By Alix Kroeger
BBC News, Brussels
A draft law to be debated in the European parliament could result in Europe-wide criminal penalties for counterfeiting and intellectual piracy.
Fashion labels are among the most pirated brands
All 27 EU countries would be obliged to consider jail terms for the violation of intellectual property rights.
From fashion to software, the range and value of pirated goods within the EU is steadily on the rise.
The European Commission says it is an international business increasingly linked to organised crime.
For these reasons, the Commission has proposed a directive, setting harmonised criminal penalties across the EU: a maximum of four years in prison, and fines of up to 91,053 euros ($120,000; £61,111).
That would rise to 273,160 euros ($360,000; £183,329) if organised crime were involved or if there were a risk to health and safety, for example, with counterfeit medicines or batteries.
The business of setting criminal penalties is a new departure for the EU.
It is based on a ruling from the European Court of Justice 18 months ago, which said that the EU's competence in certain areas - such as the environment - gave it the right to make criminal law - until now, the exclusive preserve of the member states.
The ruling has alarmed critics of the EU and what they see as its tendency to extend its powers at the expense of national governments.
Although the Commission recently announced plans for similar legislation on environmental crime, the proposed directive on intellectual property rights is the first to begin making its way through the labyrinth of EU procedure.
The legal affairs committee of the European Parliament is to debate the draft directive on Tuesday before voting on it on 20 March. It will go before the full parliament later in the year.
For procedural reasons, it does not have to get unanimous approval from all the member states in the Council of Ministers.
However, they may seek to curtail some of the more ambitious measures.