Provide small and medium-sized enterprises with the means to compete globally using their IPR as a strategic asset to become global champions

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Background: risks

The EU is home to countless small and medium-sized enterprises that share the ambition of scaling up and becoming global champions. Their ability to protect their IP, often the result of expensive and lengthy R&D work, is critical to ensure they have a fighting chance in today’s global digital economy.

However, these SMEs face many difficulties, particularly at the scale up stage, and difficulties in building and enforcing an IPR portfolio within and outside the EU. These factors contribute to an ever growing (and ever narrower) “winner takes all” digital landscape. As a result, they can be vulnerable to IP theft, making them more vulnerable to bankruptcy or acquisition—or the inability to scale up simply means they are more likely to be acquired by global tech companies.

What EU institutions need to do:

The situation requires an ambitious new agenda to create a virtuous circle of innovation and investment in new tech, prioritising targeted financing, investment incentives and protection of IPR assets.
Specifically: enable investment of at least €150 million[2] per year to qualifying companies via co-funding and matching national initiatives to help Europe’s innovators and start-ups generate new IPR and patents, to protect their R&D investments, make them more competitive beyond Europe, and ensure European innovators stay in the EU Digital Single Market.

  1. Fair access to justice

    Ensure that IPR enforcement in all jurisdictions remains affordable to SMEs so they can challenge patent infringers who profit from their inventions without a licence.
    Guarantees and bonds required from companies seeking injunctions against larger companies should not be prohibitive per se, and should take into account the financial position of SMEs.1. Fair acces to justice Ensure that IPR enforcement in all jurisdictions remains affordable to SMEs so they can challenge patent infringers who profit from their inventions without a licence. Guarantees and bonds required from companies seeking injunctions against larger companies should not be prohibitive per se, and should take into account the financial position of SMEs.

  2. Mobilise €150 million per year for IPR generation

    Use InvestEU and industry initiatives like Patent factory Europe to mobilise up to €150 million per year to help start-ups and innovative companies to generate (without equity dilution) the IPR they need to protect their R&D investments, attract investors and boost their global competitiveness.

  3. Create innovation incentives: R&D tax credits and patents for loans

    Promote innovation incentives including R&D tax credits for Europe’s innovators, and promote the use of patents as collateral for bank loans.

  4. Secure the introduction of the Unified Patent Court

    This long-awaited reform has the potential to significantly reduce costs and simplify procedures for obtaining, maintaining and enforcing patent protection in Europe.
References:
[1] One out of three EU start-ups could benefit from a €150,000 financing (average) to build their IP portfolio without equity dilution. This is based on the fact that there are over 3,000 Venture Capital deals reported in Europe in 2018 (Source: Pitchbook 2018, 2018 Annual European Venture Report https://pitchbook.com/news/reports/2018-annual-european-venture-report).