SMEs with intellectual property rights more likely to experience high growth

A new joint report published by the European Patent Office (EPO) and European Union Intellectual Property Office (EUIPO) has found that SMEs that have filed intellectual property rights (IPR) are more likely to experience high growth than those who have not.

SMEs constitute 99% of EU businesses however much of their contribution to growth and job creation is generated by only a few high growth SMEs. The success of these high growth SMEs, defined as companies that experience a growth rate in turnover of 20% or more for a three-year period,  frequently stems from investment in innovation and intellectual assets, which can help them to secure higher margins, license technology, establish collaboration agreements and attract investors.

This recent report, published in May 2019, sought to assess whether IP rights can be used as a reliable predictor of the likelihood that an SME will experience high growth, and if so, what IPR strategies perform best as a signal of their growth potential.

By identifying these high growth businesses at an early stage in their development, policy makers, investors and potential business partners can support and benefit from their development.

The report’s main findings included that:

  • SMEs that have filed at least one IPR are 21% more likely to grow in the following three years and 10% more likely to become a high growth firm.
  • The likelihood of experiencing a high growth period is 17% higher for SMEs that have filed at least one European intellectual property right.
  • In high-tech industries, the likelihood of growth is 110% higher for SMEs that have filed one or more European patents.
  • In low-tech industries, where patent filings are often rare, filing one or more European patents increases the likelihood of growth to 172%.
  • SMEs that have filed a European trade mark applications are more likely to experience high growth (62% in consumer non-durable industries; and 18% in consumer durable industries).
  • SMEs that use a bundle of trade marks, patents and designs are 33% more likely to experience a high growth period than those that rely on a single category of IPR.

As the report highlights, simply filing an intellectual property right is not sufficient to trigger growth, however, protecting and exploiting your intellectual assets can provide benefits which support the growth of your business.

It is therefore important that SMEs are aware of the different types of intellectual property rights and consider what IP might be available to them.

SMEs should also consider whether their internal IP processes are enabling them to capture and exploit their brands and innovations. Learn more about this at our next workshop from 3pm-5pm on Tuesday 18 June.

If you are developing a new product, design or brand and believe you may have some intellectual property to protect, please get in touch to speak to one of our patent or trade mark attorneys.


© 2019 Wilson Gunn