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Contribution and impact of Intellectual Property on companies

April 7, 2021

The registration and exploitation of the different types of intellectual property rights (patents, industrial designs and/or trademarks) by companies operating in the market is clearly associated with their level of innovation and a strategic positioning in this market that provides them with the tools to improve their positioning and economic performance in comparison with their competitors.

This reality, which is often conceived as theory, has been quantified in an analytical report on Intellectual Property Rights and Business Performance which was published in February. This report is the result of the collaboration between the European Intellectual Property Office (EUIPO) and the European Patent Office (EPO), following on from a previous one published in 2015.

More than 127,000 European companies from the 27 Member States and the United Kingdom were analysed for this newly published study. The study compares the economic performance of companies that own patent, trademark and industrial design registrations with those that do not. The quantification of the impact on companies is done through the analysis of indicators that try to minimise the component related with the size of the company, so that for this study the data on revenue per employee and wages have been taken as a measure of company performance.

As can be seen in the results of the study, companies that register patents, trademarks or industrial designs have 20.2% more revenue per employee than companies that do not and, therefore, do not have this advantageous strategic position.

This higher average revenue per employee is magnified in companies that have patent registrations and protect their technology and innovation through this modality, showing an increase of 36.3% in the ratio of revenue per employee with respect to companies that do not have industrial property registrations.

Companies that register industrial designs to protect the design and appearance of the products they put on the market obtain a ratio of 32.2% more revenue per employee than companies that do not carry out industrial property registrations.

Finally, companies that protect their trademarks, distinguishing their products and/or services in the market, obtain a ratio of 20.9% more revenue per employee than companies that do not register industrial property.

Structurally, companies with patent, trademark and/or industrial design registrations have a higher number of employees, an average of 13.5 employees compared to 5.1 for companies that do not register industrial property and are mainly in the information and communications sectors, manufacturing industry, sectors classified as other services and related sectors such as professional, scientific and technical activities.

In companies which have industrial property registrations, the employees are paid more. Especially in companies that register and protect their technology and products through patents, which on average have a salary per employee that is 52.6% higher than companies that do not register industrial property. These companies that register patents show, together with those that register industrial designs, the highest margin between revenue per employee and wage per employee.

As conclusion, it can be said that the theoretical advantageous position in the market of companies that invest in industrial property registrations is supported by this study, which confirms that there is a positive relationship between the ownership of different types of industrial property registrations and the economic performance of the company, which should not be taken as a guarantee of success, but as a tool that strengthens and improves the company’s position with respect to its competitors.

Article by Xavier Prados.

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