Latest news in the intellectual property field – SMEs at risk because of intellectual property rights infringement
It is no surprise that illicit commercial activities with goods that are counterfeit or otherwise infringing IP rights are a significant and growing threat in today’s economy, particularly with the increase of their online presence. All companies that create, develop and use intellectual property (IP), especially trademarks, in their business, including small and medium-sized enterprises (SMEs), are exposed to IP rights infringement.
Counterfeiters target all type of goods, including clothing and fashion items, perfumes and cosmetics, with toys and games being the most frequently targeted. Many counterfeit goods pose health and safety threats to consumers.
A recent report of the European Union Intellectual Property Office (EUIPO) reveals that infringement of IP rights is a major risk to the profitability and survival of SMEs. Statistically, the report shows that SMEs whose intellectual property rights are infringed are 34% less likely to survive after 5 years. Market monitoring is an important first step in discovering and remedying potential infringements of registered IP rights. Nevertheless, on average 40 % of the SMEs acknowledge that they do not monitor their markets for potential infringement of their IP rights or rely only on incidental information on infringement, such as customer feedback or information from business partners.
Despite the risks, companies still tend to be less inclined to register and / or monitor unauthorised use of their IP rights.
To support SMEs, the EUIPO, in collaboration with the European Commission and the national and regional IP offices of the EU, has launched an SME Fund to provide financial support to SMEs to register their IP rights. More details on this fund are included below.
SME Fund continues in 2023 and is now available
So, you have a brand, a sign used in the course of trade and / or you have created and developed an innovative design or product and you are not sure how to proceed further? Not sure what kind of IP (trademarks, designs, patents) to register or how you will cover all the official fees for registering a trademark, design or patent? The new SME Support Fund (SME Fund) for 2023 is available.
The SME Fund and who can benefit
The SME Fund is a grant scheme created in 2021 to help SMEs protect their IP rights. The SME Fund will run from 23 January 2023 to 8 December 2023. However, funds are limited and available on a “first come, first served basis”.
The SME Fund offers financial support to SMEs established in the European Union, including Romania. The funds are available for European Union and national (Romanian) trademarks, designs or patents.
IP vouchers granted to benefit from the SME Fund
Reimbursement applications are to be filed by an owner/shareholder or employee of the SME directly or by an authorised representative acting on its behalf, along with supporting documents of the company (certificate of registration or VAT related documents and / or bank details, as applicable) and the application to obtain protection for the IP right, be it trademark, design or patent. If requirements are fulfilled and funds are still available, when the trademark/design/patent is granted, the office will also issue a voucher which allows access to a partial fee reimbursement.
The reimbursement may be up to:
- 75% of the official fee amount for a trademark/design application at EU/national level;
- 50% of the official fee amount for international trademark and design applications;
- 75% of the official fees charged by national patent offices and the European Patent Office (EPO) for the registration of patents, and
- 50% of the application fees charged by the Community Plant Variety Office for the registration of new plant varieties.
To be reimbursed, all official fees need to be paid in advance, with the filing of the trademark/design/patent application(s).
Why register Intellectual Property rights?
The same report of the EUIPO mentioned above (the first part) shows that, overall, the IP ownership rate among SMEs is relatively low.
SMEs that hold IP rights have reported that registration improved their reputation or image, offered them better IP protection and better long-term business prospects. One of the most important reasons why SMEs decide to register IP rights is to prevent other companies from copying their products or services. It is worth noting that another reason for SMEs to register IP rights is that registration “improves (…) negotiating position with other companies and institutions” or “it improves chances of financing”.
SMEs that create/develop, own and use IP rights as part of their business might not be aware of the threat that their rights may be infringed and therefore at risk. In any case, owning a registered IP right makes the enforcement efforts easier, in terms of time and resources invested in any actions needed to stop the infringement.
 The report ”Risks of Illicit Trade in Counterfeits to Small and Medium-Sized Firms” of the European Union Intellectual Property Office, through the European Observatory on Infringements of Intellectual Property Rights and the Organisation for Economic Co-operation and Development (OECD), released on Tuesday 31 January 2023.
In view of the above, if you are an SME, a start-up or an established company interested in protecting your intellectual property rights, do not hesitate to contact our Intellectual Property specialists: Florina Firaru (Managing Associate) – email@example.com and Dariana Istrate (Senior Associate) – firstname.lastname@example.org.
The Romanian version of this newsletter is available here.