How do trade mark and designs create value for society?

12 May, 2017

By allowing creative people in whatever area of endeavour to benefit from the investment they have made in time or money!

Trade marks protect brands, which are at the core of all marketing activities and ensure that the public know what they are buying in terms of products or services. Designs protect the appearance of products – the look and feel that plays such an important part in buying decisions.

IP rights generally are very important for jobs and growth since industries that use them intensively support, directly or indirectly, 38% of jobs, 42% of the EU’s GDP and 90% of the EU’s external trade. These IP intensive sectors tend to pay higher wages and create better quality jobs.

The European Union Intellectual Property Office (EUIPO), as a public agency, supports and strengthens the IP system by investing in:

  • simplifying its trade marks and designs registration processes
  • converging tools and practices across EU national and regional IP offices
  • collaborating with enforcement authorities to strengthen the fight against counterfeiting and piracy
  • providing evidence that can be used by policymakers for raising IP awareness among Europe’s citizens.

The EUIPO adopted a five capitals (Organisational, Economic, Environmental, Human and Social and Relational) value creation model as part of its integrated thinking approach in 2016. The Office’s existing Corporate Balanced Scorecard’s key performance indicators (KPIs) are used to measure progress in creating value. Capital definitions and classifications were adjusted to the organisation’s perspective:

  • Economic capital – Excellence in financial management and the economic value the organisation brings to industry and society
  • Environmental capital – Efficient energy and resource management, including offsetting
  • Social & Relational capital – Trusted, collaborative and productive working practices and awareness-raising actions across organisations and with the community
  • Human capital – Investing in people, and in their health & safety, for the creation of a skilled, engaged and balanced workforce
  • Organisational capital (instead of manufactured capital) – Tools, products, services and IT that enable effective performance of the EUIPO’s mission.

Clearly, the intellectual capital is inherently transversal to the EUIPO’s core business: the registration of EU trade marks and registered Community designs.

Corporate sustainability issues and IP rights violations both affect an organisation’s return on investment, but the implications of the IP violations are probably more tangible. Most brands are hit by counterfeiting; the introduction of low quality counterfeits can further diminish demand by damaging the organisation’s reputation and brand image.

Studies by the EUIPO through the European Observatory on Infringements of IP Rights have shown that that counterfeits directly or indirectly cost legitimate industry approximately €90 billion per year in lost market share and have reduced the employment that can be offered by the legal owners of the IP rights and associated sectors by around
800 000 posts.

The impact on trade is also extremely large given the evidence from a study carried out in conjunction with the OECD, that 5% of all imports within the EU are counterfeit, worth as much as EUR 85 billion (USD 116 billion).

According to the same study, “The highest level of value-creation is often found in highly IP-intensive activities, both upstream, such as new concept development, R&D or the manufacture of key parts and components; and downstream, such as marketing, branding, or customer services”.

The means of protection of creativity and invention vary and cover not just IP rights such as trade marks, design or patents but also trade secrets and other ways of protecting ideas such as open source software and creative commons.

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