Blog post by Stephen Wyber
At the top of the European Commission’s agenda to promote competitiveness is the development of a Start-Ups and Scale-Ups Strategy. One of the key ideas discussed in this context has been the creation of a ‘28th Regime’.
This term is shorthand for the notion of an additional single framework for companies (i.e. a 28th in addition to the 27 national regimes), allowing them to operate across the European Union without having to set up in every country where they work, and comply with 27 different corporate law and taxation provisions.
While the ‘28th regime’ is a political buzz-word at the moment, the idea is not new. There is already a provision for a European company status dating back to legislation passed in 2001 and which entered into force in 2004. This provides rules around a company’s formation, organisation, general meetings, annual accounts and insolvency, leaving other issues to national (or other European) legislation.
Another (more focused) example sometimes cited is the single European patent, which offers applicants the possibility to apply for EU-wide protection rather than registering in each and every country separately.
In both cases, the idea is to offer a choice between a national presence and a European one. As such, a 28th regime offers an alternative to full harmonisation (which may take a lot of work) or mutual recognition (which may play into the hands of those jurisdictions with the laxest rules in place).
But what does this mean for research-intensive companies, including of course university spin-offs and those involved in research industry collaborations? And what about researchers and research institutions, which are both central to achieving wider policy goals and developing the ideas that will underpin the businesses of tomorrow?
A 28th Regime for Innovators
By presenting the 28th Regime within the context of start-ups and scale-ups, the Commission is presenting it as a way of allowing exciting new companies with a big focus on innovation to develop more quickly.
Access to new markets and capital is vital—but so too is the ability to access research outputs, as well as to engage in partnerships with universities and other research centres.
As highlighted in our submission to the EU’s Start-Ups and Scale-Ups strategy, this access is a major issue for innovative companies, and is only getting more important with the growth of AI and other data-based business models.
We will cover the topic of data access in the next section, but there is already an argument for exploring how, through a 28th regime, the EU can facilitate research-industry collaborations across borders.
Legal Barriers to Cross-Border Research Partnerships
EU copyright law currently poses challenges to such collaborations. The general research exception provided in the InfoSoc Directive explicitly only applies to non-commercial research. The optional nature of the exception, and a lack of clarity about its focus, further complicate matters.
This non-commercial/commercial distinction is not set in stone, however. The exception for text and data mining in the Directive on Copyright in the Digital Single Market (CDSM) opens the door to research-industry collaborations, albeit in a way that is unlikely to see more than a tiny share benefit.
Clearly, there is a longer term need to revise wider copyright law to address the chill imposed on innovation in Europe by a non-commercial/commercial distinction for research. But with the political emphasis on supporting innovative, cross-border companies, any work around a 28th regime could already build on the trend present in the CDSM and allow any companies operating under it to engage with research institutions across Europe.
For this to work, any such provision will need to make sure that research institutions themselves enjoy legal security in supporting such partnerships. This includes:
- The right to provide access to information resources—even when contracts or technological protection measures(TPMs) restrict this.
- Limitations on liability for research institutions involved in partnerships.
We would of course hope that once such provisions are available for companies operating under the 28th regime, they would soon also apply for those working only under national law (and their partners in research institutions), creating a level playing field for all innovators.
Enabling Research Collaboration Across Borders
The focus on businesses is understandable in light of the Commission’s emphasis on competitiveness. At the same time, given that much innovation comes from the taxpayer’s investment in research and science, the success of Europe’s business sector (as well as our ability to address wider challenges) depends on realising the potential of the EU as a single research area.
Indeed, the challenges faced by researchers in working with Europe’s fragmented copyright framework are not so far removed from those faced by businesses in terms of dealing with compliance costs of working across borders. Disconnect between national policies is a source of uncertainty for researchers involved in cross-border collaborations (and the librarians, legal staff and others who support them). For instance:
- In Country A, a researcher might benefit from a Secondary Publication Right, enabling open-access sharing. But in Country B, such a right may not exist. Whose law governs the project?
- Country A might permit data sharing for machine learning, while Country B does not. The law is silent on cross-border machine learning—how should organisations proceed?
These inconsistencies disrupt collaboration and innovation. Harmonisation could resolve them.
So Could There Also Be A 28ᵗʰ Regime For Researchers And Research Institutions?
The idea is attractive. However, given the nature of copyright law, a straightforward harmonisation in EU law is likely to make more sense than creating a new regime, at least in this area. This is already the case when it comes to protections for rightsholders. And since copyright does not require registration, one of the key issues that the Single European Patent sought to resolve doesn’t exist here.
As the shape of the proposed 28th regime – and the wider European Innovation Act within which it seems likely to sit – becomes clearer, it will nonetheless be important to pay close attention to how far this delivers on what spin-offs and other innovative companies need. There will also be a need to coordinate with the planned European Research Area Act.
Overall, however, perhaps most useful will be to keep reminding ourselves – and decision-makers – that the spirit of a 28th regime – making it as easy to collaborate with partners in another EU country as in your own – should apply.
As highlighted in our previous posts, Europe cannot claim to have a complete approach to competitiveness without a robust approach to supporting research and innovation. This in turn will not only support the competitiveness agenda, but also contribute to addressing wider social, economic and environmental challenges, and ensure that the EU can keep up with its international competitors such as the US, Japan, China, Singapore and others.
10 June 2025
