Guarding an Invention Secret or Seeking Patent Protection - How Are European SMEs Better Off?

Transcript

[Music] thank you for the nice technical introduction and a nice picture and i want first to say everybody thank you to be here today for this important topic regarding invention secret or seeking patent protections our european sme is better off and first i want to say thank you to our host today ivan stefanet's member of the european parliament and also our president of sme europe so um thank you very much and i will pass over directly to him for the welcome because we have 60 minutes 60 minutes of power to a for a very interesting topic and we want to use any time we have and of course the audience can have all those questions to our speakers and experts at the end of the presentation please thank you very much good morning everybody dear friends in this webinar today we want to discuss on the best strategies for european smes to protect their intangible assets and theft of intellectual property rights is increasingly done through on unlawful access to computer networks as we know cyber theft of trade secrets accounts for an estimated 60 billion euro of losses in the european union and today in time of uh growing importance of digitization we clearly see we need to deal much more with the protection of intellectual ownership just for our information currently china approves currently almost four times more patents than the european union and united states almost three times more than united than the european union that's the situation where we are patents and trade secrets exactly as the others of the bunch of intellectual property rights trademarks designs copyright geographical indications planned variety rights help companies to protect them commercialize their intangible assets fight unauthorized copying by competitors and provide them with a source of competitive advantage today we want to discuss advantages and also disadvantages for businesses of choosing one of each protection mechanism sometimes it might be smarter not to seek formal patent protection especially for small businesses in order to save costs uh dr ewa bill neger belgian and european patent attorney might have some advice as a production practitioner while large companies have the resources to manage a large portfolio of intellectual property rights such as patents smaller companies offer cannot afford often cannot afford to do this therefore their reliance on trade secrets is uh greater as we know i'm sure that my great colleague and great friend paul rubik member of the european economic and social committee who is also a businessman he can give us some insights this discussion is timely as unfortunately we are still waiting for the european unitary patent system to come finally into force as you know brexit has further delayed the establishment of the unified patent court which should have had one of its three branches in london maybe mr yan meniere from the european patent office in munich will also touch up on this burning issue and last but not least i i'd like to thank our friend mr huda books from the european parliament think thanks for having had the idea for this conference and this initiative thank you very much dear friends host back to you thank you very much evan stephanie for for this nice introduction welcome i think we coming out directly to the opening and i want to say we have 90 minutes to discuss it not only 60 minutes and i think it's a very interesting topic and the opening will be by dr uderbook's ip specialist european parliament research speaking on patents and trade secrets registration versus secrecy please the floss is heroes hello good morning horst horst heights uh good morning dr stefanetz uh greetings from brussels so press release u.s department of justice 22nd april 2021 greenville tennessee following a 12-day trial dr xiaorong yu age 59 of lansing michigan was convicted of conspiracy to commit economic espionage conspiracy to steal trade secrets possession of stolen trade secrets and wire fraud according to evidence presented at trial dr xiaorong yoo her research was related to formulation for bisphenol a3 coatings for the inside of beverage cans from 12 to 12 from 2012 to 2017 dr yu was employed as principal engineer for global research at coca-cola company atlanta georgia bisphenol a was he always used to coat the inside of cans and other beverage containers to help minimize flavor loss and prevent the container from reacting with the beverage contained in the in the can however due to potential health risks companies began searching for bisphenol a3 alternatives developing these is a very expensive and time consuming process because of dr yu's extensive education and experience with coding technologies she was one of a limited number of coca-cola employees with access to trade secrets belonging to companies like axon nobel bsf dow chemical and others dr you stole these trade secrets secrets which cost nearly 120 million dollars for the purpose for of competing in a chinese government-sponsored program called the thousand talents which encourages individuals with advanced education and experience living in the western countries to return to china while in this case coca-cola's famous secret formula remained intact dr yu is accused to have taken pictures of files on her computer to bypass coca-cola's security measures and to have transferred trade secrets information to an external hard drive so this was a very recent press release now i want to give you an insight into two specific intellect property rights as we already heard in the introduction patents and trade secrets and the advantages and disadvantages for businesses when they have to protect their creative portfolio against competitors so that is what what is at stake dr stefan it's already mentioned different uh different ip instruments it's all together it can be even in one product that we have different uh yes the one with the the snipe sneakers thank you and um it is now i start with the patent as you know patent next slide please patent is a legal title that can be granted for any invention granting process invention that has a technical character provided that it's new and it involves an inventive step and is fit for industrial application slide please in return for the exclusive right uh granted by a by a patent inventors have to disclose the secrets behind their inventions and pay application and renewal fees for the granting authority patents offer exclusive rights up to 20 years over inventions that are not part of a list of subject matters that are by definition not attentive in the international level we have article 27 paragraph 2 of the trips agreement which provides that member states can exclude patentability inventions when they contradict order public or morality next slide please the idea behind the patent is therefore some form of social contract between society and the inventor the patent acts as an incentive to disclose otherwise secret information to disclose it thus making it completely available for the general public and third parties and to allow to generate follow-up inventions but after 20 years of term the formerly secret information made public becomes public because it becomes now part of the public domain and from now on can be used freely within the 20 years where the patent protection is granted the original inventor has through the monopoly rights provided a means to recuperate his investment made formally to research and development and the assumption is that such error and d investments would have otherwise possibly not been made so this checklist you have here for the patents is nearly the opposite checklist which you have to pick when you have been when you talk about trade secrets all these points we have in patents they are not valuable for trade secrets and so you have a real choice and sometimes the choice may be smarter not to seek patent protection now trade secrets you choose to keep your invention secret i don't like the term trade secrets so much in german the chefs heimnis is a is a better term or even in french secretary i don't know what trade in this is not very it's not very handsome but okay it's called trade secrets since 100 years i like better the term know-how knowledge so in any case you have you have here the famous coca-cola the trade secret is a valuable piece of information for an enterprise that is treated as confidential and that gives that enterprise a competitive advantage probably the most famous example we have here is the is the famous coca-cola formula which is a trade secret not a patent if it had been a patent long long long time ago it would have already been expired and the coca-cola formula would have been freely on the market but it is not next slide piece as we have seen in the case of the beverage can coatings earlier such knowledge or know-how can include new manufacturing process as example improved recipes information on whom on whom to buy from information on whom to sell to different types of confidential commercial information may be protected it can be the design of a prototype of a new rally car or a tire car tire engine parts the design of a new carpet grip or the information on the next country where a company intends to do its business a trade secret may equally extend to the service sector like for example covering management techniques of international hotel services information protected can be strategic for decades for example this case this recipe or a chemical compound or it can be very short-term ephemeral for example the results of a marketing study or the name or the price and or the launch date of a new product or the price which we want to offer in a bidding procedure next slide please we have a trade secrets of course the the challenge is the reverse engineering which is not allowed in case of patent but of course it is allowed in the case of trade secrets because no protection is offered once the information is uncovered reverse engineering is completely lawful and also trade secrets can potentially last forever as we have seen provided the information in fact remains secret once the secret is out the business value is lost and the trade secret protection ends next slide please as i said the the trade secrets are part of ip rights not so old like patents it's a relatively modern ip right and not so formalized and it's protected in the property guarantee of the charter of the fundamental rights of the eu and then more specifically in article 118 tfu next slide please because there you have the text of the legal base which is the one for the patent the unitary european patent and all the patent legislation where i ever planned with a variety is and also the trade secret directive we i will not touch about on the european patent we have experts here which can tell more about this i'm sure mr meniere can tell us the state of play of the european unitary patent but the trade secrets uh directive is already in force next slide please it is the directive 2016 943 and it harmonizes the definition of trade secrets of course in the first place trade secrets allah united european union because there is also as we have seen trips wto who and international treaties on on on definition of trade secrets but of course european trade secrets directive is only for example it says that it's in it has to be seen in the context of the freedom of expression it defines what is unlawful contact conduct in the in when revealing uh trade secrets and this is the scope of the directive and we see clearly that also the trade secrets directive of the eu has not touched upon criminal law it's only the civil means through which a victim of trade secrets misappropriation can seek protection for example in the first place stopping the unlawful use and further disclose of misappropriate trade secrets immediate removal from the market of the goods that have been manufactured on the basis of a trade secret and the right of compensation for damages caused caused by unlawful use before of course this has also to be seen in the digital context before trade secrets were stolen by copying or physical physical document or an object in the in the firm today the industrial espionage is of course done more and more by access to computer networks and the european commission has done already offered a working program to protect small and medium enterprises and to better secure their networks and i t next slide please so this is in the international context you have the definition of patents on in article 27 paragraph 1 of the chips agreement from 1990 and you have the article 39 paragraph 2 which is talking about trade secrets and as you see the word trade secrets in the trips in the international context is not used it's just said for information that is secret next slide please uh to sum up now the two opposing choices we will hear now today uh we can look at them uh on different angles on on on trade secrets trade secrets has an has an aspect of unfair competition so competition law between business to business between companies it has of course the contractual side between the company and uh an employee it can be the commercial contact with another with another with another company small company or or individual person or it can be couldn't be touching about the labor contract between the employee and the firm and of course we have the third angle which is the perspective of legitimate transparency we have freedom of speech whistleblowing is not to disclosing some information can be can be absolutely fine and disclosing it can be in within the limit of freedom of speech and the sanctions which the company has against unlawful appropriation can be of course then contractual based on the breach of contract labor contract or civil contract or they can be even a based criminal but this is not defined in the trade secrets directive it's in national criminal law next slide please and the the last one um we have now to no sorry back this is not a that was already the last if you choose not to go into the public domain you might be better off that's the conclusion uh opposite opposing choices it is clear that a patent is very formalized it can be invalidated invalidated immediately if the inventor refrains from describing all and important details this is called the the enablement the it requires the patentee has to disclose enough information for others to use the invention later on after the expand the patent period has expired and you of course you have the cost aspect that was a very important point when we discussed 20 30 years ago the european unitary patent the cost for filing can be enormous the translation costs eva vinegar is expert about translation i think she will tell us and uh the renewing patterns becomes uh increasingly more expensive the longer it patents uh it lasts so it's a smart uh evaluation businesses have to do anytime when choosing on the patenting or not or hiding the information because even if your product is patentable companies always have to ask themselves will my invention be useful beyond 20 years then i will maybe choose the trade secret is it possible for other companies to reverse engineer it anyway or is the invention easily detectable and in embedded in the product already itself or is it part of an international internal manufacturing process is the invention invention likely to be independently discovered in the new future anyway so that is the overview thank you very much for your attention and i'm happy to discuss thank you dr books for this presentation this overview to give us a clear picture what is the difference between a patent and a trade secret and what are the advantage and disadvantages and now we coming to the keynotes i think that we will go deeper to the to the topic we start with janminya european patent office brussels speaking on patents and trade secrets opposing choices of complementary ip rights please the flaws is yours thank you and mr stefanek mr rubik gear panelists ladies and gentlemen good morning it's a great pleasure to be here and i'm grateful for the invitation especially for this topic it's a very important topic to to us at the epo it's key to understand the value created by patents and the way in which our applicants use patents to create value and to bring technology to the market and this is why we have been studying it a lot at the epo and also with our colleagues of the eu ipo and with this presentation i will share some insights from this research carried out in the past in the past years and let me start by discussing the what is at stake actually so as i see it a very large uh very large part of the eu economy is concerned by by this question of patent versus trade secret and this concerns actually all ipr intensive industries uh we we measure uh regularly with the uap or the contribution of these industries to the new economy and in our latest study we found that they represent about 45 of gdp 39 of employer of employment and the bulk of the eu trade with the trade surplus generated for europe and why are they concerned by 30 secrets in fact the way to see that is to look more closely at these figures that are on the slides and if you compare actually the contribution to gdp and to employment you see that it's there's a higher contribution to gdp than to employment that means that these industries create more value added for employee than other industries and the reason for that is that they are knowledge intensive they invest in the creation of knowledge and this is the means to create more value added this is a means to be more competitive on the global scale and the reflection of that is that the employees in these knowledge intensive industries are generally more qualified they are more productive because the value-added parameter is higher which results in higher wages as you can see also here so this question of uh trade secret versus patents for the protection of knowledge assets concerns all knowledge intensive industries which are equivalent to ipr intensive industries and actually from that perspective trade secrets should be considered as rightly said by mr books as a as one more option in the set of ip rights that are available to companies to protect the intellectual assets and looking at idea at the trade secret that way we see indeed that there is a strong complementarity or a strong correlation between the use of trade secret and the use of patents at the industry level so this chart comes from a study published by eypo and each chart represents an industry on the chart and on the x-axis you have the intensity the frequency of the use of trade secret and on the y-axis you have the intensity of the use of patents and you clearly see that those industries that intensively use patents also strongly rely on trade secret so again this should not be a surprise it simply means that these industries are knowledge intensive they need they have intellectual asset and they need to protect them and they use a bundle of ip rights including patents and trade secrets to to protect them the way i would see it is like a nice pair knowledge intel knowledge assets intangible assets are like a nice value and the patented part is the part that is visible but beneath under the sea you have also a lot of knowledge that is not patented and that consists for instance of of know-how that is not even codified or some sometimes have codified knowledge that is kept kept secret because it's more difficult to reverse engineer or to copy to access typically for instance for process inventions it's more difficult for a competitor to have to access to process inventions because it's hidden behind the walls under the roof uh and and then it's uh it's probably safer to bet on secrecy than for a project invention for instance typically a drug it takes a lot of money to develop a drug but once once it's [Music] commercialized it's a product on the market it can be easily accessed reverse engineered and copied there you need a patent so at the end of the day it's uh it's a question of how do i protect my intelligence my my knowledge my intangible assets and what is the trade-off between the use of patents versus trade secrets and this trade-off has been very well discussed by mr books so i will repeat part of it quickly but i would like to to add a few comments so what drives the decision to private patents what are the benefits and the costs for for the inventor actually i said by mr books it's a it's a matter of having a contract with society by filing a patent uh as an applicant i can get the benefit of a strong legal protection for a limited period of time and with that protection i can better secure my market i can probably enhance my my margins and better uh what better secure return on the errand investment and uh looking forward the availability of patent protection is a strong incentive to invest in research and r d because there is this prospect of having a secure legal protection so that's the first part a tool a policy tool to incentivize investment in the inherent but there is a counterpart to that which is the publication of the patent application with a lot of details on the invention actually the publication should be such that it enables third party to reproduce the invention and this is primarily meant to benefit the public this information becomes codified it's not not any more pure know-how or hidden coded knowledge it becomes public available to all searchable to all and as a matter of fact we know that patent information is the main source for instance of of intelligence and competitors errands often for for companies that has a strong benefit to society and the available studies show that the the private return on research is twice higher than the sorry the public return on research on r d is twice higher than the private return on r d because the knowledge uh diffuses can be used for a long time sometimes for centuries think about the wheel for instance uh well this is still useful and still creating value although it was invented centuries ago so important inventions last well beyond the inventors and uh it would be a pity not to publish them because they may be lost and that's a strong benefit of the patent system as compared with the secrecy for society but there is another aspect that is increasingly important for for companies it's that the publication of the invention makes it possible uh combined with the legal protection makes it possible to organize transactions focused on knowledge and in today's knowledge economy where collaboration is increasingly important this is key actually this is something that is very difficult to do with secret because well there's this well-known knowledge paradox if you want to sell or to convince a third party of the value of your technology you have to show it but once you have shown it if it's not protected well you cannot have a contract anymore because the technology is gone you have given the knowledge uh it's already shared and so that's very difficult to to overcome uh all licensing managers know well that even with a patent it takes a lot of time to carefully advance to know to disclose the secret part and the patent is uh not only useful but critical actually to organize such transactions such discussions to build contracts on the basis of knowledge and this is especially important for smes and this is what i would like to develop in the in the rest of my presentation so what is the benefit of adding a patent on top of adding a patent layer on the knowledge on the intellectual assets so we have some studies measuring that benefits and both of them are are focused on uh uh what are rigorous in in the sense that they really compare apples with apples and peers with peers we we compare smes or large funds within the same sector same age same size and on this basis we find that smes that own a patent enjoy a 50 premium in terms of revenue probably as compared that with those that do not use the patents and we also have a such a premium for large firms but interestingly the premium is especially high for small businesses so having this secure legal protection makes a big difference for these small applicants so we could also argue that it was said that there's a cost of using a patent so maybe these smes use patents because they are more successful more they are richer so one way to check that is to look at their growth actually so in another study with our colleagues of eypo we checked whether smes have filed patents in a given time period and then we check their growth in the subsequent period after in the next period and again we find a strong correlation between the use of patents and subsequent growth and even the likelihood of high growth meaning plus 20 percent at least 20 percent of turnover growth during three consecutive years and all of that is correlated with the use of ip even more with the use of patents and even more with the use of european patents and this should not come as a surprise it means that these companies are using patents to protect intellectual assets they are innovative so more likely to grow and in the case of european patents they they file european patents because they want european-wide protection meaning that they are planning to grow internationally which is the right way for smes and startups to scale up today in europe and importantly those smes that use patterns and seem to generally succeed with patents to not only use patents to prevent imitation so it's very certainly this function of preventing mutation where the trade secret is an auction as well but they also use a lot patents for what i would call transactional purposes patents are a way for them to enhance their reputation these are the investors vis-a-vis customers it's a way for them to secure freedom to operate in case the invention is a for instance patented by a third party it's a way for them to build contracts to organize licensing and to raise funding increasingly especially for for startups vc phones are increasingly sensitive for deep tech investment to the not only the fact of using patents but the quality of the patent protection which is a very good development in europe as a last word i would like to emphasize why this transactional function is important and for that let me quote uh results from a survey of our european smes that uh filed with the epo and we checked we asked them whether they succeeded in commercializing their inventions and we find that about two-thirds of them do commercialize their patented inventions which is quite high most of the remaining third is because the invention is still in development for instance or it turns out the market is not as big as as expected but two-thirds succeed and for those that succeed half of them do that through external partnerships and that should not be a surprise smes are small by definition they do not have many assets and they have to rely on third party to enter new markets to organize manufacturing to carry out r d and the appro use technology that they do not master therefore partnerships are especially important for small small businesses to commercialize their technology and these partnerships are focused on technology and so again patents are absolutely instrumental for that and as a large mark in response to mr stefanek and mr books i would like also to mention that we find in this survey that most of their external partners are european and actually when we ask them what kind of partner are you looking for they an increase in an even larger proportion of them say they want they are searching for partners in the rest of you and we see indeed that the european markets so beyond the national market is the natural way for them to grow and to scale up so this is where they have to find partners and this is why they need pan-european protection and this is why you are impatient and we are as well to see the entry into force of the unitary patent which will very much facilitate access to this pan-european protection and the prospect is good in that respect because as you probably know the the german constitutional court rejected the complaint that was filed uh against the entire patent that in summer and the the instrument were just deposited by germany yesterday actually so now we are waiting for one more country it could be austria slovenia or malta in the coming weeks or a few months and we expect the unitary pattern to enter into force in the second half of 2022. this i thank you for your attention and i will be very happy of course to to discuss and take questions thank you thank you very much for this presentation with a lot of data i think this is always important that we know what we are talking about what this means in reality but we coming now also to the practical side to dr eva wilnega european belgian patent autonomy speaking on avoiding the cost trap by using the correct protection mechanism for smes i have to say i like your signature with this little tank and patents are weapons please we want to hear more about this the process use um thank you i'm trying to share screen if that is possible share and to the presentation thanks for the invitation also from my side it really is a pleasure to talk with that to high-ranking uh panel um i will address the practical point because i've spent my uh entire life in industry as a patent attorney and a lawyer i was with with esf then owens corning and then philip morris before actually uh founding my own ip advisory here in in brussels um so the first question of course when we talk about costs we have the patent office costs but then we have the uh legal fees that have to be paid so what is a patent attorney uh the patent attorney actually has a technical qualification very often he's got a phd order or a master degree or in science or in engineering that's the two main focus area mathematics now with computing is also on the rise and then we have a three years training where we actually have to serve at a you know with an experience work with an experienced patent practitioner to get up to speed and then the patent office exam and it's important to uh state and i i can only uh stress that a patent attorney in the adds real value when he's seen a lot basically when he's in the beginning of his in his earliest 40s right that's that's just he has to have seen a lot and this is why uh you know we charge so much on our hourly basis currently we have um exactly today uh 12 638 european patent attorneys uh entered or registered at the european uh patent office so this is this is the uh the big pool of of of professionals that is at the disposal of smes in europe what costs a patent and that varies widely it can be uh done completely inexpensively by keeping you know sticking to the key points and keeping the description short avoiding as dr book said the enormous translation costs by you know keeping using machine translations keeping the description to sticking to the key points but nevertheless the typical costs of a patent family in the top five top five meaning europe us japan korea china over the lifetime of a patent would be in the 200 thousands yeah it could be less but that would be a a task indicator so it's a substantial amount of um of money for one invention and we all know that nowadays we need to work with portfolios to protect the technology um then we um have the cost of uh enforcing a patent and here we look at um also in the at least 100 000 if it's here if it's in in the us we start with with one million basically to enforce a patent it's a very very expensive hobby and that makes it very difficult for smes obviously to to fair to respect attitude to enforce their their patents however we also we've already heard from from the european patent office that patents are used to create value in different senses but they're also very interesting tax deductions through through patents and yet also a comment uh in the comment section the digital exchange of intellectual property which i'd like to learn more about what tax impact that has from from the uh it was peter peter regent that made this comment so um the tax deductions are actually quite uh interesting it depends a bit on the country the market uh they are uh oecd uh standardized but here in belgium for example we end up with a uh tax rate for innovation income of um 3.75 so below four percent which is of course very interesting for any sme um as compared to that a trade secret is of course much uh much cheaper uh to register trade secret for example as as an ie depot at the benelux patent office for uh five years renewable would only be 37 euros so it's it's very inexpensive can be renewed but as we have heard there's a lot of misappropriation of trade secrets if you've heard the coca-cola case by dr books um it's it's very expensive to track and trace all the requirements and to put up all the requirements to limit the access to trade secrets and to effectively protect that um we have for smes here in bologna for example in belgium very attractive subsidies so smes can get up to 50 of their uh patent costs up to the grant of the patent um reimbursed it's a bit of administrative burden but still nevertheless very very uh attractive offer for the smes here in other countries have similar similar programs um however what we've seen here bologna is that that the patent law firms have actually very increased level of pricing which is probably driven by those subsidies and um the outcome that shows that the outcome is always a bit different than than the lawmakers intention quite often it is not um the question of of uh patent versus uh trade secret um but um how to leverage the uh investment in the exit and it's um it's definitely the exit that makes then the difference whether the investment in the patent or trade secret uh has has paid out and investors has already been said private equity and venture capitalists they look very closely these days on the value of the patent portfolio um [Music] right then we have um yeah we have of course the legal frameworks uh here in europe we can be very proud of the trade secret uh directive of 2016 that has worked out um very well and and also uh the patent the european patent uh well it's of course it's got a bit of a cost issue but then um but then once we have the unitary pattern we have a very very good legal framework for patent and trade secret um when to patent and when to keep the information secret we have um the um patent which is more for the concepts the bigger picture solution how is how is the problem solved and then how exactly is it done that would be then the realm of the trade secret then i have some tips on how to find a patent which are freely available and totally inexpensive patent scope by the world intellectual property office we have espacenet patent inspiration would be a commercial provider but they offer a free uh free entry with very brilliant graphs which show easily give access to benchmarking for smes um then how to oppose a patent that i will not show but for those who are interested there is a very good tutorial five minutes by the european patent office and of course if you have questions feel free to to reach out thank you thank you very much dr vinegar i think this was very practical also the costs and and also that you compare then the the the trade secrets and the ip i think it's very valuable for our smes and we discussed this in the debate more and deeper and now we're coming to dr paul ruby connor president of smup a member of the eit governing board member of the european economic and social committee give us a view of the new ip strategy of the eesc and also perhaps reflect a little bit what we heard already in the keynotes please defloss this use yes first of all uh many things i was very impressed also by the speech of even stephanie i think even brought it very good to the point that we are living in a global competition and you know for me as a blacksmith it was always clear that if we have new technologies which we could get secured in the global competition it would be a big benefit so in my young days i got a patent for forging a hole into a linchpin so a forged hole into a linchpin was uh something very original and at this time i was at the university in linz so i asked if i can write my thesis about international patent and license policy and then i went to switzerland to speak with our specialists here i went to united states to the duke university you know which is uh the number one which is uh sponsored by coca-cola uh on intellectual property uh at this time of course we had a lot of books about lawyers interests into this area but i think i was the first one who published a scientific publication on license strategies so the principle was that we can find the patent policy active you know active patent policy means you apply a patent of course you have to see that it must be an inventive step and into a durable industrial application uh like dr dr book said anyway many things also for your presentation i know that the epis is doing a wonderful job job for all of us and we know that if you apply a patent you have one year time to rethink where you can uh get your your payment so uh if you look to the strategy of course it's clear to say okay maybe it's it's wise uh to get a patent in in the area where you live to be protected around you but where it's produced maybe where where the new product is uh produced or where the competition is so where is the largest market so the strategy where to file a patent is is quite important for the cost issue uh because you can have a national parliament you can have a a national patent you can have a european to say so patent and you can go to anywhere in the world uh to file your patent strategy so there is also a big difference on the security of the patent uh you know in europe uh in austria i think was one of the first countries in the world who started with a patent office and uh you know if if you uh get a patent in europe it's checked in detail around the world uh if this is really new so if you get a patent on on european side you can be sure or very sure that your patent will be strong and could be defended easier yeah if you go to united states you very easily get a patent but then you have the big risk of being defended very easily and i said the costs of of of getting to court could be quite high so the strategy is always where is your market where could it be produced where is the competition and uh how big is the competition so for small companies of course uh patent protection gives a good background you know big companies told me that if they fight against against the smes and put a lot of money in it and uh take a lot of lawyers saying every patent could be destroyed but on the other area you can also try to to put patents around your patent with mail more more or less going into the same direction so you also could run this active patent strategy the passive strategy is to fight the other patents which are coming near to your idea it's also good if you have a a trade say a secret uh because also with straight secret you should be careful if it's really secret and if it's not published a third party could uh try to get a patent on on on your trade secret and uh then of course uh you you run into serious problems so also to know the procedure how to to protect a trade secret is i think crucial for the future and uh we all know that europe lost a lot of space in in patent applications as even said china files four times more united states uh three times more uh i think thirty years ago europe had fifty percent of of say of the patents and china five percent and now it's exactly the other way around said china get 50 percent of the patents in europe only five percent uh so i say overall innovation strategy in the european research area and i'm also a rapporteur in the european economic and social committee uh for uh for the european uh research area and therefore it's clear that we have to take care how to help smes to make the right decision so uh from my practical point you know as i filed my patent for the linchpin uh i i got the patent and i'm very proud on this wonderful document you get but on the other side the production process how we really forged it we made a trade secret so nobody should know how we really have done it so we have a kind of double protection as a process uh we know exactly how to do and on the other side if they are coming out with the finalized uh product uh we have separate say patent protection so you see it's a practical guidance uh how important ip is and i i would say uh the work on intellectual property is a key issue that in future time we can earn good wages and can place this power game on on the global competition thank you thank you much uh dr paul ribbik i think it's very entrepreneurial point of view i think it's important to see that you also have to focus on the market and where the competition is uh we coming directly to the bay bay but i want to give also doctor who the books a chance to reflect what he heard now from our keynote speakers please defloss as yours and please for the audience use the question answer sections below in this task list task down and and use this function please i have i had the question to to to eva wilnega on the on the on the costs side uh is that meaning that it is filing with the european patent office or with the national patent and what do you advise when it comes to markets where i want to have the protection for my invention how do i know if i'm better if i file it in belgium or is it valid for a whole europe how how does that work yeah um thanks uh dr books for for the question so the question is how how do we determine uh the 200 000 which i put up for average cost fee over the lifespan of a patent in the top five markets which is europe us china korea and japan that would be the average cost based on over the lifetime the annuity fees and the translation costs the fees of the patent office and the fees uh that one has to pay the patent attorney so that would be not meant to decide how to effectively uh protect um that very much depends on the industry yeah so um in other mobile if i have a german patent that is worth a lot because that's the main market in europe and i can probably not produce a car that would not enter the german market if i'm active in europe so this is this depends really automotive is different than data processing or data processing is different than pharma so if you look at the industries that would validate in most of the countries and i'm i'm sure um mr will confirm that pharma would validate would take the most countries by far yeah biotech on average would validate it in 10 european markets those who don't require translations because one has to translate it to polish and turkish uh 70 pages it gets just that costs get easily out of control yeah does that answer your question dr books yes thank you and dr very interesting uh question because you know in in my studies a long time ago but uh also in in the meantime it's a very good question where where to file uh the patent the first time uh because it makes it if a big difference uh if you apply with your patents the first time in belgium in austria in switzerland in singapore in china so if you look into the return on investment and on to the revenue of of the taxation it makes a big difference uh where you start to uh to to to file your your your patent so uh first of all the most important thing is that you keep it secret uh because it depends on the time when you present your proposal to the patent office uh if it's published uh also in a small circle you can't have a patent anymore so from the secret to the patent it's a very uh uh important step uh to keep it with your patent uh uh attorney really secret that he files it to a very professional uh in basic uh defense structure and and then you should decide who is filing the patent if if you do it as a company if you do it as an employee because all of this would have a big effect on on what the outcome uh in in the end will be so uh also for an employee it's it's important to speak with the responsible people in their own company how to handle this revenue questions on the patent and at least it's also very clear to see which license strategy you make you can make an active license strategy to say license out of the patent but you also can make a passive life license strategy that you look around the world if there is a patent available which you can use and get return on investment and then you can buy license maybe by realities or whatever so if you look to the balance of the global license statistics and i think it's very important to see how we buy in a patents or buy out patents or buy license or a sale pay license uh it's a very big revenue stream and it's totally underestimated in in the public how important this revenue streams in let's say export import to increase the buying power of our people because if if you sell it of course it's it's getting up like to say export it it's getting revenue uh and if you buy it and you can do something cheaper or better uh to distribute it around the world it's also doubling the buying power and the wage situation so we should not underestimate it how important the ip is thank you very much only for the audience are collecting all the questions if they are very specific we will have them on the end now we're discussing first the general topics and i pass over to mr munir please deposit yours thank you i i would like so i fully agree with uh with mr rubik's comments and i would like to to elaborate a bit on that and especially to come to come back on the question of costs i think there was the discussion on the uh europe losing ground to the u.s and china i would i would connect that discussion to a even a kind of cultural mindset actually and i think it's a it's an issue of seeing ip and patent in that case at the costs or as an investment and i think really there is a mindset issue sometimes in europe in that respect it's not only across the box that you have to tick that you have a patent you have to ask yourself what kind of value do i want to create and capture with uh with this patent and these drives and then you can leverage it to create value we have would like to mention that we have produced a number of case studies of smes in europe that are easily accessible on our website www.www.epo.org slash sme and one of them for instance is irogen it's an irish startup that has been become a world leader in aerosol drug delivery and they're an sme but what they did is that they have a they have a strong patent portfolio and actually strong enough uh to contract with companies like philips or general electric to distribute their technology across the world and in that respect actually the investment is really an investment in the patent portfolio that makes it possible to access to enter new markets that being said the cost remains an issue and they would like to see they told us they would like to see the united pattern because they have to trade off protection in some european countries versus some non-european countries for instance and that that may mean that they do not enter some european countries today another remark so talking about value in you seeing patents as an investment value oriented this has strong ramifications for the organization uh this is where also the cultural mindset issue is it has to be proactive patenting and it has to be aligned with the strategy and with the management practices beyond the ip so it's very important that the top management is aware of that it's not only the issue of the of the patent department it's the issue of the company actually and this has ramification as said by mr rubik in terms of ip capture it's important to monitor constantly what is the what are the new inventions coming out what do we keep secret what do we patent what do we secret to the moment until we patent them because if you don't do that you do not control the flow and you may you may disclose inventions too early and use the patterns yes and i would last say that this is especially important for smes because they are resource constrained and so they have to focus their resource on the most perfect way of creating value and so they have to pick wisely uh what they protect and so it's important that this decision goes up at the top level of the company thank you very much i want to come in this discussion back to the enforcement not only to the cost of the time framework because we have only not only in china so also problems in the european union it takes some time serious to enforce the patent we had the cases and then also after the decision is made by the court that we needed the best action takes and this is well-known and nothing happening and we have many complaints by smes that this case is not rare so what is it i think you're losing mark shares and then this uh and then after this how you get your money back after years even if this company is popping up and then closing again after they make the share if i will perhaps you can say something about this yeah that is uh uh definitely if i understand the question right there is some kind of uh abuse so if one is attacking a company the company will close down and wanna and open up company b is that the question yes yes yes exactly in in uh so the length of the proceedings um that's that's definitely an issue but that can be handled by uh by um you know seeking appropriate advice and there are uh countries for example in the us uh the international trade commission that you get a judgment within six to eight months right it's it's a it can be it's not gonna be damaged it's just gonna be an injunction but it's it's very effective so there are very effective uh means it's just you have to seek appropriate advice it's a very specialized uh matter then with enforcement in in other countries where we have an enforceable title against company a and it just closes down in company b does the same thing now that's a red race there's no there is no um you know that's uh it's i don't have the answer to that but maybe my my colleagues have i i think that extreme cases in eastern europe where it takes with us related also with perhaps with corruption i don't know but it takes many years and is well known also by the authorities from from from countries like australia or germany it takes really a long time to enforce also than the decision of a court yeah this makes already losings in high rates and that is this companies went bankrupt and then there was nobody to to to to sure to to enforce this problem then another question perhaps uh also from the from the audience for to you also miss vinegar could you please explain how public funding leads to inflated ipv fees i i know it i can know it because also your colleagues are clever i'm sorry i'm not sure that everybody understood the question yes this is about uh because the violinist is founding fifty percent of the costs to to to for the ep fees and i think some of the colleagues of ms miller are clever and rising the prices because of this so together yeah so yeah actually um i mean that's my personal opinion so this is the impression i have and it's probably not uh the it's just we are in digital age uh if you have a fully digital uh office then you can actually go down with your pricing quite substantially what i see is that the 20th century prices are quite maintained and that's um that's you know if there would be not that incentive of the subsidies maybe they would have to be more competitive and that would uh yeah the market and then the yeah another question um what is with africa what are with such regions who are perhaps how to enforce their patents how to to do this there africa i think it's very special perhaps yeah so let's take for example namibia i'm have a cooperation with the namibian patent office and guess how many uh inventions they have had last year yeah obviously if you go to nigerian court it will take a long time and it's uh it's they have maybe 20 patent patents per year had in the past i mean that will be uh evolving uh but it's uh it's it the courts are not that experienced and they are not yet um a very i mean if you have a patent in front where you meet a country where you have effective enforcement measures so china is catching up we have the us and we have uh germany right so um this is this is where i would recommend to to go for effective enforcement africa will catch up that's for sure okay then we have a question also general questions i i choose tommaso from apple to what extent does reverse engineering influence the choice between patents and trade secrets is it correct to say that the more likely re will be the more likely people will option for patent while the less likely re will be the more likely people will choose trade secrets yes this is correct yes that's correct this is one of the main drivers of the decision to whether to patent and one of the challenges also is to uh yes to two to one to monitor uh reverse engineering or to to to to know also whether whether the the the invention can be hidden uh to uh reverse engineering and there is a famous example of the tires so mishna was uh has been for a long time a believer in the trade secret because it's difficult to to reverse engineer a tire and now they fight patterns actually so they have been reversed engineered and and and they changed their strategy and this to say that there's a lot of innovation as well in inverse engineering okay thank you very much shall i raise the hand dr books yes please sorry um i can't find the race hand function no just on the enormous amounts of patents applications we sometimes as europeans we get scared when we see how many patents are filed in china coming from china as i just want to relativize this i'm sure that the ipo can can somehow confirm it's often they have patents of course the patent get a patent in china and the internal is very cheap it's very fast and it's sometimes things which are only for the chinese market yeah which are not at all interesting i'm saying it's a lot of crap also which they patent so we we shall not uh we should not be scared of this and then sorry to ask for the machine translations which were mentioned i would like to know uh if this is google translate or is there a special special tools and is this then accepted by the european patent office for example machine translations then miss mr meniere please so there are a lot of elements so on on patents in china and the us yes indeed it's so the patent system is not the same the thresholds for patenting are not the same and so we cannot directly compare the numbers and what is actually what is comparable is the but the number of patterns that that are extended internationally and that concerns only a small fraction of uh of the patents in china for instance but still not a negligible one and these are this is sometimes very impressive technology in 5g with artificial intelligence for instance it's not negligible but the orders of magnitude are much much smaller and to me that raises the question of the harmonization and quality of the international patent system and there we have to anticipate we have to look forward and this concerns africa that was discussed so indeed there are few patents today in africa some time ago there were a few patents in the in india or in vietnam or even before in china so it will come and it's important to help them prepare for for that and set up the right system and so this is an important strategic priority for the epo and we already have some validation agreements with morocco for instance so tunisia in africa where they recognize actually the european patents so european patents can be violated directly in these countries and we are in advanced discussions with other african countries like aripou so a group of african countries for to extend the validation agreement and as a counterpart to the validation agreement we train them so we have we provide technical assistance tools training uh that can be helpful uh to have a quality patent system including the on the litigation aspect so i just wanted to mention that concerning the translation so what we have is a tools for uh translating prior art and that is a very important because now we just discussed that there are a lot of patent applications in china in korea and they are valid prior art and so we need to examine applications inventions against this prior art and we use machine translation for that and now it works the system is very mature and works very well and we have the actually we have the biggest uh databases in the world in terms of prior art documentation so patterns but also non-patent literature like standard specification for instance and this is typically the type of resource that we can share with with our partners in africa or in the rest of the world thank you another questions could can it be how often is happening that it's a mixed uh approach so in robotic yet the robot is it has a patent and the software is a trade secret how often is this so that that we that did companies use both to protect the the the products of course of course all the time i would say i know so this is the most common approach or it's just likely if it's only that that you meet i try to show this this was maybe the the basket the sneakers you have the design you have the label you have the trademark you have the patent you might have a trade secret in all in one product okay thank you and the second thing is that data is that smes are searching for strong partners to to because they are afraid to uh alone to protect the patent that they are only finding a large company to enforce this is how often is this that i say okay it's for me too difficult it is really a global thing i need a big partner not only for selling it also to protect it how often is happening sorry on this one i i actually we we tested that so we studied that we surveyed smes and that was my expectation but it's not what we found actually so half of the in half of the cases they work with large companies but in half of the the other half they work with small businesses and they do not uh particularly prioritize a large one so they are it's really open in that respect so certainly large companies are valuable partners in certain cases but not not indeed and typically to enter a foreign market for instance in europe a partnership with another sme can make a lot of sense or by pulling resources and expertise to address a new challenge thank you very much and then we're coming to a more specific questions from enrique fontes he represented the european major exhibition centers associations regarding the priority of exhibitions at fares and the definition of international fares contained in the eu design regulations do you think that reform of the regulation should be used to include a definition of international fare that is not limited to universal exhibitions and which will also cover the standards that the industry use to define what an international fair is perhaps dr weineke please so um that's a very important uh point and so the question was a commercial commercial prior prior use at a trade show um should that be uh not novelty destroying to to a design or to a patent application uh same thing here and i fully support that because we have other countries like japan or the us which have a grace period the us of one year in germany we have that with the utility model we have six months six months race period that means i can try out the test the waters with my invention and then still work on it and then file it and it's um and if i have to file it and then i can only you know exchange or have to foresee confidentiality commit it's less subtle so i would fully support that but i don't know how these discussions stand at this time and another question is there a possibility to have an assurance on a patent to protect me as a sme who could answer this dr rybik please yes in principle of course uh uh you can find an insurance who takes law uh cases uh but normally it's quite expensive and the question is if the case comes up if they really will fight for you so uh of course it depends on on the insurance company and maybe the broker you take but from principal it's possible thank you we got another question i think this is interesting also for startups and and and uh very smes from the top from the from the health sector uh to mr books it's a it is a good idea to stop pattern protection for vaccines in africa and compare it this is a very political question of course i support the european union approach which is always to say in the case of medicines it is not only the patent which is the story you lift the patent but you might not be able to product to produce the vaccine it doesn't help you it's very easy to say yeah lift all the patents yeah for for our european or german vaccines but then you have to also have the know-how to produce it so that's what we tell the united states or countries like south africa or india which are very much pushing on that point um but we should we could also say please dear google dear ury it's very important that we have a computer which we advance in technically the world has need you you have to lift the patent on google or amazon so we don't do that but they they ask us because by coincidence we have the vaccine that's my personal opinion thank you very much dr paul please yes you know first of all a patent is always open uh and transparent for the world so for scientific use you can use the patent at all the time you know also all the details which are filed in the patent and it's a very good base for for further research and education of the people but if you want to use it commercially of course you have to pay for it and that's why we have license agreements and you know whoever pays the license is something different it could be paid by the country in africa who want to have it could be paid by private company could be paid by european union or by a u.s government so i think it's very clear that uh as a trips agreement uh also could enforce uh uh the use of patents uh but uh under certain conditions and uh it makes no sense to destroy the value of a patent uh in in giving it uh free for production uh because the production as we have heard today it's also necessary to know the trade or the production secrets to say it clearly because also in the production there has a lot of secrets you know a lot of people say yes vaccinations is done easily but you know it's a different if you produce uh five pieces of vaccinations or one thousand or one million or one billion you know one billion nobody really can estimate how big the investment is and and how difficult it is to get all these certifications uh for producing such a patent it's very complex and only this very big companies are able uh to do it in in a proper and certain time and i think the european union made a perfect decision uh to file it together uh to take care of all these uh difficult uh questions also from the ip side and i think it it's much better to buy the products from the companies which which are doing it or ask them to to put a licensed production somewhere uh and and to pay for it and and you have seen that the russians are going to africa uh and uh offering full plans to to to to put it on earth and then of course we see advice of of the people who know how to produce as a certainty is here and the security for the consumers and and for the patients so uh uh only lifting a patent makes no sense at all uh it's it's it's a very uh primitive political question to say if you lift a patent everything is solved it's the opposite yeah it will start with a lot of problems and so therefore i think uh lifting of patent makes no sense at all thank you very much i think this is an important point because if you develop a patent you're collecting also data you know how to produce it and i think only to have the patent alone it means not that you can deliver this in the highest quality i think uh how many before we coming to the last questions how much is the consumers aware about patents and quality normally i when you are checking the name the brand made in in germany are you checking there's often also an ipina a patent number there but how how often really if b2b is just is clear but how often really consumers making a decisions because i have the original patent producer is there some data from consumer sites it's an advantage in selling you know at least it's a unique selling proposition if you get a product where it says written says a patent on it you know that maybe you can't have this product uh somewhere else so uh it's also a guarantee that it's new you know at least not oldest in 20 years and uh so therefore i think a lot of people are writing only the patent application on on on their products uh if i uh patent this something else so if you have really a patent number which gives you all this protection and i think uh these patents are weapons is especially for smes a very good sentence i really like it then the enjoy if i think that's exactly brought to the point mr meniere perhaps uh also two questions for you should we more promote awareness to consumers and also work together with consumer protections about patents i think it's not so so in the public discussion also on that this is also a quality uh rim point of the product please yes so we indeed we [Music] we perceive a need for to raise awareness on the role of ip and ipn the role of ip the society in general and [Music] even very specifically in the in universities among future engineers future scientists like future researchers they need to be aware of ip and to take that into account in their future professional world so that's the best moment and this is where we invest most besides through our european patent academy besides uh our general efforts to uh like the inventor european better world or studies showing the benefits of patterns to to the economy if i may just add one point concerning the uh the consumers and the perception of patents i think it's important also to to and drugs to have in mind the the risk of counterfeiting and actually ip is very important there because it's an incentive for the owner to fight counterfeiting and uh that's that is often over overlooked but in fact if you don't have uh if you don't have bad incentive then you you need you need a check mechanism to to uh to avoid counterfeiting and we see that there's a lot of counterfeiting very much i think it's a very important point and clever that the private sector is is protecting the consumers for quantifying now we come into the last questions the last round and it's about digitalization i think it's very interesting uh is this from hey i cannot read the name now here peter reigner to develop the digital exchange of intellectual properties and making a new regulation for this market for all countries in eaa could be a very important step to bring investment for the innovation under eu regulations do you think could be could be this developed in europe union could do you think could be this developed in europe union so is this question clear miss william dr vinegar you are seeing you could like to answer this question yeah yeah absolutely i mean it's uh it's i i do think in in the monetization of ip assets we still have a long of course keeping the competition at a distance uh the exit increasing you know the value proposition of the company there are many uh the quality we've heard that but then there are uh many patents uh which which are unused right and uh or or are not enforced and then this something like um that could help with the monetization of those assets and then draw further as a um encourage further investment in in innovation i do think this is very exciting i'd absolutely like to learn more about the tax aspects of of that and uh and i'm sure my my colleagues have have other other other comments on this uh future thank you very much if there is no comment we coming to our end and i would like to have a last statement of everybody or perhaps a resume about this this webinar or a wish or or something else doctor who the books yes i guess as a initiator of this you are happy with the discussion please support us yes i was very impressed uh about about the quality of the speakers apart from my own which was not so good but uh for example what i learned a lot now when i and i was very happy to learn from mr meniere that the european unitary patent is basically one step before coming into force we heard from him that germany finally has ratified the united patent court agreement which is an international agreement we have long on the long way since the a 90s we have lost already we have lost a member who was gotten tired of us the united kingdom so i hope this does not hinder and jeopardize the the coming into force of the european united patent and now we have the last obstacles overwhelmed and uh so that is of course uh that would be a real real mind change for european businesses if we could have a real e patent because as you know the european patent we have now is 38 member states it has nothing to do with the european union of course all member states are member of the european patent convention but a european patent with the 12 stars on it and on with under the jurisdiction of the european court of justice that would really be a trademark for the whole world and so today seems to be a very good day thank you very much then i will press over to mr munir please the last words of today in this webinar for you thank you and i would like also to to thank you again for for the invitation and uh to stress how important this topic and this event is uh in our view and how timely also i think uh we know uh but we are we are seeing today uh uh uh really a fast acceleration of startups creation and development uh in europe and this resonates with the eu wind deal and the digital transition at the eu level that really push in that direction push towards deep tech startups we have ecosystems being deployed with more savvy investors and it's really a perfect time to uh to realize the the single market for technology and so it's a very good news and very good timing indeed uh in in our view that the united patent is coming to life at last thank you thank you dr wilnecker your words now yeah um thanks again uh for the invitation uh dr books and then uh um it's it's been a pleasure to talk uh to so to have this discussion and i really encourage all smes to engage in an ip dialogue but because there's a lot of experience that other ip peers sme peers might have gained and that can be shared thank you then thank you very much and the last words from mr smee the political perspective dr paul rybick please support the sears yeah yes thank you so much you know in the european economic and social committee uh i am rapporteur on the european research area you know european research area we should have three percent of the gdp uh it's approximately 450 billion euro every year which is invested in research and science we want to have in the new strategy uh going up to four percent because we learned that this area brings the best growth of of gdp if you look to south korea you have seen that they are going above 4 percent and they have the highest gdp growth so i'm also in on on the board of the european institute of technology where i pray every day please use ip as a standard uh tool to accelerate our economy into the right direction you know in eit i also pray that work together with all european agencies we have excellent agencies more than 40 but most of the people don't know them and work together on the global level like on wto level where where trips is from utmost importance what i learned is that china is now understand understood how important ips so it was not 30 years ago and we i have the feeling we still lose a little bit uh uh the importance of of ip uh it's it's uh a lot of people fight against ib because they don't understand what is it all about and maybe this debate this is uh also uh enlightened from people from outside of european union uh to weaken our development but therefore i think we need a new strategy for ip whilst i've sent you a link to the european economic and social committee where we have written all the report on the new ip strategies for the european union there's a basic document from the european commission and i think we should do uh utmost to bring it to our smes how important trade secrets and patents and ip for the overall development is so thank you very much i'm very proud and i also learned a lot in in this debate uh and let's go on uh i i know that urdu got my book about the license marketing uh and license policy you know it's now i think more than 30 years old but the principles will last forever thank you bye thank you much to all the speakers to the host i have to say it was very interesting i think we cannot do often enough such events and i would also ask the european patent office to send us perhaps the links for the academy how they promote patents we can share this with our sme community thank you also to eva vinegar for this practical point of view i think if questions are coming up still from our audience we will share it with you thank you to all the books again i think this is very interesting that also that you coming up to us actively to our sme community to promote this topic and dr paul rubick of course as our honourable president thank you that you are always active in supporting these topics thank you have a nice day and we will see you soon again i hope [Music]