The EC promises IP action in the digital space

On 25 November 2020, the European Commission published its Action Plan on Intellectual Property. The wide-ranging Plan promises a number of regulatory changes in the IP sphere in the coming years. It also champions the need to address the technological revolution, both in terms of using IP rights to protect such technology (eg 3D printing and the Internet of Things) and harnessing technology to improve IP systems and procedures (eg blockchain technology).

Among the items being considered in the Action Plan are:

• Modernising the EU design system, strengthening and expanding the geographical indication (GI) system, reviewing the Database Directive and clarifying the use of the Trade Secrets Directive.
• A number of proposals to boost the uptake of IP by SMEs, including the provision of vouchers to help finance IPR registration by SMEs.
• Various initiatives to fight counterfeiting and piracy, including strengthening the powers of various authorities.
• Clarifying and upgrading the rules governing responsibilities of online platforms as regards illegal content through the Digital Services Act.
• Considering the impact of new technologies on the IP system, both in the context of the above initiatives and more generally.

The Plan identifies five key challenges:

1. Improve the protection of IP

The report outlines the difficulties faced by a fragmented EU IP system and stresses the need to prioritise fast, effective and affordable IP protection tools.

In particular, the Commission is looking to modernise EU design protection, which has already been the focus of separate consultation. Key findings include:

• A lack of clarity on certain key elements of design protection and a lack of harmonisation across EU Member States.
• Design legislation needs to be adapted to support the twin digital and green transitions. In particular, there are uncertainties regarding the possibility to protect graphical user interfaces and icons as designs, as well as dynamic views of designs. There is also uncertainty around the protection and enforcement of 3D printed designs and scope for abuse of the "private and non-commercial use" exception to infringement if 3D printers become more readily available.
• The system needs to become substantially more accessible and efficient for industries, SMEs and individual designers, who are often unaware of the advantages of registered design protection. The registration system is out-dated and overly complicated.
• There is uncertainty as to the way design law interacts with the law on trade marks and copyright, which may account for the under use of the designs system.

There will be a public consultation on the designs system in Q1 2021, with a new draft Regulation likely to follow in late 2021 or early 2022. Overall, we can expect to see changes to substantive and procedural design law with a broader range of designs being protectable. If – as appears to be the intention – there is also greater clarity on the interaction between designs and other forms of IP protection – this will be welcome. Whether this will be sufficient to encourage innovators to rely more heavily on designs (as opposed to other forms of IP protection) remains to be seen.

The Commission also plans to expand the geographical indication (GI) system to non-agricultural products, review the Database Directive (see below) and clarify the use of the Trade Secrets Directive (see below).

More generally, the Plan acknowledges a number of ongoing discussions and initiatives on the protection and use of technology in the IP sphere. For example, it references the need to distinguish between inventions and creations generated with the help of AI technology and those solely created with AI technology and the need to utilise technologies such as blockchain to increase the effectiveness of the IP system. Nothing concrete has been proposed in the Plan.

2. Boost the uptake of IP by SMEs

A 2019 EUIPO survey reported that only 9% of SMEs have registered IP rights. The Action Plan highlights concerns about SME reluctance to register, exploit and enforce IP rights.

The Commission commits to providing the EUIPO with an IP voucher scheme to help finance IP registration by SMEs and to provide them with wider financial support. Commitments are also made to roll out IP assistance services for SMEs to provide them with strategic IP advice.

3. Facilitate the sharing of IP

The Plan highlights the need for the improved sharing of IP, particularly in crisis situations (like the COVID-19 pandemic).

There is much discussion on balancing the need for data sharing (especially to facilitate access and use of data by SMEs) against the risk of theft of trade secrets. The Commission raises the need for clarification of the Trade Secrets Directive, particularly around:

• what type of data or datasets could qualify as a "trade secret"
• whether the current list of exceptions can sufficiently support the green and digital economies, and
• whether and how tools offered by the Directive can be used to counter the cyber theft of trade secrets.

The Commission has launched a study with a specific focus on strategic sectors, such as healthcare and automotive industries. Based on the results of this study, the Commission will consider the need for further action.

Following evaluations of the Database Directive, which concluded that it could be revisited to facilitate data access and use, the Commission will now commence its review of the legislation. This will look at data sharing initiatives in the area of antitrust law and consider how the Directive can facilitate data generated in the roll out of the Internet of Things and machine generated data.

4. Fight counterfeiting and improve the enforcement of IP rights

The Commission reports that in 2019 imports into the EU of counterfeit and pirated goods amounted to EUR 121 billion and resulted in lost sales of EUR 50 billion. The Action Plan discusses three main ways in which this can be combated:

• Clarifying and upgrading the rules governing responsibilities of online platforms, through the Digital Services Act (see here for further information on the DSA).
• Enhancing the role of law enforcement authorities, including the European Anti-Fraud Office.
• Developing an EU Toolbox against counterfeiting, which specifies principles for how rights holders, intermediaries and law enforcement authorities should act, cooperate and share data. The Commission will encourage cooperation between a range of players, including online platforms, social media and payment services. An important element of this will be the sharing of data and the promotion of new technologies such as image recognition, artificial intelligence and blockchain.

The Commission will also promote cybersecurity awareness, to help reduce the growing rate of cyber thefts of trade secrets (especially those affecting SMEs).

According to the Commission, upgrading the responsibilities of online platforms and strengthening the capacity of law enforcement authorities will also assist in tackling other forms of online IP infringement, such as illegal internet protocol television and other forms of illegal live streaming.

5. Promote a global level playing field

IP intensive industries account for 93% of total EU exports of goods to the rest of the world. The EU recognises its role as a global norm setter and acknowledges various ongoing initiatives with WIPO and internationally.

Grand ambitions

The Action Plan focuses on the need for innovation, the employment of new technologies in the IP industry and the need for sharing data around protected assets. These key elements help to build foundations on which SMEs can develop and grow.

This ambitious Plan suggests a busy time to come across the range of IP protection but focuses particularly on reviews and clarifications on the Database Directive, certain key provisions of the Trade Secrets Directive and a review of EU legislation on industrial designs and GIs.

Find out more

To discuss any of the issues raised in this article in more detail, please reach out to a member of our Technology, Media & Communications team.