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Cablegate: More Sensitive Diplomatic Cables About "Community Patent" or "EU Patent"

Cablegate



Summary: A couple more transmissions between embassies/consulates regarding "SENSITIVE" details from Brussels

According to the more recent Cablegate cables, harmonising patent laws -- a process now known as "Community Patent" or "EU Patent" -- is rather abrasive as a whole. Countries in Europe would benefit almost in no shape or form from it. Politicians worry that people will find out who benefits from this, mostly patent lawyers and multinationals to be specific.



To quote the cable from the Government of Italy (GOI), as it was posted yesterday morning, "THE GOI, MOREOVER, DOES NOT/NOT SUPPORT THE CREATION OF A SEPARATE GROUP TO PURSUE PATENT HARMONIZATION DISCUSSIONS. PRIGIONI NOTED THAT, IN THE GOI VIEW, THE CREATION OF A SEPARATE GROUP WOULD CREATE THE IMPRESSION OF A DEAL BEING STRUCK BEHIND CLOSED DOORS, POTENTIALLY UNDERMINING THE LEGITIMACY OF AN AGREEMENT. HE PROPOSED INSTEAD THAT BILATERAL EXCHANGES BE USED TO SUPPLEMENT STANDING COMMITTEE DISCUSSIONS."

In the following latest two cables from Brussels (2009), cable 1 states in ۦ3 that: "Speaking at the post-Social Summit press conference, Dutch PM/European Council chair Balkenende said participants all agreed that "if we want a social Europe we need a strong economy in Europe." Commission President Prodi underlined the need to actually implement the Lisbon agenda. With a reference to the persisting deadlock on the draft legislation concerning the Community patent, Prodi stated: "If we continue to decide by unanimity, the Lisbon agenda has no chance of being implemented." Prodi also called for Member State budgets to reflect the commitments taken under the Lisbon strategy. Balkenende and Prodi underlined the role of social dialogue as being "at the heart of the European Social model."

"Politicians worry that people will find out who benefits from this, mostly patent lawyers and multinationals to be specific."The "Lisbon strategy" need not depend on the so-called 'Community' patent (a euphemism), which would only increase the aftermath of lawsuits. Cable 2 says in ۦ4: "The Communication cites a number of problems for the shortcomings. It notes barriers to ICT business growth, wherein sub-optimal conditions for SME access to markets, innovation and finance, plus excessive regulatory burdens, prevent SMEs from expanding and growing their market shares more rapidly. The Communication highlights how fragmentation of EU ICT markets is also a key limiting factor for SME growth and innovation. The EU's failure to achieve a real internal market in telecoms, and to standardize ICT regulation and IPR regimes, limit the ability of firms to grow rapidly. The Communication calls for creation of a Community patent to help remedy this situation. The lack of collaboration between public procurement authorities and those overseeing R&D and innovation results in many missed opportunities for innovative products to flourish."

The logic here is very flawed. What they are trying to insinuate is that in order for businesses to thrive in Europe they might need a broader market like that in the United States. But to suggest that SMEs suing or threatening more competitors in more parts of Europe would somehow spur innovation is to ignore all the good academic studies (including empirical evidence) from the US -- ones that suggest patents have only harmed innovation and continue to do so. The sacred cow which is patents is simply the wrong thing to blame here and to portray it as a gateway to success is simply to spin or lie for an agenda. Here are the two cables in question:








UNCLAS SECTION 01 OF 02 BRUSSELS 004741

SIPDIS

DEPT FOR DRL/IL DOL FOR ILAB

E.O. 12958: N/A TAGS: PREL [External Political Relations], ELAB [Labor Sector Affairs], ECON [Economic Conditions], EUN [European Union], USEU BRUSSELS SUBJECT: EU SOCIAL SUMMIT RENEWS COMMITMENT TO LISBON STRATEGY; LABOR AND EMPLOYERS SPLIT ON PRIORITIES

ۦ1. SUMMARY. EU-level organizations of labor and employers at a pre-European Council meeting with EU leaders on November 4 reaffirmed their commitment to the "Lisbon strategy" for turning the EU into the most competitive economy by the year 2010. The employers and unions not surprisingly continue to have different priorities for reactivating the Lisbon agenda. END SUMMARY.

ۦ2. The European Council meeting was preceded on November 4 by a "Tripartite Social Summit," in which the EU Troika (Dutch Presidency, Luxembourg, UK and European Commission) as well as representative organizations of the "social partners" (labor, employers, "cadres" and employees) reviewed the Lisbon strategy for turning the EU into the most competitive economy by the year 2010. The Social Summit heard a presentation by former Dutch PM Wim Kok of the report drawn up by his high-level panel on the progress of the Lisbon Strategy. The report takes a gloomy view on progress made over the past four years. It explains the EU's disappointing delivery by the overloaded agenda, poor coordination and conflicting priorities, and blames the lack of political will by the Member States. In order to ensure that Member States take up their responsibilities, the Kok report calls for a process- redesign along three lines: "more coherence and consistency between policies and participants, improving the process for delivery by involving national parliaments and social partners, and clearer communication on objectives and achievements." The report rejects proposals for the 2010 Lisbon target to be lifted. It also states that the EU should not become a "copy-paste" of the US.

ۦ3. Speaking at the post-Social Summit press conference, Dutch PM/European Council chair Balkenende said participants all agreed that "if we want a social Europe we need a strong economy in Europe." Commission President Prodi underlined the need to actually implement the Lisbon agenda. With a reference to the persisting deadlock on the draft legislation concerning the Community patent, Prodi stated: "If we continue to decide by unanimity, the Lisbon agenda has no chance of being implemented." Prodi also called for Member State budgets to reflect the commitments taken under the Lisbon strategy. Balkenende and Prodi underlined the role of social dialogue as being "at the heart of the European Social model."

ۦ4. The President of the European Employers' Federation (UNICE), Jurgen Strube, opined that the sense of urgency with the Lisbon agenda must be translated into implementation but called for the focus to be on competitiveness: "All (Lisbon) objectives are interrelated but it's important to focus on the key drivers: competitiveness and economic growth. ETUC Secretary-General John Monks said his organization (the European Trade Union Confederation) supported the Kok report as a "realistic" and "balanced" document, adding: "We know there are choices to be made, but the route is not the same as in the U.S. What concerns us are the "delocalisations" (out-sourcing), working time related issues, etc. There is an agenda there."

ۦ5. A statement released by the Dutch Presidency said the parties "reaffirmed their commitment to the Lisbon agenda" as "the most effective means by which to fulfill" the EU's economic and social objectives "and thereby underpin the role of social dialogue in European governance," adding: "All parties agreed on the need to add a new impetus to the implementation of the Lisbon strategy in order to bring about a balanced economic, social and environmental renewal in the EU." The contribution of social partners was "essential in unleashing the potential for economic and employment growth by finding the balance between flexibility and security." Balkenende and Prodi were said to have "expressed their readiness to continue the debate and stated that they were looking forward to a substantial joint contribution from the social partners with commitments relating to their area of competence in the context of the Mid-Term review of the Lisbon strategy next spring."

ۦ6. COMMENT. Just like the members of the Kok panel were said to be divided on the remedies to the problems of the EU economy, the employers and unions not surprisingly continue to have conflicting demands on priorities to be addressed in the context of their "social dialogue" at the service of the Lisbon strategy: the employers are calling for further liberalization, the removal of obstacles to cross-border provision of services, and for research policy to be tweaked toward boosting competitiveness. In contrast, the ETUC calls for stronger social cohesion "as an essential part of Europe's competitive advantage" and insists that the Lisbon process should not amount to deregulation, weakening worker rights and protection, and cutbacks in living and social standards.

SCHNABEL














VZCZCXRO5173 PP RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV RUEHSR DE RUEHBS #0399/01 0790718 ZNR UUUUU ZZH P 200718Z MAR 09 FM USEU BRUSSELS TO RUEHC/SECSTATE WASHDC PRIORITY RUCPDOC/USDOC WASHDC PRIORITY RUEAFCC/FCC WASHDC PRIORITY INFO RUCNMEM/EU MEMBER STATES COLLECTIVE

UNCLAS SECTION 01 OF 03 BRUSSELS 000399

SENSITIVE SIPDIS

FCC FOR WEISLER DOC FOR ITA, NTIA - ALEXANDER, MAC - DEFALCO STATE FOR EUR/ERA, EB/CIP, EB/IPE PLEASE PASS TO USTR

E.O. 12958: N/A TAGS: ECPS [Communications and Postal Systems], ECIN [Economic Integration and Cooperation], EINV [Foreign Investments], EINT [Economic and Commercial Internet], ETRD [Foreign Trade], ECON [Economic Conditions], EUN [European Union] SUBJECT: EU SEEKS TO DOUBLE ICT RESEARCH AND INNOVATION FUNDING

ۦ1. (SBU) SUMMARY. The European Commission released a March 13 Communication calling for doubling funding for information and communication technology (ICT) research and innovation and other steps to boost ICT in Europe. "A Strategy for ICT R&D and Innovation in Europe: Raising the Game" emphasizes that ICT provides vital tools to promote economic recovery and address long-term aging, environmental and energy concerns and lays out plans to make the EU the world leader in ICT development by 2020. The Commission notes that the EU lags the U.S. and Japan in the proportion of R&D devoted to ICT and the economic value generated by ICT. The report cites regulatory barriers to ICT business growth, fragmented markets, disjointed R&D efforts and inadequate funding for the shortcomings. The Commission calls specifically for doubling ICT R&D investment by 2020, to be matched by member states. The Communication also calls upon EU institutions and Member States to coordinate efforts to overcome fragmentation of ICT R&D efforts and markets, to raise the number of ICT "poles of excellence," and to set the right conditions to grow new innovative ICT businesses across Europe. The new strategy forms part of preparations for an EU research and innovation plan as called for by the December European Council, and underpins EU efforts to promote greater emphasis on R&D and innovation as a critical factor to speed recovery from the global economic crisis. END SUMMARY.

COMMISSION PROPOSES ICT RESEARCH AND INNOVATION STRATEGY --------------------------------------------- --------

ۦ2. (U) The European Commission released a Communication on March 13 calling for doubling funding for information and communication technologies (ICT) research and innovation and other steps to boost the ICT sector in Europe. The report follows upon a public consultation, launched in September 2008, on an EU research and innovation strategy for ICT, and responds to the December 2008 European Council call for an EU plan for innovation and research. The Communication, "A Strategy for ICT R&D and Innovation in Europe: Raising the Game," stresses the importance of deepening, rather than cutting R&D support during the current economic crisis, and lays out plans to make the EU the world leader in ICT development and use by 2020. The Communication underlines that Member States, EU institutions and industry must pool resources and better coordinate ICT research and innovation efforts to reach this goal.

EU LAGS OTHERS IN ICT RESEARCH ------------------------------

ۦ3. (U) The Communication notes that in the EU, ICT represents 34 percent of the two trillion euro global ICT market, accounts for 12 million jobs and generates six percent of EU GDP. ICT R&D accounts for a quarter of all private R&D spending, a third of all R&D employment, and fifth of all patents in the EU. Nevertheless, the EU ICT business sector spends less than half as much as its U.S. counterpart on R&D spending. The EU also lags other OECD members in the proportion of R&D devoted to ICT, who on average devote more than 30 percent of total R&D to ICT. The Communication notes a growing deficit of ICT skilled workers across the EU, resulting in "several hundreds of thousands" of unfilled jobs. Value added by the EU ICT sector is only 23 pecent of total value added, which lags the U.S., Japan and advanced economies.

ۦ4. (U) The Communication cites a number of problems for the shortcomings. It notes barriers to ICT business growth, wherein sub-optimal conditions for SME access to markets, innovation and finance, plus excessive regulatory burdens, prevent SMEs from expanding and growing their market shares more rapidly. The Communication highlights how fragmentation of EU ICT markets is also a key limiting factor for SME growth and innovation. The EU's failure to achieve a real internal market in telecoms, and to standardize ICT regulation and IPR regimes, limit the ability of firms to grow rapidly. The Communication calls for creation of a Community patent to help remedy this situation. The lack of collaboration between public procurement authorities and those overseeing R&D and innovation results in many missed opportunities for innovative products to flourish.

ۦ5. (U) In addition, the Communication outlines how Europe's ICT R&D landscape remains fragmented, despite new efforts under the seventh EU Framework Program for R&D (FP7). Member State ministries continue to develop R&D, innovation and education policies in isolation, without adequate cross-ministerial consultation. The plethora of varied EU, Member State and intergovernmental R&D funding mechanisms also lead to confusion for innovators.

THE SOLUTIONS - GREATER AND MORE COORDINATED ICT R&D INVESTMENT --------------------------------------------- -------

BRUSSELS 00000399 002 OF 003

ۦ6. (U) In response to these shortcomings, the Commission says Europe "needs to raise its game." The Commission calls for a systematic ICT R&D strategy that mobilizes resources and stakeholders along three paths: raising public and private ICT research and innovation; prioritizing ICT research and innovation into key areas and reducing fragmentation; and facilitating the emergence of new public and private markets of ICT-based innovations.

ۦ7. (U) In specific terms, the Commission calls for doubling ICT R&D investment by 2020, beginning with a boost in EU-level spending under FP7 from 1.1 billion Euros in 2010 to 1.7 billion in 2013, to be matched by Member States. This could be accompanied by direction of additional regional/cohesion funding toward ICT innovation and research. The Commission urges Member States to develop more public-private partnerships, to boost public procurement of innovative ICT products, and to explore pre-commercial procurement.

OVERCOMING FRAGMENTATION ------------------------

ۦ8. (U) The Communication calls for a series of actions to better coordinate its R&D and innovation policies and specialize its resources. It urges Member States to work with EU institutions to develop shared strategies and policies, to enhance the dialogue within the National ICT Research Directors Forum and to work more closely with ICT advisory groups. The Commission commits to strengthen stakeholder groups and use instruments such as the ICT Knowledge and Innovation Communities (KICs) to bring industries, entrepreneurs and academics together. Member States and regions are urged to redouble efforts to develop knowledge-based innovation clusters, and increase sharing of R&D infrastructures for sectors that require large investments, such as nanotechnology and high-performance computing.

FACILITATING MARKETS FOR INNOVATION -----------------------------------

ۦ9. (U) The Communication discusses ways to facilitate the emergence of markets for innovation, so that the EU can "produce and commercialize the equivalent of its share in the global ICT market." The Commission calls for both general policy measures and targeted procurement as means to create more favorable conditions for EU-wide innovation markets. Member States and regions should promote closer collaboration between innovation users and producers across the public sector. Governments should ensure interoperability and work harder to promote common standards, and the Commission will work to revise the ICT standardization process.

ۦ10. (U) Also, the Commission plans to support a series of substantial pilot projects to deploy innovation ICT products and develop new pan-European ICT-based service infrastructures. Among these may be projects to focus on innovative ICT solutions for sustainable healthcare or for energy efficiency, as well as an effort to develop an electronic identity management (eID) infrastructure, to increase the trustworthiness of e-government and e-commerce services.

ۦ11. (U) Finally, the Communication calls for simplification and streamlining of R&D administrative procedures, to cut red tape and allow for greater flexibility in program procedures. The Commission notes it will expand international cooperation on the largest-scale ICT challenges, such as the Future Internet and quantum computing.

CONCLUSION AND COMMENT ----------------------

ۦ12. (U) The Commission's new proposed ICT R&D and innovation strategy projects that if fully adopted, by 2020 the EU will have: doubled its private and public investment in ICT R&D, doubled venture capital investment in high growth ICT SMEs, developed an additional five ICT poles of world-class excellence, to make ICT research careers more attractive to bridge the current skills gap; grown new innovative ICT businesses so that one third of all ICT R&D business expense comes from new firms; and ensured that the EU ICT sector supplies at least the equivalent of its share in the global market.

ۦ13. (SBU) The proposed strategy is part of a larger series of EU initiatives to boost the EU's innovative capacity across sectors. These were triggered by the seminal 2005 Aho report detailing the EU's R&D and innovation shortcomings. The new ICT strategy is designed to build on the EU i2010 ICT policy framework, the broad-based EU innovation strategy and ICT-related initiatives under the European Research Area framework. The effort will need approval by the European Council, which is likely. It is unclear whether

BRUSSELS 00000399 003 OF 003

this and other EU innovation promotion initiatives will allow the EU to overcome the persistent innovation gap remaining versus the U.S., and in any case, will take time to show measurable results.

MURRAY







If there are any Cablegate areas we should explore more urgently, please leave a comment.

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