IP protection: building value and growth for small businesses

• Author: Julian Crump
• Position: President of the International Federation of Intellectual Property Attorneys (FICPI)

While large companies invest in IP for good reasons – to protect their products and services, discourage competition and create new revenue streams for themselves – IP undoubtedly benefits smaller businesses too.

SMEs that apply for patents, trademarks or designs are more likely to grow quickly and succeed than those that do not.

In fact, the evidence is that SMEs that apply for patents, trademarks or designs are more likely to grow quickly and succeed than those that do not.

Video: Hear from leading IP practitioners how IP can support SMEs

A 2019 EPO/EUIPO study demonstrated that SMEs that have at least one IP right are 21 percent more likely to experience a growth period. Meanwhile, a 2021 update to the study found that fewer than 9 percent of SMEs owned at least one of the three main IP rights (a patent, trademark and design). By contrast, the figure is close to 60 percent for larger firms. This reveals a shocking disparity in the use of such a valuable business tool.

The value SMEs gain from protecting their IP assets comes in many forms

As well as serving as the current president of FICPI, I am a Chartered UK and European Patent Attorney, and a partner in the firm of Abel + Imray in London, Bath and Cardiff, UK and Spain. To look for examples of SMEs that use IP protection as a key element of their business success, my partners and I reviewed our list of clients. We did not have to look far.

Several years ago, aircraft seating designers Acumen Design Associates moved from a consultancy model (with revenue based on project fees), to also creating their own designs, which are then patented. Today, a major part of Acumen’s revenue comes from issuing licenses for the use of their protected designs. (Photo: Courtesy of Acumen Design Associates)

The results are instructive and hugely encouraging for other SMEs:

Growing license sales and royalty revenue - Several years ago, market-leading aircraft seating designers Acumen Design Associates, led by founder Ian Dryburgh, moved from a consultancy model, with revenue based on project fees, to also creating their own designs, which are then patented. Today, a major part of Acumen’s revenue comes from issuing licenses for the use of their protected designs - including a large deal in 2016 with United Airlines for business class seating.

Winning venture capital (VC) funding - XYZ Reality Ltd., has won numerous accolades for a highly accurate, “engineering grade” augmented reality (AR) solution which ensures building construction matches exactly the architects’ drawings. Their solution avoids problems with traditional site setting-out methods and penalties for errors. The patent application was complicated, involving multiple disciplines from advanced engineering to AR and physics. A positive opinion on the application from the European...