Posted on 12/12/2019

European patent usage by SMEs published in new study

We consider the key findings that demonstrate how SMEs exploit patents to grow their business globally.

The European Patent Office (EPO) has published a new study on the commercialisation of patents and patent applications filed by small and medium sized enterprises (SMEs).  The key findings demonstrated how SMEs take advantage of European patents to secure licensing agreements, collaborate with partners and ultimately grow their business internationally.

The results were compiled from 1441 interviews in relation to pending and granted European patent applications owned or co-owned by SMEs from a range of countries and industries.  The interviews were designed to create a picture of the importance of the invention and patent for the SME, the motives for, and types of, commercial exploitation, as well as any potential for, and challenges in securing, collaborative commercial exploitation with business partners.

In general, SMEs considered their patented inventions to be some of the most important for their industry, with 39% of respondents putting their invention in the top 10% for their industry.  The main motivation across all industries for obtaining patent protection was preventing imitation (83% of respondents).  This was followed by improving reputation, obtaining freedom to operate and facilitating commercial contracts/licenses.

Overall, two thirds of patented inventions reached the market and of them, 50% were exploited in collaboration with an external partner.  This shows the importance of business partnerships in SMEs realising the full potential of their patented inventions.  SMEs frequently cited motives for entering a business partnership of: increasing revenue, accessing new markets, collaborating on innovation, outsourcing manufacturing and settling infringement.   It seemed that most partnerships were formed from existing relationships, as the most popular partners for SMEs were their own clients or customers.

Over a third of SMEs who applied for a European patent planned future business partnerships to exploit their invention, with the majority being new collaborations with new partners.  However, the report highlights the challenges faced by SMEs in starting a business partnership, with finding the right contacts or partners with which to do business being the most significant.  Interestingly, the results show that most business partnerships in relation to an SME owned patent are down to the business partner finding the SME rather than the SME finding the business partner, with direct personal networks being the most popular channel for this.  This highlights the importance of maintaining a strong business network and ensuring the SME’s business activity is accessible to potential business partners, which is facilitated in part by maintaining a patent portfolio allowing an SME to publicise their inventions and expertise while controlling legal rights to the invention.

The study also mentions that individual patents are often used in conjunction with other intellectual property rights by SMEs to strengthen their business, such as other patents, trade marks and registered designs. The full EPO study can be found here.

If you have any questions or would like to discuss opportunities for developing an intellectual property portfolio to support and grow your business, please get in touch and we will be happy to assist.

Wilson Gunn