Private equity, venture capital drive innovation through Intellectual Property (IP), European research shows

• New Invest Europe, EUIPO report tracks 100,000+ intellectual property filings

• Venture-stage companies with pre-existing trademarks attract +55% funding; +68% at buyout-stage

• 100% increase in private capital investment correlates with a 10% expansion of IP assets

Brussels, Belgium, 20 November 2024 - Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, partnered with the European Union Intellectual Property Office (EUIPO) to launch a new study into private equity and venture capital’s role in European innovation. ‘Protecting European Innovation: Private Equity’s Role in European Intellectual Property Rights’ maps trade marks and patents – two key markers of innovation – at private equity and venture capital backed companies across countries, business sectors and fund stages, and demonstrates the essential role private equity plays in driving innovation and the development of new technologies and services, contributing to Europe’s economic growth and competitiveness. (IP).

Intellectual property in its various forms serves both to protect innovations, ideas and creativity as well as to protect and to promote prestige and commercial goodwill, leading the innovation path that goes from ideas to products available to the public and back again, ensuring remuneration for the creators.

The report analysed over 56,000 portfolio companies and more than 100,000 trade mark and patent filings across Europe between 2007 and end-June 2023. It highlights how private equity and venture capital are aligned with EU goals to boost innovation, partly by targeting companies that already have a history of trade marking and patenting activity, and also giving them the tools to create more innovative products and services that increase business competitiveness and add value to companies and economies.

A total of €809 billion was invested into EU27 companies over the period, with 20% of investment flowing into companies with patents and 40% into businesses with trade marks.

• Italy leads for trade mark registrations per company with an average of 2.5 filings, demonstrating its strong brand protection culture. Denmark led in patent filings, with companies averaging almost 1.5 applications per company, showcasing its research and development prowess.

• The Biotech and Healthcare sector had more than 2 patent filings per company, illustrating the high level of discovery by companies at forefront of life-saving and -enhancing treatments. Consumer Goods sector averaged over 1.5 trade mark filings per company, reflecting the power and value in the brands that European consumers use every day.

Companies with pre-existing trade marks received significantly more investment: 55% more at the venture stage, 45% at the growth stage, and 68% at the buyout stage. At the same time, companies receiving more investment were more likely to expand their IP portfolios, with a 100% increase in investment potentially increasing the odds of subsequent patent or trade mark filings by around 10%, after controlling for previous IP activity.

The report digs deep into data on countries, sectors and companies to generate statistical insights that highlight the virtuous circle between private equity and venture capital investment and the creation of intellectual property rights. They illustrate that companies and their backers understand that creating and protecting innovation also means protecting business.

Eric de Montgolfier, CEO of Invest Europe, commented:

“Innovation is at the beating heart of successful companies, and by extension the lifeblood of growing economies. Breakthrough innovations are emerging around the world and Europe has the ingredients to lead: world-class research, global companies and a wealth of entrepreneurial talent. With its ability to help companies develop and commercialise innovation, private equity and venture capital can offer a key to unlock many of the challenges Europe faces.”

João Negrão, Executive Director, EUIPO, added:

“Our collaborative study reveals the undeniable importance of IP rights in shaping a company's future and its appeal to investors. It can be a deciding factor when it comes to venture and equity funds supporting European companies. We aim to encourage the finance world to see IP as valuable intangible assets, indispensable to EU innovation and growth.”

Click to download ‘Protecting European Innovation: Private Equity’s Role in European Intellectual Property Rights’ or view the report online.

NOTES TO EDITORS

About Invest Europe

Invest Europe is the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors. We have over 650 members, split roughly equally between private equity, venture capital and limited partners – with some 110 associate members representing advisers to our ecosystem. Those members are based in 57 countries, including 42 in Europe, and manage 60% of the European private equity and venture capital industry’s €1.15 trillion of capital under management. Businesses with private capital investment employ 10.9 million people across Europe, 5% of the region’s workforce.

For more information visit www.investeurope.eu

About the EUIPO

The EU Intellectual Property Office (EUIPO) is one of the largest decentralised agencies of the European Union, based in Alicante, Spain. In 2024, it was ranked as the most innovative IP office in the world for the fifth time. Celebrating its 30th anniversary in 2024, the EUIPO has managed the registration of EU trade marks since 1994 and designs since 2003, both of which are intellectual property rights that cover the 27 Member States of the European Union. The agency added another IP right, craft and industrial geographical indications, to its portfolio in 2023. The EUIPO also carries out cooperation activities at EU and international level to create a level playing field in the world of IP and hosts the European Observatory on Infringements of Intellectual Property Rights.