Intellectual property: key to securing finance for growth


Growing companies often rely on equity finance to secure their business plans, but this can be challenging, especially when market demand is difficult to forecast.

Adrian Tombling, partner and patent attorney at European intellectual property firm, withers and rogersExplains how investing in intellectual property (IP) protection can help businesses unlock the finance they need.

The government has recently published report good Advising businesses on how to take advantage of IP assets and use online tools. Featured is an advising tool on using IP to secure investment in resources.

A 2019 Study, Released by the European Patent Office (EPO) and the European Union Intellectual Property Office (EUIPO), it found that small and medium-sized businesses that have at least one IP right are more likely to experience rapid growth. percentage is higher. However, the study found that only nine percent of European SMEs have registered IP rights, meaning many businesses are deprived of the benefits they can provide.

Often, lack of awareness is the main reason behind this under investment, but it is not the only reason. Innovation-led businesses may focus more on developing early-stage concepts than on scaling up their activities for widespread production domestically and internationally. As a result, IP protection can be overlooked. Not only could this prevent a company from reaching its true business potential, but it could also undermine UK economic growth.

While IP security offers great benefits to businesses of all sizes, for SMEs it can be the ticket to becoming a high-growth firm. Securing IP rights is important at each stage of development. At the concept level, ‘trade secrets’ can be used to protect market-sensitive information and then upon filing patent applications to protect innovation from counterfeiting competitors, following investment in an R&D program Should be considered. Once granted, patents provide 20 years of exclusivity, helping businesses reap the commercial benefits of their innovation.

Before bringing a product to market, businesses should consider whether the appearance of the product requires protection. Registered designs are usually provided quickly, enabling rapid entry into the market if required. Trademark registration is also important to protect the identity of the brand from the name to the packaging.

When starting a company, it can seem overly optimistic to think about future expansion plans. However, when it comes to IP security, it is always important to consider any market the business may wish to enter in the future.

When planning to export to other markets for the first time, it is important to obtain additional funding in advance, and IP assets can help businesses secure finances on more favorable terms. Filing for protection in multiple areas can also make granting an IP license to a third party a much simpler process.

For innovative businesses that don’t plan to invest in global expansion, licensing deals can be an attractive option, allowing the company to build a new revenue stream without deviating from its chosen focus. Should a business decide to prepare itself around licensing deals, IP rights become even more important, risking third-party agreements and increasing investor confidence.

A combination of IP rights can build a strong portfolio, providing strong and long-lasting commercial benefits. As well as enabling businesses to keep violators away, laying out different forms of IP protection can also help extend the period of protection beyond the typical 20-year period. For example, even if a patent does expire, trade marks, trade secrets and other IP assets will ensure that the product is protected from competitors.

Bundling rights can also help businesses achieve higher growth. The EPO and EUIPO study found that SMEs with a collection of patents, trademarks and registered designs are 33 percent more likely to achieve high growth in the market of their choice.

IP rights are often associated with high-tech companies in sectors such as consumer electronics and telecommunications, where R&D activity is part of everyday activity. However, low-tech businesses can benefit just as much from IP, if not more than from these technology-focused companies.

According to the study, low-tech businesses that operate in specific areas of manufacturing, including food production and textiles that have at least one European IP right, are more likely to develop into a high-growth firm than high-growth firms. Chances are. -Technology sector. This may be due to the lack of IP ownership in these markets, increasing the potential commercial value of the rights.

No matter what sector a business is in, IP rights should be carefully considered as part of its growth strategy. It is never too early to build a strong IP portfolio through bundling rights and seeking protection in other areas. By better positioning businesses to secure investment and scale successfully, IP provides them with the opportunity to optimize value from their activities as they progress.

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