The EU Commission published a new intellectual property action plan. The action plan, touted as “an intellectual property action plan to support the EU’s recovery and resilience” outlines possible future moves, noting that intangible assets are “the cornerstone of today’s economy”, with IPR-intensive industries generating 29.2% (63 million) of all jobs in the EU during the period 2014-2016, and contributing 45% of the total economic activity (GDP) in the EU worth €6 trillion.
The action plan also notes that the quality of patents granted in Europe is among the highest in the world, and that European innovators are frontrunners in green technologies, and leaders in specific digital technologies, such as connectivity technologies. That being said, the action plan notes that while smart intellectual property (IP) strategies can act as a catalyst for growth, European innovators and creators often fail to grasp the benefits of IP.
The action plan indicates that the Commission is willing to take stronger measures to protect European IP, to increase IP protection amongst European SMEs and to help European companies capitalise on their inventions and creations.
Ambitiously, the action plan also notes that the EU aspires “to be a norm-setter, not a norm-taker” and is keen to seek ambitious IP chapters with high standards of protection in the context of Free Trade Agreements, to help promote a global level playing field.
Some of the key takeaways are noted below.
Unified Patent (UP)
The implementation of the Unified Patent is seen as a priority in the action plan, indicating that it will reduce fragmentation and complexity, and will reduce costs for participants, as well as bridging “the gap between the cost of patent protection in Europe when compared with the US, Japan and other countries”. The action plan also indicates that it will “foster investment in R&D and facilitate the transfer of knowledge across the Single Market”.
With the introduction of 5G and beyond, the number of standard essential patents (SEPs), as well as the number of SEP holders and implementers, is increasing (for instance, there are over 95,000 unique patents and patent applications supporting 5G). The action plan notes that many of the new players are not familiar with SEP licensing, but will need to enter into SEP arrangements, and that this is particularly challenging for smaller businesses.
One area that has garnered a lot of press attention recently relating to the licensing of SEPs, and in particular to businesses that are perhaps not as familiar with SEP licensing, is that of the automotive sector. The action plan acknowledges this and notes that “although currently the biggest disputes seem to occur in the automotive sector, they may extend further as SEP licensing is relevant also in the health, energy, smart manufacturing, digital and electronics ecosystems.”
To this end, the Commission is considering reforms to further “clarify and improve” the framework governing the declaration, licensing and enforcement of SEPs. This includes potentially creating an independent system of third-party essentiality checks, and follows off the back of a pilot study for essentiality assessments of Standards Essential Patents and a landscape study of potentially essential patents disclosed to ETSI also published alongside the action plan.
Modernising EU design protection
The Commission has indicated that it wants to “modernise” EU design protection “to better reflect the important role design-intensive industries play in the EU economy”. At present, the Commission is asking for stakeholder feedback on the options for future reform. Recent results of an EU evaluation show that the current legislation works well overall and is still broadly fit for purpose. However, the evaluation has also revealed a number of shortcomings, including the fact that design protection is not yet fully “adapted to the digital age” and lacks clarity and robustness in terms of eligible subject matter, scope of rights conferred and their limitations. The Commission also considers that it further involves partly outdated or overly complicated procedures, inappropriate fee levels and fee structure, lack of coherence of the procedural rules at Union and national level, and an incomplete single market for spare parts.
Updating the SPC system
While the Commission notes that, following an evaluation, the Supplementary Protection Certificate (SPC) framework finds that the EU SPC Regulations “appear to effectively support research on new active ingredient, and thus remain largely fit for purpose”, it believes the EU SPC regime could be strengthened to reduce red tape, improve legal certainty and reduce costs for business. One option being touted is to introduce a centralised (‘unified’) grant procedure, under which a single application would be subjected to a single examination that, if positive, would result in the granting of national SPCs for each of the Member States designated in the application. The creation of a unitary SPC, complementing the future unitary patent, is listed as another option.
Patent pooling in times of crisis
The EU Commission notes how the pandemic has highlighted the importance of effective IP rules and tools to boost innovation and secure fast deployment of critical innovations and technologies, both in Europe and across the globe, but that it sees a need to improve the tools in place to cope with crisis situations. To this end, the action plan includes proposals to introduce possible mechanisms for rapid voluntary IP pooling and better coordination if compulsory licensing is to be used.
Increasing access for SMEs to IP protection and the introduction of an “IP voucher”
The action plan notes that only 9% of EU SMEs have registered IP rights. It aims to help SMEs better manage their IP and improve their competitiveness by giving EU SMEs easier access to information and advice on IP. Through the EU’s public funding programmes and further rolled-out at a national level, EU SMEs will get financial aid to finance so-called IP scans (comprehensive, initial, strategic and professional advice on the added value of IP for the individual SME’s business), as well as certain costs related to IP filings.
This will happen through the implementation of an “IP voucher”, which is made available in co-operation with the EUIPO, providing co-funding of up to €1,500 for:
- IP Scans: up to 75% of the cost and/or
- registration of trade marks and design rights in the EU and its Member States: up to 50% of the application fees.
SMEs will be able to apply as of mid-January for the IP voucher, through a dedicated website. We understand that the voucher will be provided on a “first come first served” basis.
The action plan also indicates the EU Commission’s intention to make it easier for SMEs to leverage their IP when trying to get access to finance, and that this may be done for example through the use of IP valuations.
EU toolbox against counterfeiting
The EU commission notes that counterfeiting is still a major problem for European businesses and proposes that an “EU toolbox” is set up to set out a co-ordinated European approach on counterfeiting. The goal of this EU toolbox should be to specify principles for how rights holders, intermediaries and law enforcement authorities should act, co-operate and share data.
AI and blockchain technologies
The action plan notes that in the current digital revolution, there needs to be a reflection on how and what is to be protected – perhaps a nod to the recent litigation we have seen regarding whether an AI can be considered as an inventor. The action plan in particular notes that questions need to be answered as to whether, and what protection should be given to, products created with the help of AI technologies. A distinction is made between inventions and creations generated with the help of AI and the ones solely created by AI. The action plan notes that the EU Commission’s view is that AI systems should not be treated as authors or inventors, which is the approach taken by the EPO, but that harmonisation gaps and room for improvement remain and the EU Commission has indicated that it intends to engage in stakeholder discussions in this respect.
There is much to take in from the action plan, and we will closely monitor developments in all of the above areas to see what will be implemented and when.
Voice Quality Matters: Quarter of Employees Working From Home Still Experiencing Regular Connectivity Issues
-Survey of 1007 SMEs in the UK by Spitfire Network Services Ltd reveals pain points for employees working from home-
-27% experience frequent or occasional connectivity disruptions despite working remotely since March-
-Only 4% of employees working from home have a dedicated Internet connection for work-related purposes-
Spitfire Network Services Ltd, a provider of telecoms and IP engineering solutions to UK businesses, today revealed data that showed more than a quarter of employees experience regular issues with connectivity whilst working from home. The ‘Voice Quality Matters’ survey found that 27% of employees faced connectivity challenges such as drop-outs or lags during the course of their working day, causing frequent disruption and impacting on productivity. With the majority of voice (video) communications hosted via the Internet, the importance of ensuring your voice can be heard has never mattered more.
The survey revealed that only 4% of employees working from home had their own dedicated internet connection for work purposes. Instead, employees are relying on their home broadband for connectivity. When asked, 57% of employees revealed that they had between 3-10 devices connected to their home broadband at any one time.
Employees were also asked about the time of the day that most of the issues occurred, 4pm-6pm was revealed to be the problem hours. With kids returning from school and using personal devices, the strain on the network resulted in connectivity problems arising.
Dominic Norton, Sales Director, Spitfire Network Services Ltd, commented on the findings: “We were unsurprised to discover that more than one in four employees are facing connectivity challenges whilst they work from home. When you consider that remote working can no longer be classed as the supposed ‘new normal’ with this shift happening over 9-months ago, it shows that businesses have been slow to act. Connectivity is critical for employees to mirror the experience of the office from home – critical for delivering a service to customers and ensuring their workforce is as productive as possible. My message to businesses would be to act now and really consider the damage that may be being caused to both productivity and reputation.”
In total, 1007 respondents were surveyed throughout November 2020 as part of the Voice Quality Matters survey conducted by Spitfire Network Services Ltd.
For more information about Spitfire Network Services Ltd, visit www.spitfire.co.uk.
To find out how we can support your customers to ensure they stay connected, please contact [email protected].
How can we benefit from mandated e-invoicing?
By Mark Stephens, the CEO of Blackstar Capital
Electronic invoicing is at a tipping point. On the one hand, only a small minority of invoices that are sent globally are e-invoices. It is estimated that 75% of the world invoices are still transacted on paper, and those that rely on email instead experience similar inefficiencies. On the other, a recent trend of B2G mandates from governments around the world could potentially serve as a catalyst for a new wave of public and private sector e-invoicing adoption.
In India, for example, the Central Board of Indirect Taxes and Customs has regulated that e-invoicing will be mandatorily adopted by all companies with a turnover exceeding INR 500 crore. The decision follows many countries in Latin America, most notably Brazil and Mexico, where electronic invoices have been mandated as the only acceptable standard for all significant public and private commercial transactions.
In Latin America, these systems are largely being used as a tool to improve the government’s fiscal control and recapture lost tax revenue from economies with high rates of cash transactions. Brazil, Chile and Mexico have all adopted a ‘clearance model,’ where before invoices are sent, they are cleared by a government portal. Documents are therefore tax-compliant in real-time, reducing delays and fines, while significantly reducing tax leakage. India’s model is broadly similar to this, and the EU is also looking towards adopting something similar to the clearance model.
In 2019, all VAT-registered businesses in Italy started issuing invoices electronically using the country’s online exchange system. The decision in Italy, like many others, was again driven by tax efficiency. While these mandated government decisions can help achieve this, experts say the benefits of e-invoicing actually go well beyond this and it is time the arguments for mandating e-invoicing include the benefits for small, medium and global businesses too. The EU has been clear: mandated e-invoicing has the potential to not only save government processing costs, but also provide the stimulus for private sector adoption that can drive the environmental, cost, and efficiency benefits.
For businesses, the potential benefits are huge. Companies on average able to save between 50-70% of processing costs and 65% of invoice processing time. E-invoicing reduces errors, fraud and human intervention. A Wax Digital study found about 25% of time handling paper invoices is spent on resolving problems related to data entry and processing. As there are roughly 16 billion B2B invoices processed each year in Europe alone, Deutsche Bank projected that full adoption could lead to an annual saving of at least €260 billion. Organisations already using e-invoicing have been motivated to do so because of this huge cost efficiency aspect.
In the most recent Spring Statement, the Chancellor of the Exchequer described late payments as a ‘scourge’ and according to Siemens Financial Services, SMEs in the UK are missing out on over £250bn of working capital cash flow due to late payments. Xero found that businesses which use online tools get paid 33% faster than those which use paper invoices. Faster approval cycles result in better cash flow, which can be passed down the supply chain in cost and time savings. Finally, a mandated move from paper to paperless could have a huge impact on the global carbon footprint.
In addition to the impact that the reduction of late payments can have on the working capital of businesses globally, e-invoicing can provide a more efficient avenue for the funding of invoices. Invoice financing is not new, but the level of transparency and depth of data accessible via modern e-invoicing platforms enable direct access for financiers to provide faster, efficient, de-risked, and innovative funding solutions in relation to the financing of such invoices. There is a growing belief that this will have a fundamental, evolutionary impact on the invoice financing space.
Public sector mandated e-invoicing therefore can be expected to drive private sector e-invoicing adoption and provide the gateway for the digitisation of many business processes. The blueprint for adoption was Denmark’s pioneering 2005 legislation that allowed vendors to submit invoices online, free of charge, using a SaaS service. The Danish were focused on the economic benefits of e-invoicing and decided the best way to influence behaviour would be to keep the barriers to entry as low as possible. By offering a free and open service, Denmark was able to voluntarily achieve the long-term commercial adoption of B2B e-invoicing in the private sector after mandating public sector B2G e-invoicing.
Now with the challenges of Covid-19, global governments will be more focused than ever on cost efficiencies and the need to guarantee tax revenues. Mandating e-invoicing, however, can also have huge knock-on benefits for the wider B2B business market. With a higher adoption rate across the private sector, mandating e-invoicing will provide huge cost and efficiency savings for businesses at a time when public and private finances are under significant pressure.
How fintech companies can facilitate continued growth
By Jackson Lee, VP Corporate Development from Colt Data Centre Services
The fintech industry is rapidly growing and, in the first half of 2020, fintechs have secured more than $25 billion in investment globally, despite the huge uncertainty caused by COVID-19. As fintechs and their customer base expand, it is important to recognise that the success of these companies is predicated on the ability to use data effectively in providing a personalised experience to their customers.
To ensure these companies do not become victim of their own success, they must ensure they have the ability to scale up their operations and data storage as quickly and cost-efficiently as possible, especially in these challenging times.
So what must fintech companies do if they are to facilitate this growth without bursting at the seams?
Big fish in a small pond
Fintech companies are growing exponentially, and for many, even the current uncertainty around the pandemic has not decelerated the pace of their growth. However, having started small – with only having access to limited tools at the beginning of their journey, many fintech companies can’t keep up with their own rapid growth. When it comes to data infrastructures, they are facing a real risk of becoming a big fish in a small pond.
In order to achieve widespread innovation, and to keep their advantage over traditional financial institutions, fintech companies need the necessary playground space to experiment in.
When the pandemic and its consequent disruptions started to take hold, most businesses weren’t prepared for the types of challenges that they would have to face. Although the suggestion of investing in data infrastructure might seem counter intuitive at the moment, a lifeline for fintech companies going forward will be flexibility and the ability to scale.
As the uncertainty around the pandemic continues, fintech companies, like other industries are finding it difficult to commit to long-term business plans. Despite their continued growth, fintech companies continue to be cautious to invest in expanding their operations during an unpredictable economic climate, especially when they are doing well enough as it is.
Even before the pandemic, fintech companies exhibited slower rates of the adoption of digitalisation and advanced IT infrastructures than other industries. It’s clear the future is digital and for fintechs to effectively compete in today’s volatile market, they need to be proactive and invest in the value of data and digital transformation.
One area that fintech companies must be proactive in is their IT infrastructure, especially their data storage and connectivity, in order to allow them to act faster than big, established competitors.
Due to the continuous growth of fintech companies, with no sign for it to slow down, these companies will have to continually scale their operations up to manage increased demand. Ordinarily, this would have very high costs as they would have to continually alter their IT infrastructure and solutions.
When it comes to flexibility, data is a crucial aspect for fintechs. In today’s world, companies store masses of data, and its amount is growing fast. This makes the storing of the data a juggling act, and the costs keep growing with it. In periods of economic uncertainty, such as the one we are experiencing now, this constant increase in data can quickly turn into a challenge. Therefore, fintechs must ensure that scalability is at the heart of everything they do. When it comes to scalability, however, the key factor is not just growth or the ability to scale up. A vital, but often overlooked opportunity in scalability lies in scaling down, when needed. For fintechs aiming at this level of scalability, hyperscale is the only way forward.
The answer is hyperscale
Hyperscale data centres provide businesses with a one-stop shop for all their data and capacity requirements. These centres, which are built in a campus-style design, allow companies to build out further data centres quickly within the same location, or if needed, downsize. In an environment of ever-fluctuating demand, hyperscale enables scalability of data and storage swiftly. This presents many benefits. The sheer size of these facilities allows for large-scale cloud adoption, which is more streamlined, flexible and cost-effective than ever before. This will help fintechs to get a better handle on their data and reduce costs as much as possible.
With this level of scalability, companies can operate like an elastic band, expanding or retracting when necessary and at a moment’s notice. For example, imagine this year’s Christmas. With the uncertainty of the pandemic and constantly changing restrictions, people’s online activity will be even higher than in previous years. Fintechs will have to scale up their operations to cope with the high demand of online services. Meanwhile, when demand goes down in January, it might be beneficial to scale down and reduce costs until demand increases again.
Hyperscale will also help fintech companies to future-proof their operations, which has become a key consideration as the economy looks to recover from the pandemic. By having the level of flexibility that hyperscale provides, businesses will always have the ability to lean or expand. Being able to adjust quickly within the hyperscale environment, with no added costs, makes fintechs more resilient and flexible to disruptions.
While cutting costs will continue to be a priority in today’s business environment, it is important that fintech companies look beyond this and focus on innovation and technology. The issues that the pandemic unearthed already existed and needed to be addressed by businesses. Therefore, they need to take the current situation as an opportunity to reconsider and improve their business models. Flexibility, scalability and cost efficiency must be top priorities in this new era. Hyperscale can provide this trinity of success.
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