New research has shown that intellectual property (IP) now accounts for more than 80 per cent of the value of world stock markets, compared with only 20 per cent being based on physical assets, and yet small firms often do not do enough to protect their IP assets.
Developing new IP is the key to developing the value of the company and licensing their IP to larger organisations can make significant money for many smaller businesses.
Professional associations and regulators such as the Intellectual Property Office (IPO) are increasingly looking to help SMEs protect their IP and only last month the European Commission revised its rules on the transfer of technology across EU member states, which will come into effect from May 1.
Licensing technology is a vital tool for the encouragement of innovation, as it enables companies to develop and sell improved products, while inventors can profit from their developments.
The golden rule for small firms is for them to protect their IP as early as possible, as once ideas have been shared too widely it can be too late to recoup ownership, particularly if patent protection is to be secured.
However, many small firms do not bother to invest in registering their IP, as they do not understand the issues surrounding it and often do not realise that it is not an expensive exercise.
Effectively, if small firms were to consider registering their IP in the same way that they would routinely take out insurance for other parts of their business, they could avoid a lot of problems and loss of profit further down the line.