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

Intellectual property (IP) ownership 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 (EU Trademark Office, EUIPO) sheds light on the importance of patent and trademark rights for the economic success of European startups. The study shows that intellectual property (IP) ownership increases startups' chances of obtaining financing, especially in industries with higher capital requirements.

Ten times higher chance of funding

On average, about 29% of European startups have registered intellectual property rights. However, this usage varies by industry. Biotechnology startups are the most likely to use these IP rights, with nearly 50% of these companies having patents or trademarks. Other IP-intensive sectors include science and technology (25% use patents and 38% use trademarks), healthcare (20% use patents and 40% use trademarks), and manufacturing (20% use patents and 36% use trademarks).

The study highlights the importance of patents and trademarks that are valid across Europe. Startups using such rights are more likely to obtain 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 address our society's most pressing challenges 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 startups as catalysts for innovation and highlights the importance of intellectual property. The EPO has created innovative tools to bring together investors and startups with breakthrough technologies with the launch of the Unitary Patent and the Deep Tech Finder.

The Executive Director of the EU Trademark Office, João Negrão, emphasizes the importance of trademark rights in protecting investments in intangible assets. The study shows that 27% of the startups surveyed have filed 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 key to financing and collaborations.

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

The study also shows significant differences between European countries in terms of the use of intellectual property. Finland and France have the highest percentage of startups that have registered an IP right, at 42% each. Germany, Austria, Italy and other countries also register IP rights at above-average rates.

In Germany, biotechnology startups lead in the use of patents and trademarks, with more than 70% of these companies holding intellectual property rights. Manufacturing, science and technology, healthcare and sustainability follow with intensive use of intellectual property.

Patents provide conferring right against foreign appropriation

It is emphasized that patents provide emerging companies with the fundamental right to prevent others from unauthorized appropriation of their technologies. Trademarks serve as robust legal protections for investments in intangible assets and protect the identity of startups from infringement. The European Patent Office has opened its new Patents and Technology Observatory, which serves as a one-stop shop 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 unveiled 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 underscore the importance of intellectual property to the commercial success of startups and offer hope that European startups can flourish even more in the future.