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New study shows the economic benefits of protecting IP

A European study released last month highlights the economic benefits to companies of protecting their intellectual property rights.

The study of over 127,000 companies across the European Union (EU) and the United Kingdom found that companies who had protected their IP rights with a patent, registered design, registered trade mark, or combination of these, generated on average 20% greater revenue per employee than companies which did not own any registered IP rights.

The study notes that companies owning at least one patent had on average a 36% higher revenue per employee and offered an average of 53% higher wages compared to companies which did not own any patents. Similarly, companies owning at least one registered trade mark had on average 21% higher revenue and offered an average of 17% higher wages than those which did not.

Small and medium sized enterprises (SMEs) which employed a combination of IP rights had even higher revenue per employee. For example, those owning registered patents as well as trade marks generated on average 75% more earnings per employee than those without any registered forms of IP.

The findings of this study illustrate the positive relationship between registration of IP rights and economic performance. The study notes that increased economic performance is not solely attributable to the ownership of IP rights, but highlights that IP ownership allows companies, especially SMEs, to adequately monetize their intellectual property.

The study also shows the disparity of IP ownership between SMEs and large companies. Less than 9% of SMEs in Europe have protected their IP rights, whereas the number of large companies who had protected IP was over 55%. Further, only 0.9% of SMEs in the study had one or more patents, and 8.2% had one or more registered trade mark. This is compared to 17.8% of large companies who had one or more patent, and 52.5% having at least one registered trade mark.

While this study was centered around businesses in the EU and UK, the general finding that owning IP rights can provide positive economic benefits should also apply in New Zealand, Australia, and elsewhere around the world.

1 Intellectual property rights and firm performance in the EU, conducted by the European Patent Office and the European Union Intellectual Property Office, published February 2021, and available at:$File/ipr_performance_study_en.pdf

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