The European Commission has proposed a new European Innovation Act, intended to strengthen Europe's innovation ecosystem and help startups and scaleups develop, finance and grow their businesses within the EU. The proposal is designed to address two persistent barriers to commercialising innovation: limited access to finance and fragmented rules across Member States.
Improving access to finance for IP-rich businesses
Many startups and scaleups hold patents, software, datasets and other intellectual property that may be commercially valuable but difficult to value reliably. That can make it harder to support fundraising or debt financing. The proposed Act would introduce a common EU framework for valuing intellectual property, create a digital marketplace connecting buyers and sellers of IP assets, and provide expert support to help companies bring innovations to market. The Commission estimates that these measures could generate around €35 million in administrative cost savings and unlock up to €10.2 billion per year in additional IP-backed venture capital and debt.
A common procedure for R&D procurement
The Act would also establish a common procedure for public R&D procurement, with the aim of giving public buyers and suppliers greater legal certainty and helping new technologies reach the market faster. This could be particularly relevant to technologies addressing shared societal challenges, including health, education and clean mobility. The proposal would also make it easier for public buyers in different Member States to run joint R&D procurements. The Commission forecasts that these measures could generate €1 billion per year in savings for public buyers and €25.92 billion in additional annual profits for companies.
Regulatory sandboxes
Alongside the European Innovation Act, the Commission has proposed common principles for regulatory sandboxes. Sandboxes allow companies, researchers and public authorities to test new products, services or technologies for a limited period in a controlled setting and under regulatory supervision. For innovators, sandboxes can provide earlier clarity on how rules apply in practice. For regulators, they can provide evidence on whether existing rules remain fit for purpose. Although sandboxes already exist in some areas of EU law, the absence of a common approach has created fragmentation and uncertainty. The Commission's proposal aims to create a common EU reference framework for sandboxes in areas not already covered by EU legislation, giving innovators more room to test new solutions while protecting public interests.
Why this matters
UK startups, scaleups, investors, universities and technology suppliers that raise finance, license IP, participate in EU-funded projects or sell into EU public-sector markets may be affected by any new EU framework for IP valuation, R&D procurement and regulatory sandboxes.
The IP valuation proposals could influence diligence, financing and licensing strategy for technology businesses with European portfolios. And the procurement and sandbox measures may create new routes to market for regulated or public-sector-facing technologies.
