In our last article, as part of our World IP Day series, we examined what IP means for SMEs. Today we will look at the value of IP for SMEs and as you will see, the value can be great.

According to a WIPO report on Intangible Capital in Global Value Chains, “IP and other intangibles add twice as much value to products as tangible capital”. It was estimated in this report that about a third of the value of products purchased by consumers comes from intangible assets like branding and technology.

A recent joint study by the EUIPO and EPO(1) shows that SMEs account for 99% of European businesses and employ 2 out of  every 3 employees. SMEs and individual entrepreneurs account for 20% of applications filed from Europe at the EPO, and an even higher percentage of applications filed from Europe for trade marks and designs at the EUIPO.  This link between IP and economic growth is demonstrated in evidence which shows that companies that own IP rights have 20% higher revenue per employee than companies that do not. This revenue premium rises to 55% and even higher for SMEs. The study also finds that SMEs with prior IPR activity are more likely to grow than other SMEs and the likelihood of an entity becoming a high-growth firm is higher for SMEs that have filed a European IPR.

Thus, when a business is establishing its presence in the marketplace, protecting and managing its IP is critical as it can mean the difference between success or failure.

Protecting your IP protects not just your current marketplace but your future marketplace as it safeguards your ability to expand geographically.  Additionally, IP rights can be bought, sold, used as a lien or as security and can generate income through licensing.

Identifying and protecting your IP may increase the worth of a business in the eyes of investors. For example, while intangible, the goodwill imbued within a trade mark can be one of a company’s most important assets and should be protected just as more tangible physical assets are protected.

Building an IP Strategy

An IP Strategy is a plan, in line with your business goals, to acquire or maintain IP assets and to gain the most possible value from such assets. You can find more information on how best to build your IP strategy in our article here. Having an IP Strategy provides a competitive edge in the market.

Implications of recent challenges on IP Rights

The coronavirus pandemic has had a great impact on the economy. Businesses around the world have cut costs and stopped any unnecessary spending. In this context, it is important not be tempted to make risky cuts to IP budgets. Rather, one must maintain IP protection to make sure that there are the necessary measures in place for the business to continue functioning efficiently.

It is advisable to focus on your IP strategy and prioritize according to the needs of your business. The answer might be to look at more leverage through sale, transfer, licence and/or retention which is properly calculated and planned.

Daren Tang, the WIPO Director General has recently commented on IP application trends and suggested that “because IP is so connected to technology, innovation and digitalization, IP will become even more important to a greater number of countries in the post-COVID world.”

Should you have any questions about your IP, please contact us at or and we would be delighted to assist.

(1) High Growth Firms and Intellectual Property Rights, Joint EPO-EUIPO Report, May 2019.