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14 November 2017

A study published today, 14 November 2017, by the EPO finds that the Unitary Patent could significantly enhance
technology transfer in the EU through more trade and foreign direct investment
(FDI)
. Improved harmonisation of Europe’s patent system has the potential to
increase trade and FDI in high-tech sectors by up to 2% and 15% in the
EU,
leading to annual gains of EUR 14.6 billion in trade and EUR 1.8 billion in FDI.

The study, Patents,
Trade and FDI in the European Union
, carried out by a team of
economists from the EPO, the University of Colorado Boulder and the London
School of Economics, shows that, while patents already have a positive effect
on trade and FDI in Europe, their impact is currently hindered by the lack of
truly barrier-free EU-wide patent protection.

“This
study provides further evidence of the benefits of patent protection for the European
economy,” said EPO President Benoît Battistelli,
“It sets out in particular the direct benefits of greater harmonisation of the
system for our region.” According to Mr Battistelli, “The
Unitary Patent and Unified
Patent Court
, which are expected to be implemented soon, will
be a vital step towards the realisation of an EU single market for technology,
and will support productivity growth and economic development in Europe.”

Untapped potential in Europe’s technology market

The study focuses on high-tech
manufacturing industries, including ICT, chemicals and medical devices, which make
intensive use of intellectual property rights. Compared with other industries, these “high-IP” sectors
are found to be major contributors to EU exports and FDI flows to the rest of
the world, confirming the results of a previous study by the EPO and the EU Intellectual Property Office.
By contrast, the new study shows that the contribution of these industries to
trade and FDI flows between EU
countries is still limited, suggesting untapped potential to achieve an EU
single market for technology.

Measuring the
economic benefits of patent harmonisation

The study further finds that trade and
FDI flows in
high-tech manufacturing industries are particularly
sensitive to the level of patent protection in a country: stronger patent
protection has a significant positive impact on high-IP imports and on the
value and number of FDI deals in high-IP sectors. Against this backdrop,
the study identifies certain limitations to the circulation of patented
inventions which hinder trade and investment in high-tech industries within the
EU.

Greater harmonisation of patent protection in
the EU would boost European trade and FDI in high-IP industries, the analysis
concludes. A full harmonisation scenario would increase high-IP trade and FDI
flows to or between EU countries by 2% and 15% respectively EU-wide, leading to
annual gains of EUR 14.6 billion in trade and EUR 1.8 billion in FDI. For the 15
EU countries most affected by the changes – Austria, Bulgaria, Cyprus, Czech
Republic, Greece, Hungary, Lithuania, Malta, Poland, Portugal, Romania, Slovak
Republic, Spain, Sweden and the UK – this would mean increases of 5% (trade) and
29% (FDI). 

Removing limitations

Limitations
to the circulation of patented inventions are due to the current fragmentation
of the European patent system following the grant of a patent by the EPO. In order to save on the costs
of the national validation and maintenance fees payable in each country in
which protection is required, most companies currently validate their
European patents in a small number of EU member states only. In addition, patents
are subject to uneven levels of national protection and
to the risk of parallel litigation, with the potential for different outcomes
in different countries. The Unitary Patent will address these shortcomings, and
is thus expected to facilitate technology transfer through trade and FDI within
the EU, especially in countries that are currently less attractive for
patent owners. By cutting the overall costs by 70%, the Unitary Patent will
facilitate the access to the European market of innovation and technology for
SMEs, universities and research centres in particular.

Further information

 
 
 
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