Member Article

At the end of November 2020, the European Commission published a plan for getting the EU out of the mess that it’s in as a result of COVID-19. The report is entitled “.” Although the report is aimed at European authorities and businesses, there are aspects of the plan that have general application.

According to the report, IPR-intensive industries account for 93% of total EU exports of goods to the rest of the world, as well as almost 45% of Europe’s GDP and directly contribute to the creation of almost 30% of all jobs. The report continues that only 9% of Europe’s SMEs hold registered IP rights such as patents, designs and trade marks (although this does not include copyright and trade secrets).

The report records that the COVID-19 crisis illustrated Europe’s dependence on critical innovations and technologies. It would seem that this is true for the rest of the world, too. What the European Commission took from this learning though, was the “importance of effective IP rules and tools to secure a fast deployment of critical IP”.

The report identified a number of challenges in the way that European companies protect and use IP assets, including:

• part of the EU’s IP system remains too fragmented, with procedures that are complex and costly and that sometimes lack clarity;
• too many companies, in particular SMEs, and too many researchers, do not make full use of the opportunities offered by IP protection;
• tools to facilitate access to IP (and therefore allow the take-up and diffusion of technologies) are insufficiently developed; and
• a lack of fair play at global level and EU businesses often lose out when operating abroad.
  
  

In order to address these challenges, the Commission proposes a number of actions.

Firstly, an aggressive action plan to deal with the fragmented nature of the EU IP system is proposed, including:

• support of a rapid roll out of the unitary patent system;
• modernisation of the EU legislation on industrial designs;
• strengthening of the protection system for geographical indications for agricultural products (and considering an EU protection system for non-agricultural geographical indications); and
• evaluation of the plant variety protection legislation.
  
  

Secondly, to improve the uptake and use of IP, the Commission proposes to provide a scheme for “vouchers” to finance IP registration and strategic IP advice, while also rolling out IP assistance services for SMEs.

Thirdly, to facilitate licensing and sharing of IP, the Commission proposes to:

• ensure the availability of critical IP in times of crisis, including via new licensing tools and a system to co-ordinate compulsory licensing;
• improve transparency and predictability in standard-essential patents licensing;
• promote data access and sharing, while safeguarding legitimate interests, via clarification of certain key provisions of the Trade Secrets Directive and a review of the Database Directive.
  
  

Finally, the report records that European businesses face significant obstacles when operating in non-EU countries, which include weak IP rules and enforcement, forced technology transfer and other unfair practices such as limitations on IP ownership of joint research results and cyber theft. To address these challenges, several steps are being considered with a focus on free trade agreements and Trade Enforcement Regulation. Of particular interest is also the use of foreign investment screening mechanisms.

So, how about Africa? Well, there is much in the plan that is relevant.

The significance of IP: IP does play a significant role in Africa, although perhaps not in exactly the way that it does in the EU. In certain countries like South Africa, there is significant R&D and manufacture of products, and rights such as patents and registered designs are as significant to local companies as they are to foreign companies. In those African countries where there is little local manufacture, IP rights such as trade marks will still be important, as will rights such as GIs and traditional knowledge. 

Small businesses: The protection of IP by small businesses in Africa is likely generally low.

Theft of trade secrets: There is no doubt that this is common in Africa, despite the fact that trade secrets are protected in a number of countries.

Africa: the suggestions

Upgrades of IP systems: IP protection and enforcement systems are constantly being updated in Africa and brought into line with international standards. Having said that there are still some countries with antiquated systems. What is critical for Africa to appreciate, is that long delays in the examination, processing and ultimate registration of registered IP rights is hampering not only local IP creators and the creation of value, but it is also having a negative impact on direct foreign investment.  

Incentivising the use of IP by small businesses: This would be a particularly good thing for Africa and it would certainly raise levels of IP-awareness. It cannot be overstated how important IP assets are to businesses and any form of support of the creation of what is probably the most important driver of value in businesses must be supported – whether in the form of tax incentives or otherwise.

Incentivising the rapid pooling of critical IP in times of crisis: This suggestion will surely strike a chord on a continent that has felt very much like the poor relation during the COVID-19 crisis, having stood right at the back of the line for vaccines.

In conclusion

The European Commission’s plan has some interesting aspects to it. These are perhaps as relevant for Africa as they are for the EU, not only with respect to the creators of IP in Africa, but also for purposes of attracting foreign investment.