Delivering a unified patent system for Europe
The voting of two regulations concerning the unitary patent by the European Parliament and the Council in December 2012 is a historic decision, ending a 40-year EU patent stalemate. This single patent regulation is a watershed for the European business landscape, and in particular for SMEs, as it drastically cuts the costs of patenting and red tape beginning in 2014.
‘The overall aim is to simplify the procedure, as there will only be a one-stop shop – the EPO – in place for obtaining and maintaining the unitary patent,’ says Jean-Luc Gal, head of the Brussels bureau of the European Patent Office (EPO). ‘The new system will reduce the cost of the patent, since there will be no need to pay a patent attorney for validating and maintaining the patent in different EU Countries, no more translations to be filed, and the rate of the renewal fee for the unitary patent will be significantly lower than the cost corresponding to the maintenance of the national patents in the 25 participating Member States. As a result, patenting should be cheaper and more accessible to SMEs.’
The objective of the new regime is to create the so-called unitary patent that will allow patent protection to be obtained for 25 Member States (MSs) – all except for Italy and Spain, which are free to join at any time in the future – on the basis of a single application and without further administrative formalities. ‘The future unitary patent will be in fact a European patent for which the protection will be effective in all MSs participating in the enhanced cooperation,’ states Mr Gal. The patent package will enter into force either on 1 January 2014 or when 13 MSs ratify the Unified Patent Court (UPC) agreement, whichever is the latest.
The UPC will be competent to handle disputes concerning both future unitary patents and current traditional European patents. He hopes that the EPO might be able to grant the first unitary patent as early as April 2014, although this would require the smooth ratification of the agreement by the MSs.
Reaping the benefits of the unitary patent
Mr Gal explains that the lack of a unitary patent has adversely affected European SMEs: ‘Up to now, it has been quite difficult for an SME to issue protection for its inventions in many MSs, as the process was quite complex and costly. For example, once protection was obtained, as in the case of invention infringement by third parties, the SME had to pursue legal actions in the various countries where the infringement took place. With the new system, the SME will only have to file one complaint to the UPC for obtaining a decision which will be enforced on the territory of all the participating MSs.’
For European SMEs, the new regulation provides a number of benefits. First, SMEs will be able to cut costs and the process for legal enforcement of patent rights will be much more efficient. Second, strong patent protection in Europe will increase access to funds. Third, the unitary patent will serve as leverage, in the sense that a strong patent regime will allow companies to protect their inventions against competitors that can otherwise poach and exploit their ideas. Lastly, it will allow SMEs to rely on an EU patent instead of having to produce and sell inventions as products on the mass market, being primarily dependent on trade secrets and copyright.
Mr Gal stresses that there will be a significant cost reduction for SMEs. At present, the applicant has to pay EUR 4,045 for obtaining the patent (procedural fees), EUR 23,375 for translations, EUR 5,750 for local agents and EUR 2,987 for local patent office fees. Under the new system, the procedural fees will remain identical but the translation cost will be limited to only EUR 680. As a result, the total cost for validation would stand at EUR 13,462, as compared to the current cost of EUR 36,157.
The EPO aims to raise awareness of the patent system through its e-learning platform: ‘SMEs are, in many cases, not very knowledgeable about the European patent system, so such online courses are of particular interest.’
’The entry into force of the whole system will create an EU-wide one-stop shop for obtaining a patent in Europe,’ concludes Mr Gal.
Facts and Figures
DG Research and Innovation’s SME Unit reaches out to EU citizens, SMEs
Samuel Maenhout, policy officer at the SME Unit of the Directorate-General for Research and Innovation (DG RTD), discusses the key role SMEs will play in 2013 and beyond, as well as the strategic communication activities planned by the unit.
‘2013 is the European Year of Citizens, and there is a genuine will in the EU to enter into dialogue with citizens about topics that concern them most,’ underlines Mr Maenhout. ‘Our unit subscribes firmly to this, as we will be reaching out to specific target audiences in a language that they understand via the channels that are theirs.’
SMEs at the forefront of EU’s present and future
SMEs are at the heart of Europe 2020, the decade-long strategy which envisions a smart, sustainable and inclusive economy delivering high levels of employment, productivity and social cohesion. ‘A 2012 survey shows that the chief concerns of Europeans at national level remain unemployment, the economic situation at large and rising prices due to inflation,’ he says.
‘Throughout the economic downturn, SMEs have continued to be the backbone of the European economy, primarily responsible for wealth and economic growth, alongside their vital role in innovation and R&D,’ stresses Mr Maenhout. About 20.7 million firms account for more than 98% of all enterprises, of which the lion’s share (over 92%) are firms with fewer than 10 employees. According to the annual report on SMEs in the EU entitled ‘EU SMEs in 2012: at the crossroads’, it was estimated that SMEs accounted for 67% of total employment and 58% of gross value added.
SMEs translate research results and innovative ideas into products, services and business models that meet market demand and provide solutions to societal challenges. More highly innovative companies are instrumental in helping Europe to exit the crisis and to become a knowledge-based economy. ‘The EU’s motivation to give a firm boost to SMEs is stronger than ever,’ emphasises Mr Maenhout.
2013 marks the build up to the launch of Horizon 2020, the research and innovation (R&I) programme for the period 2014-2020. The successor to the Seventh Framework Programme (FP7) intends to fill gaps in funding for high-risk innovation projects by SMEs. As such, it will create business opportunities in response to major societal challenges. In addition, it will strengthen productivity and innovation capacities and help innovative SMEs to grow.
Horizon 2020 seeks to provide much greater support to SMEs through a new dedicated instrument. By bringing together the R&I-related SME measures that are currently spread across several programmes, this instrument will provide one comprehensive and simple scheme adapted to SME needs. Under Horizon 2020, a single SME or a group of SMEs will be able to apply for funds to finance a project of economic and preferably also societal relevance in a user-friendly manner that puts business first. Mr Maenhout explains that a large part of the unit’s communication efforts will concentrate on providing details of the application of the new instrument from start (idea/concept design) to finish (commercialisation/go-to-market). Support networks, expert evaluators and coaches will have the opportunity to attend specific events where their potential role will be clarified. According to Mr Maenhout, the particulars about such SME support under Horizon 2020 will gradually become available.
Building bridges via communication actions
2013 in particular will see a stronger emphasis on the importance of innovative SMEs in order to prepare them for the launch and implementation of Horizon 2020, which places greater focus on market delivery. The unit aims to appeal to innovative SMEs more directly by bridging the communication divide that exists between the small business world and the EU public support infrastructure.
Mr Maenhout outlines the unit’s upcoming communication initiatives, including but not limited to the following:
‘Getting relevant and value-added information to innovative SMEs, but also sincerely listening to their concerns via dedicated networks, events or social media platforms, will be complementary actions to ensure that SMEs have sufficient knowledge and know-how about EU support and funding application processes to start acting upon them,’ says Mr Maenhout.
He believes that one of the main objectives for public intervention in Europe in research, innovation and industrial policies should be to increase European innovative company growth. To translate the EU policy agenda into effective policy actions, EU support policies need to foster R&D investment in a specific innovative company type, and only where there are market failures (e.g. difficulty in accessing capital, knowledge and infrastructures) and clear high social returns, for instance in such domains as aging society, climate change, energy supply, safety and security.
‘It is this ambition that will drive the SME Unit forward in 2013, and it is based on this premise that the bulk of our energies will be spent,’ concludes Mr Maenhout.
News & Events
Innovation tops bill at upcoming EU SME conference: A way out of the crisis?
The high-level conference ‘SMEs and Europe: with innovation out of the crisis’ (working title), which is to take place in Dublin on 11-12 June under the auspices of the Irish EU presidency, will take a closer look at what it takes to be a thriving entrepreneur in the 21st century, how small companies can compete effectively in an increasingly globalised world, and how they can gain maximum benefit from existing and future private and public support mechanisms. The event will spotlight Horizon 2020, the EU’s upcoming Framework Programme for Research and Innovation, which is less than one year away from its official launch. It also provides an opportunity to make a difference – or help entrepreneurs to make a difference – and shape the EU Innovation Agenda.
Strategically held during the culmination of the 7th Framework Programme for Research and Innovation (FP7) and before the launch of its successor Horizon 2020, the EURO-SME 2013 conference is seizing the momentum for SMEs and innovation. In the current economic conditions, the main challenge for the EU – and many other developed countries for that matter – is providing the conditions for smart, sustainable and inclusive growth. Sustainable, long-term growth and job creation will be delivered best via SMEs that gain and sustain their competitive advantage through innovation. The event promises to bring together hundreds of entrepreneurs, policymakers, SME support organisations from the private and the public sector, and other intermediary bodies that will provide their energy and ideas on how to improve the EU eco-system for innovative enterprises. Furthermore, it will introduce SME-specific measures in Horizon 2020 to this community.
‘At this moment in time in particular, the willingness of policymakers throughout Europe to help SMEs and to facilitate their needs is particularly striking,’ says Mr Sean Burke, Ireland’s SME National Delegate for FP7 and Programme Manager at Enterprise Ireland, who is at the driver’s seat of this event. ‘The conference wants to give SMEs and their representatives a unique and interactive platform to express their needs and to raise support for them, and this all in the historic and prestigious setting of Dublin castle, which will be at the centre of decision-making in the EU for the duration of the Irish presidency.’
The conference will focus on three broad themes concerning the future of SMEs: SMEs and innovation in the 21st century; SMEs in a networked world; and supporting SMEs in their ambition to grow.
With its inclusive and interactive character, the conference will go beyond so-called conventional wisdom and empty statements. Its ambition is to show SMEs how their strengths and weaknesses can be exploited or addressed through open innovation in order for businesses to remain successful, seize new opportunities, build partnerships and engage in innovation.
‘SMEs are at the core of business activity in Europe and they need to exploit current trends to their advantage,’ underlines Mr Burke. ‘Innovation in all its aspects and forms is the key to sustainability. So, promoting SME growth through innovation and entrepreneurship should be done at every opportunity.’ The EU for one has anticipated that climate change, resource efficiency and ageing will become drivers of future markets, and its support policies are programmed to help SMEs make the most of these emerging and global market opportunities.
The conference will also explore the business side of how to integrate innovation into today’s SME, which is challenged from all sides by competition, ailing markets and customers, dwindling or lacking resources and constantly changing technologies. Topics to be discussed include public networking solutions which SMEs can engage in, the way they not only compete but also cooperate with multinational corporations, or the way they might react in the future in an open innovation context with customers and technological solution providers, among other stakeholders.
Competitiveness, the driving theme of the conference, includes financial support structures, globalisation factors related to SMEs, business ecosystems and mobility and skills of labour which affect SMEs. ‘All these will have an impact on creating a competitive advantage for SMEs in a very difficult business environment,’ stresses Mr Burke. The closing session of the conference will function as a launching platform for the SME-specific measures under Horizon 2020.
Mr Burke is confident that the two-day event can also contribute to the education of policymakers. It will give a sense of where modern-day business is heading to, what would or should be future actions towards (continued) success and how SMEs can gain and sustain their competitive advantage. As such, the objective of the conference is not only to deliver this kind of information or highlight best practice examples from across the EU, but also to propose concrete steps on how SMEs will benefit by the use of innovation.
Mr Burke says that there was a lot of attention paid to access to finance and profitability at two previous EURO-SME conferences. Many of the recommendations resulting from these two events have contributed to reshaping the EU’s policy landscape when it comes to innovation in SMEs. The 2014 launch of Horizon 2020 will integrate SME business and innovation needs in a common framework, which proposes to look at innovation through a project-lifecycle lens.
Speeches, discussions, case-study examples and interactions at the conference will feed into the Dublin Declaration, a set of recommendations to the EU Competitiveness Council. Mr Burke argues that the conference will celebrate the status of SMEs with policymakers around Europe, which now more than ever recognises them as the main drivers of wealth and job creation: ‘It is a very opportune time to discuss aspects of SMEs innovation, jobs and growth. Public authorities have always been ready to set in place the conditions for businesses to thrive and grow. Horizon 2020 is one of the main vehicles for moving beyond that and helping to deliver innovation to the market. The Dublin Declaration has the ambition to be a reference document for the EU’s Competitiveness Council. It will provide plenty of ideas in terms of policy, and how to customise it even more to the needs of European SMEs, including on how funding can be channelled so as to be more effective at satisfying SME needs.’
The dedicated website (www.eurosme2013.eu) will be operational from early February, with registration opening at a later stage.
Success Story – SILCO
SILCO – Doing away with bacteria in water systems
Harmful bacteria can be removed from water sources through the addition of copper and silver ions. The SILCO project has developed an innovative monitoring device that senses the elimination process of complex bacterial communities known as biofilm and unsafe bacteria from drinking water systems. The prototype successfully killed legionella bacteria at a natural source spa in Slovakia, helping to alleviate public health concerns associated with the potential contamination of water sources.
‘We set out to develop a sensor which quickly and cheaply measures the content of copper and silver, and other metals in water,’ says Peter van der Linde, managing director of Holland Watertechnology (HWT), the SME responsible for developing the sensor during the SILCO project’s lifetime and its current supplier.
HWT is a Dutch company which develops and produces innovative solutions in the areas of water, chemicals, electrolysis and sensor technology. It is a wholly owned subsidiary of Holland Environment Group, which has been developing ground and groundwater solutions since the mid-80s. ‘Soil contamination was a serious issue in the Netherlands during the 1980s, and that’s when we started developing innovative techniques,’ he explains. ‘It’s the knowledge that we accumulated over the years which eventually led us to the research and development of our BIFIPRO® technology that uses copper and silver ionisation to eradicate biofilm and legionella from water systems.’
‘We started this project in 2009 together with our SME partners in the Netherlands, Greece and Slovakia, and with universities from Italy and Germany, to develop the Silco-sensor,’ states Mr van der Linde. ‘After a period of extensive testing in our labs, the first prototype sensor was eventually installed in a Slovakian spa in July 2011.’
The BIFIPRO® system releases copper and silver ions into the water to eliminate biofilm, a breeding ground for harmful bacteria like legionella. It is equipped with a sensor that accurately monitors the concentration levels of copper and silver ions in water sources and facilities, which is a determining factor in the removal of biofilm and legionella.
Mr van der Linde explains that the copper and silver amounts are monitored in real time in the Netherlands. The quantities released into the water are immediately known, while the dosage can be adjusted remotely if need be. Before the development of the SILCO® sensor, water samples needed to be taken and analysed over a number of days, thus making the entire process considerably more complex and expensive.
Mr van der Linde stresses the environmental benefits of the BIFIPRO® system: ‘There’s a strong case to be made for terminating the use of chemicals to control the growth of bacteria and switching to a more environmentally-friendly technology with copper-silver ionisation.’
HWT boasts more than 180 customers ranging from the healthcare and elderly care domains, to hotels, penal institutes, swimming pools, spas and cooling towers. Mr van der Linde adds that the project has received numerous enquiries from interested parties worldwide, in spite of the current economic climate. HWT projects the market value for the system to be between EUR 10-15 million for the period 2013-2017. ‘We’re hopeful that the creation of the limited company and the recent allocation of new manpower will fuel the commercialisation of our product.’
‘The ongoing development of the BIFIPRO® system has strengthened our market leadership in the Netherlands, as well as opening up new opportunities,’ emphasises Mr van der Linde. The EU-funded project may have finished over a year ago, but HWT is busy bundling related technologies with the SILCO product in an effort to advance the sensor and validate its performance in harsh working environments.
‘New partnerships are being established and a separate limited company is being set up which includes SME partners. This company will be responsible for new developments and the commercial exploitation of the sensor technology,’ claims Mr van der Linde. Placing the sensor into a handheld device is in NWT’s future plans, and he sees numerous application possibilities in the process industry.
‘For us, the SILCO project has been a great success,’ says Mr van der Linde. ‘It’s been our experience that most of the practical input has come from the SMEs.’ He continues: ’As Holland Watertechnology, we do see a lot of potential in our own applications and industries, but we also see abundant interest from other industries. Scaling up the project to full commercialisation is our current challenge, but it requires more time than anticipated. The biggest challenge of all is the creation of sufficient financial resources to speed up this entire process. We’re determined to succeed, though.’
Participants: The Netherlands (Coordinator), Germany, Greece, Italy, Slovakia