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European Commission Moves to Protect IP in Supply Chains

Intellectual Property (IP) is a key driver of innovation and growth. To address the challenges of IP infringement, the European Commission has launched several initiatives, including one focused on IP in responsible supply chains.

In the European Union (EU), a study has estimated that IPR-intensive sectors account for around 39% of EU GDP (worth some EUR 4.7 trillion annually) and, taking indirect jobs into account, up to 35% of all jobs. Likewise, IP infringement can not only lead to health and safety risks for consumers, impact corporate reputations and diminish competitiveness, it can also have bottom-line impacts. Case in point: More than €26 billion and up to 363,000 jobs lost every year in the EU due to counterfeiting of clothes, shoes and accessories.

To address the impacts of IP infringements, the European Commission has moved on several fronts. Many know of the Trade Secret Directive, which is the Commission's proposal to create common rules for the protection of companies' know-how and business information. In December 2015, it came closer to becoming law when the European Parliament, Council and European Commission reached a preliminary agreement on the Directive.

Jean Bergevin

Jean Bergevin

In an upcoming webinar hosted by CREATe.org, the European Commission's head of the Intellectual Property and Fight Against Counterfeiting Unit Jean Bergevin and policy officer Stéphanie Martin share insights into two other areas of focus: 'Integrity of Supply Chains' and 'Follow the Money.' In this Q&A, CREATe.org COO Craig Moss talks with Bergevin and Martin about their work.

Stéphanie Martin

Stéphanie Martin

Moss: How did this initiative come about?

Bergevin: As you know, IP is critical to the success of any company and in the European Union, our countries depend upon IP for continued growth and prosperity. To address the challenges posed by counterfeits and other infringements, in 2014 the European Union (EU) released an Action Plan for the Enforcement of Intellectual Property Rights (IPR). It focused on 10 actions dedicated to commercial-scale IP infringements. The actions we are discussing in the webinar include: Action 2: Integrity of Supply Chains; and Action 3: Follow The Money. More recently, the Commission announced in the IP chapter of the Communication “Upgrading the Single Market: more opportunities for people and business”adopted on October 28th that it would favour a “Follow the Money” approach to deprive commercial-scale infringers of their revenue flows,

Moss: What do these actions cover?

Martin:  Action 2 – Integrity of Supply Chains – addresses the IP challenges associated with today's highly fragmented, vast and complex supply chains. Action 3 – Follow-The-Money – tackles the source of revenues associated with the sale of infringing goods. It involves enhancing the involvement of intermediaries, such as advertising and payment services and it aims at promoting the initiatives that already exist in countries at the national level. It also looks to target shippers, wholesalers and resellers involved with these products.

Moss:  I have been delighted to be involved in the Integrity of Supply Chains work. Can you share a bit more about the focus and process?

Martin:  In June 2015, the European Commission held a workshop which brought together European Commission officials, representatives from the OECD, academia, civil society, and the business community to discuss our initiative on due diligence in supply chains and the inclusion of intellectual property (IP) protection in responsible supply chain management.

The workshop focused on two aspects of integrating IP protection into the responsible supply chain:

  • Improved corporate behavior – Inclusion of IP protection management systems in responsible supply chain management.
  • Utilization of track and trace technology: using cost-effective technology to help track authenticity of parts and finished products.

Moss: As you know, many EU and US companies have responsible supply chain initiatives that cover environmental and labor compliance. How does IP protection tie into that?

Bergevin: We want companies to take a more holistic look at the idea of responsibility in the supply chain. IP protection can be added to existing responsible supply chain programs, so companies do not need to start something entirely new. There is also research that shows the benefits of applying lessons learned from labor compliance issues to address IP protection issues, so there may be ways for companies to address both problems simultaneously. 

Moss: Tell us about the public consultation that is under way and how people can get involved.

Martin: The workshop participants contributed to the development of a survey that forms the public consultation that we launched on December 17th . The survey for the consultation focuses on the mechanisms developed by companies to secure their supply chains and thereby protect their Intellectual Property (IP).

The results of the consultation will allow for the mapping and the promotion of best practices as well as the elaboration of EU supply chain integrity scheme(s) composed inter alia of a “due diligence toolbox” for the attention of IP intensive companies.

We are inviting any company acting as an IP right holder and/or as a supplier to such a right-holder to complete the survey form within both the goods and service sectors. SMEs are highly encouraged to participate in the consultation. The survey can be found here. It will run until April 6th , midnight.

To learn more about these initiatives, join the CREATe – European Commission webinar on February 11th at 11 EST. You can register here.

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