WRITTEN QUESTION P-0111/03

by Arlene McCarthy (PSE) to the Commission

(21 January 2003)

Subject: Benefits of intellectual property rights to the EU economy

To what extent does the EU economy benefit from intellectual property rights in the field of copyrights, patents and designs? Can the Commission quantify benefits to the EU economy?

Answer given by Mr Bolkestein on behalf of the Commission

(11 February 2003)

Intellectual and industrial property rights (IPRs) are part of the infrastructure of modern society. Like laws designed to protect other forms of property, such as personal or immovable property, IPRs are closely bound up with every area of economic and cultural activity, and so it is not easy to quantify the overall benefits they provide. However, they have very great value through providing protection and encouragement for the investment made by enterprises and individuals in creative and innovative activity, as well as in activities aimed at the building up of goodwill and reputation. It is beyond question that large sections of the economy of the Union are dependent for their competitive advantage upon the various types of IPR available to protect against unfair exploitation of their investments by imitators and copiers. Of particular note are the fields of pharmaceuticals and other high-tech inventions, entertainment, software, publishing and luxury goods.

An indication of the value placed on patents by their owners has been estimated using an economic model in a study carried out for the Danish Ministry of Trade and Industry(1), in which it was concluded that the average value of a patent in Denmark is approximately EUR 20 000. While caution must be exercised in extrapolating this figure to Europe as a whole, it does suggest that the total value of all patents currently in force in Europe could run into the hundreds of billions of Euros.

The above analysis takes no account of the benefit that society at large derives from having access to new technologies, but one clear example of this can be found in the pharmaceutical industry, which is known to be particularly dependent upon patents because of the very high costs associated with research and development relative to the costs of production. In this case, investment in the development of new medicines, which was estimated by the industry to amount to EUR 18,8 billion in Europe in 2001, would be seriously affected, if not halted altogether, in the absence of the patent system.

In the field of copyright, the Commission is awaiting the results of a study that it has commissioned The economic importance of copyright which should be completed by October 2003. Previous estimates of the production of the main copyright industry e.g. publishing, records, films and software) range from 3-5 % of the Community's Gross Domestic Product. However such estimates are often based on total production of particular industries, without further analysis. This study should present an economic analysis of all the core copyright industries (literature and the press, music, theatre, film and video, photography, visual arts, radio and television, software and databases, architecture, advertising and industrial design) and copyright-dependent industries (manufacture and distribution of electronics, computers, music instruments, photographic and cinematographic equipment, networks, intermediaries). This analysis will be based on the Gross Value Added per country and the share of employment in each sector and revenues generated. It should also include an analysis of the contribution made by the legal protection given to copyright and related rights. The Commission will make the study available upon its completion.

(1) Mette Gørtz & Merete Konnerup Welfare Effects of a Patent Insurance Microeconomic Evaluation and Macroeconomic Consequences (June 2001).