Intellectual property rights play a big role in a knowledge-based economy: they ensure that businesses and designers are able to profit from their creations. They also provide assurances to consumers in terms of quality and safety. But in a special report published today, the European Court of Auditors warns that the EU’s legal framework for protecting intellectual property is not as effective as it could be. Although the framework in place gives some guarantees, a number of shortcomings remain, in particular in the EU Designs Directive and the EU fees mechanism. The auditors also highlight that EU and national systems would benefit from being better aligned.

Intellectual property rights (IPR) are crucial to the EU’s global competitiveness. IPR-intensive industries generate almost half (45 %) of the EU’s economic activity, worth €6.6 trillion, and provide nearly a third (29 %) of total EU employment. Each year, counterfeit products are estimated to lead to €83 billion in lost sales in the legitimate economy. If the problem of counterfeit products were tackled effectively, the EU economy would gain 400 000 jobs according to a recent estimate of the EU Intellectual Property Office (EUIPO). Counterfeit products also have considerable safety risks, as was recently illustrated during the COVID-19 pandemic. For these reasons, the European Commission, other EU bodies such as the EUIPO, and Member State authorities make considerable effort to ensure that intellectual property rights are respected throughout the EU single market.

“Intellectual property rights are vital for the EU economy: they encourage innovation and investment, and discourage counterfeiting and its harmful effects”, said Ildikó Gáll-Pelcz, the ECA Member responsible for the audit. “But the current EU framework doesn’t give all intellectual property rights the protection they need. We hope that our recommendations will help the EU to increase that level of protection to the level that the single market requires.”

The Special report of The European Court of Auditors in its entirety