The recent report, on a detailed study covering the period from 2007-2019, takes a closer look at the role of Intellectual Property Rights by analyzing a representative sample of over 127 000 European companies from all EU Member States and outlines the virtuous cycle between the economic performance of companies and the impact of Intellectual Property Right on said performance. Given the fact that the dataset used for the study is significantly larger than that of any other data source of this type currently available, the sample is large enough to draw representative conclusions.
In addition to the finding that companies owning Intellectual Property Rights generate 20% higher revenue per employee than those companies that do not own Intellectual Property Rights, the report also reports other impressive numbers in relation to the positive impact of IP-portfolio’s, the main take aways being the following, as can be read in the conclusions of the report on page 54 thereof:
‘First, revenue per employee for owners of IPRs (patents, trade marks and/or designs, national and/or European) is on average 20% higher than for non-owners of IPRs. This IPR ownership “revenue premium” is largest for patent owners at 36.3%, followed by design owners at 32.2%, and trade mark owners at 20.9% All the differences found are statistically significant, meaning that they are very unlikely to have come about purely by chance.
Second, wages paid by IPR owners are on average 19.3% higher than those paid by firms that do not own IPRs. In this case, the “wage premium” is highest for patents (52.6%), followed by designs (29.7%) and trade marks (17.4%). Again, these differences are statistically significant.
Third, a considerable number of firms (91.2%) do not own any of the three IPRs. Moreover, a greater proportion of SMEs than large firms are non-owners (91.3% of SMEs versus 44.4% of large firms). In other words, only 8.7% of SMEs own any of the three IPRs included in this study, but 55.6% of large firms do. This does not imply that 44.4% of large firms do not use IPRs in their commercial activities. They may use IPRs, but not be the formal owners. If they are part of a larger group structure, IPR ownership may be with other entities within the group.
Fourth, there are noticeable differences among IPR-owning firms. On average, large firms own more rights than SMEs, independent of the type of right. Compared with large firms, SMEs tend to use national rights more often than European rights, and they have a relatively greater reliance on trade marks.’
The report shows that ideas and creativity often are the most valuable source of input for companies, making companies seeking ways to generate appropriate returns on their investments by exploiting these ideas and creativity in different ways, and Intellectual Property Rights being instrumental for generating such appropriate returns. In short: owning Intellectual Property Rights, in particular patents, trademarks and designs, is strongly associated with an improved economic performance.
Authored by: Lenneke van Gaal, Samantha C. Brinkhuis.
