Communication from the Commission to the European Parliament, the Council and the European Economic and Social Committee - An Industrial Property Rights Strategy for Europe
Date: 2008-07-16
Institutions: European Commission
Subjects: European patent, competitiveness, industrial property, innovation, intellectual property, patent law

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 16.7.2008 
COM(2008) 465 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL AND THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE 

An Industrial Property Rights Strategy for Europe 

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COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL AND THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE 

An Industrial Property Rights Strategy for Europe 

1. 

INTRODUCTION 

Intellectual property law establishes protection over intangible property. For example, when a 
manufactured  product  is  sold,  the  product  itself  is  then  owned  by  the  purchaser.  However, 
intellectual property rights allow associated intangible elements to remain in the ownership of 
the creator or inventor of the product. These intangible elements include the idea or invention 
behind the product or the name or sign to distinguish it from others. Traditionally, intellectual 
property  can  be  divided  into  two  main  categories:  industrial  property  and  copyright.  This 
Communication focuses on industrial property rights1.  

Patents and trade marks are the best-known industrial property rights. Patents are a limited-
term  exclusive  right  granted  to  an  inventor  in  return  for  the  disclosure  of  technical 
information from the invention. By contrast, the rights associated with trade marks, which are 
signs  indicating  the  origin  of  goods  and  services  have  no  maximum  duration  provided  they 
continue to be used in trade. However, both these rights can only be maintained in force by 
the  payment  of  maintenance  fees.  Industrial  property  rights  are  diverse  and  include  lesser-
known  rights  such  as  industrial  designs,  geographical  indications  and  plant  variety  rights. 
However,  what  all  these  rights  have  in  common  is  that  they  enable  holders  to  prevent 
unauthorised use of an intangible asset of potential commercial value, whether this is an idea 
behind an innovative product or process, or an indication to the consumer of origin. 

Europe  requires  strong  industrial  property  rights  to  protect  its  innovations  and  remain 
competitive  in  the  global  knowledge-based  economy.  In  the  EU,  protection  at  Community 
level  exists  for  most  of  the  registered  industrial  property  rights.  However,  pending  an 
agreement on the Community patent, businesses do not have this possibility in patents. To fill 
this gap, the Commission published a Communication2 in April 2007 to revitalise the debate 
on  the  patent  system  in  Europe  and  set  out  a  way  forward  to  a  Community  patent  and 
improved  patent  jurisdiction  for  the  EU.  The  Commission  considers  that  progress  in  this 
matter is vital and reaffirms its intention to seek agreement as a question of priority on these 
proposals. 

Last  year's  Communication  provided  the  impetus  towards  progress  on  outstanding 
Community legislative issues in patents. Having now established momentum towards finding 
solutions  on  patents,  this  Communication  turns  towards  developing  a  horizontal  and 
integrated strategy across the spectrum of industrial property rights. The Communication does 
not  intend  to  discuss  the  relative  merits  of  formal  industrial  property  rights  and  alternative 
business models such as open source software or trade secrets, but focuses on the industrial 

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On copyright, the Commission has published a Green Paper "Copyright in the Knowledge Economy" 
COM(2008) 466 final 
"Enhancing the patent system in Europe" COM(2007) 165 final 

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property rights themselves. It analyses existing initiatives with a view to proposing actions for 
the  system  to  function  in  an  optimal  way  to  meet  challenges  that  Europe  will  face  in  the 
coming years.  

2. 

THE CHALLENGES 

In the Strategic Report on the renewed Lisbon strategy for growth and jobs, the Commission 
identified  investing  in  knowledge  and  innovation  as  one  of  four  priority  areas  for  focused 
actions  in  the  2008-2010  cycle3.  Protection  of  intellectual  property  is  a  key  framework 
condition  for  innovation,  stimulating  R&D  investment  and  transfer  of  knowledge  from  the 
laboratory  to  the  marketplace.  A  clear  regime  for  intellectual  property  rights  is  an  essential 
condition  for  the  single  market  and  in  making  the  "fifth  freedom",  the  free  movement  of 
knowledge, a reality. This may also contribute as part of wider policy to finding solutions that 
could  address  global  issues  of  increasing  significance  such  as  climate  change,  the  ageing 
world population, and a possible energy crisis. 

2.1. 

The economic and societal benefits of industrial property rights  

Property, whether tangible or not, is crucial to the operation of a market economy. Industrial 
property rights such as patents, designs and plant variety rights give an incentive to produce 
new  inventions  and  other  innovations  by  awarding  an  exclusive  right  for  a  limited  period. 
Such industrial property rights facilitate entry of newcomers to a market by helping to attract 
venture capital and enabling production to be licensed to incumbents. Trade mark rights are 
essential  for  a  system  of  undistorted  competition,  allowing  the  customer  to  distinguish  the 
products  and  services  of  undertakings.  Trade  marks  provide  a  highly  effective  means  of 
communication.  On  the  one  hand,  they  serve  as  a  medium  for  information  and  advertising, 
and on the other hand, as a symbol to create and represent the entrepreneurial capacity and the 
image of an undertaking. Without competing imitations, the producer can increase his market 
share, enhance profit margins and develop customer loyalty. 

The  benefits  of  patent  rights  also  extend  beyond  the  rights  holder  by  dissemination  of 
knowledge. While rival companies may lose market share due to a competitor's patents, they 
benefit  from  new  technological  opportunities  in  published  inventions,  reducing  the  need  to 
perform reverse-engineering. This can create a virtuous circle of innovation which, in the long 
term,  balances  the  initial  effect  of  high  prices  during  the  period  of  market  exclusivity. 
Industrial property can therefore have a positive effect on competition when accompanied by 
rigorous application of competition rules to prevent abuses of rights.  

An  example  of  the  pro-competitive  effects  of  industrial  property  is  the  formation  of 
technology  pools4  in  patents,  by  reducing  transaction  costs  and  by  setting  a  limit  on 
cumulative royalties. The creation of a pool allows for one-stop licensing of the technologies 
covered  by  the  pool.  In  cases  where  licensees  receive  on-going  services  concerning  the 
application  of  the  licensed  technology,  joint  licensing  and  servicing  can  lead  to  further  cost 
reductions. 

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"Strategic report on the renewed Lisbon strategy for growth and jobs: launching the new cycle (2008-
2010) Keeping up the pace of change" COM(2007) 803 final PART I 
Commission Notice "Guidelines on the application of article 81 of the EC Treaty to technology transfer 
agreements" OJ C 101, 27.04.2004, p.2 

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Despite these benefits, industrial property rights are not an end in themselves. Policy needs to 
consider the trade-off between offering an exclusive right and the diffusion of new products 
and  processes  in  order  for  industrial  property  rights  to  continue  to  produce  economic  and 
social benefits in the future. 

2.2. 

The changing innovation environment 

In  the  global  knowledge-based  economy,  the  importance  of  innovation  as  a  driver  of 
competitive  advantage  has  increased;  EU  business  can  no  longer  rely  on  prices  to  maintain 
their competitiveness. Within this environment, small and medium-sized enterprises (SMEs) 
and  public  research  organisations  (PROs)  including  universities  are  playing  an  ever-
increasing  role  with  licensing  of  industrial  property  rights  becoming  more  important.  The 
Commission  has  put  even  more  emphasis  on  SMEs  in  the  Lisbon  Cycle  of  2008-10  by 
proposing new measures in the Small Business Act for Europe5. Furthermore, the importance 
of  knowledge  transfer  between  PROs  and  the  private  sector  in  boosting  European 
competitiveness has been recently reaffirmed with a Recommendation by the Commission to 
Member States. This includes a Code of Practice for PROs on the management of intellectual 
property6  and  builds  on  the  call  for  the  creation  of  a  European  knowledge  transfer 
framework7. The Recommendation will help to create a more level playing field and facilitate 
transnational knowledge transfer. This may also be improved by a harmonised definition and 
application  of  the  research  exemption  to  patent  infringement8.  Furthermore,  as  many  PROs 
are  becoming  more  entrepreneurial,  e.g.  through  licensing  activities  or  the  creation  of  spin-
offs,  their  needs  are,  to  an  increasing  extent,  similar  to  SMEs.  Many  of  the  measures  for 
SMEs outlined in this Communication can therefore also be of benefit to research institutions. 

As  an  essential  part  of  the  management  of  intellectual  assets,  industrial  property  rights  are 
playing an increasing role in a company's overall business strategy. In recent years, there has 
been  a  dramatic  growth  in  the  demand  for  patents,  trade  marks  and  other  registered  rights. 
However,  other  ways  to  safeguard  information  like  trade  secrets  remain  important,  as  does 
lead-time advantage over competitors. Furthermore, in the ICT sector, open-source software 
business models now co-exist alongside proprietary models. In a survey last year of European 
company executives, 53% said the use of intellectual property rights will be very important or 
critical to their business model in two years, compared to 35% who considered this was also 
the case at the time of the survey9. However, the growing importance of intellectual assets in 
value  creation  contrasts  with  lack  of  a  standardised  treatment  of  these  assets  in  corporate 
reporting,  which  may  hinder  access  to  finance  for  businesses.  This  might  be  remedied  by 
future international developments in intangibles reporting systems. 

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"Think small first – A 'Small Business Act' for Europe" COM(2008) 394 final 
"Commission  Recommendation  on  the  management  of  intellectual  property  in  knowledge  transfer 
activities and Code of Practice for universities and other public research organisations" C(2008) 1329 
"Improving  knowledge  transfer  between  research  institutions  and  industry  across  Europe:  embracing 
open innovation" COM(2007) 182 final 
The research exemption to patent infringement allows a patented technique to be used by researchers 
for  experimental  or  private  and  non-commercial  purposes.  Its  application  in  EU  Member  States  is 
currently 
see 
http://www.eutechnologytransfer.eu/deliverables/experimental_use_exemption.pdf 
"The  value  of  knowledge:  European  firms  and  the  intellectual  property  challenge",  Economist 
Intelligence Unit white paper 2007 published by the Economist 

broad-based 

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2.3. 

A strategy on industrial property rights for Europe 

Internationally-agreed  principles  for  industrial  property  protection  date  back  to  the  19th 
Century10.  Towards  the  end  of  the  20th  Century,  minimum  standards  were  embedded  in  the 
TRIPs  agreement11.  In  the  21st  Century,  a  strategy  on  industrial  property  rights  needs  to 
ensure  Europe  responds  to  the  challenges  of  the  global  knowledge-based  economy.  The 
intellectual property system should continue to act as a catalyst for innovation and contribute 
to  the  overall  Lisbon  strategy.  The  Commission  has  laid  out  criteria  to  achieve  this:  such  a 
system should be high-quality, featuring tough examination standards; affordable, balancing 
cost  with  quality  and  legal  certainty;  consistent,  with  a  common  interpretation  of  laws  and 
unified  court  proceedings;  and  balanced,  between  rewarding  valuable  intellectual  creation 
and ensuring the easy circulation of ideas and innovation12. 

Whereas  a  regulatory  framework  already  exists  on  a  number  of  industrial  property  rights  at 
EU  level,  in  the  field  of  patents,  the  situation  is  very  different.  It  is  clear  that  affordability, 
consistency and balance between rewards to inventors and the circulation of ideas would be 
greatly improved by the adoption of a Community Patent and EU-wide patent jurisdiction.  

This  Communication  outlines  actions  for  a  high-quality  industrial  property  rights  system  to 
allow  Europe  to  benefit  from  its  potential  in  addressing  the  challenges  of  economic 
globalisation.  The  strategy  complements  the  Communication  on  the  patent  system  in 
Europe13, but it is wider in scope, addressing industrial property rights in a horizontal manner. 
High  quality  rights  are  an  essential  requirement  for  all  aspects  of  the  system  –  support  for 
business  including  SMEs,  facilitation  of  knowledge  transfer  and  effective  enforcement  of 
rights  to  combat  counterfeiting  and  piracy.  Only  with  a  quality  system  can  Europe  benefit 
from new opportunities in the global economy and fulfill its responsibilities. 

The elements of this integrated strategy are interdependent and mutually reinforcing but not 
exhaustive.  The  Community  is  competent  on  important  policy  aspects  and  the  Commission 
therefore  has  a  particular  responsibility  to  assist  in  finding  ways  forward.  However,  the 
responsibility for success is a shared one. In the context of the Lisbon agenda, Member States 
are therefore invited to take into account this strategy when formulating their own strategies, 
addressing, amongst other things, possibilities for simplification in line with better regulation. 
Equally,  other  stakeholders  such  as  inventors,  universities,  businesses  and  end-users  play  a 
vital role and need to make informed choices in the management of industrial property rights. 

3. 

THE QUALITY OF INDUSTRIAL PROPERTY RIGHTS 

A  high  quality  system  of  industrial  property  rights  should  achieve  the  acknowledged 
objectives of encouraging innovation and diffusion  of  new  technology  and  knowledge.  This 
goes beyond technical and legal examination of individual rights to consider their economic 
impact.  High  quality  rights  only  offering  rewards  to  inventions  that  meet  the  legal 

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Paris Convention for the Protection of Industrial Property (done in Paris 1883, last revised Stockholm 
1967) 
Trade-related aspects of intellectual property rights - See http://www.wto.int/english/docs_e/legal_e/27-
trips_01_e.htm 
"An innovation-friendly, modern Europe" COM(2006) 589 final 
"Enhancing the patent system in Europe" COM(2007) 165 final  

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requirements  are  essential  to  a  well-functioning  system,  along  with  user-friendly  access  of 
information on these rights to businesses and society. 

3.1. 

Patents 

The quality of patents in Europe is generally perceived to be high. Nevertheless, stakeholders 
are  concerned  about  maintaining  and  improving  patent  quality  in  Europe  and  avoid 
shortcomings  of  some  other  patent  offices14.  This  concern  is  also  shared  in  the  European 
Parliament15.  For  example,  large  numbers  of  overlapping  patent  rights  can  create  additional 
barriers  to  commercialise  new  technologies  that  already  exist  in  "patent  thickets"16.  Poor 
quality rights can also contribute to problems with "patent trolls"17 that have arisen in the US 
judicial system. 

Europe  is  no  exception  to  worldwide  trend  of  continually  rising  numbers  of  patent 
applications.  In  2006,  the  number  of  patent  applications  filed  at  the  European  Patent  Office 
(EPO) in a year exceeded 200,000 for the first time and grew by 5.6%18. Applications are also 
becoming more voluminous, with both the number of claims and pages of applications at the 
EPO  doubling  over  the  past  20  years19.  The  increase  in  numbers  and  complexity  of  patent 
applications  worldwide  has  resulted  in  rising  backlogs  of  pending  applications20,  increasing 
market  uncertainty  caused  by  other  factors  such  as  unused  patents.  In  addition,  a  greater 
proportion of prior art21 is published in non-European languages such as Chinese and Korean. 
Along with applications in new fields of technology, these trends pose particular challenges to 
patent offices. There is also a need for improved access to patent information for companies 
and innovators. 

It  is  vital  that  patents  are  awarded  only  where  a  true  inventive  contribution  is  made.  The 
granting of poor quality patent rights has a negative effect, contributing to economic and legal 
uncertainty. The EPO has "raising the bar" as a strategy concerning its future workload, and 
patent offices in Europe should work together, e.g. by mutual exploitation of work to maintain 
high quality rights and avoid patents being granted in fields which are not patentable such as 
software  and  business  methods.  Examiners  also  need  to  be  kept  abreast  with  latest 
developments  in  their  field  through  continuing  professional  development.  Furthermore,  the 
role of patent offices includes refusing applications which should properly be accounted for 
when measuring their performance. In addition, stakeholders have an important role to play to 

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in 

group 

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Parliament 

the  European 

Consultation and public hearing on future patent policy in Europe in 2006 
http://ec.europa.eu/internal_market/indprop/docs/patent/hearing/preliminary_findings_en.pdf 
"Policy options for the improvement of the European patent system" – a study requested by the Science 
Technology  Options  Assessment 
at 
http://www.europarl.europa.eu/stoa/publications/studies/stoa16_en.pdf 
A patent thicket refers to the potential problem that due to the high number of patents associated with a 
particular product or technology, innovation in the sector is slowed down because of fear of hold-up and 
patent infringement litigation.  
"Patent trolls" are patent owners whose main business is to use patent rights to threaten companies with 
infringement actions to obtain an interlocutory injunction and extract licence fees from third parties  
EPO Annual Report 2006 at http://www.epo.org/about-us/office/annual-reports/2006.htm 
"When  small  is  beautiful:  measuring  the  evolution  and  consequences  of  the  voluminosity  of  patent 
applications  at  the  EPO",  Eugenio  Archontopoulos  et  al.  Information  Economics  and  Policy,  Vol  19, 
No. 2 (June 2007) 
There  are  as  many  as  10  million  unexamined  patents  in  the  world,  and  at  the  EPO,  the  number  of 
pending examination procedures reached 304100 in 2006, a rising from 285400 in 2005.  
Prior  art  is  the  information  made  available  to  the  public  before  a  given  date  that  is  relevant  to  the 
originality of a patent application, and therefore the scope of the patent rights that should be granted.  

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prevent patent offices receiving too many applications with no inventive step. Initiatives such 
as  patent  peer  review  schemes  by  fellow  experts  and  voluntary  codes  of  best  practice  to 
improve  the  standard  of  incoming  applications  are  encouraging  ways  of  improving  patent 
quality against the background of increasing demand. 

Utility  models,  which  exist  in  some  EU  Member  States,  are  similar  to  patents  in  giving  the 
holder  an  exclusive  right  to  a  technical  invention,  but  they  have  a  shorter  lifespan  than 
patents.  The  invention  protected  by  a  utility  model  must  be  new,  but  generally  the  level  of 
inventiveness required is less than for patents. Utility models and national patents granted in 
Member  States  which  do  not  conduct  a  thorough  assessment  of  inventive  step  are  a  faster 
route of protection. However, they can be seen as lower quality rights than examined patents, 
and can therefore increase legal uncertainty. 

The Commission will 

- launch a comprehensive study on patent quality to analyse the risks of low quality 
rights and explore ways to avoid their presence in Europe 

-  study  the  extent  of  possible  problems  with  unused  patents,  including  evaluating 
their causes and suggesting remedies.  

Member  States  with  utility  models  and  patents  not  examined  for  inventive  step  are 
invited to assess the contribution these rights make to innovation. 

3.2. 

Trade marks 

Europe  depends  on  powerful  brands22.  This  requires  strong  trade  mark  protection  that  is 
effective against improper licensing, non-use or unfair use, or infringements. 

Registration  processes  including  the  examination  of  trade  marks  must  be  subject  to  high 
quality  standards,  in  particular  to  ensure  that  the  resulting  registrations  are  entitled  to  a 
presumption of validity, meeting customers' expectations. They must be transparent, reliable, 
consistent  and  affordable  for  business.  At  EU  level  the  Office  for  the  Harmonisation  of  the 
Internal  Market  (OHIM)  has  set  up  a  User  Satisfaction  Survey.  The  2007  results  show  an 
increase  in  the  overall  satisfaction  of  agents  and  proprietors,  with  fewer  complaints  and 
greater  efficiency  at  resolving  them.  However,  there  is  room  for  improvement  in  appeal 
decisions,  particularly  timeliness.  Furthermore,  despite  the  greater  use  of  e-business  tools, 
speed  and  reliability  could  be  better.  OHIM  has  developed  a  Quality  Management  System, 
launched  a  Service  Charter  defining  its  objectives  by  what  users  can  expect,  and  has  the 
ambition to become a fully fledged "e-organisation"23. 

Trade mark registration in the Community has been harmonised in Member States for more 
than 15 years, with national and Community trade mark rights co-existing for over 10 years. 
Although the trade mark system shows clear successes, it is time for an overall evaluation.  

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Eurobrand2007 Study at http://study.eurobrand.cc/valueranking2007/ 
See for details the OHIM website: http://oami.europa.eu/en/userscorner/default.htm 

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The Commission will evaluate the overall functioning of the Community and national 
trade mark systems. The study will analyse the impact of the trade mark systems in 
the EU on stakeholders, and could form a basis for future review of the Community 
trade  mark  system  and  enhanced  cooperation  between  the  OHIM  and  national 
offices. 

3.3. 

Other industrial property rights 

Apart from trade marks, other systems for industrial property rights exist at Community level. 
The  Community  design24  system  began  in  2003  and  now  provides  a  route  to  protection  in 
third countries following accession in 2008 of the EC to the Geneva Act of Hague Agreement 
on the international registration of designs. Although national design law has to a large extent 
been  harmonised  with  the  Designs  Directive25,  adoption  of  the  proposal  to  liberalise  the 
aftermarket  in  spare  parts26  would  provide  a  more  consistent  system  in  the  Single  Market. 
Given  these  ongoing  developments  and  the  relatively  new  Community  design  system,  the 
Commission does not currently envisage an evaluation of the design system. 

Longer-established Community protection systems include geographical indications (GIs) and 
Community  Plant  Variety  (CPV)  rights.  The  EC  provides  GI  registration  systems  for  wines 
and  agricultural  products  and  foodstuffs  by  protected  designation  of  origin  (PDO),  and  for 
protected geographical indication (PGI) which also extends to spirits27. These systems assure 
consumers they are buying a genuine product that owes its identity or reputation to the region 
of  origin.  GI  protection  systems  have  different  function  and  objectives  from  trade  mark 
protection.  However,  both  systems  contribute  to  protecting  product  names  from  misuse  and 
imitation.  The  Commission  is  presently  carrying  out  an  ex  post  evaluation  of  the  overall 
application  of  the  system  for  agricultural  products  since  1992.  The  relationship  with  trade 
marks is part of the study. It will also publish a Green Paper on agricultural product quality 
policy  in  2008,  which  is  intended  to  consult  stakeholders  on  product  standards,  production 
requirements  and  quality  schemes  including  the  future  development  of  the  GI  systems. 
Furthermore, how to facilitate GI protection for non-agricultural products is another issue that 
the  Commission  is  reflecting  on,  so  as  to  bring  benefits  to  European  and  third  countries' 
producers. 

For the CPV  system,  the  Community Plant Variety Office, which grants CPV protection, is 
commissioning  an  evaluation  on  its  role  and  activities.  An  overall  evaluation  of  the 
Community  legislation  governing  CPV  rights  might  also  be  envisaged  after  the  current 
evaluation on the acquis on the marketing of seed and plant propagating material which also 
considers the links with the CPV system. 

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Council Regulation (EC) No 6/2002 of 21 December 2001 on Community designs OJ L 3, 5.1.2002, p.1  
Directive 98/71/EC of 13 October 1998 on the legal protection of designs OJ L 289, 28.10.1998, p.2 
"Proposal for a Directive of the European Parliament and the Council amending Directive 98/71/EC on 
the legal protection of designs" COM (2004) 582 final 
Protection is available by three Regulations covering wines (Council Regulation (EC) No. 1493/1999 
OJ L 179 14.7.1999, p.1), spirits (Council Regulation (EC) No. 110/2008 OJ L 39, 13.2.2008, p.16) and 
agricultural and food stuff products (Council Regulation (EC) No. 510/2006 OJ L 93 31.3.2006, p.12). 

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The Commission will: 

-  publish  a  Green  Paper  in  2008  on  agricultural  product  quality  policy  which  will 
cover GIs 

-  carry  out  an  assessment,  including  via  public  consultation,  on  the  feasibility  of 
geographical indication protection to non-agricultural products.  

3.4. 

Industrial Property Rights and Competition 

Promotion  of  innovation  and  driving  economic  growth  are  common  goals  of  industrial 
property  and  competition  law.  Strong  protection  of  industrial  property  rights  should  be 
accompanied by rigorous application of competition rules. 

The existence and exercise of an industrial property right are not of themselves incompatible 
with  competition  law.  Only  in  exceptional  circumstances  may  the  "exercise"  of  a  right 
constitute an infringement of EC competition rules, in particular if the company is dominant 
and  its  behaviour  is  likely  to  lead  to  elimination  of  competition  in  a  relevant  market.  The 
Court of First Instance has confirmed the circumstances when e.g. a refusal to license may be 
abusive,  namely  when  the  information  that  is  refused  is  indispensable  to  compete  in  a 
secondary market, when competition in that secondary market is likely to be eliminated, and 
when  new  products  for  which  there  is  consumer  demand  are  prevented  from  coming  to 
market28.  

An area of growing prominence in the interface between industrial property and competition 
law  is  standard-setting.  In  general,  standard-setting  is  a  positive  contribution  to  innovation 
and  economic  development.  Nevertheless,  in  order  to  avoid  potential  distortions  of 
competition, standard-setting should be carried out in an open and transparent manner29. One 
example  of  a  distortion  may  be  a  "patent  ambush",  whereby  the  owner  of  a  proprietary 
technology essential to a standard extracts an artificially inflated ex post (i.e. after a standard 
is  set)  value  for  his  patented  technology  by  deliberately  concealing  his  patent  during  the 
standard-setting process. 

Rules within standard-setting organisations may specify an ex ante (i.e. before a standard is 
set)  duty  to  disclose  essential  patent  applications  and/or  issued  patents  or  a  duty  to  offer 
commitments  to  license  the  essential  patents  on  fair,  reasonable  and  non-discriminatory 
(FRAND)  terms30.  Some  bodies  have  also  adopted  rules  whereby  holders  of  potentially 
essential  technologies  to  a  standard  declare  maximum  royalty  rates  that  they  would  charge 
were their technology selected to become part of the standard. The Commission encourages 
European standards organisations to make these policies effective. 

28 

29 

30 

Judgment  of  the  Court  of  First  Instance  (Grand  Chamber)  of  17  September  2007,  Microsoft  v 
Commission, Case T-201/04 
Commission  Notice  -  Guidelines  on  the  applicability  of  Article  81  to  horizontal  co-operation 
agreements, OJ C 3, 6.1.2003, p. 2 
General  Guidelines  for  the  Cooperation  between  CEN,  Cenelec  and  ETSI  and  the  European 
Commission and the European Free Trade Association, signed on 28 March 2003, OJ C 91, 16.04.2003, 
p.7  

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Rules requiring ex ante disclosure of maximum royalty rates should not be used as a sham for 
illegitimate price discussions. However, in themselves, they are not anti-competitive. Indeed, 
in  appropriate  circumstances,  they  could  have  the  potential  to  be  strongly  pro-competitive 
allowing for ex ante competition based on both the technical merit and price of a technology. 
In such a scenario, the consumer will be the ultimate beneficiary, since ex ante competition 
would prevent an artificially high ex post price from being charged. This notwithstanding, it is 
generally  not  for  competition  law  to  second  guess  a  specific  IP  policy  of  a  standard-setting 
body, but rather to provide guidance on which elements may or may not be anti-competitive. 
It is for industry to choose which scheme best suits its needs within these parameters31. 

The Commission will:  

-  launch  a  fact-finding  study  to  analyse  the  interplay  between  intellectual  property 
rights and standards in the promotion of innovation32 

-  adopt  a  consultative  document  on  standardisation 
information  and 
communications  technologies  (ICT)  in  the  first  quarter  of  2009  which  will  include 
how standards relate to industrial property rights in the sector. 

in 

4. 

INNOVATION SUPPORT FOR SMALL AND MEDIUM-SIZED ENTERPRISES 

Small and medium-sized enterprises (SMEs)33, account for 99% of all enterprises, providing 
85 million jobs in Europe. Successful exploitation of industrial property rights can provide the 
essential leverage for SMEs to prosper. However, SMEs often do not take full advantage of 
opportunities to exploit industrial property rights34. Research indicates that they utilise formal 
industrial  property  rights  less  and  instead  rely  on  other  protection  methods,  such  as  trade 
secrets  or  marketing  advantages.  When  this  is  due  to  lack  of  awareness  or  support,  this  is 
undesirable and highlights the need for prompt policy actions. 

4.1. 

Improving SME access to industrial property rights  

High  costs  are  often  cited  by  SMEs  as  a  reason  for  not  having  formal  industrial  property 
rights.  Unlike  trade  marks  and  designs,  SMEs  cannot  choose  between  national  and 
Community  regimes  in  patents.  The  entry  into  force  of  the  London  Agreement35  on  1  May 
2008  will  help  SMEs  benefit  from  the  Single  Market  by  reducing  translation  costs  for 
European patents36. But there is vast potential for improvement by a cost-effective, accessible 
Community  patent37,  which  has  again  been  demanded  by  SMEs  in  the  consultation  on  the 

31 

32 

33 

34 

35 
36 
37 

For example, in some circumstances, royalty-free licenses can be effective in promoting wide take-up of 
standards in areas where strong network effects apply. 
"Towards  an  increased  contribution  from  standardisation  to  innovation  in  Europe"  COM(2008)  133 
final 
Commission Recommendation of 6 May 2003 concerning the definition of micro, small and medium-
sized enterprises OL L 124 20.5.2003 p.36 
"Implementing the Community Lisbon Programme Modern SME Policy for Growth and Employment" 
COM(2005) 551 final 
The Agreement dated 17 October 2000 on the application of Article 65 EPC [2001] OJEPO 549 
See http://www.epo.org/patents/law/legislative-initiatives/epc2000.html 
"Enhancing the patent system in Europe" COM (2007) 165 final – see Annex II and references therein 
for calculations of cost benefits of the London Agreement and Community patent 

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Small Business Act38. The Small Business Act set out, as one of its ten principles, that the EU 
and Member States should encourage SMEs to benefit more from the opportunities offered by 
the Single Market, including, amongst other things, their access to patents and trade marks. 

Other suggested solutions are incentives for SMEs such as prior art searches and subsidies for 
the  first  10  patent  applications39  which  could  increase  use  of  industrial  property  right 
protection. Whether lowering costs for all SMEs (e.g. by reduced processing fees40), offering 
targeted subsidies41, or incentives to decrease taxation from income from licensing industrial 
property rights42 would be more effective could warrant investigation43. 

The Commission 

- continues to work on an efficient and cost-effective, high quality and legally-secure 
patent system at European level, including a Community patent and EU-wide patent 
jurisdiction 

- will explore how the fee structure for the future Community patent can be designed 
to facilitate access for SMEs.  

Pending  the  adoption  of  the  Community  patent,  Member  States  are  encouraged 
within  the  Community  framework  for  State  aid  for  Research  and  Development  and 
Innovation44 

- to make use of the provisions to support industrial property rights 

-  explore  ways  SMEs  can  make  better  use  of  rights  within  this  framework  such  as 
reducing patent fees, or tax incentives to promote licensing activity . 

4.2. 

Improving SME access to dispute resolution procedures 

SMEs  often  have  limited  resources  to  initiate  legal  action,  particularly  patent  litigation.  An 
affordable, efficient and reliable EU-wide integrated patent jurisdiction would be an obvious 
and highly effective remedy.  

Another suggested solution is patent litigation insurance. The most recent study on this topic 
by the Commission45 evaluated the feasibility of a small number of schemes. It concluded that 
only  a  mandatory  system  would  be  economically  viable.  However,  this  result  is  put  into 

38 
39 
40 

41 

42 
43 

44 
45 

http://ec.europa.eu/enterprise/entrepreneurship/sba_en.htm#aa 
http://ec.europa.eu/internal_market/indprop/docs/patent/hearing/preliminary_findings_en.pdf 
Small entities can obtain a 50% fee reduction under US patent law, see 
http://www.uspto.gov/web/offices/pac/mpep/mpep_e8r6_appxl.pdf 
For  example,  subsidising  first-time  patent  applicants  (e.g.  1er  brevet  service  of  OSEO  Innovation  in 
France or INSTI SME Patent Action in Germany), or allowing further subsidies (e.g. IPAS service in 
Ireland). 
Some countries allow income tax reductions from licence revenues from patents. 
A  memorandum  on  removing  barriers  for  a  better  use  of  the  IPR  system  by  SMEs:  A  report  for  the 
Directorate-General 
http://www.proinno-
europe.eu/NWEV/uploaded_documents/IPR_Expert_group_report_final_23_07_07.pdf 
OJ C 323, 30.12.2006 2006, p.1 
"The  possible  introduction  of  an  insurance  against  costs  for  litigation  in  patent  cases"  by  CJA 
Consultants Ltd at http://ec.europa.eu/internal_market/indprop/docs/patent/studies/pli_report_en.pdf - a 
follow-up study 

for  Enterprise 

Industry 

2007 

June 

and 

at 

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question  by  recent  work  on  setting  up  voluntary  schemes.  The  Commission  will  therefore 
follow further developments in this field. 

Alternative  dispute  resolution  (ADR)  mechanisms,  particularly  mediation,  can  complement 
the judicial system and be a viable alternative both for SMEs and larger companies if they are 
speedy,  reliable  and  cost-effective.  Directive  2008/52/EC46  provides  a  framework  for 
mediation in cross-border disputes. It facilitates access to dispute resolution by addressing key 
aspects of the relationship between mediation and civil proceedings and providing useful tools 
to  promote  mediation.  The  Commission  also  encourages  the  application  of  high  mediation 
standards  in  domestic  disputes  and  supports  the  use  of  the  European  Code  of  Conduct  for 
Mediators47 to improve quality and consistency of mediation services.  

In the context of work on the Community patent and an integrated patent jurisdiction system, 
the creation of a patent arbitration and mediation centre at Community level is being explored 
to  deal  with  cases  where  validity  is  not  at  stake.  Complementing  ADR  facilities  for  patents 
outside the Community framework, this centre could ensure proximity and better accessibility 
to  patent  disputes  by  SMEs.  The  centre  would  establish  a  Community  list  of  mediators  and 
arbitrators  who  could  assist  the  parties  in  settlement  of  their  dispute.  Although  ADR  would 
not  be  mandatory,  a  judge  of  the  integrated  patent  jurisdiction  would  investigate  with  the 
parties the possibilities for settlement of the dispute by the arbitration and mediation centre. 

The Commission will 

- explore how mediation and arbitration can further be encouraged and facilitated in 
the context of ongoing work on an EU-wide patent litigation system.  

Member States are  

- encouraged within the context of the Lisbon strategy to provide sufficient support 
for SMEs to enforce their industrial property rights. 

4.3. 

Quality support for SMEs on management of Industrial Property Rights 

Despite the large numbers of publicly funded services in Europe providing support to SMEs, 
fairly  few  can  be  described  as  high  performers,  although  some  "islands"  of  well  designed 
programmes exist48. Industrial property rights, throughout their life-cycle, should, along with 
other intellectual assets, be included as an integral element of the business plan of companies. 
Quality  support  to  SMEs  on  management  of  industrial  property  rights  should  be  tailored  to 
their  individual  needs.  This  requires  a  rare  combination  of  technical,  legal  and  business 
expertise. The ip4inno "train-the-trainer" initiative49 prepares trainers specialising in IPRs to 
disperse knowledge to business advisory communities. SME support services can also make 
better  use  of  their  own  expertise.  National  patent  offices  and  technology/development 
agencies working in combination can create synergies by combining their technical/legal and 

46 

47 
48 

49 

Directive 2008/52/EC of the European Parliament and of the Council of 21 May 2008 on certain aspects 
of mediation in civil and commercial matters, OJ L 136, 25.5.2008, p.3. 
See http://ec.europa.eu/civiljustice/adr/adr_ec_code_conduct_en.htm 
Benchmarking  National  and  Regional  Support  Services  for  SMEs  in  the  Field  of  Intellectual  and 
at  http://www.proinno-europe.eu/admin/uploaded_documents/Benchmarking-
Industrial  Property 
Report-SME.pdf 
See http://www.proinno-europe.eu/index.cfm?fuseaction=page.display&topicID=63&parentID=54 

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business  expertise.  The  aim  of  the  IP-Base  Project  is  to  promote  the  development  of  new 
awareness actions and support services. It is based on collaboration between national patent 
offices and local innovation structures, including the Enterprise Europe Network. 

European  SMEs  increasingly  need  to  operate  in  markets  outside  the  EU  in  order  to  survive 
and  prosper.  Robust  IPR  protection  is  vital  for  SMEs  to  make  full  use  of  new  trading 
opportunities.  The  Commission  will  enhance  help  for  companies  in  third  countries.  For 
example, in China,  an IPR Helpdesk has been launched to provide business-oriented advice 
on  IPRs  including  enforcement.  This  pilot  action  will  be  assessed  to  consider  whether  this 
support should be continued on longer-term basis, expanded or modified to meet future needs 
of SMEs. 

The Commission will 

- assess the IPR Helpdesk in China with a view to providing optimised IPR support 
services for SMEs in third countries and to assessing the potential for continued and 
expanded support. 

Member States are encouraged to  

-  raise  awareness  of  intellectual  asset  management  for  all  businesses  and 
researchers, including SMEs. 

5. 

ENFORCEMENT  OF 
COUNTERFEITING AND PIRACY 

INTELLECTUAL  PROPERTY  RIGHTS 

-  COMBATING 

Protection  of  new  innovations  by  intellectual  property  must  be  accompanied  by  effective 
enforcement  mechanisms.  Counterfeiting  and  piracy  are  reaching  alarming  levels  with 
significant implications for innovation, economic growth and job creation in the EU and risks 
for health and safety of European citizens. Worldwide, international trade in counterfeited and 
pirated  products  in  2005  was  estimated  at  $200  billion50.  Counterfeiting  and  piracy  is  an 
enormous phenomenon which is thought to be growing in absolute value and proportionally to 
global  GDP  in  line  with  trends  in  international  trade.  There  is  therefore  an  acute  need  for 
intensified action, both within the EU and in third countries, to protect European companies 
and their investments in innovation.  

5.1. 

Effective enforcement through Community legislation 

Within  the  single  market,  the  Enforcement  Directive51  is  the  cornerstone  of  the  EU's 
contribution to the fight against counterfeiting and piracy. Correct transposition and practical 
application  is  necessary  to  achieve  its  goals.  The  Commission  is  helping  coordinate  the 
implementation reports from Member States required by 29 April 2009. 

50 

51 

Organisation for Economic Cooperation and Development, The Economic Impact of Counterfeiting and 
Piracy 4/6/07 DSTI/IND(2007)9/PART4/REV1 
Directive  2004/48/EC  of  the  European  Parliament  and  of  the  Council  of  29  April  2004  on  the 
enforcement of intellectual property rights, OJ L 157, 30.4.2004, p.16 

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13 

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Criminal law measures also constitute, in appropriate cases, a means of enforcing intellectual 
property rights. Differences in the implementation of criminal procedures and penalties create 
discrepancies  in  the  level  of  protection  available  for  rights  holders.  The  Commission 
continues to believe that Member States need to put in place effective criminal law measures. 

Where a court has held that intellectual property rights have been infringed, enforcement of 
the  judgment  or  order  should  not  pose  significant  difficulties  for  the  rights  holder.  The 
Commission  is  considering  how  cross-border  enforcement  can  be  simplified  as  part  of  a 
review of  the  Brussels I Regulation.52 One of the elements envisaged is the abolition of the 
exequatur  requirement53  as  a  pre-condition  for  enforcement  of  a  judgment  from  another 
Member State. 

The Commission will 

-  ensure  a  full  transposition  and  effective  application  of  the  Enforcement  Directive 
2004/48/EC  

- consider how cross-border enforcement of judgments can be improved in its review 
of the Brussels I Regulation.  

5.2. 

Frontier initiatives 

At  the  borders  of  the  Community,  goods  suspected  of  infringing  IPRs  can  be  seized  under 
Customs  legislation54.  For  this  to  be  effective,  holders  of  IPRs  need  to  cooperate  fully  with 
customs and exchange data that will enable customs to target suspect shipments successfully. 
Such  cooperation  is  one  of  the  pillars  of  the  action  plan  for  a  customs  response  to  combat 
counterfeiting and piracy adopted by the Commission in October 200555 and endorsed by the 
Council. The Commission will soon present the results of its implementation and intends to 
subsequently launch a new customs action plan building on the success of the first one. The 
recent amendments to the Customs Code to improve controls for safety and security purposes 
offer  new  tools  for  the  rapid  dissemination  of  information  on  high  risk  traffic.  These  tools 
should be used to the full. 

The  number  of  cases  treated  by  customs  involving  counterfeit  and  pirated  products  rose  by 
over 15% to over 43,000 cases in 200756. Customs enforcement has brought significant results 
but  is  clearly  only  part  of  the  solution.  It  is  critical  that  this  is  accompanied  by  actions 
preventing  the  distribution  and  ultimately  the  manufacturing  of  IPR-infringing  goods.  In 
addition, it is recognised that further cooperation with customs in manufacturing countries is 
essential. To  this end, a joint customs action plan against  counterfeiting and piracy is being 
drawn up with the authorities in China. This plan should be finalised in 2008.  

52 

53 

54 

55 
56 

Council  Regulation  (EC)  No  44/2001  or  22  December  2000  on  jurisdiction  and  the  recognition  and 
enforcement of judgments in civil and commercial matters, OJ L 12, 16.1.2001, p.1  
Where there is an exequatur requirement, a judgment given in a Member State which is enforceable in 
that Member State is enforceable in another Member States when it has been declared enforceable there. 
Council  Regulation  (EC)  No  1383/2003  of  22  July  2003  concerning  customs  action  against  goods 
suspected of infringing certain intellectual property rights and the measures to be taken against goods 
found to have infringed such rights OJ L 328, 30.10.2004, p.16 
"A customs response to latest trends in Counterfeiting and piracy" COM(2005) 479 final 
See 
http://ec.europa.eu/taxation_customs/resources/documents/customs/customs_controls/counterfeit_pirac
y/statistics2007.pdf 

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At  the  same  time,  the  unitary  Community  patent  title  providing  complete  geographical 
protection without any loopholes would render more effective the fight against counterfeiting 
and the copying of products patented by European companies. This would help to prevent the 
entry of counterfeit products into the European Single Market and facilitate their seizure by 
customs  authorities  at  all  external  borders  of  the  EU  and  their  removal  from  the  market 
wherever they enter distribution channels.  

The Commission will 

- seek to ensure full use by rights holders and Customs of information-sharing tools 
in order to target high risk traffic of counterfeit goods 

- develop a new action plan on a customs response against counterfeiting and piracy 

-  develop  a  joint  action  plan  against  counterfeiting  and  piracy  with  the  Chinese 
customs authorities during 2008. 

5.3. 

Complementary non-legislative actions  

Effective  enforcement  requires  improved  networks  between  the  Commission  and  Member 
States,  between  different  national  authorities  in  the  Member  States,  and  between  the  public 
and  private  sector.  Awareness  of  the  damage  of  counterfeiting  and  piracy  also  needs 
improving. Consumers sometimes associate counterfeit goods with cheap clothing and luxury 
products,  but  are  ignorant  of  the  health  and  safety  risks  of  fake  versions  of  medicines, 
personal  care  products,  electronic  components  and  motor  vehicle  components.  In  addition, 
there  is  limited  awareness  of  the  link  between  counterfeit  goods  and  tax  evasion,  money 
laundering, drug cartels, paramilitary involvement, organised criminal gang associations and 
child labour. The idea of education and awareness-raising on the importance of copyright for 
the availability of content is widely supported as a tool in the fight against piracy57. A public 
"zero-tolerance"  approach  towards  IPR  infringement  would  help  improve  enforcement  for 
rights holders, including SMEs.58 

To improve intelligence networks, the Commission will work with Member States and study 
how  collection  and  documentation  of  information  on  illegal  activity  can  be  more  effective. 
Within a Member State, coordination between the key players including customs authorities, 
the police, trading standards officers, prosecutors, IP offices and the courts can be enhanced 
by  sharing  best-practices.  Between  Member  States,  an  efficient  network  of  administrative 
cross-border  cooperation  could  be  set  up  to  facilitate  rapid  exchange  of  information.  This 
could build on existing systems, such as the internal market information system59 which could 
be used to disseminate information on counterfeit goods.  

Greater  cooperation  between  the  public  and  private  sectors  can  also  improve  enforcement. 
The Commission will explore the extent to which an inter-industry deal can be brokered at EU 
level  to  crackdown  on  large-scale  illegal  downloading  of  copyright-protected  material, 

57 
58 

59 

EN 

"Creative content online in the single market" COM(2007) 836 final 
Effects  of  counterfeiting  on  EU  SMEs  and  a  review  of  various  public  and  private  IPR  enforcement 
initiatives 
at 
http://www.ec.europa.eu/enterprise/enterprise_policy/industry/doc/Counterfeiting_Main%20Report_Fin
al.pdf  
See http://ec.europa.eu/idabc/en/document/5378/5637 

resources 

and 

15 

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striking  the  balance  between  the  need  to  safeguard  personal  data  and  the  impact  that  file-
sharing  websites  have  on  the  creative  industry.  A  stakeholder  agreement  at  EU  level  could 
also  be  achieved  as  a  step  towards  eliminating  the  selling  of  counterfeit  products  over  the 
internet. 

The Commission will 

- consider the potential contribution that further awareness-raising activity can make 
towards changing the public perception about counterfeited and pirated goods, both 
at European level and by Member States  

-  study  how  information  gathering  can  be  improved  so  that  comprehensive 
documentation can be set up as a basis for better targeted enforcement actions 

-  work  to  improve  cooperation  between  all  players  involved  in  the  fight  against 
counterfeiting  and  piracy  within  individual  Member  States  to  enhance  efficiency  of 
actions at national level 

-  explore  solutions  to  establish  an  effective  network  for  administrative  cooperation 
between Member States to allow for Europe-wide actions  

- act to facilitate public/private sector agreements in the fight against IP violations  

- seek to broker an inter-industry agreement at EU level to reduce the internet traffic 
related to piracy and the selling of counterfeit goods. 

Member  States  are  invited,  within  the  scope  of  the  Lisbon  strategy,  to  ensure 
sufficient information and resources are available to enforcement authorities to work 
constructively with right holders in combating violations of intellectual property.  

6. 

INTERNATIONAL DIMENSION 

6.1. 

Trade mark law reform 

The  WIPO  Singapore  Treaty  on  the  Law  of  Trademarks60  of  2006  builds  on  the  1994 
Trademark Law Treaty and aims at creating a modern and dynamic international framework 
for  the  harmonisation  of  administrative  trade  mark  registration  procedures.  The  Treaty 
provides for new developments in communications technology, relief measures on time limits, 
and  explicitly  recognises  non-traditional  visible  trade  marks  and  non-visible  marks,  such  as 
sound and taste marks. There are also special arrangements to provide developing countries 
with  technical  assistance  to  help  them  take  full  advantage  of  the  provisions  of  the  Treaty. 
European industry can benefit from the successful agreement of the Treaty only by ratification 
or accession by EU Member States and the EC.  

The  Commission  will  prepare  the  ground  for  the  accession  of  the  EC  to  the 
Singapore Treaty on the Law of Trademarks and encourages Member States to ratify 
this treaty. 

60 

See http://www.wipo.int/treaties/en/ip/singapore/ 

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6.2. 

Patent reform agenda 

Patent  law  harmonisation  could  make  it  easier  for  European  companies  to  patent  their 
inventions outside the EU. Since 1970, the Patent Cooperation Treaty (PCT)61 has offered a 
route  to  global  patent  protection  by  a  single  international  application.  Formalities  law  has 
largely  been  harmonised  by  the  Patent  Law  Treaty62  of  2000,  but  little  progress  has  been 
made in agreeing a Substantive Patent Law Treaty (SPLT). Developing countries have raised 
concerns  that  a  patent  system  should  adequately  take  into  account  their  interests.  But  key 
differences  in  the  patent  system  also  persist  among  industrialised  countries.  In  the  US, 
ownership of a patent is awarded to the first individual to realise an invention, unlike Europe 
where ownership is awarded to the first to file a patent application. Other differences are the 
grace period in the US preceding the filing of an application where disclosures can be made 
without  prejudicing  later  patent  applications,  and  no  obligation  to  publish  all  US  pending 
applications  at  18  months  from  their  filing  or  priority  date.  In  the  Transatlantic  Economic 
Council,  the  Commission  will  work  with  EU  Member  States  to  establish  a  way  forward  in 
international patent law harmonisation.  

Substantive  patent  law  harmonisation  would  simplify  patent  processing,  facilitate  greater 
work  sharing  activities  between  patent  offices,  and  could  ultimately  lead  to  mutual 
recognition  of  granted  patents  between  offices.  Europe  has  the  responsibility  to  ensure  that 
high quality standards on patentability are also part of multilateral frameworks. 

The Commission will work with EU Member States towards international patent law 
harmonisation  in  the  negotiations  for  a  Substantive  Patent  Law  Treaty  and  in  the 
Transatlantic Economic Council. 

6.3. 

Enforcement of intellectual property rights in third countries 

As a key competitive asset for EU businesses, there is a growing concern about the increasing 
misappropriation  of  IPRs  in  third  countries.  Following  the  Strategy  for  the  Enforcement  of 
IPRs  in  Third  Countries  in  2004,63  the  Commission  highlighted  the  need  to  reinforce  IPR 
enforcement  activity  and  cooperation  with  a  number  of  priority  countries64  defined  on  the 
basis of a separate survey65 which will be regularly updated. Actions with priority countries 
include  strengthening  cooperation  with  like-minded  countries,  establishing  IPR  dialogues, 
shifting technical assistance resources to enforcement and building awareness of IPR issues in 
EU  companies  operating  in  these  countries.  At  a  bilateral  level,  all  trade  agreements  under 
discussion include specific chapters on IPR. By regulatory convergence, these should achieve 
effective protection and enforcement of IPRs and further clarify international obligations. 

Multilaterally, new initiatives on enforcement have emerged within different forums such as 
WTO/TRIPS Council, G8 (Heiligendamm process), OECD and WIPO. A recent proposal to 
strengthen  the  international  IPR  framework  is  the  anti-counterfeiting  trade  agreement 
(ACTA).  This  joint  US-Japan  initiative  seeks  an  international  agreement  on  combating  IPR 
infringements.  It  identifies  three  key  areas  for  agreement:  international  cooperation, 

61 
62 
63 
64 

65 

See http://www.wipo.int/treaties/en/registration/pct/ 
See http://www.wipo.int/treaties/en/ip/plt/index.html 
OJ C 129, 26.5.2005, p. 3  
"Global  Europe:  Competing  in  the  World  –  a  Contribution  to  the  EU's  Growth  and  Jobs  Strategy" 
COM(2006) 567 final 
http://ec.europa.eu/trade/issues/sectoral/intell_property/survey2006_en.htm 

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principally  between  customs  and  other  enforcement  agencies,  enhancing  the  enforcement 
framework  by  enhancing  expertise,  and  the  statutory  framework.  Considering  the  potential 
that coordinated action can offer, the Commission is working based on a negotiating mandate 
to achieve a formal agreement.  

The Commission will 

-  conduct  an  IPR  survey  IPR  of  enforcement  activity  outside  the  EU  on  a  regular 
basis 

- seek effective protection and enforcement of intellectual property rights in bilateral 
trade agreements  

-  strengthen  enforcement  activity  and  cooperation  in  third  countries  through 
regulatory dialogues, particularly those with high levels of counterfeiting and piracy 

- work towards a multilateral anti-counterfeiting trade agreement.  

6.4. 

Development issues 

Recent years have seen a focus on industrial property in the developing world in international 
discussions, and how this can act as a tool for social, environmental, economic and cultural 
development.  The  Permanent  Committee  on  Development  and  IP  within  WIPO  created  in 
2007 could represent a significant platform to make progress in the debate. Another example 
is the WHO ad hoc Intergovernmental Working Group (IGWG) on Public Health, Innovation 
and  IP  which  recently  finalised  a  global  strategy66  with  the  aim  to  improve  access  to 
medicines  and  tackle  the  increasing  problem  of  neglected  diseases  especially  in  developing 
countries. The EU continues to play a key role in the initiatives on industrial property to the 
benefit of those in developing and least developed countries.  

In  the  framework  of  the  United  Nations  Framework  Convention  on  Climate  Change,  the 
relation  between  intellectual  property  rights  policies  and  enabling  environments  for 
technology transfer has been established in the Bali Roadmap of 200767. The EU is ready to 
engage  in  discussion  where  possible  side  effects  may  hamper  the  progress  of  developing 
countries in tackling climate change.  

At  the  WIPO  Intergovernmental  Committee  on  IP,  genetic  resources,  traditional  knowledge 
and folklore (IGC), the European Community submitted a proposal in 2004 for establishing a 
mandatory  requirement  for  a  patent  applicant  to  disclose  the  source/origin  of  any  genetic 
resources  and  associated  traditional  knowledge  used  in  its  patent  applications68.  This 
requirement  could  help  indigenous  communities  from  where  these  genetic  resources  and 
traditional knowledge originate to allow verification of compliance with rules on Access and 
Benefit  Sharing  (ABS)  in  order  to  share  the  benefits  from  the  commercial  exploitation  of 
patents  and  also  assist  Patent  Offices  in  examining  the  novelty  of  these  inventions.  The 
Commission therefore continues to support efforts towards adoption of the proposal and notes 
that  patent  laws  in  some  Member  States  contain  provisions  on  the  disclosure  of  the 
geographic origin of biological matter in patent applications. 

66 
67 
68 

http://www.who.int/phi/documents/POAWhitePaper.pdf 
See http://unfccc.int/meetings/cop_13/items/4049.php 
See http://www.wipo.int/tk/en/genetic/proposals/european_community.pdf 

EN 

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Following  the  Doha  Declaration  adopted  by  the  WTO  in  200169  and  the  subsequent 
decisions70  to  amend  the  TRIPS  Agreement,  the  EU  adopted  the  Regulation  on  compulsory 
licensing  of  patents  relating  to  the  manufacture  of  pharmaceutical  products  to  export  to 
countries  with  public  health  problems  in  May  200671.  EU  ratification  of  the  2005  Protocol 
amending the TRIPS Agreement constitutes an important signal of commitment to this issue. 

The Commission will participate actively in international discussions aiming to help 
developing countries realise the potential of their industrial property rights. 

7. 

CONCLUSIONS 

To remedy the shortcoming in the current industrial property rights system in order to make 
the  most  out  of  Europe's  innovation  potential  and  competitiveness,  integrated  action  is 
needed.  In  the  field  of  patents,  the  Community  patent  alone  would  be  a  major  remedy  to 
difficulties  to  protect  inventions  such  as  costs  and  complexity  faced  by  inventors  and 
businesses  in  Europe.  In  addition,  an  integrated  EU-wide  jurisdictional  system  could 
substantially  improve  accessibility  to  settle  disputes  and  legal  certainty  for  right  holders  as 
well as third parties. It is therefore of utmost importance that these objectives are achieved as 
a matter of urgency.  

After  the  adoption  of  the  pending  legislative  proposals,  protection  systems  for  the  main 
industrial  property  rights  will  be  in  place  at  Community  level.  However,  aspects  of  the 
systems  will  need  evaluating  over  time  to  ensure  their  optimal  effectiveness.  Moreover, 
important complementary actions are needed to support the legal framework in order for it to 
provide strong enforceable rights for European businesses of all sectors and sizes as well as 
inventors  and  research  organisations  in  order  to  take  full  advantage  of  the  opportunities 
provided by global knowledge-based economy.  

This Communication mainly sets out actions at Community level. However, it is intended to 
inspire  further  dialogue  and  actions  from  Member  States  and  stakeholders  in  society.  Here, 
Member States play a role in formulating strategies in their areas of competence. Moreover, 
inventors, research organisations and SMEs need to have a raised awareness of the potential 
of industrial property rights in order to make informed choices. When making use of formal 
industrial  property  rights,  businesses  in  general  should  build  them  into  an  overall  business 
strategy.  The  responsibility  to  realise  the  full  potential  that  industrial  property  rights  can 
provide to the economy in Europe is therefore a shared one. 

69 
70 

71 

EN 

http://www.wto.org/english/tratop_e/trips_e/implem_para6_e.htm 

See http://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_trips_e.htm 
See 
http://www.wto.org/english/tratop_e/trips_e/wtl641_e.htm 
Regulation (EC) No 816/2006 of the European Parliament and of the Council of 17 May 2006 on the 
compulsory  licensing  of  patents  related  to  the  manufacture  of  pharmaceutical  products  for  export  to 
countries with public health problems, OJ L 157 09.06.2006. p.1 

and 

19 

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