Small businesses can protect their IP and grow by leveraging it

There is a myth that protecting IP (IP), should be reserved for larger companies. It’s not appropriate for smaller and medium-sized enterprises.
Although large corporations invest in IP for legitimate reasons (to protect their products and services from competition, discourage competition, and create new revenue streams), IP also benefits smaller businesses.
SME’s that apply for patents and trademarks are more likely grow quickly and to succeed than those who don’t.
It is evident that SMEs that file for patents, trademarks, and designs are more likely than others to grow quickly.
Video: Find out from IP experts how IP can benefit SMEs
EPO/EUIPO research in 2019 found that SMEs who have at least one IP-right are 21 per cent more likely to experience a growth phase. The study was updated in 2021 and found that only 9 percent of SMEs held at least one of the three IP rights: a patent or trademark. The figure for larger firms is close to 60%. This is a shocking gap in the utilization of such a valuable tool for business.
There are many benefits that SME’s can derive from protecting their IP assets.
In addition to being the current president for FICPI and a Chartered UK/European Patent Attorney, I am also a partner in Abel + Imray, London, Cardiff, UK and Spain. My partners and me reviewed our clients list to identify SMEs that have used IP protection to enhance their business success. We did not need to search far.
Acumen Design Associates was founded in 1995. They started as a consultancy firm, but were able to create their own designs. Acumen’s income today comes mainly from the issuing of licenses to use their protected designs. (Photo by Acumen Design Associates
The results are extremely instructive for other SMEs and very encouraging.
• Increased license sales and royaltiesFounded in 2008, Acumen Design Associates was the market leader for aircraft seating designs. Revenues were based on project fees and they moved to a consultancy model. They also started designing their own designs that are then patentable. Acumen’s revenue today comes mainly from the issuing of licenses to use their protected designs, including a large deal with United Airlines in 2016 regarding business class seating.
• Winning venture capital (VC), funding-XYZ Reality Ltd. was awarded numerous awards for their highly accurate, engineering-grade augmented reality (AR), solution that ensures building construction matches the architects’ drawings. The company’s solution is more accurate than traditional methods of site setting up and does not penalize for errors. The complex patent application involved many disciplines from advanced engineering to AR, physics and more. XYZ Reality received a positive opinion from the European Patent Office. This allowed them to secure venture capital funding.
IP is valuable in its own right, and it goes beyond the protection of the underlying product/service. It can even be the company’s most valuable asset.
• Making SMEs more desirable for acquisitionSiltbuster Limited has been named the UK’s most trusted provider of on-site water solutions and has won the Queen’s Award for Enterprise. Its founder, Dr Richard Coulton patented breakthroughs that helped make the company more environmentally-friendly. Coulton started the company with the goal of treating concrete wastewater from construction sites in a more sustainable way. Workdry International bought Siltbuster’s IP and technology in 2018, after seeing it.
• From university research to university turn-outUniversity College London’s research team is investigating how to transfect cells.siRNANanoGenics Limited, a small business, was born. NanoGenics Limited was formed after several years of research and development.LipTide r)to improve the fight against cancer by focusing on specific genes. The IP rights associated with the sale were purchased by the company for GBP 2.5 million (approx. USD 6.2 millions, which helped their cutting-edge medical technology advance to commercialization.
• Use trade secrets to stay below the radar of your competitorsRheonLabs Ltd. makes high-impact protective body wear and is an expert user of IP. Initial, they used trade secrets to protect some aspects of their IP. They stayed under the radar of their competitors, rather than filing patent applications that are published after 18 month. Rheon labs started patenting after others began to encroach on their field. They made their technology public and gained 20 years’ of exclusivity. However, their competition must now invent new products to be eligible for their patents.
RheonLabs Ltd. makes protective bodywear for high impact sports and is a sophisticated and strategic user of IP. (Photo: Courtesy Rheon Labs Ltd.
• Trademarks underpinning commercial partnerships- TheRheon Labors (r),When pre-filing searches revealed that there were few third party rights that could hinder its use, the trademark was filed early. As the company grew and entered the world of commercial partnerships and collaborations, design registrations and water-tight nondisclosure agreements (NDAs), were added to the company’s IP portfolio.Rheon Laboratories(r)Now, the brand is well-known and the company reaps the benefits of valuable goodwill. The registration helps lock in the value and allows for co-branding.Rheon Labors (r),trademark are used to reduce concussive hits and brain injuries. If you do not have a registration or water-tight licensing arrangements, third parties could use your trademark on their goods. You risk losing it. The registration of a company’s mark protects it for 10 years. However they are able to be renewed at any time as long they don’t become generic terms.
• To show market potential, creating valuable IP assetsCeres Power is a company that has patented “deep tech” which has many clean energy applications. This technology has proven to be a valuable asset. After the initial field trials failed, the company likely would have filed for bankruptcy had it not been for IP Group Plc. IP Group helps early-stage companies who have IP derived from university research. They help them get to a stage where they can show the real-world viability and attract co-investment from large corporations. Dr. Rob Trezona explained to me that IP is a table stake. If portfolio companies don’t own their IP rights, they won’t be able raise funds. Investors will often seek out a whole bunch of patents, rather than just one or two. IP Group’s success with Ceres’ turnaround was based on the realization of its outstanding IP position, which allowed it to generate greater value as a technology provider. This allows it to license technology and jointly develops technology. It has successfully partnered with Bosch, Doosan, and Weichai Power in the development of products for data centres, distributed generation, and heavy-duty vehicles. This partnership allows it to create value through licensing fees and royalties.
NanoGenics Limited, a pioneering, research-based gene treatment company, has sold IP rights for its LipTide(r) therapy to GBP 4.5million. (approx. The USD 6.2 million helped their cutting-edge medical technology advance to commercialization. (Photo: Courtesy of NanoGenics Ltd.
These examples demonstrate how IP can be a valuable asset on its own. It can even become the company’s most important asset. It is certain that there will be many other examples among other IP firms’ global clients.
IP rights act as a protective cover around intangible assets. This locks in value and makes them tradeable via licensing, pooling/securitization, acquisition, or other means. Investments made by companies to develop new products and processes or simply in the creation of new product ideas are at risk without IPRs. It’s almost like having a beautiful garden and not putting up fencing to keep out the rabbits!
A specialist IP attorney can help an SME identify the most important aspects of novelty and broad utility. These are essential for a successful IP strategy.
SME owners may find it difficult to protect their IP. It can be difficult to seek out patent, trademark, and design rights. There are few “self-filers” and most of them either abandon their applications, or fail to obtain granted rights.
I have an obvious self-interest as a patent attorney in pointing to the depth and sophistication offered by independent IP professionals for SMEs.
IP rights protect an intangible property by encapsulating it in a protective layer. This locks in its value and allows for trade through licensing, pooling, or securitization.
Nevertheless, given the stakes and the evidence of SMEs having IP rights that are more successful than others, as well the frequent failure of SMEs in completing the application process, the conclusion can be drawn.
To support and accelerate growth, SMEs need to look at protecting their IP assets.
Independent IP attorneys are able to draw on a wide range of experience in advising clients. They can focus on the novelty of the invention, rather than the immediate applications. This allows patents to last longer and the businesses they protect are more attractive to investors.
A partnership with an independent IP professional can bring a substantial return for an SME, not just in terms of a successful application but also in its future as the owner and holder of IP rights.
XYZ Reality Ltd. developed an accurate and “engineering quality” augmented real (AR) solution to ensure that building construction matches architects’ drawings. Venture capital funding was secured after the European Patent Office (EPO), gave a positive review of the company’s application. (Photo by XYZ Reality Ltd.
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