How SMEs exploit their intellectual property assets: Evidence from survey data

How do motives to patent affect the use of the patent portfolio among SMEs?

Understanding how SMEs utilize their intellectual property assets is crucial, particularly in the context of financing constraints that these firms face in research and development. Patents can play a significant role in bridging financing gaps; knowing how SMEs leverage their patents for monetary reasons can inform policy aimed at enhancing their innovation capacity and overall economic growth.

We conducted an empirical analysis using survey data from the European Patent Office involving 772 total responses, focusing on a sample of 94 small- and medium-sized enterprises (SMEs) and 298 large enterprises to compare patenting motives and usage strategies. This involved descriptive statistics and trivariate ordered probit regression models to analyze the relationship between patenting motivations and portfolio usage.

We found that nearly half of the SMEs patent for monetary reasons, significantly more than large firms. Moreover, SMEs use their patents more intensively, with the analysis indicating that the probability of using a larger share of the patent portfolio correlates with the motives of attracting investors and licensing. A U.S. SME is found to be twice as likely as a European SME to have a high licensing rate, highlighting inefficiencies in the European market for technology.

• Survey data from the European Patent Office conducted in 2006 with 772 responses from firms that filed patents in 2005, including 94 SMEs.

• The motivations to patent are accurately reported by survey respondents.
• Patent utilization strategies are primarily driven by the motives stated in the survey.