Due to the fact that SMEs are still struggling to thrive in this always-changing world, they must be provided with enough assistance to develop. If they get that support, one day, they will become the pillar of the world, replacing the current giant in the corporate world and contributing even more to the advancement of the world. Understanding this need, the European Union Intellectual Property Office (EUIPO) has established a new fund that offers assistance to EU-based SMEs. With this support, SMEs will receive the means to protect their intellectual property (IP) rights and along with it, acquire the tools to develop their company as IP plays a key role in SME growth. This is clearly demonstrated with the interview of Erik Oskarsson about the fund, IP, and how it all impacts SMEs.
Erik Oskarsson
Erik is the Manager at Sweden Country.
Erik provides advice in commercial research, start-ups, and multinational corporation context focusing on identifying, evaluating, and controlling innovation and competitive advantages.
Erik has advised a wide range of clients in industries such as telecoms, life sciences, clean technology, and the automotive industry on topics of IP strategy, technology due diligence, IP valuation, open innovation, and licensing. Erik specializes in contextualizing IP and intellectual assets to support clients’ growth and profitability.
The SMEs situation in and after the Covid-19 pandemic
The Covid-19 pandemic affects all aspects of society. Not just businesses but the employees, students, elders, etc. are all affected by this wave of destruction.
Although we can’t really say that this business is affected more and that business is affected less, we can safely assume there are many particular difficulties for SMEs businesses which are different than the big corporations who have had a strong foundation to withstand such a destructive wave.
Not just the Covid-19, new developments on the tension between Russia and Ukraine have also put more pressure on the SMEs as they don’t typically have a wide range of supply chains.
Therefore, if their main supply source got blocked due to the war or the restriction orders from the pandemic, the SMEs won’t have it easy trying to find a new source of supply.
This is particularly important as in comparison to large enterprises that have many supply chains, the SMEs rely heavily on their manufacturing or business operation based on their supply chain.
Consequently, the interruption of the supply chain over a long period of time might mean the downfall of the business.
The problem with the supply chain along with other elements such as the security of funding all contribute to the growing difference between SMEs and large businesses.
The SMEs’ point of view on IP rights
With today’s technology and transparency, information about the importance of IP rights is not news anymore.
Most SMEs’ business owners who have had the funds and the knowledge, the determination to start their business should have had adequate information about IP rights.
Accordingly, if the SMEs choose not to invest in IP protection, it’s probably because although they acknowledged its importance, they think that the importance of IP rights protection doesn’t worth the money invested.
Erik’s statement about IP has clearly shown the thinking of SMEs in this day and age: “IP is a rich man’s game.”
That statement is true and comprehensive, and undoubtedly reflects the SMEs’ point of view on the matter.
In general, a registered patent can cost around 10,000 euros for every market the business wants to expand to. For an SME with the ambition to become an international enterprise, they might get cold feet and basically won’t have that kind of money to spare.
Even if they somehow can afford it by limiting the markets to an exceptional crucial market, there are also challenges stemming from the intangible nature of the intellectual property (IP) that awaited them.
For example, with limited resources, the SMEs won’t always have a clear view of the potential of IP in the long run but only in the near future. This means that if the IP protection doesn’t grant them immediate value, they tend to neglect it and won’t make the investment, rather, they would invest in other sectors that, according to their own analysis, value more.
It’s a cycle that can be hard to break and we can only recommend the SMEs but we can’t directly tell them what to do, or what to invest in.
The SMEs need to self-realize that the value of IP rights goes far beyond patent and trademark enforcement, it might be used as currency in negotiations, to communicate company value to investors or potential buyers, and to bolster a business’ reputation.
The EUIPO’s new fund and its support for SMEs
The EUIPO’s new fund will allow EU-based SMEs to be partially reimbursed for certain IP services.
With this incentive, SMEs will have some of the costs for IP scan services, trademark, and design registration, and fees charged by national patent offices and the World Intellectual Property Organisation reduced.
From a broader viewpoint, the fund also indicates that the EUIPO realizes the importance of funding for the involvement with IP rights of SMEs.
By providing funding, EUIPO is putting IP services firmly on the agenda for SMEs and somehow encouraging them to take more time to consider IP protection.
Although this program can’t fully support the SMEs financially, it is a great step forward and will help to change the minds of the SMEs’ business owners on the IP matters if the cost is one of the challenges.
The limitations of the fund
As mentioned above, this fund will not be a fundamentally push to change the mindset of SMEs, not spiritually and materially.
It only serves as a small encouragement so that SMEs can have slight backing to invest in IP protection.
Advice on the IP funds incentive
According to Erik, the IP funds incentive is good, but not great yet.
He stated that the world needs to have more IP funds incentives so that the IP world can truly thrive.
At the moment, there have been many incentives worldwide by countries to fuel innovation in their respective jurisdiction. However, the funding is not diverse enough and only focused on certain elements of IP.
In China, the government focus on subsidizing the operational elements of IP, such as the cost of applying for a patent.
In Sweden, businesses can apply for funding towards IP strategy, up to a total of €10,000.
In the UK, the government recently introduced an IP Access Fund which offers a wide variety of support up to £5,000 to help SMEs protect and commercialize their IP. This funding can be used for services ranging from the management of IP assets to IP valuation, IP insurance, and professional fees for IP services.
Although the support comes in a good direction, it is arguably not enough to promote IP, especially during these difficult times.
Advice for SMEs
According to Erik, IP needs vary substantially from industry to industry.
Consequently, the SMEs need to research, analyze carefully about their industry and make the right choice for their business.
For sectors that have a strong connection between IP and products like the pharma industry, it is best to register patents.
For businesses in the telecoms industry, a good IP strategy might be more important as there have already been many overlapping patents in the sector.
For tech SMEs, first of all, they should have a crystal IP strategy, research, and prioritize the IP asset that is important.
It’s also useful for SMEs’ business owners to have a fundamental knowledge of IP to be able to utilize the protection of IP rights in the daily operation of the business.
The knowledge will come in handy when there are infringement actions by third parties. Not if but when that happens, SMEs will have the tools to defend their rights.
Experts on the EUIPO fund’s importance for the development of SMEs
Erik Oskarsson, Manager at Sweden Country, has expressed his hopeful view of the introduction of the EUIPO fund.
Not just the EUIPO fund but he hopes that in the future, there will be many more incentive programs that aim to support SMEs who are struggling with IP.
SMEs are a vital part of the post-pandemic economic boost. Not just that, Erik also believes that SMEs are the future of environmental technology and their innovations will be central to whether we can achieve the 2030 climate goals.
On the other hand, he remained his opinions on the matter of not enough IP support programs or the incentives are not wide enough in the world.
If access to IP services is not sufficiently supported, the ability of SMEs to capitalise on their innovations, contribute to the economy and climate and, ultimately, oppugn larger businesses and multinationals, is limited.
Erik stated: “Governments should view this fund as a foundation of support but seek to provide additional and more flexible funding. Above all, they must look at measures to support IP on the whole, rather than only supporting certain services.”
(Reference from Intelligent SME Tech)
You can see a list of EU IP firms here.