A seed growing into a strong tree, symbolizing SME growth through strategic patenting.

Patent Power: How Smart Patenting Can Catapult Your Business Growth

Mira Elwood in Tech & Innovation June 2025 • 4 min read.

"Unlocking the Secrets to Strategic Patenting in the Digital Age: A Guide for Small and Medium-Sized Enterprises (SMEs)"

In today's rapidly evolving digital landscape, innovation is the lifeblood of success. For businesses in the Information and Communication Technology (ICT) sector, staying ahead of the curve requires not only groundbreaking ideas but also a robust strategy for protecting those ideas. Patents, often viewed as complex and costly legal instruments, can be powerful tools for driving growth, especially for small and medium-sized enterprises (SMEs).

However, the relationship between patents and business growth is far from straightforward. While large corporations often dominate the patent landscape, SMEs can leverage intellectual property rights to carve out a competitive advantage and secure their position in the market. The key lies in understanding how to strategically acquire and utilize patents to foster innovation, attract investment, and deter competition.

This article delves into the world of strategic patenting for SMEs in the ICT sector. We'll explore how patents can be more than just legal documents—they can be catalysts for growth, market expansion, and long-term sustainability. Learn how to navigate the complexities of intellectual property rights and unlock the true potential of your innovative ideas.

The Patent Paradox: Why Aren't More SMEs Benefiting?

A seed growing into a strong tree, symbolizing SME growth through strategic patenting.

It seems intuitive that patents should boost a company's profitability and market share. However, research reveals a more nuanced picture. A study investigating the causal relationship between patent grants and firm dynamics in the global ICT industry uncovered some surprising findings. While patents do impact smaller companies' market shares and size, a direct impact on profitability isn't always observed across firm sizes. This begs the question: what's holding SMEs back from fully realizing the financial benefits of patenting?

Several factors contribute to this paradox:

High Concentration of Patent Ownership: Less than 2% of larger firms hold a staggering 89% of all patents. This creates a competitive disadvantage for SMEs, who may find it difficult to navigate the complex patent landscape.
Barriers to Access: Many SMEs struggle with the intricacies of the IPR system, including a lack of knowledge, the complexity and cost of registration procedures, and the potential cost of court procedures for IPR infringements.
Strategic Use by Large Firms: Bigger companies often use patents strategically, not just to protect specific innovations but as tools for negotiation, litigation, and signaling their technological dominance. This can create a barrier to entry for smaller players.

To counter these challenges, it's crucial for SMEs to adopt a strategic approach to patenting, focusing on how intellectual property rights can be directly linked to tangible business outcomes.

Empowering SMEs Through Strategic Patenting

The research is clear: strategic patenting can be a game-changer for SMEs in the ICT sector. By understanding the nuances of intellectual property rights, overcoming barriers to access, and focusing on innovation, smaller companies can leverage patents to drive growth, increase market share, and secure a competitive edge. Competition authorities and policymakers should acknowledge firm heterogeneity when they think about intervention or IPR reform proposals that are intended to reduce IPR protection. Ultimately, a more level playing field in the patent landscape will foster greater innovation and benefit the entire ICT ecosystem.

About this Article -

This article was crafted using a human-AI hybrid and collaborative approach. AI assisted our team with initial drafting, research insights, identifying key questions, and image generation. Our human editors guided topic selection, defined the angle, structured the content, ensured factual accuracy and relevance, refined the tone, and conducted thorough editing to deliver helpful, high-quality information.See our About page for more information.

This article is based on research published under:

DOI-LINK: https://doi.org/10.48550/arXiv.2108.00814,

Title: What Do Firms Gain From Patenting? The Case Of The Global Ict Industry

Subject: econ.gn q-fin.ec

Authors: Dimitrios Exadaktylos, Mahdi Ghodsi, Armando Rungi

Published: 02-08-2021

Everything You Need To Know

What is the main benefit of strategic patenting for SMEs in the ICT sector?

Strategic patenting helps SMEs in the ICT sector to drive growth, increase market share, and secure a competitive edge. By understanding intellectual property rights, overcoming access barriers, and focusing on innovation, smaller companies can leverage patents to their advantage. This approach allows them to compete more effectively in a landscape often dominated by larger corporations, fostering innovation and contributing to the overall ICT ecosystem.

Why do SMEs sometimes struggle to fully realize the financial benefits of patenting?

Several factors contribute to the challenges SMEs face in benefiting from patents. These include the high concentration of patent ownership among larger firms (less than 2% of larger firms hold 89% of all patents), barriers to access due to the complexities and costs of the intellectual property rights (IPR) system, and the strategic use of patents by larger firms for negotiation, litigation, and market dominance. These factors create a competitive disadvantage for SMEs, hindering their ability to fully capitalize on their innovations.

How can SMEs in the ICT sector overcome the barriers to strategic patenting?

SMEs can overcome the barriers to strategic patenting by adopting a strategic approach that focuses on directly linking intellectual property rights to tangible business outcomes. This involves understanding the intricacies of the IPR system, navigating the complex and costly registration procedures, and being aware of potential infringement costs. Additionally, it is crucial for SMEs to focus on innovation, which in turn allows them to secure their competitive edge in the marketplace.

How do larger firms use patents differently than SMEs, and what impact does this have?

Larger firms often utilize patents strategically, going beyond simply protecting specific innovations. They employ patents as tools for negotiation, litigation, and signaling their technological dominance. This approach can create significant barriers to entry for smaller players. The strategic use of patents by large firms, coupled with the concentration of patent ownership, can create a challenging environment for SMEs seeking to establish and protect their intellectual property.

What is the significance of intellectual property rights (IPR) in the context of SMEs and the ICT industry?

Intellectual property rights (IPR) are of paramount importance for SMEs in the ICT industry because they are crucial for protecting innovation, fostering growth, and securing a competitive advantage. IPR, including patents, allows SMEs to safeguard their groundbreaking ideas, attract investment, and deter competition. Strategic patenting enables SMEs to navigate the competitive landscape, which in turn promotes a more level playing field and benefits the entire ICT ecosystem. This highlights the need for SMEs to understand and leverage IPR to achieve market success.