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A meeting of members of the European Commission and Council of Ministers will today and tomorrow discuss whether the European Union's intellectual property laws are holding back the region's competitiveness.

The EU Commissioners for the internal market and for science and research will discuss patent and copyright laws with EU ministers. The basis of the discussions will be a Commission report which says that patent and copyright laws are "bottlenecks" blocking the progress of European entrepreneurs.

The Competitiveness Council of Ministers will hear that EU countries have mostly climbed up the international rankings of countries whose legal and infrastructural environments are welcoming to business, but that there are still problems.

"The innovation gap between the EU and its key competitors, the US and Japan, has narrowed," said a Commission statement. "However, the Commission also recognises policy gaps and indicates areas where further improvements both at European and at member states level are necessary in view of the challenges ahead."

The Commission has produced a review of the EU's innovation policy and put it in context with other nations' and regions' policies. That review says that intellectual property laws in the EU could better favour business.

"Despite improvements, the EU innovation system continues to suffer from shortcomings that negatively influence the market rewards and incentives for private investment in innovation which as a consequence remains lower than that of our main competitors," it said. "The legal framework for the protection of intellectual property remains incomplete, the venture capital market is fragmented and the level of equity funding low."

The Commission has long campaigned for the creation of a single EU patent but has in the past failed to win the support of the European Parliament for the plan.

"An adequate legal framework to protect knowledge properly is a precondition for an innovative society. In the area of Intellectual Property Rights, among other things as a result of the failure to introduce a Community patent, the EU is still not providing favourable conditions for the development and diffusion of innovation," the report said.

"The European patent system is costly and fragmented, discouraging innovation compared to the US and Japan. The difference in patenting costs in comparison to these countries is significant and is not being reduced. It is high time to change this situation," it said.

The report also identifies copyright law as a crucial factor in fostering entrepreneurial behaviour. "Commission efforts on copyright policy have been aiming to further develop the emerging EU cross-border market for the dissemination of knowledge," the Commission report said. "The development of new digital products, services and business models, which thrive on openness, needs a supportive and predictable legal framework."

The Commission said that EU structure and policy on innovation was still fragmented and dissipated across many of the EU bodies and countries, which made innovation difficult for entrepreneurs.

"The EU has rightly identified innovation as a key driver for a prosperous future," said the report. "However, making the EU a vibrant space for innovation requires continuous attention and calls for a better exploitation of the potential of the partnership between the Union and its member states by taking more focussed and better coordinated actions at all levels."

The Commission said that by spring of next year it would propose a European Innovation Act to draw all these strands of innovation policy together.

See: The report (12-page/52kb pdf)

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OUT-LAW.COM is part of international law firm Pinsent Masons.

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