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Supporting European SMEs on the global scene

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In order to seize the opportunities opened up by internationalisation, enterprises need to take care of several aspects, not least the protection of their intellectual property rights. A new EU-US portal provides a wealth of useful information in this domain.

Businesses which ‘internationalise’ their operations through exports, foreign partnerships, investments and cross-border clustering are more likely to enjoy growth, enhanced competitiveness and long-term sustainability. This is borne out in a 2009 study, which found that internationally active SMEs reported employment growth of 7%, while SMEs without any international activities experienced only 1%. Furthermore, some 26% of internationally active SMEs introduced products or services that were new for their sector in their country, whereas for other businesses this was only 8%.

The same study found that 25% of European SMEs export or have exported at some point during the last three years, thus being more active at international level than their US and Japanese counterparts. However, despite the advantages of internationalisation, most SMEs still depend largely on their domestic markets.

Pirates of globalisation

One reason for this apparent reticence is that SMEs often do not feel adequately equipped to launch themselves upon the international market, and fear that if they do so they might leave themselves open to copyright infringement and even counterfeit fraud. This is a legitimate concern. Almost every manufactured product – from food and shampoo through to auto parts and industrial machinery – has been counterfeited, and some businesses lose customers to competitors offering a product or service that infringes their trademarks, copyrights, patents, or some other form of intellectual property rights, such as designs or trade secrets.

Indeed, the reality is that the international trade in counterfeit and pirated goods, estimated at $250 billion a year Choose translations of the previous link , represents a serious threat to international business. According to a recent OECD study entitled ‘The economic impact of counterfeiting and piracy’, the share of counterfeit and pirated goods in world trade is also estimated to have increased from 1.85% in 2000 to 1.95% in 2007.

This issue is especially acute for SMEs, who often lack the resources to deal with this sort of challenge. For example, very few SMEs can afford to have an in-house lawyer, and managers may see the subject as too technical or time-consuming, or fear high costs.

Portal to safe business

This is why the United States and the European Union have joined forces to launch the TransAtlantic IPR Portal, which offers guidance to both European and American enterprises that wish to do business in other countries. It contains a wealth of information on intellectual property rights (IPR) that has been pooled together, then classified and arranged in an easy-to-use manner. It also provides information on how to contact relevant authorities and where to find advice. Essentially, it tells SMEs that help is at hand, and that international business is possible for them.

The ultimate goal of the joint website is to help European and American companies fully utilise all the IPR-related resources and tools developed on both sides of the Atlantic. "Improved IPR protection and enforcement will result in greater employment prospects and economic growth,” says European Commission Vice-President Antonio Tajani Choose translations of the previous link , who is responsible for Industry and Entrepreneurship. “Counterfeiting and piracy cause great damage to businesses, not least to small and medium size enterprises. Both the EU and US are committed to helping companies compete fairly on both sides of the Atlantic.”

The portal came about through the US-EU IPR Working Group, which was established in 2004 to identify areas for joint action – particularly in third-country markets – where the United States and Europe share many of the same concerns regarding intellectual property rights protection. It became clear that, while both parties had plenty of information on this issue, this was often difficult to find. In addition, the EU had information on countries that the US did not, and vice versa. Through pooling resources and communicating information more clearly, SMEs on both sides of the Atlantic stood to benefit.

The IPR Portal is organised into six major sections, with the country toolkits section at its heart. Here, a dynamic map of the world enables the visitor to click on a continent and to find the particular country he or she is looking for, together with all the relevant information. Entrepreneurs can also use the portal to learn the basics about intellectual property rights, manage their IPR correctly, learn about training opportunities, find the relevant enforcement authority, and locate more experts who can advise on a particular issue.

Navigating the Chinese market

The EU has been backing European enterprises in their internationalisation endeavours through a series of initiatives. One remarkable example is the China IPR SME Helpdesk, which is financed under the Competitiveness and Innovation Framework Programme and supports European SMEs in both the protection and enforcement of their IPR in China. The helpdesk has helped several SMEs in this manner since it was established in 2008.

For example, a Greek olive oil manufacturer operating in China since 2007 found that their Chinese distributor had registered their trademark in a number of food classes without consent. After studying related case studies and e-learning modules on the China IPR Helpdesk portal, the Greek company contacted the helpdesk for a more in-depth consultation.

The company was advised to file an opposition within three months of the date of publication of the trademark application in the official Trademark Gazette, or to negotiate buying back the trademark. By providing invaluable background information and advice, the China IPR SME Helpdesk saved the firm significant time and enabled them to act quickly and efficiently.

Furnishing timely advice

Another recent beneficiary of the China IPR SME Helpdesk was a well-known Portuguese fashion and furniture designer, which had registered its logo and trademark in Europe and decided to register it in China.

After applying for the trademark, they discovered that a Chinese company had previously filed the trademark in 2006, and that it had been approved in 2009. After studying related case studies and e-learning modules on the China IPR Helpdesk portal, the Portuguese company was advised by the helpdesk to consider buying back the trademark rather than go through lengthy and costly court proceedings, as they could not file a cancellation because the opposition time frame had already expired.

The company was also advised to look into registering other IPR in different service classes including domain names in Latin and Chinese characters. Following this advice, the Portuguese designer registered the domain names and bought back the trademark from the Chinese company who was willing to sell, which saved them both time and money in court proceedings.

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