Show me the money! (for a good reason, I promise…)


It is well known that SMEs can struggle to find the capital to protect their intellectual property rights. ₁ This is particularly the case for small or start-up enterprises which face Capex demands from every corner of their business.

The importance of protecting their IP rights is also well known, however. So, confronted with a funding shortfall, where can SME’s turn for capital help?

In New Zealand, there are a range of grants and funds available from, for example, Callaghan Innovation,₂ but these are either not suitable for SMEs who are just looking for some extra capital to protect their IP rights or they require SMEs to jump through significant hoops to even have a chance of obtaining funding.

SMEs must therefore turn to other funding sources such as FFF,₃ private equity funds, angel investors, third party lenders or crowdfunding for any capital they need for protecting their IP rights.

While there is obviously nothing wrong in seeking funding from such quarters, what if there was an another, simpler source of funding potentially available?

In the European Union, there is such a source for SMEs established in the EU: The Ideas Powered for business SME Fund, from the European Union Intellectual Property Office (EUIPO). A brief introduction to the SME Fund is as follows.

The SME Fund is a grant scheme specifically designed to help EU-based SMEs protect their registrable IP rights. SMEs are defined₄ as “enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding EUR 50 million, and/or an annual balance sheet total not exceeding EUR 43 million”.

Grants are awarded in the form of vouchers that the beneficiary can use to claim a reimbursement.₅

The SME Fund offers four different vouchers that can be used to claim reimbursement for various IP-related activities: these include applications for trade marks, designs, patents, and plant varieties, and IP Scan₆ services.

The trade mark and designs voucher has a maximum value of €1000 (NZ$1800); the patents voucher a maximum value of €3500 (NZ$6300), the plant variety voucher a maximum value of €1500 (NZ$2700) and the IP Scan voucher a maximum value of €1350 (NZ$2430).

Depending on an applicant’s country or region, an applicant could save as much as 75% on IP right applications and 90% on an IP Scan.₇

Applications for grants, which are completed online in no time at all, can be submitted by a business owner, employee or an authorised external representative acting on their behalf such as an IP lawyer, patent or trade mark attorney.

Once an application is approved, SMEs will receive their grant award and vouchers within 15 working days.

SMEs must ‘activate’ the vouchers by requesting reimbursement (using the appropriate form) within two months (extensions of up to a further two months are possible), after they have paid for the relevant services.₈ Reimbursement is made directly into SMEs’ bank accounts.

Speaking purely for myself, I think the SME Fund is a brilliant scheme.

It might be that if such a scheme was implemented in New Zealand, the definition of ‘SMEs’ would need to change so as not to bankrupt the country or result in grants to MEs that really shouldn’t need them; even with such changes, though, a scheme would unquestionably be of significant benefit to New Zealand SMEs’ registered IP asset base and the New Zealand economy.

If any members of the current coalition government in New Zealand (including Mr Rutherford and Mr Uffindell) are reading this article, then, to them I say – how about it?

1. Once those rights have been identified. 2. See https://www.callaghaninnovation.govt.nz/products/fund/ 3. Friends, Family and Fools. 4. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32003H0361 5. https://www.euipo.europa.eu/en/discover-ip/sme-fund 6. IP Scan is an “IP pre-diagnostic” service whose aim is to provide SME’s with guidance on how to register and capitalise on their IP: see https://www.euipo.europa.eu/en/discover-ip/ideas-powered-for-business/ip-scan 7. See fn 5 above 8. https://www.euipo.europa.eu/en/discover-ip/sme-fund/how-to-apply

Ben Cain
Ben Cain
Ben Cain is a Senior Associate at James & Wells. He can be contacted at 07 928 4470 (Tauranga), 07 957 5660 (Hamilton), or email ben.cain@jamesandwells.com.

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