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New research reveals value of patenting and technology licensing to UK firms

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New research has demonstrated the value of patenting to innovative UK firms, challenging the widely held view that patents were no longer fit for purpose.

The Survey of Innovation and Patent Use (SIPU), led by Brunel University and commissioned by the Intellectual Property Office (IPO), shows that whilst only 11% of firms surveyed take advantage of patenting, when looking at those firms which innovate this number rises to 40%. 

The research also shows that the size of the organisation does not influence the likelihood of patenting; rather it is the ability to create novel innovations and the volume of R&D which is the strongest factor in determining whether a business is likely to patent. 

Another key finding of the survey showed that firms are relying more often on technology licensing to keep up with the market, especially when innovation is limited by constraints on resources. Between 2009 and 2012, it is estimated that expenditure on technology in-licensing was around £6.9 billion a year in the UK. This equates to almost 40% of the total business enterprise spending on R&D, a much higher figure than researchers were expecting.

Industries where innovation rates are low were most likely to use technology licensing in a bid to keep up with the market. In contrast, industries with high rates of innovation were less likely to use licensing, possibly due to the desire to maintain exclusivity and avoid having to share a technology with competitors.

Lead researcher Professor Suma Athreye from Brunel Business School said: "What this research shows is that despite popular belief there is still great value to UK firms in patenting. The often quoted statistic, based on CIS surveys, that only 3% of UK business use the patent system is down to the fact that it is just not relevant for many organisations. It is those firms which are developing new to market innovations that really benefit from patenting both to protect their IP and to allow them to bring in revenue through licensing.

"In a global marketplace patents are vital to protecting UK business interests and to supporting growth in the economy. Innovators - those organisations that really benefit from patents - are already taking advantage of this, so the findings of the survey suggest that rather than focusing on encouraging use of patenting through legislation, what policy makers instead need to consider is how to boost the conditions for innovation in general."

The Report “Innovation, Patenting and Licensing in the UK: Evidence from the SIPU survey” authored by Professors Ashish Arora (Duke University) and Suma Athreye (Brunel University) and Dr Can Huang (UNU-MERIT, Maastricht) will be presented at a conference organised by the IPO and Brunel University and sponsored by the ESRC (Economic and Social Research Council) at the Big Innovation Centre (BIC) on Monday 9 September.