Study: Startups with patent and trademark rights are more successful in raising funds

Owning intellectual property (IP) makes it easier for startups to find funding, especially in capital-intensive high-tech sectors

Munich, October 17, 2023 - A recently published study by the European Patent Office (EPO) and the European Union Intellectual Property Office (EUIPO) sheds light on the importance of patent and trademark rights for the economic success of European startups. The study shows that ownership of intellectual property (IP) increases the chances of start-ups obtaining financing, particularly in sectors with higher capital requirements.

Ten times higher chance of funding

On average, around 29% of European start-ups have registered intellectual property rights. However, this usage varies depending on the sector. Biotechnology start-ups use these property rights most frequently, with almost 50% of these companies having patents or trademarks. Other IPR-intensive sectors include science and technology (25% use patents and 38% trademarks), healthcare (20% use patents and 40% trademarks) and manufacturing (20% use patents and 36% trademarks).

The study emphasizes the importance of patents and trademarks valid throughout Europe. Startups that use such rights are more likely to receive funding in the early stages of their development compared to purely national rights. This is particularly relevant for "deep tech" startups, which often require significant investment and a longer development time.

Startups are dynamic catalysts for innovation and economic growth. They have the potential to develop new solutions that can help us tackle the most pressing challenges facing our society and enable a more sustainable future.

António Campinos, President of the European Patent Office

The President of the European Patent Office, António Campinos, underlines the role of start-ups as catalysts for innovation and emphasizes the importance of intellectual property. With the introduction of the Unitary Patent and the Deep Tech Finder, the EPO has created innovative tools to bring together investors and start-ups with ground-breaking technologies.

The Executive Director of the EU Trade Mark Office, João Negrão, emphasizes the importance of trade mark rights for the protection of investments in intangible assets. The study shows that 27% of the start-ups surveyed have registered a trademark - more than any other IP right.

Intangible assets now account for the majority of a company's value. Formal intellectual property rights, such as trademarks, are not only a legal protection for investments in intangible assets, but also the key to financing and cooperation.

João Negrão, Executive Director of the European Union Intellectual Property Office

The study also shows considerable differences between European countries with regard to the use of intellectual property. Finland and France have the highest proportion of start-ups that have registered an IP right, at 42% each. Germany, Austria, Italy and other countries also register intellectual property rights at an above-average rate.

In Germany, biotechnology start-ups are the leaders in the use of patents and trademarks, with more than 70% of these companies owning intellectual property rights. The manufacturing industry, science and technology, healthcare and the sustainability sector follow with intensive use of intellectual property.

Patents provide a right against misappropriation

It is emphasized that patents give emerging companies the fundamental right to prevent others from unauthorized appropriation of their technologies. Trademarks serve as robust legal protection for investments in intangible assets and protect the identity of start-ups from infringement. The European Patent Office has opened its new Patent and Technology Observatory, which serves as a central point of contact for those interested in innovation. At the launch conference, the results of the study were discussed and a new digital tool, the Deep Tech Finder, was presented to help investors evaluate startups. The Deep Tech Finder can be found here.

The study and the initiatives of the European Patent Office and the EU Trademark Office underline the importance of intellectual property for the economic success of startups and offer hope that European startups can flourish even more in the future.