COMPANIES OWNING INTELLECTUAL PROPERTY RIGHTS EARN 20% MORE REVENUE PER EMPLOYEE THAN OTHER COMPANIES IN THE EU
A new study published by the European Union Intellectual Property Office (EUIPO) and the European Patent Office (EPO) shows that companies owning at least one patent, registered design/model or trademark generate, on average, 20% more revenue per employee than companies that do not own any of these intellectual property rights (IPRs). The study also found that these patent owner companies pay, on average, 19 % higher wages than other companies.
The study, entitled 'Intellectual property rights and firm performance in the EU' supports a strong and positive link between owning different types of IPRs and improving company economic performance. In terms of individual IPRs, it is patent ownership, with 36% higher revenues per employee and 53% higher salaries, that shows the strongest link with company economic performance, compared to those companies that do not own IPRs, followed by owning registered designs or models (with 32% higher revenues and 30% higher salaries) and trademarks (with 21% higher revenues and 17% higher salaries).
The new study is yet another example of the importance of intellectual property rights for the European economy. A joint EUIPO/EPO study, published in 2019, on IPR-intensive industries, showed that these industries are responsible for a significant and increasing share of the European economic activity and employment. An earlier EPO/EUIPO study, also published in 2019, found that SMEs that own patents, registered models, designs or trademarks were more likely to achieve a large increase in turnover in subsequent years than other companies.
The study also isolated the effect of IPR ownership from other factors, such as company size or the countries and industries in which the company operates. These results confirm a positive relationship between IPR ownership and economic performance, showing 55% higher revenue per employee for IPR owners compared to non-IPR owners. Moreover, the analysis shows that this relationship is even more pronounced in the case of SMEs: IPR owners have 68% more revenue per employee than those who do not own any IPR. In the case of large companies, this additional revenue is 18%. The study also revealed that less than 9% of European SMEs own at least one of the three types of IPRs, compared to almost six in ten for large companies, highlighting the significant potential for smaller companies to take greater advantage of intellectual property rights.
In addition, SMEs that combine different IPRs have even higher revenue per employee. Small businesses that own both patents and trademarks generate 75% more revenue, and the increase in revenue for those that have registered designs or models and trademarks is estimated at 84%. SMEs owning a combination of patents, trademarks and registered designs or models generate almost twice as much revenue per employee (98%) as companies that do not own any of these three IPRs. Overall, the report also shows that IPR-owning companies are more strongly represented in the information and communication industry (18% of companies in this industry own IPRs), the manufacturing industry (14%) and other services (14%), as well as in the scientific and technical fields (13%).
The report is based on the statistical analysis of a sample of over 127,000 companies from the 27 EU Member States and the UK, covering the 2007-2019 period. It is the follow-up of a similar report published by the EUIPO in 2015, which used data from only 12 Member States. The methodology has also been improved by a team of economists from EUIPO and EPO. Now, it covers patents, registered models/designs and trademarks, as well as any combination of these three types of rights.