Effects of the European Union trademark: Lessons for the harmonization of intellectual property systems

Abstract

We study the impact of the European Union Trademark (EUTM), the first pan-European intellectual property right (IPR) title established in 1996. The EUTM drastically reduced the cost of trademark protection, particularly for firms active in many EU member states. As a consequence, the number of marks and the resources spent on protection increased substantially, indicating that there was a large latent demand for IPR protection. Our results suggest that the fragmentation of the EU IPR system, due to the resulting high cost of IPR protection, is an impediment to market entry and innovation, especially for companies operating in smaller EU member states. Our findings are informative for the governance of IPR protection in the EU as well as for plans to harmonize the IPR environment in other trade blocs.