The Economic Relevance of Intellectual Property and its Protection - a study focusing on the German "Mittelstand" (SMEs)

The key questions of this research can be summarized in three blocks:

The initial purpose of the study was to analyse the importance of intellectual property compared to traditional tangible assets in the German economy and its relative development over time. A growing relevance of intangible assets increases the need to protect innovation using formal property rights like patents and trademarks or informal, strategic methods like technical copyright protection, trade secrecy or fast realization of innovations (lead advantage). The analysis of German companies’ IPR protection strategies was an integral part of the study.

A further point for analysis in this study was the growing threat of illegal imitation in emerging markets like China, but also in Germany and in other industrialized countries. The range of counterfeiting concerning proprietary technologies and design imitation as well as the resulting damages were studied. This includes financial impacts as well as employment losses and the distortion of strategic business decisions.

A third goal was to evaluate a possible need for further economic policy actions. It is reasonable to assume that especially R&D-intensive SME are at disadvantage when it comes to protecting innovation through the patent system and face challenges exploiting their own IP efficiently. There are a number of activities intending to facilitate the entrance of SMEs into the IP system. From this study insights can be gained for support programs on the use of IPR, effective IP enforcement and its economic exploitation of innovation. Based on a detailed analysis of IP support programs, this study was to provide recommendations for improvements and to point out inefficiencies or loopholes in existing SME support programs.

A summary of the main results in English can be downloaded here [3], the German version of the full report is available as BMWi-Forschungsbericht Nr. 579 [4]