Why is intellectual property protection important for EU SMEs?
Small and medium-sized enterprises (SMEs) are the backbone of the EU economy. They represent 99% of all businesses in the EU, account for more than half of Europe’s gross domestic product (GDP) and employ around 100 million people. The positive association between economic performance and ownership of intellectual property rights (IPR) is particularly strong for SMEs.
SMEs that own IPR generate 68% more revenue per employee SMEs that have no IPRs at all, according to the latest study published in 2021 by the European Patent Office (EPO) and the European Union Intellectual Property Office (EUIPO) on IPRs and business performance in the EU. As the study shows, IPR protection has become crucial for the success of SMEs, and therefore it is essential that SMEs are aware of the value of intellectual property (IP) and how best to benefit from it.
Intellectual property relates to intangible assets, which include intellectual and industrial property. IPRs can be protected by law under patents, trademarks, industrial designs, copyright, plant variety protection, but also through trade secrets, unfair competition, civil and criminal law.
SMEs can benefit from intellectual property protection and seize business opportunities globally if their intellectual property portfolio is managed effectively. A strong intellectual property strategy also helps SMEs attract funds from potential investors, allowing them to internationalize in emerging markets. According to a joint report by the EPO and EUIPO in 2019, IPR-intensive industries generated around 45% of the EU’s total GDP, worth € 6.6 trillion. These sectors also accounted for the bulk of the EU’s trade with the rest of the world, accounting for 96% of goods exported from the EU.
The protection of intellectual property is also essential to foster innovation by providing a return on investment in research and development (R&D). In addition, a well-prepared intellectual property protection strategy will help SMEs prevent others from free-riding their intellectual property. Above all, an SME, as a legitimate owner of IPR, will resort to coercive measures to put an end to an activity which infringes its IPRs.
The protection of intellectual property is the key to the successful expansion of EU SMEs in the SEA region
The South East Asia (SEA) region is a promising destination for EU SMEs, thanks to their open policies and incentives to attract foreign investment. The region is a thriving economy with a combined GDP of USD 3 trillion in 2018 (the 5th largest in the world) and a population of 649.1 million.
The SEA region is the EU’s third largest trading partner outside of Europe (after the United States and China) with more than € 237.3 billion in merchandise trade in 2018. The EU is the second largest trading partner in the SEA region after China, accounting for around 14% of SEA trade. The EU is by far the largest investor in SEA countries, with foreign direct investment (FDI) stocks in the SEA region amounting to € 337 billion.
To date, the EU has already concluded two free trade agreements with Vietnam and Singapore, respectively – the EU-Vietnam Free Trade Agreement (EVFTA) and the EU-Singapore Free Trade Agreement (EUSFTA ) – and negotiates a comprehensive economic partnership agreement with Indonesia. . These FTAs facilitate market access by eliminating tariffs and non-tariff barriers on both sides, as well as stimulating investment flows. Each agreement includes a comprehensive IPR chapter with commitments to improve IPR protection and enforcement in line with international standards.
The report by the Organization for Economic Co-operation and Development (OECD) and EUIPO published in 2019 shows that companies victims of counterfeiting and piracy continue to be registered mainly in Europe. China remains the main source of counterfeit and pirated goods, but some of the main SEA economies are also among the top 25 sources. As the study shows, the exposure of EU SMEs to IPR infringements in the SEA region is high; and EU SMEs should take this into account when preparing their IP strategy.
In the context of COVID-19, intellectual property infringements in the online environment appear to be increasing in SEA countries, via e-commerce and social media platforms, due to the lack of effective regulations against infringements of intellectual property online. Intellectual property owners are advised to apply for registration for the protection of their intellectual property rights in each country of interest. Registration with intellectual property offices and customs registers can contribute to successful enforcement.
Stay tuned to the IP PME IP Key South East Asia and South East Asia Helpdesk to learn about the successes of EU SMEs operating in South East Asia and how IPR protection is supporting these companies during the pandemic.
How does the European Union support EU SMEs in SEA?
In addition to bilateral trade agreements introducing commitments for enhanced protection and enforcement of IPRs, the EU relies on intellectual property dialogues and technical cooperation programs on intellectual property to support EU businesses in the process. trade and investment in the region, including SMEs.
The European Commission (EC) has launched, among others, the following initiatives to support SMEs in the EU.
Helpdesk IP PME South East Asia
The South East Asia SME IP Helpdesk is an EC initiative to help EU SMEs protect and enforce their IPRs under SEA. All the services offered by the Helpdesk are free.
In a nutshell, the Helpdesk services cover (i) Telephone support for inquiries (tailor-made confidential advice to EU SMEs on SEA related intellectual property within 3 working days), (ii) Intellectual Property Guides and Country Fact Sheets and (iii) On-site and online training.
Southeast Asia IP Key
IP Key South-East Asia (IP Key SEA) is a four-year EU funded program implemented by EUIPO to support the protection and enforcement of intellectual property rights in South East Asia , with a view to creating the environment conducive to trade and investment in the region. By contributing to the improvement of intellectual property frameworks and the implementation of best practices, IP Key SEA aims to ensure a level playing field for local businesses and EU stakeholders. IP Key SEA is one of the three flagship IP Key programs implemented by EUIPO, along with IP Key China and IP Key Latin America.
Other incentives for EU SMEs
EU SMEs can now request assistance to protect their IPRs under the following programs:
• The SME Ideas Powered for Business Fund: a € 20 million grant program created to help SMEs develop their intellectual property strategies and protect their IPRs, at national and European level
• Horizon IP Analysis: Help SMEs to manage and promote intellectual property in research and innovation collaborations
#Know before you go
Protecting IPRs in the context of SEA is crucial for EU SMEs to ensure a safe ground for their business activities. Without protection, the enforcement of intellectual property rights will not be possible. Therefore, EU SMEs are strongly advised to make effective use of the different EU initiatives to set up their IP strategy before expanding to the region. Contact the SEA IP PME Helpdesk ([email protected]) and IP Key SEA ([email protected]) to learn more about the tools available.