Why is IP protection important for EU SMEs?
April 26th, 2021 – 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 about 100 million people . The positive association between economic performance and ownership of intellectual property rights (IPRs) is particularly strong for SMEs.
SMEs that own IPRs generate 68 % higher revenue per employee than SMEs that do not own any 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 firm performance in the EU . As the study shows, IPR protection has become crucial to the success of SMEs, and it is thus key for SMEs to be aware of the value of intellectual property (IP) and of the best ways to benefit from it.
IP relates to intangible assets, which comprise intellectual and industrial property. IPRs can be protected by law under patents, trade marks, industrial designs, copyright, plant variety protection, but also via trade secrets, unfair competition, civil and criminal law.
SMEs can benefit from IP protection and seize business opportunities globally if their IP portfolio is managed effectively. A strong IP strategy also helps SMEs attract funds from potential investors, enabling them to internationalise in emerging markets. According to a joint report between the EPO and the EUIPO in 2019 , IPR-intensive industries generated approximately 45 % of the total GDP in the EU, worth EUR 6.6 trillion. Those sectors also accounted for most of the EU’s trade with the rest of the world, comprising 96 % of goods exported from the EU.
IP protection is also crucial to fostering innovation by providing a return on investment on Research and Development (R&D). Furthermore, a well-prepared IP protection strategy will help SMEs prevent others from free-riding on their IP. Importantly, an SME, being the legitimate owner of IPRs, will have recourse to enforcement actions to stop an activity infringing their IPRs.
IP protection is the key to success of EU SMEs expansion in the SEA region
Southeast Asia (SEA) region is a promising destination for EU SMEs, thanks to their open policies and incentives for attracting 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 people.
Written by Bangkok Post
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