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Study Finds Startups with Patents and Trademarks Get More Funding

A groundbreaking study by the European Patent Office (EPO) and the European Union Intellectual Property Office (EUIPO) reveals a significant advantage for startups with patents and trademarks in securing funding.

The Significant Role of Patents and Trademarks

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Startups that hold patents and trademarks are up to 10.2 times more likely to successfully secure funding in their early stages. However, only 29% of European startups have filed for these IP rights.

The President of the European Patent Office, António Campinos, said: “Startups are dynamic catalysts for innovation and economic growth. They hold the potential to develop new solutions that can tackle society’s most pressing challenges and deliver a more sustainable future. So we must find ways to support our startups further. This year the EPO has made great progress with the introduction of the Unitary Patent, but now our new Observatory on Patents and Technology will introduce a ground-breaking tool, the EPO Deep Tech Finder, enabling potential investors to identify and assess startups with pioneering and promising new technologies. We’re matching creative sparks with those who have the resources to power the engine of innovation – this could be a win for all.”

The Executive Director of the European Union Intellectual Property Office, João Negrão, said: “Intangible assets represent the vast majority of the value of a business today, and formal intellectual property rights, such as trade marks, are not only legal safeguards for investment in intangibles, but the key to securing financing and collaborations. This is especially important for newly started, innovative companies, who typically have few assets at the initial stage aside from their intellectual capital. Today´s study shows that 27% of the start-ups analysed had applied for a trade mark, more than any other IP right. This is why the support that we can give them is so important, not only to take the first step and register their IP right – and here the EU Commission´s SME Fund implemented by the EUIPO together with EU national and regional IP Offices is very relevant – but also further down the line with initiatives such as IP valuation and IP Scan enforcement. We see however that Europe lags behind other regions in the world when it comes to financing starts-ups and we must step-up efforts to enhance IP as tool for access to finance, growth and sustainable development for EU businesses, and specially SMEs, so our innovative start-ups can thrive.”

Industry-Wise IP Filing Trends

Biotechnology leads in IP intensity, with nearly 50% of startups using patents or trademarks. In sectors like science and engineering, healthcare, and manufacturing, the numbers range from 20% to 40% for patent and trademark users.

Advantages of European IP Rights

Startups with European patents and trademarks have a better chance of getting early funding, over 5 times more likely than with just national IP rights – 6.1 times more for trademarks and 5.3 for patents. This is especially true for deep-tech startups, as owning IP rights greatly increases their ability to secure necessary investments.

Geographical Variations in IP Filing

Finland and France are at the forefront, with 42% of startups filing for IP rights. This trend is also strong in Germany (40%), Austria (40%), Italy (39%), Norway (37%), Sweden (34%), Denmark (34%), Switzerland (32%) and the Czech Republic (31%), where startups actively file for both patents and trademarks.

Conclusion: IP as a Strategic Asset for Startups

The study underscores the importance of patents and trademarks in the startup ecosystem. These IP rights are not just legal protections but pivotal in boosting a startup’s chances of securing crucial funding and gaining a competitive edge in the market.