There has been significant M&A activity in Portugal and, in this environment, it is vital that proper FTO analyses are carried out, says João Jorge of RCF - Protecting Innovation
Interview with JOÃO JORGE, Member of the Board (COO), RCF - PROTECTING INNOVATION
What are currently the biggest opportunities for law firms in the area of intellectual property (IP)?
Awareness of the value of intellectual property in Portugal – in terms of it being one of the most important assets for companies – is growing significantly. In terms of trademarks, Portugal has one of the biggest filing rates in the EEA, with more than 21,000 new filings per year in the last three years. With regards to patents the numbers are very small but there is an increase in national filings (not reaching 1,000 new applications but increasing 14 per cent from the previous year). The same is happening with regard to filings of IP rights abroad both at EUIPO (1,916 filings) and EP (272 applications), which reveals a growth trend. With these numbers in mind, business internationalization is an area where IP advice plays a decisive role. This is achieved by supporting SMEs (99.9 per cent of all Portuguese companies are SMEs) in defining, prosecuting and advising on the management of IP rights. Another important area often forgotten or in many cases badly handled is FTO [freedom to operate] work, which is sometimes related to due diligence. Due to the small size of Portuguese companies – though they are filled with innovative entrepreneurs – there is a very dynamic M&A environment. Among all the types of support that is needed, validity of rights analysis and proper FTOs are fundamental for these operations and should be carefully prepared.
What are currently the biggest IP challenges clients face?
There are no IP challenges that I would say are the “biggest” for Portuguese IP filers and owners. IP laws are in general harmonized within the EU and Portugal has transposed the trademark directive early. The need to keep an updated file with possible proofs of use, a practice that is well known abroad, may be the actual biggest challenge for organizations. Another current challenge is awareness of the existence of EUTMs [European Union trademarks] valid in Portugal and of the need to make the proper searches – including in the EUTM databases – before any commercial decision is made on the use of a new trademark.
Another challenge that may be present in the near future is the effect of unitary patents in the European Union if the system comes into force. It will lead to a dramatic increase in the potential for infringement as suddenly instead of having around 5,000 new EPs validated in Portugal, the new system will render a number near to the number of all granted patents, about 95,000. In 10 years (median life of a EP) it will mean the difference between 50,000 to 950,000 valid EPs in Portugal. The risk of infringement litigations will be much higher and proper advice will be needed at all steps of R&D and M&As.
What impact has the coronavirus pandemic had on IP?
In the years preceding the pandemic a rationalization of IP portfolios was already being undertaken by IP owners. The effect of Covid-19 on IP was minor and mainly apparent during April and the beginning of May. It seems that the effect is now over and it is business as usual . Of course, the changes in the ‘modus operandi’ of society was a big challenge, specifically ensuring that everything in IP kept rolling and that distancing or virtual offices were not a factor. INPI [the Portuguese Institute of Industrial Property] was a source of assurance as it kept the office running via electronic means. From our perspective we are providing private and secured internet access to our clients whereby every document related to their rights – whether it is a filing order, a filing receipt, or any correspondence exchanged, or official documents and invoices – is quickly available. They can also, from anywhere in the world with an internet connection, have access to their IP rights status with information being updated twice a day. This also contributed to the sense of normality.
What will be the biggest trends in IP in the coming year?
Portugal is a hub for technology companies. Tremendous technological developments are occurring in several areas like automotive and life sciences, as well as the integration of hardware and software in all areas of development, businesses and products. Artificial intelligence is being implemented and is impacting on everyday tasks. Everyone is keeping an eye on these developments. At our level, we will make every effort to be in close alignment with our customers by following the relevant technological developments, the general developments in their sectors of activity and by developing our internal processes to be able to act, help and respond promptly.