Being the second directive on the enforcement of "intellectual property rights", it is sometimes called IPRED2 (Second Intellectual Property Rights Enforcement Directive). The first directive on the enforcement of IP rights, Directive 2004/48/EC deals with civil enforcement of intellectual property rights. It was hastily passed before the Fifth Enlargement of the European Union of May 1, 2004. It did originally include criminal sanctions provisions, but this rather controversial part was omitted in order to be able to meet the deadline of May 1, 2004.
This directive incriminates infringements of intellectual property rights. It deals with intentional infringements on a commercial scale or aiding, abetting or inciting to the infringements.
The directive applies to such intellectual property rights as are provided for in Community legislation and/or national legislation in the Member States. No definition is provided in the original draft and in that form, the Directive would apply to any intellectual property right. Subsequent readings of the Directive have included clarifications. Examples of such expressly included rights are sui generis rights of database makers or trademark rights.
The Directive, in its first draft, includes patent violation, traditionally a civil issue. This would possibly have far-reaching consequences for the EU economy as the risk of criminal prosecution for violating patents when new products or new functions are included is great. Moreover, traditionally, a large majority of all patent disputes are settled out of court before civil infringement disputes continue. The bill also includes a provision which would allow intellectual property holders to assist the police in an investigation, which cedes great power from the state to a patent-holder to threaten rivals with imprisonment, rather than a civil suit alone.
The Parliament has, in subsequent reading, excluded patents from the scope of the Directive.
The Directive applies to willful, commercial or intentional violations of trademark or copyright laws. An amendment that would have limited the directive to commercial activity done with the intent to earn a profit was rejected. Instead, consumers will be criminally liable if their behavior is not for personal and not for profits purposes and was done for the purpose of obtaining an economic advantage.
According to some, IPRED2 does not seem to be a particularly well drafted Directive. The number of amendments passed and adopted in subsequent readings is unusual, as is evident from the drafting process. The definitions, usually contained in the preamble or the beginning articles, were missing until subsequent readings. Originally about commercial piracy and counterfeit goods only, in its present form it includes any violation of Intellectual Property rights.
According to the Foundation for a Free Information Infrastructure (FFII), it is impossible not to violate software patents, and the IPRED 2 directive threatens most of Europe's software developers with imprisonment.
In July 2006, the Dutch parliament wrote a letter to EU Commissioner Frattini with a thorough legal analysis of the proposed directive, concluding that the subject-matter of the proposed directive definitely falls outside the European Community’s competence (as defined in the EU treaties).