Intellectual property rights (IPRs) such as trademarks, patents, and designs, help small and medium-sized enterprises (SMEs) to expand their business and stand out from competitors, protecting their creations and developments, and making it easier to grow through innovation and creativity.
In this context we refer to the more than interesting study[1] published in January 2025 from the European Union Intellectual Property Office (EUIPO) and the European Patent Office (EPO), which explores the impact of intellectual property rights (IPRs) on the economic performance of firms across the European Union. The study evaluated over 119,000 firms across all 27 EU member states and the main finding is that, in general, companies that hold IPR perform better than those that do not register such rights.
According to the earlier study results, in the EU, IPR ownership is significantly lower among SMEs compared to large firms. Fewer than 10% of SMEs hold any of the three types of IPR (trademarks, patents, or designs), whereas nearly 50% of large firms own at least one type of IPR or a combination thereof.
Among the types of intellectual property protection:
- a trademark may be any sign capable of being represented graphically, such as a word/ words, graphical representations, the shape of a product or its packaging, under certain requirements slogans etc.;
Note - A trademark is a strategic, (typically) most valuable, asset of a company either if small/ medium or large.
- patents protect inventions (such as products or processes) that must be new, involve an inventive step and be susceptible of industrial application;
- designs/ models protect the aesthetic appearance of the whole or a part of a product and may arise from the lines, contours, colors, shape, texture, materials or ornamentation of a product.
Protection of trademarks, patents or designs may be obtained through registrations with relevant intellectual property offices.
In terms of other type of IPRs whose protection is ensured without registration with authorities, copyright protects original works of authorship (i.e. software, musical, literary, visual, photographic and audiovisual works, etc.), while business confidential information may be protected by trade secrets.
IPRs provide exclusive rights to their owners which would have resources to prevent others from making, using and selling such without consent. Any unauthorized exploitation of the registered and protected IPRs constitutes infringement, which may result in legal actions (i.e. civil actions, including interim injunctions, customs measures, criminal complaints, request for award of damages).
IPRs provide to businesses a competitive advantage and leverage to confidently expand into new markets internationally.
IPRs also make SMEs more valuable for acquisition. In the context of mergers & acquisitions, IPRs play an extremely important role in assessing the value and risks associated with the target company and, during the due diligence process, the IP portfolio of the said company is carefully and comprehensively analyzed.
A common misconception we encountered in our experience is that IP protection is expensive and only relevant for large companies.
In fact, SMEs stand to gain even more from securing IPRs, as they have more resources to combat competitors and infringements to seek avoiding having unique ideas, products, or services copied or used without permission. Authorities support schemes and programs[2], cost-effective registration processes, and legal support for SMEs make IPR protection increasingly accessible.
Investors view registered IPRs as valuable assets. Businesses with protected intangible assets — the knowledge and expertise they have gained through experience, or with long - established brands often secure better financing terms and higher valuations. IPR portfolios serve as proof of innovation and commercial growth potential.
As recent studies also show, for SMEs, intellectual property is not just a legal formality, it’s a strategic business tool. By protecting their brands, innovations/ creations, and designs, SMEs safeguard their creative assets and unlock new growth opportunities, attract financing, and expand confidently into new markets.
IPRs are a key tool towards competitive and prosperous businesses, thus protecting the intellectual property becomes a must in the digital age.
Companies should proactively safeguard and strategically manage their intellectual assets, proprietary knowledge, and innovations they generate to enhance competitiveness and mitigate legal risks. To effectively navigate the intellectual property system, SMEs should conduct regular reviews of their IP strategies for rights identification and management, perform comprehensive due diligence before engaging in any IP-related activities, and ensure corresponding marketing and legal strategies as well as employees training on the importance of intellectual property protection and compliance.
The complex legislation in the field provides a useful basis for protection and enforcement of company’s IPRs.
[1] Intellectual property rights and firm performance in the European Union. Firm-level analysis report, January 2025. The report is available here.
[2] As an example, The Ideas Powered for business SME Fund is a grant scheme designed to help EU-based SMEs to protect their IPRs and this year program runs from 3 February 2025 to 5 December 2025. SME’s may be reimbursed for up to 75% of official fees.
By Florina Firaru, Head of Intellectual Property, NNDKP
