Patents

MOST INNOVATIVE FIRMS DON’T BOTHER WITH PATENTS

A surprisingly small number of innovative firms use the patent system. In the UK, only one in every 25 innovative firms applies for a patent, according to research by Bronwyn Hall, Christian Helmers, Mark Rogers and Vania Sena, presented at the Royal Economic Society’s 2013 annual conference.

Their study looks at survey data on firms from 1998 to 2006, which combines information on innovation activities from the UK Community Innovation Survey (CIS) with information on firms’ patent holdings. It finds that:

• Only 1.7% of all registered firms in the UK patent their innovations.
• Even among those firms engaged in research and development (R&D), only around 4% have applied for a UK or European patent over the period.
• Even in high-tech manufacturing sectors, which arguably produce the most patentable inventions, the share of patenting firms in the UK is less than 10%.

The same firms report that they do not consider patents or other forms of registered intellectual property as important as informal intellectual property for protecting inventions.

The authors present a number of explanations for these findings:

• Most firms are small and medium-sized enterprises (SMEs) with fewer that 250 employees, which may find use of the formal intellectual property system simply too costly.
• Many innovations are new to the firm but not to the market.
• Many sectors are not patent active.

The study then assesses the implications of patenting for a company’s ‘innovative performance’ as measured by turnover due to innovation. It finds evidence of a positive association between patenting and turnover, which raises the question of why more firms do not patent.

The authors conclude:

‘It is likely that the explanation lies in the quality of the firm and of its innovations rather than the patenting decision in itself, and these things are of course difficult to measure using the type of data we have’.

ENDS


Contact:

RES media consultant Romesh Vaitilingam:
+44 (0) 7768 661095
romesh@vaitilingam.com
@econromesh