Protecting Innovation in German firms: Trade Secrets and Patents

The European Union Intellectual Property Office Observatory, in collaboration with the Centre for European Economic Research (Zentrum für Europäische Wirtschaftsforschung) ,ZEW, in Mannheim has now completed the pilot study Protecting Innovation Through Patents and Trade Secrets: Determinants and Performance Impacts for German Firms.The European Observatory on infringements of Intellectual Property Rights (the Observatory) was created at the European Commission to improve the understanding of the role of Intellectual Property and of the negative consequences of IPR infringements for German firms.

In a study carried out in collaboration with the European Patent Office (EPO) , the EUIPO, acting through the Observatory, calculated that 39% of total economic activity in the EU is generated by IPR intensive industries, and approximately 26% of all employment in the EU is provided directly by these industries, with a further 9% of jobs in the EU stemming from purchases of goods and services from other industries by IPR-intensive industries.

Another study compared economic performance of European companies that own IPRs with those that do not, finding that IPR owners´ revenue per employee is 29% higher on average. Although only 9% of SMEs own registered IPRs, those that do have almost 32% more revenue per employee than those that do not.

Building on this work, the Observatory is now seeking to enhance its understanding of the role and contribution of trade secrets within the IP portfolio of firms. In collaboration with the Centre for European Economic Research in Mannheim (ZEW), the Observatory has examined the determinants and performance impacts of protecting innovation through the use of patents and trade secrets for German firms.
Three main findings emerge from the analysis:

1. Innovating firms are more likely to combine patents with secrecy, as Intellectual Property law becomes stronger and as technology uncertainty increases.
2. Patents are more likely to be used (alone or in combination with secrecy), when innovations are new-to-market and in open innovation practices such as research cooperation.
3. The use of Secrecy is identified as being more important for process as opposed to product innovations.

 

This is a pilot study in preparation for a more comprehensive, EU-wide study that is currently in progress.

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Source:

Official PDF from the Study by EUIPO