Patents Are Not Brands: Four Patent-Specific Fixes for the European Innovation Act

The European Innovation Act, proposed on 9 September 2026, has understandably attracted attention chiefly as a procurement measure, although Chapter 3 creates a separate architecture for IP-backed finance and commercialisation. Articles 32 to 37 would give the EUIPO a mandate to build a Union framework for the valuation and disclosure of intellectual property assets, a Union-wide platform for the licensing and transfer of IP rights, measures to facilitate the development of a secondary market, a data function covering IP used as collateral, and a certification scheme for IP valuers.

Patent practitioners should pay particular attention to the proposal’s treatment of patent valuation within a horizontal framework covering all types of intellectual property rights. That design is sensible, but its implementation must still capture variables that can be decisive for patents: finite legal life, claim-defined scope, jurisdictional and family coverage, validity and revocation risk, existing licences and security interests and, for standard-essential patents (SEPs), essentiality, FRAND commitments and pool participation.

The case for the measure is strong

The EUIPO’s IP-backed finance report of April 2026, the intellectual parent of Chapter 3, describes a closed loop: “without transactions, no data accumulates; without data, risk assessment remains conservative”, and so no instrument scales. The EU SME credit gap is put at up to EUR 365 billion annually, with EUR 70 to 150 billion attributable to IP-intensive firms.

The proposal’s premises are unusually friendly to rights holders. The explanatory memorandum notes that over 90% of the corporate value of certain leading firms is attributable to intellectual property. Article 32(3)(b) commits the Office to facilitating licensing and transfer; Article 32(3)(c) to facilitating the development of a secondary market; Article 33(5) permits the Office to investigate the feasibility of a Union-wide register of pledges over IP. The JRC estimates the additional IP-backed finance at between EUR 2.7 and 10.2 billion per year. Patent valuation already takes place through a fragmented, bespoke and often costly market that is difficult to scale, particularly for smaller firms.

The objectives are sound, but implementation must differentiate among intellectual property rights rather than flatten patent-specific determinants of value. The proposal itself recognises the need for such differentiation in the life sciences. Article 32 expressly extends the valuation framework beyond intellectual property rights to “regulatory exclusivities for pharmaceuticals”. The value of a pharmaceutical or biotechnology asset may therefore reflect its patent position, the applicable data and market protection, any orphan-market exclusivity, and the product’s stage of development and regulatory approval. Accounting for these factors is economically sensible, especially for IP-intensive start-ups seeking finance before generating substantial product revenue. Their assessment requires sector-specific expertise because regulatory exclusivities arise under pharmaceutical law and have their own legal basis, scope and duration. Depending on the applicable regime, they may attach to a marketing authorisation or medicinal product, with corresponding limits on their transfer and enforcement. The same attention to sector-specific factors may be needed elsewhere.

Procurement-origin obligations entering standards

Chapter 2 sets a default favourable to contractors. Article 19(1) and (2) provide that IP in procured R&D results must not accrue exclusively to the public buyer and that contractors retain ownership, an improvement on the position outside the Procurement Directives. That allocation is nevertheless subject to significant qualifications. Article 19(4) gives buyers free access for their own use and for their present and future contractors. Articles 19(5) to (7) create progressively stronger step-in mechanisms. Article 19(7), after specified conditions and prior efforts to obtain authorisation on fair and reasonable terms have been satisfied, permits uncompensated non-exclusive third-party licensing and, where that is insufficient, transfer of ownership without compensation. It applies where contractors fail to commercialise without legitimate reasons or use the results in a manner contrary to the public interest, an expression the proposal nowhere defines. Article 19(9) allows buyers to object to exclusive licensing or transfer. Article 19(11)(a) then requires the contractual architecture to ensure that the contractor’s R&D-procurement obligations are passed into transfer and licensing agreements and that each subsequent owner or licensee is required to pass them on again.

Article 10(1)(p), under the heading ‘Procurement documents’, then permits public buyers to require contractors to contribute results to standardisation, expressly subject to the Article 19 obligations. The heading matters because the proposal briefly innovates in legislative numbering: the provision on financial guarantees is also labelled Article 10, although the sequence and the proposal’s own cross-references show that it should be Article 16.

A patent subject to free public-buyer access, contingent uncompensated step-in licensing and an objection right over exclusive dealings could be declared essential to a standard while already carrying procurement-origin obligations that must be contractually passed through the chain of title and licensing. The implications for an essentiality declaration, subsequent transfers, inclusion in a licensing programme or pool, and the interaction between a buyer’s step-in rights and a declarant’s FRAND undertaking remain unspecified. A later acquirer or licensee may receive rights subject to obligations for which the proposal creates no dedicated public register or persistent title-linked disclosure mechanism.

What remains unclear is how procurement-origin obligations operate once a patent enters a standardisation process, a question that a horizontal intangible-asset framework is not designed to resolve.

The framework omits the discipline that keeps valuations in their lane

Article 33(3) envisages a broader transactional evidence base, including information from IP, business and pledge registers, evaluation methods, transaction characteristics and the type of IP right concerned. Yet the expressly identified outcome indicators, including equity valuation, collateralisation and loan-to-value ratios, reflect the framework’s financing orientation.

The financing orientation would be less problematic if the framework incorporated the discipline of the standards it draws on. The Technical Working Group convened by the EUIPO and the Commission includes the International Valuation Standards Council alongside Accountancy Europe, AIPPI and the European Investment Fund, and the IVSC has itself presented on applying the IVS to intellectual property. Under IVS 101 the valuer must establish the scope of work and intended use; under IVS 102 the basis of value must be stated; under IVS 106 both must be reported. A figure prepared for secured lending is not automatically transferable to a licensing negotiation or a damages assessment: purpose and basis matter.

Articles 32 and 34 contain no equivalent requirement. Article 32(3)(a)(iii) establishes disclosure arrangements designed to present information in a comparable and structured manner, with nothing recording the purpose for which any assessment was prepared. Article 35(3) excludes Office responsibility and denies valuations binding or presumptive legal effect, but it does not prevent parties from adducing them as evidence or regulate the weight they may acquire outside the financing context for which they were prepared.

A Union framework without a purpose-and-basis statement would be a regression from the international standards feeding into it. For patents, the consequence is especially acute because the same valuation figure may later be invoked in licensing, damages, or FRAND disputes, even though the original assessment was prepared for a different purpose.

What a certified valuer is required to know

There is little basis for a general institutional objection to the EUIPO assuming this role. The respective roles of the EUIPO and EPO can complement one another. The EPO already contributes patent-specific evaluation and information tools, including IPscore, and brings deep technical and patent information expertise; the EUIPO, for its part, has built specific capacity around IP-backed finance through the IP Finance Roadmap and its memorandum of understanding with the EIF. A Union financing framework can sensibly sit with the EUIPO while drawing on EPO and professional valuation expertise for patent-specific inputs.

The more specific concern lies in the certification requirements. Article 35(4)(a) already requires an appropriate educational or professional background, relevant experience and technical competence in the valuation of IP assets. Article 35(5)(b), however, leaves the minimum content and learning outcomes of the specialised training entirely to an implementing act. At the level of the proposal, nothing specifies a minimum covering claim scope, validity risk, remaining term, geographic coverage, existing licences and encumbrances, FRAND commitments or pool membership. A valuer may be well qualified in general IP valuation yet lack the patent-law and licensing expertise needed to assess those inputs. Others have already cautioned that valuations not grounded in realistic assessment risk undermining confidence in the market they are meant to create. The register will confer authority; the curriculum should earn it.

A Union venue for licensing offers, and one savings clause

Article 32(3)(b) would establish a Union-wide digital match-making platform to facilitate, voluntarily, the licensing and transfer of IP rights protected in the Union. Recital 35 disposes of Articles 101 and 102 TFEU in a single savings clause.

That general safeguard does not resolve the patent-specific questions raised by the platform. The text is silent on whether jointly owned, jointly administered, or pooled rights can be represented, and on how a portfolio or pool licence would be expressed. Nor is the concern transparency as such. The technical specifications should ensure that joint or portfolio offers do not require or facilitate the exchange of non-public competitively sensitive information among competing licensors. Patent pools ordinarily resolve those governance questions before becoming operational. The proposal leaves them to implementation.

The implementation timetable is incomplete

Articles 32(3)(a) and (b) give the Office four years to deliver the framework and the platform. Still, the proposal sets no corresponding deadline for the implementing acts governing the framework’s technical specifications and the certification scheme. Since certification attests competence in applying the framework, the certification rules should be in place before the framework becomes operational.

Four amendments

A purpose-and-basis requirement. Insert in Article 34, and in Article 32(3)(a)(iii) for disclosures, a requirement that every assessment state its intended use and basis of value. The requirement would reproduce existing professional practice under IVS 101, 102 and 106 at minimal cost, while making clear that a figure prepared for secured lending is not directly transferable to a licensing or damages inquiry. The requirement would protect both sides: a licensor should not meet a conservative collateral valuation offered as evidence of portfolio worth, and an implementer should not meet an optimistic fundraising valuation offered for the same purpose.

Minimum patent content in the training specification. Add to Article 35(5)(b) a requirement that the training cover the principal patent-law and licensing determinants of value. General valuation standards cannot, by themselves, supply the patent law and licensing expertise required to assess those inputs. A patent expiring in three years, claims facing central revocation, or an existing FRAND undertaking may determine the result while remaining invisible in a cash-flow model. The gap between Article 35(3), which disclaims legal effect, and Article 35(7), which publishes a register, can be bridged only by an appropriately demanding competence standard.

Disclosure of Article 19 obligations when procured results enter standardisation. Provide in Article 10(1)(p), under the heading ‘Procurement documents’, that where results are contributed to standardisation, the applicable Article 19 obligations are identified in a persistent record accessible to subsequent acquirers and licensees and, where the relevant standard-development organisation’s declaration system permits, alongside the patent or licensing declaration; alternatively, exclude such results from Article 19(5) to (7). Existing declaration systems are generally designed around patent-standard mappings and licensing declarations, not procurement-origin access and step-in rights. Because those obligations survive successive transfers, persistent disclosure would reduce uncertainty over their existence and operation.

A recital on FRAND. Confirm that the voluntary framework establishes no benchmark for determining FRAND terms or aggregate royalties. If the framework is not intended to perform that function, the clarification imposes no substantive cost. Without it, both sides gain a new argument, and courts may be invited to treat an instrument built for bank lending as a Union reference point for something else. Recital 35 already does this for Articles 101 and 102.

The last point carries particular weight because the withdrawn SEP Regulation would itself have conferred a valuation-related competence on the EUIPO. In Case C-727/25, the European Parliament is challenging the Commission’s decision to withdraw that proposal. The action alleges, among other things, breaches of institutional balance and sincere cooperation. The case is tracked on the Parliament’s Legislative Train, analysed in JIPLP, and discussed on this blog by Bonadio and Porath. The litigation keeps the future of the EUIPO’s role in SEP governance legally and politically salient, even though the proceedings concern the withdrawal of the SEP Regulation. This strengthens the case for clarifying the intended scope of the new valuation framework.

Why the legislative stage matters

Much of the scheme’s substance will be settled by implementing acts adopted under the examination procedure before the committee established under Regulation (EU) 2017/1001. Delegating technical specifications is orthodox, but the consultation arrangements are asymmetrical. Article 39(4) imposes an expert consultation obligation for delegated acts, but there is no equivalent obligation in the proposal for implementing acts that will specify the valuation framework and certification scheme.

The call for evidence and public consultation closed on 3 October 2025, and the proposal is now before the European Parliament and the Council under the ordinary legislative procedure. That is the appropriate stage to settle the safeguards above. If they are left entirely to implementation, important choices about patent-specific valuation inputs, disclosure and certification will move to implementing acts after the legislature has fixed the architecture. The four proposed amendments would address those gaps at the legislative stage, before technical implementation begins.