Owning IP rights puts European firms ahead
Companies owning at least one patent, registered trade mark or design generate higher revenues per employee, and pay higher wages, than companies owning none of those registered intellectual property rights (IPRs).
A new study, published today by the European Patent Office (EPO) and the European Union Intellectual Property Office (EUIPO) analyses the relationship between intellectual property rights (IPRs) and firm performance in the European Union. It confirms that companies that own IPRs generate higher revenues per employee, create more employment and pay higher wages than their counterparts without an IP portfolio. These relationships between IPR ownership and economic performance are particularly strong for small and medium-sized enterprises (SMEs).
Average values of selected variables by IPR ownership, 2019-2022
Number of employees | Revenue per employee (in EUR / year) | Wages per employee (in EUR / year) | ||
---|---|---|---|---|
Non-IPR owners | 4.17 | 147 230 | 25 430 | |
IPR owners | Any IPRs | 9.08 | 182 270 | 31 040 |
% difference compared with non-owners | 117.75% | 23.79% | 22.07% | |
Patent owners | 13 | 189 490 | 36 420 | |
% difference compared with non-owners | 211.69% | 28.70% | 43.26% | |
Trade mark owners | 9.06 | 181 560 | 30 740 | |
% difference compared with non-owners | 117.19% | 23.32% | 20.9% | |
Design owners | 11.67 | 190 440 | 31 730 | |
% difference compared with non-owners | 179.91% | 29.34% | 24.79% |
Note: Employment and performance indicators (revenue per employee and wages per employee) are calculated as the weighted mean value of the per-firm averages of variables over the period 2019-2022. The ‘Non-IPR owners’ group is defined as firms with no stock of any registered IPR (patent, trade mark or design). The ‘IPR owners’ group is defined as firms that owned at least one patent, trade mark or design, or any combination thereof. The ‘Patent owners’, ‘Trade mark owners’ and ‘Design owners’ groups are defined as firms that owned at least one of these particular IPRs. Since many firms own bundles of IPRs, the various groups of IPR owners overlap. ‘Any’ refers to ownership of either national or European-level IP rights of the respective IPR type.
IPR-owning firms
European companies that own patents, trade marks, or designs, generate revenues per employee which are +23.8% higher on average than for companies without IPRs. Moreover, these IPR-owning companies are found to pay wages that are +22.1% higher on average than other companies. Even after correcting for relevant factors such as country of origin and sector of activity, large IPR-owning companies saw their revenue per employee to be +16% higher than those without, whereas the premium enjoyed by SMEs owning IPRs was +44% higher than those without! However, fewer than 10% of the SMEs own any of the three types of IPR or a combination thereof, compared with almost 50% of the large firms.
The study shows as well that IPR-owning firms are more strongly represented in the sectors of information and communication (with 14.8% of companies in that sector owning IPRs), manufacturing (14.2%), water supply and waste treatment (12.0%), as well as scientific and technical activities (10.7%) and wholesale and retail trade (10.6%).
Patents and European competitiveness
According to the study, patent ownership benefitted firms on average with +28,7% higher revenue per employee and +43,3% higher wages.
These findings validate the Draghi report's call for boosting European competitiveness and growth through greater commercialisation of innovation. The study especially shows that patents and other IPRs are important assets for the success of small businesses. The EPO is committed to helping smaller firms and new entrants to the patent system with targeted fee reductions and rebates. The Unitary Patent, launched in June 2023, is also reducing costs and complexity for all users of Europe’s patent system, proving to be exceptionally popular with SMEs.
Background
The study looked at a cohort of 119 000 European firms from all 27 EU Member States over a ten year period (2013-2022). The IPRs considered in the analysis were patents, trade marks and/or designs registered at the EPO, the EUIPO and/or at the national and regional IP offices within the EU. Data from public IP registers were matched with entries in ORBIS (a commercial database) which, for example, provides data from annual accounts reported to regulators. This information allowed values like “revenue per employee” to be derived.
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