354. The European Union delegation is pleased to co-sponsor this agenda item together with the delegations of Australia, Canada, Chile, the European Union, Japan, Singapore, Switzerland, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, the United Kingdom, and the United States of America. We thank in particular Canada for the active role in the drafting of the document submitted to the TRIPS Council. We also thank the US for their full involvement in the coordination of the group.
355. Intellectual property rights (IPRs) play an increasingly important role in corporate strategy and the intangible assets created through innovation represent a major share of the value of today's businesses. The IPRs associated with intangible assets are the legal guarantee for potential returns on investment in innovation and a means to get funding. The utilisation of IPRs to gain finance is considered an important aspect given that SMEs and startups encounter difficulties in raising funds from bank loans due to the risks involved, while Venture Capitals ask for a large equity interest.
356. Actually, according to the EUIPO SME scoreboard 2019, only 13% of SMEs owning IP rights tried to use intangible assets to obtain finance: 9% successfully and 4% unsuccessfully. Additionally, only 25 % of medium-sized IPR owners have professionally valued their intangible assets, and this drops to 20 % for small and micro-sized IPR owners. The European Union Intellectual Property Office (EUIPO), through its European Observatory on Infringements of IPRs and the European Patent Office have carried out four EU-wide studies on the contribution of IPRs to the EU economy. These studies aim to provide evidence to support policymaking and form a basis for raising awareness among Europe's citizens about the value of intellectual property.
357. The Study on "Financing intangibles – Is there a market failure?" (Financing intangibles - Publications Office of the EU (europa.eu)) found that growth companies that invest mainly in intangible assets have difficulties in obtaining external funding to finance their growth because they lack sufficient tangible collateral that is accepted by banks, leading to higher interests rates and hampering access to credit. In light of these results, the EU has developed programmes in favour of the financing of the SMEs. I am going to mention only three : COSME, Innovfin and INNOSUP-10 including LeadershIP4SMEs.
COSME (Competitiveness of Enterprises and Small and Medium-sized Enterprises)
358. COSME, the Europe's programme for SMEs, aims to make it easier for SMEs to access finance in all phases of their lifecycle – including the creation, expansion, or business transfer. Thanks to COSME, businesses have easier access to guarantees, loans and equity capital. EU 'financial instruments' are channelled through local financial institutions in EU member States. COSME helps businesses to access markets in the EU and beyond. It funds the Enterprise Europe Network (EEN) that helps SMEs find business and technology partners and understand EU legislation. The "Your Europe Business" portal provides practical information on doing business within Europe. It also finances a number of IP SME Helpdesks. The COSME Loan Guarantee Facility is managed by the European Investment Fund and deployed by eligible local banks, leasing companies and guarantee institutions.
359. The Innovfin guarantee refers more directly to IP rights. This guarantee scheme financed by Horizon 2020 and Horizon Europe supports innovative SMEs. One of the eligibility criteria for such companies to obtain a preferential credit based on this guarantee scheme is the ownership of an IP right related to technical inventions. The aim of the loan is to enable the direct or indirect use of this technology right. Specifically, this eligibility criterion refers to the beneficiary who has registered at least one technology right such as patent, utility model, design right, topography of semiconductor products, supplementary protection certificate for medicinal products or other products, plant breeder's certificate or software copyright, in the last 24 months.
360. At this stage, I would like to briefly introduce the European Innovation Council and SMEs Executive Agency (EISMEA). Established on 1 April 2021, EISMEA brings together in one Agency all the activities of the European Innovation Council (EIC) and all programmes related to small and medium-sized enterprises (SMEs). The Agency has a clear focus on innovation in the single market and contributes to create strong synergies to support the recovery of the European economy.
361. The Agency implements the following programmes over a period of seven years:
Interregional Innovation Investments
Horizon Europe, pillar III: the European Innovation Council (EIC) and European Innovation Ecosystems, including LEADERSHIP4SMEs
362. Part of INNUSOP actions related to innovative SMEs under Horizon 2020, LEADERSHIP4SMEs, aimed at particularly focusing on IP towards deep-tech innovative SMEs and Startups. It was launched in September 2020, for a twoyears duration with the objectives of supporting SMEs and startups developing disruptive technologies, enhancing their IPR portfolio and exploiting it to stimulate their growth with funding. It comprises eight consortium partners, covering ten EU member States for the moment.
363. In fact, SMEs' reluctance to use IPRs is largely due to a lack of knowledge about IP as a whole and finance access but also a lack of interest on intangible in general. In parallel, there is a need to turn the outcomes of Europe's excellent research into innovation and step up the EU efforts towards achieving breakthrough market-driven innovations that will contribute to a more competitive European industry.
364. LEADERSHIP4SMES aims at responding to the existing financial gap existing particularly for deep technology companies when dealing with their intangible assets. The action purposes are to encourage innovative SMEs and start-ups to better exploit and promote their innovative assets, as well as building a strategic vision based on their first results that should be easily assessable by the funders. The various services propose complementary expertise in IP, funding and business development, and a leverage proven tool – the Venture Development Platform – so that IPR are included in a holistic business development approach.
365. LEADERSHIP4SMEs has built up a 360° offer through partnership with external experts (consulting companies, venture capitalists and banks, corporations, innovation intermediaries). The chosen methodology is to put in place an online platform in which best practices, training, business opportunities combined with IP assessment and integration within the business plan are proposed to innovative SMEs.
366. Today, the online Community encompasses 591 SMEs and Start-ups, which have access to a resource repository and matchmaking tool, provide support to Individual roadmaps, action plan and a service guide is available, as well as an IPR-centric business growth best practices guide. Furthermore, public funding is sought as a reinforcement in the process, having an additional leverage effect on both technology development and validation, facilitating the collaborations, and increasing the valuation. LEADERSHIP4 SMES is successful to define a holistic IPR business development approach and also to create a community around this matter. The beneficiaries, start-ups and SMEs can more easily access to finance.