High-profile research shows that intellectual property underpins a significant slice of the EU’s total financial firepower
Some 40% of Europe’s economy is associated with intellectual property (IP) Rights, a new report has revealed. According to the research, carried out by three major European IP groups, IP-based industries contribute an annual €4.7 trillion to EU companies and public-sector organisations – equivalent to US$6.3 trillion. As NewLegal Review reported in June last year, a report from the US Chamber of Commerce credited IP-rich sectors with $5 trillion of American gross domestic product (GDP). As such, the valuation in the new report suggests that Europe has outshone its transatlantic competitor.
Titled IP Rights-intensive industries: contribution to economic performance and employment in Europe, the report emerged from research carried out by trademark registry the Office for Harmonisation in the Internal Market (OHIM), together with the European Patent Office (EPO) and the EU Observatory on Infringements of IP Rights. As well as finding that 77 million (35%) of EU jobs are sustained by IP-rich industries, the research discovered that remuneration in those sectors was around 40% higher than the average European wage.
A total of 321 different industries – roughly half of Europe’s industrial classes – were determined to be ‘IP intensive’ in the study, with the criteria for inclusion either that they have more IP Rights per employee than non-IP based sectors, or because IP defines their essential characteristics. Among the top 20 most-IP rich sectors were engineering, automotive, computing and pharmaceuticals, with the full spectrum of IP-related industries accounting for around 90% of the EU’s trade with the rest of the world.
European Commission (EC) internal market and services commissioner Michel Barnier said that the report provides ample scope for underpinning evidence-based policy making, and added: ‘What this study shows us is that the use of IP Rights in the economy is ubiquitous: from high-tech industries to manufacturers of sports goods, games, toys and computer games – all are making intensive use of not just one, but often several, types of IP Rights.’
For EPO president Benoît Battistelli, the study demonstrated that the benefits of IP Rights are not just economic theory. ‘Especially for small or medium-sized enterprises (SMEs), but also for research centres and universities, patents often open the door to capital and business partners,’ he said. ‘In order to remain competitive in the global economy, Europe needs to encourage even further the development and use of new technology and innovations.’
Meanwhile, OHIM president António Campinos stressed that the report ‘tackles the fundamental question’ of to what extent IP-rich industries matter to jobs, GDP and trade in the EU. ‘We now have a clear answer,’ he said: ‘They do matter. They matter a lot.’
Speaking to NewLegal Review, Haydn Evans – Vice President, IP Solutions at leading IP management company CPA Global – sounded a note of caution over the study data, but said it was broadly encouraging. ‘The IP included in the research was applied for between 2004 and 2008,’ he said, ‘and that’s been used as a proxy to link with economic activity from between 2008 and 2010 – so some of the IP activity examined could be up to nine years old. However, the signs are reflective of corporates becoming steadily more aware of IP, and developing policies to raise their game on filings. The similarities to the US figures are very positive, and show that Europe is as much of a knowledge economy as the US, with IP becoming ever more important.’
Now that the groups behind the study have its headline figures in hand, Evans added, they could start conversations with industry to highlight IP’s benefits – such as the finding that the average employee in an IP-rich sector earns more. ‘They can really promote the idea that IP protection is not just a defensive mechanism, but something worth doing for market advantage,’ he argued. ‘And a lot of industries could look at the sector rankings for hints on how they could use IP to improve their commercial success and move up the board.’
So, what could the outlook be in about five years’ time, when the effects of the forthcoming unitary patent have bedded in? ‘The central idea of that initiative is to make innovation easier,’ Evans said ‘which means we can certainly expect an increase in EPO filings. However, I think that a lot of unitary patent filings will be made by non-European companies, with US and Asian corporations perhaps benefiting slightly more from its effects.’