Doing Business in Europe

Europe offers an interesting jurisdiction for startups to incorporate a business entity and file patents for innovations. Many entrepreneurs who decide to start a European company often find it quite difficult because of all the red tape that must be jumped through before getting off the ground. Setting up an office in Europe can be very time-consuming. The regulations regarding setting up a company can be quite complicated. There are also legal formalities to fulfill, not to mention taxation to deal with. One must therefore be aware of every aspect of doing business in Europe before jumping into the venture.

Doing Business in Europe was rated fourth by the World Bank for ease of doing business in Europe; fifth globally and fifth in the overall quality of life index. The report looked at different dimensions of the legal environment including the anti-trust laws for establishing a company, getting financing, paying taxes, settling bankruptcy, and labor law regulation amongst many others. Surprisingly, entrepreneurship in Europe did not feature among the factors that were studied. This might be due to different reasons such as the scale at which the industry has grown compared to other countries, or it may also be because entrepreneurship is considered a soft form of innovation.

No matter how it might be viewed, there is no doubt that startups need technology and that is where the European countries score over the rest of the world. Some of the best European technology companies such as Vivaxa and Skype have grown incredibly large because of the innovations they have brought into the markets. Europe is home to some of the biggest technology firms in the world such as Cisco, EMC, Apple and Google. These firms definitely paved the way for what we call the European technology boom.

In line with innovation and technology, the European countries also score well on business and consumer protection. The European Union’s single market policy and the rules on product pricing and consumer protection helped accelerates startup activity as well as technology development. Consumer protection is especially important because the new industries are mostly based on technology with issues such as data security, privacy and anonymity surfacing. This makes it extremely important to be protected from the threats posed by cyber criminals. It also ensures fair competition between companies, making it easier for customers to choose services and products.

Another factor that was studied was entrepreneurs’ mindset. This is the belief that startups should not look at profit only but should also consider social aspects of being a startup. Being able to think creatively in terms of solving problems is important to innovators. This will encourage more of them to continue building their businesses in the European markets. In the last few years, it seems that European startups are becoming more valued as consumers.

Entrepreneurs also need to consider the corporate tax rates when doing business in Europe. Ireland has a very low corporate tax rate of 6 percent. To take advantage of this you should register your company in Ireland. Companies can employ a local head office and thus avail of low taxes. If you have a European subsidiary, you can avail of European corporate tax benefits.

Companies looking for an innovative solution to their business problems should consider doing business in european countries such as Ireland, Sweden and Finland. By doing so you will benefit from lower corporate tax, liberal trade regulations and a pro-business environment. In order to take advantage of these factors, all you have to do is find an effective business solution. If you decide to do business in european countries like these, it will be easier for you to establish an office, get registered and obtain needed corporate documentation.

Patent Process in Europe

Patents mandate the freedom to prohibit others from exercising an alleged creation, not the freedom to prevent others from utilizing a “power in nature . . . open to all”, with this patent eligibility comes into question. While there is no “one size fits all” strategy to internationally fulfil the standards for patent eligibility, there are several widespread seams, such as the validity or absence of a technical consequence, to accept for deliberation. The regulations for subject matter eligibility for patents and computer-implemented (CI) creations assess concrete limitations on the CI creations that are patentable in the EU jurisdictions. 

The European patent system governs under the European Patent Convention (“EPC”) in which Article 52 interprets patentability – “European patents shall be granted for any inventions which are susceptible of industrial application, which are new, and which involve an inventive step”. This terminology is similar to the patentability regulations comprised in the US laws for the patent-eligible subject matter. Nonetheless, the EPC statutorily limits patentability in Article 52(2) distinguishing mathematical criteria, aesthetic achievements, and demonstrations of data as un-patentable. Also, the Article 53 specifically eliminates from patentability “inventions the commercial exploitation of which would be contrary to ‘order public’ or morality,” “plant or animal varieties, or essentially biological processes,” processes for humans or animals, and diagnostic systems exercised on them.

Patentability Criteria in Europe

The European Patent Convention (EPC) has dictated four Criteria of Patentability. A creation is patentable if, it is novel (Article 54), comprises an inventive step (Article 56), is eligible for industrial application (Article 57), and is not omitted under Article 52(2) and (3).

Novelty: As per the EPC an invention cannot originate from a prior duration in any course, whether a commodity, a method, the data is not accessible to the public whether in European nations or elsewhere in the world.

Inventiveness: As per law, an individual with a normal brain and ability in the composition should not be competent to develop the assertions of the creation. This standard is identical to the US Criteria of non-obviousness.

Industrial Application: Section 4 dictates that creation shall be seized to be eligible for industrial application if it can be rendered or utilized in any aspect of the industry comprising agriculture. This standard is identical to the US Criteria of utility.

The European Patent Convention has no favourable advice on what is deemed a creation for the objectives of patent legislation. Still, it conveys in Article 52(2) a non-exhaustive record of what is not to be considered as inventions, and thus not patentable matter. The following cannot be considered as inventions:

(a) Discoveries, scientific theories, and mathematical methods

(b) Aesthetic creations

(c) Policies, guidelines, and processes for conducting mental acts, games or business, and computer software

(d) Presentation of data

EPO Patent Practice

As per Article 52(1) EPC, “European patents shall be granted for any inventions, in all fields of technology, provided that they are new, involve an inventive step and are susceptible of industrial application.” This brings up four subjects, whether it is an invention, whether the invention is susceptible to industrial application, whether it is novel and does it encompass an inventive step. The initial issue is that the asserted subject-matter is an invention in the domain of patentable subject matter. The invention issue or patentable subject-matter issue foregoes the three additional problems, which need not, be analyzed if there is no invention. The case of the Boards of Appeal of the EPO, looked into the question “Is there an invention?” moreover indicates the additional matter on “Does the asserted subject-matter have a technical element”, possessing a technical element is a tacit regulation of the EPC to be fulfilled by creation to be an invention under Article 52(1) EPC.

Patentable subject-matter references furthermore intervene at an auxiliary degree, in the inventive step inspection. In EPC dictates that a creation comprising of a mix of specialized and non-technical characteristics and possessing technical identity in its entirety is to be evaluated for the condition of inventive step by accepting all characteristics which participate to the technical identity whereas details generating no contribution cannot aid the dignity of inventive step. The non-technical details are prohibited from the sphere of patentable subject-matter as an issue of agreement. 

This test for patentable subject-matter dictates that a petition or patent which does not deliver a technical outcome to a technical problem would be declined (Article 97(1) or rescinded (Article 102(1) as requiring inventive step.

The EPO fulfills plans for assessing the patent-eligibility of Computer-Implemented Inventions (CII), particularly established on Artificial Intelligence (AI). For example, AI image programs are deemed technical and accordingly patent-eligible. Contrarily, AI text programs with a text category only founded on the subject of the article are not deemed technical. These are prohibited from patentability as attaching importance to words is a cognitive assignment and not a technical undertaking.

The Unitary Patent

The Commission is enthusiastic in the execution of a patent package. When it is inaugurated it founded a European patent with unitary effect and a recent patent court. The unitary patent is a legitimate title that will furnish uniform insurance across all contributing nations in a step, contributing large cost benefits and decreasing administrative limitations. The package can initiate a Unified Patent Court that will request a sole jurisdiction with restricted competence over European patent prosecution.

Utility Model in Europe

A utility criterion is registered freedom that provides the holder undivided practice of a technical invention. There is no EU-wide utility criterion insurance, the Commission surveys the monetary effect of utility model regulation.

Supplementary Protection Certificates

Supplementary protection certificates (SPCs) serve as an addition to patent freedom established by EU laws to equalize the penalty of patent safety for pharmaceutical and plant protection commodities that arise due to the prolonged trials these commodities need before to obtaining regulatory marketing authorization.

Biotechnological Inventions

The laws on the extent and constraints of patent insurance for biotechnological creations are harmonized in the EU by Directive 98/44/EC on the legal safety of biotechnological creations. They contain biological substances or procedures through which biological substance is generated, refined, or utilized. These are patentable if they fulfil the common conditions for patentability, i.e. novelty, inventiveness, and industrial applicability.

Patents for Industrial Innovation

Exploitation of IP for industrial innovation tested the method of a policy device that boosts the possibility of modern business growth founded on exterior IP accession, encompassing new patented inventions. It indicated that a policy tool can be formulated to boost the aim of exterior IP by Small and Medium-Sized Enterprises (SMEs) concentrating on perception and agreement costs. Further, it is not probable to formulate a policy concentrated solely on stagnant patents. It can execute the tool at a domestic degree as SME aid is governed at these categories and it requires the advantages inherent in the vicinity.

Our team of advanced patent attorneys assists clients with patent searches, drafting patent applications, and patent (intellectual property) agreements, including licensing and non-disclosure agreements.

Advocate Rahul Dev is a Patent Attorney & International Business Lawyer practicing Technology, Intellectual Property & Corporate Laws. He is reachable at rd (at) patentbusinesslawyer (dot) com & @rdpatentlawyer on Twitter.

Quoted in and contributed to 50+ national & international publications (Bloomberg, FirstPost, SwissInfo, Outlook Money, Yahoo News, Times of India, Economic Times, Business Standard, Quartz, Global Legal Post, International Bar Association, LawAsia, BioSpectrum Asia, Digital News Asia, e27, Leaders Speak, Entrepreneur India, VCCircle, AutoTech).

Regularly invited to speak at international & national platforms (conferences, TV channels, seminars, corporate trainings, government workshops) on technology, patents, business strategy, legal developments, leadership & management.

Working closely with patent attorneys along with international law firms with significant experience with lawyers in Asia Pacific providing services to clients in US and Europe. Flagship services include international patent and trademark filings, patent services in India and global patent consulting services.

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