32, "The customs union "Chapter 2, Article 33," customs cooperation ", Chapter 3, Articles 34-37," The prohibition of quantitative restrictions among Member States ".

Article 28 states that the Union shall comprise a "customs union" and defined the meaning of the latter (section 1), furthermore, it is bounded the substantive scope of implementing the critical for the free movement provisions which are the prohibition of customs duties and equivalent taxes provision of Article 30 and all the provisions of Chapter 3, i.e. it is bounded the cycle of products that fall under these provisions (section 2) and Article 29 focuses on the latter issue, but especially for products from third countries.

In the present essay, intellectual property and free movement of goods and services will be discussed and it will be examined how and to what extent the intellectual property right law affects or not free movement of goods and services.

Intellectual Property

Each work subject to copyright can create wealth-economic benefit to the author-to the extent that s/he, due to the intellectual property system, can against any third party and by exercising his/her powers of his absolute and exclusive legal right of the intellectual property to exclude any third party from achieving financial gain without the consent of the author for cost-effective or profitable use of his work. When the legislature confers absolute and exclusive rights as copyright, the holder of these rights in the legislature means that he has only the (absolute) control over who is allowed to make use of his work, of when his works will be published or distributed to the public, and on how these works will be used[2]. Essentially, according to the law the author or copyright holder has a monopoly right, the right to intellectual property, under the conditions of the transfer of the economic part of the right, he may aquire rights of oligopolistic nature. In case of a copyright holder who is the only one owner of the intellectual property and the only one who trades his right in the market, he influences the pricing of his work and therefore, he exercises monopoly in the market. In the case, again, of transferring the economic aspect of the intellectual property right to a publisher or production company or any other third party, then the transfer is usually done by the creator to a very limited number of competitors in the market that is not such as to believe that everyone becomes secondarily copyright holder and it has negligible influence on the pricing of the work on the market • in this case it is referred as oligopolistic exercise of copyright.

However, in the society of knowledge and information, economic growth can not depend neither on monopolies nor oligopolies. The development does not only depend on the production and distribution of knowledge and information, or in this case, the works of the author or copyright holder, but depends mainly on the ability of society to produce new wealth and economic benefit from existing forms of knowledge-and information from existing works of authors. The notion that the access to the works of authors and existing information is a prerequisite for the cultural and economic development of society is widely accepted today in the knowledge economy and information society[3].

In the digital era of the Internet and the dissemination of works and information subject to copyright protection, the statutory protection for such property which anyway receives special protectionism by law as an absolute and exclusive right to property with features of monopolistic or oligopolistic nature -has been enhanced by measures of technological protection by using mainly software of cryptographic code. More and more copyright holders such as publishers or the media who speculate on the management and distribution of works subject to copyright protection rely on measures of technological protection such as DRM technologies. The technological measures to protect works in conjunction with the existing legal framework for the protection of intellectual property are likely to cause an unprecedented «enclosure movement» in the intellectual property that was rather unthinkable in the past and was never the goal of intellectual property throughout its legal history[4].

The technologically enhanced system of intellectual property protection, as it stands today, emphasizes the exclusion of third parties from access and use of protected works by using technologically advanced methods and tools, however, they inevitably lead to horizontal inclusive, that is, the use of the works of all users, even those who have a legitimate right to use this way of exemption provided by law or legal constraints. This horizontal block of every user from using works in the internet supposedly perceived as if it was the perfect solution to encourage the production and dissemination to the public of works of speech, science and the arts ∙ ie by increasing the absolute and exclusive control in the works of authors and secondarily of the holders which is now largely achievable by using technological DRM limitations, the maximum exclusion of users is intended from works and, as a result of this exclusion, the production of the maximum profits for the authors or holders that could come from the compulsory boost of consumers in the market of works instead of using them individually through the Internet without buying them even if a technologically advanced way of the payment of equitable remuneration for its private use is assured.

This encouragement of absolute and exclusive control of the author and secondarily of the beneficiaries on works with the help of technological limitations type DRM creates conflict with the legitimate interests of users of works which becomes more pronounced the more IT and Internet technology penetrates -that is, these technologies made ​​the copying of works and information a «commodity», convenience and basic characteristic in the daily lives of users and creators. The absolute and exclusive control of the use of a project, was understood as something doable in the analogue world of the pre-internet era. Thus, the intended,in the analogue world, achievement of absolute and exclusive control of the work in favor of its creator, formed the legal nature of the right to intellectual property at a time when the online Internet environment neither existed nor could be understood even on an imaginatory level.

However, these features of domination of the author on his work, if, in the era of internet, are available in the online environment by its author are impinged on characteristic properties of 'public goods' that a work or information acquire or when their distribution to the public occur through the Internet. Each work is subject to the legal protection regime for intellectual property that is out of rules adjustment of intellectual property in the Internet environment and gets the characteristics of a "public good» according to microeconomics . Although it is not the same as mere information-a copyrighted work is not just information or a sum of information-however, in the Internet in order that the work of any creator is released it is digitized into bits and shipped as a whole of bits i.e. a whole of digitized information[5].

Under these digitized data conversion that equalize behaviorally the work with information regarding its use and circulation in the online environment, the absolute and exclusive nature of copyright law as legal properties in digitized work circulating on the internet is doubtful whether they can be combined with the technological environment of the Internet, but also with the characteristics of the circulating information on the Internet as determined by the microeconomics of economic sciences. In short, in the Internet where «information wants to be free», it is doubtful whether the legal science can successfully give to it (the information or the digitized work that acts in the Internet as information with characteristics of "public goods") features of absolute and exclusive control on it by the of the beneficiary[6]. To date, there has not been an absolute and exclusive control of information on the Internet, as there has never been an absolute and exclusive control of any- according to economists-"public good" either concerning its use on an online or offline environment. An example of "public good" in offline environment is national defense. Every citizen may evaluate it differently-some require more, while others want less defense-but all citizens get equal proportion of defense • and nobody can exercise on it absolute and sole control by resorting to any property rights!

The importance of maintaining a balance between the intellectual property right granted by law to creators and the users’ rights to access and enjoyment of scientific, artistic and literary works cannot be ignored especially today where the internet technologies and social networks increase vertically the usability of works that are available and circulated online[7].The need for a legal framework on intellectual property requires that balance amid conflicting interests of the author or beneficiary and the totality of users indicates that in cases where access to works of authors is increased and encouraged with the use of new technologies, then the economic aspirations of the author or the beneficiary and the personal bond of the work with the creator could certainly not be eliminated, but adapted to a system that takes into account both the ongoing social changes in the way the works are accessed, used and shared through Internet, but also to achieve the greatest possible economic benefit from its use. This balance and different aspirations of creators and users could be met in a flexible licensing of copyright works for their access, dissemination and use through the internet.

Under the existing legal framework in Greece on intellectual property, the existence of flexible licensing of works is conceivable. At European level, it has been assumed that intellectual property can be subject to a regime of compulsory licensing without having issues arisen or legal problems regarding healthy competition to be caused[8]. The intellectual property adapted in a regime of compulsory and flexible licensing could be understood in the form of state aid for the implementation of a sustainable system of compulsory licensing of works[9]. Moreover, from the origination of the system of compulsory licensing of works was conceived as a solution to the problem of conflicting interests between creators and users. In Germany[10] and the USA[11] the legislature has introduced the system of compulsory licenses in order to balance the conflicting interests of users and creators. Moreover, the international Berne Convention for the Protection of Literary and Artistic Works Article 13§ 1 that enables the introduction of a compulsory licensing system with the express reservation that the conditions and reservations concerning them should be strictly limited in the country that puts them in place[12].


[1] Sunder, M., (2006), IP³, 59 Stanford Law Review, pp.256-332.

[2] Lemley, M., (2004), Ex Ante versus Ex Post Justifications for Intellectual Property, 71 University of Chicago Law Review, pp.129-196, available at .

[3] Sunder, M., (2006), IP³, 59 Stanford Law Review, pp.256-332.

[4] Sunder, M., (2006), IP³, 59 Stanford Law Review, pp.256-332.

[5] The mathematician Claude E. Shannon was the first who used the word bit in his seminal 1948 paper “A Mathematical Theory of Communication”. He attributed its origin to John W. Tukey, who had written a Bell Labs memo on 9 January 1947 in which he contracted from «binary digit» to simply «bit». Interestingly, Vannevar Bush had written in 1936 that the «bits of information» could be stored on the punched cards used in the mechanical computers of that time. A bit (a contraction of binary digit) is the basic capacity of information in computing andt telecommunications; a bit can have the value of either 1 or 0 (one or zero) only. These attributes may be implemented, in a variety of systems, by means of a two state device.

[6] Smith, H., 2007, Intellectual Property as Property: Delineating Entitlements in Information, 116 Yale Law Journal, pp.1742-1822, available at [last check, Sept.8, 2012].

[7] New, W., 2011,Copyright System Must ‘Adapt or Perish,’ WIPO Director Says, Intellectual Property Watch, March 15, 2011, available at [last check, Sept.8, 2012], who cites President of Russia Medvedev’s view expressed in January 2011 in Davos that the old principles of intellectual property regulation are not working anymore, particularly when it comes to the internet, which is fraught with the collapse of the entire intellectual property rights system. See, also, Gurry F., (2011),The Future of Copyright, speech addressed to Blue Sky Conference: Future Directions in Copyright Law, Queensland University of Technology, Sydney, Australia, available at .

[8] See European Court of Justice, (1995), joined cases Radio Telefis Eireann (RTE) and Independent Television Publications Ltd (ITP) v. Commission of the European Communities, C-241/91 P and C-242/91 P, available at [last check, Sept.8, 2012]; the same, (2004), IMS Health GmbH & Co. OHG v. NDC Health GmbH & Co. KG, C-418/01, available at http://eur-!celexplus!prod!CELEXnumdoc&numdoc=62001J0418&lg=en [last check, Sept.8, 2012]; the same, (2007), Microsoft v. European Commission, T-201/04 ECR II-03601, available at http://eur-

[9] In his book The Future of Ideas: The Fate of the Commons in a Connected World, Lawrence Lessig argued that file sharing should be empowered by recognizing a system of compulsory licenses similar to those used in cable retransmission, the fee being set by a policy maker striking the right balance. See Lessig, L., (2001),The Future of Ideas: The Fate of the Commons in a Connected World, Vintage Books, available at [last check, Sept.8, 2012], pp.254-255; Bell, T., (2003), Author’s Welfare: Copyright as a Statutory Mechanism for Redistributing Rights, 69 Brooklyn Law Review, pp.229-272, available at

[10] The German Copyright Act of 1910.

[11] The US Copyright Act of 1909 ss.1(e), 25(2), which was a reaction to the Supreme Court’s decision in White-Smith Music Publishing v. Apollo Co., 209 US 1 (1908), available at [last check, Sept.8, 2012] which ruled that manufacturers of music rolls for player pianos did not have to pay royalties to the composers. The ruling was based on a holding that the piano rolls were not copies of the plaintiffs’ copyrighted sheet music, but was instead parts of the machine that reproduced the music.

[12] See article 13§1 of the Berne Convention according to which each country of the Union may impose for itself reservations and conditions on the exclusive right granted to the author of a musical work and to the author of any words, the recording of which together with the musical work has already been authorized by the latter, to authorize the sound recording of that musical work, together with such words, if any; but all such reservations and conditions shall apply only in the countries which have imposed them and shall not, in any circumstances, be prejudicial to the rights of these authors to obtain equitable remuneration which, in the absence of agreement, shall be fixed by competent authority.

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Intellectual Property and EU Law. Has the expansion of intellectual property rights by the EU courts reduced the free movement of goods and services?
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Fotini Mastroianni (Author), 2013, Intellectual Property and EU Law. Has the expansion of intellectual property rights by the EU courts reduced the free movement of goods and services?, Munich, GRIN Verlag,


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