Wednesday

7th Dec 2016

Opinion

The intellectual property challenge

Europe is the original. Most of the fundamental inventions have shaped and influenced our modern societies were made in Europe. Democracy, modern law, social welfare and more practical things such as cars, the internet, telecommunications, nuclear power, planes, fax-machine and MP3 were all born in Europe.

European countries are still in the lead today when it comes to the number of inventions found and their patenting.

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Yet Europe's leadership is under threat. Most European states have already launched sweeping reforms of their education systems to close the gap with the world's elites. But while this key element of Europe's originality seems to be on the right track, two major threats are still lingering over the inventive process in Europe.

If we look at the major inventions, we have to acknowledge that money made with these inventions was or is made mostly or to a large extent outside of Europe.

Cars were invented by the Germans Daimler and Benz but the American firm Ford was the first to gain a big commercial success with his "Model T", the first best selling car.

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Today Europe's automotive industry is still a backbone of our economies but other world regions like Japan or the USA have more or less reached our standards. The fax or MP3 are some more European inventions exploited mostly outside the EU. And an exhaustive list would be much longer. Why?

Inventive, not innovative

Europe suffers from a structural problem: it is an inventive but not an innovative region.

Europe has thousand ideas but not enough people taking the risk and trying to bring them to the market. Here European politics have to head for a change.

The EU can help with the creation of the structures needed to bring scientists, inventors and entrepreneurs together or by supporting scientists or inventors to head for the market on their own.

The culture of risk capital has to be renewed. After the burst of the "new economy" bubble, investors have become reluctant to the idea of providing risk capital for ideas they do not fully understand or where market chances are not evident at first sight.

But these very attributes might just be the exact prerequisites for major inventions. The new framework programme for competitiveness and innovation (CIP) which was adopted by the European Parliament on 1 June is a step in the right direction.

Promoting entrepreneurship, which should be an aim of the education system already, will be a major task for the member states.

Patents and copies

Another solution might be the funding of patenting. To have a technical invention protected under patent law in many EU countries, the US and Japan can easily cost up to 100,000 euros.

This is a major obstacle for young inventors who would like to become entrepreneurs.

Here institutions like the European Investment Fund (EIF) could help financing the patent and in return receive a share of the profit or a shareholding. If we want to keep Europe's economy going and our current welfare states, we have to be innovative, which means making money out of our inventions.

The second major problem occurs when it comes to robust protection of our "originals".

And with robust I mean not only protection on paper. A patent is the beginning, but it might not be sufficiently binding to deter "copy" countries like China.

Low fines and lukewarm enforcement of intellectual property endangers European manufacturer's success.

The process of reforming the systems abroad has already begun but will take maybe another two decades to be effective. Meanwhile the EU has to act at home.

Free trade was the major contributor to Europe's development and bans and protectionism are not the right answer. Keeping this in mind, origin marking might be a key and easy principle to prevent Europe to be flooded by exact copies.

Dumping

A simple and obligatory stamp "made in..." would help inform the customers and let them decide. Dumping cases must also be addressed more clearly in the future.

Although the European Commission is already very active in this field, anti-dumping measures are not very popular. While the accusations of "social-dumping" might just be genuine comparative cost advantage in a different perspective, VAT exemptions and energy for free are definitively unfair trade practices and not acceptable.

Finally one conclusion can be drawn: Europe has to change its climate for innovation if it wants to be an innovative region. Support for and protection of innovation form together with high education and research standards the pillars on which an innovative Europe can be built further.

The author is German liberal MEP (ALDE/DE), Member of the Committee on Industry, Research and Energy and rapporteur of the Competitiveness and Innovation Framework Programme. jorgo.chatzimarkakis@europarl.europa.eu

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