European Study Demonstrates Positive Relationship Between IP Ownership and Economic Performance

A recent joint study by the European Patent Office (EPO) and the European Union Intellectual Property Office (EUIPO) has revealed that companies that own at least one registered intellectual property right (patents, designs, trade marks) generate 20% higher revenues per employee compared to companies with no registered intellectual property rights (IPRs). Companies owning IPRs were also found to pay 19 % higher wages on average.

While the study notes that the findings “do not constitute conclusive proof that encouraging firms to make greater use of IPRs will cause their performance to increase”, it does demonstrate a strong positive relationship between IP ownership and economic performance. This is particularly so for SMEs, with the study finding SMEs that own IPRs have a 68% higher revenue per employee than those that do not. By comparison, for large companies, this revenue premium is 18%. Despite these findings, only 9% of European SMEs own any IPRs. The data highlights the significant potential for SMEs to exploit IPRs.

Patent ownership correlated to the largest increases with 36% higher revenue per employee and 53% higher wages, followed by registered designs (32% higher revenue and 30% higher wages) and trade marks (21% higher revenue and 17% higher wages). Companies with a combination of IPRs enjoyed even higher revenues.

Christian Archambeau, EUIPO Executive Director, in a statement, said:

“In a critical context for the majority of European businesses, these results underline the importance of making it easier for small companies to protect their innovations and creativity with IP rights, one of the major goals of our Strategic Plan 2025”.

Antonio Campino, EPO President stated:

“The study further demonstrates that there is significant untapped potential for SMEs in Europe, as it shows that they stand to benefit the most from owning intellectual property. Added to this, business which makes intensive use of IPRs helped pull us through the 2008 financial crisis, so I strongly believe innovation will help drive Europe’s recovery from the impact of COVID-19”.

While the study was of the European economy and European IPRs, these findings are applicable to other major economies and provide evidence of the importance of IPRs to economic performance.

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