Small and medium-sized

enterprises, intellectual property,

and public policy

Rashid Nikzad

Industry Canada, 50 Victoria Street, Gatineau, Quebec, Canada K1A 0C9. The author is now at

Statistics Canada, Canada. Email: Rashid.Nikzad@uottawa.ca

The objective of this paper is to study the use of intellectual property (IP) rights by small andmedium-sized enterprises (SMEs). The paper draws on different surveys and studies in selectedcountries, with an emphasis on Canadian SMEs, to compare the use and exploitation of IP bycompany size. The paper finds that despite the potential benefits of acquiring formal IP rights forSMEs, they use IP rights to a lesser degree than large companies due to several factors, mainlythe low rate of innovation compared to large companies and the cost and complexity of the IPsystem. The paper also presents a framework to analyze whether there is a role for government toplay in this area, and how the government could address this under-utilization of IP rights by SMEs.

Keywords: intellectual property; small and medium-sized enterprises; government policy; innov-ation policy.

1. Introduction

Studies in several OECD countries show that the rate ofinvestment in intangible assets has exceeded the rate ofinvestment in traditional capital such as machinery, equip-ment and buildings during the past 30 years. As a result,the most common assets of many companies have shiftedfrom predominantly tangible assets to intangible, know-ledge-based assets such as intellectual property (IP) rights(patent, trademarks industrial design, copyright, goodwill,etc.). IP rights are also intended to facilitate the process ofvalue creation from intangible assets. This shift increasedawareness about the importance of IP rights and IP policyamong policy-makers.

One important issue for IP policy-making is the acqui-sition, use and benefits of IP rights to small and medium-sized enterprises (SMEs). SMEs represent over 90% ofenterprises in most countries, and are often considered tobe the driving force behind a large number of innovations,job creation, and investments (World Intellectual PropertyOrganization (WIPO) 2010). Statistics suggest that inmany start-up companies, particularly in technology-related industries, IP assets are often their single mostvaluable assets (Shukla et al. 2011). However, studiesshow that most SMEs do not use IP or fully benefit

from the use of IP rights. To address this issue, manynational IP offices have started programs to encourageSMEs to better obtain and exploit IP rights and to under-stand the barriers that impede the use of the IP system bySMEs. The Standing Committee on Industry, Science andTechnology, House of Commons, Parliament of Canadarecently recommended that:

. . . the Government of Canada study the barriers, in terms ofcost and time, for SMEs to register, affirm or defend their IP.

(Parliament of Canada 2013)

The objective of the present paper is to study the use ofIP rights by SMEs. To do so, the paper draws on differentsurveys and studies in selected countries, with an emphasison Canadian SMEs. The paper finds that despite the po-tential benefits of acquiring formal IP rights to SMEs, theyuse IP rights to a lesser degree than large companies due toseveral factors, mainly the low rate of innovationcompared to large companies and the cost and complexityof the IP system. The paper also presents a framework toanalyze whether there is a role for government to play inthis area, and how the government could address thisunder-utilization of IP rights by SMEs. The paper arguesthat some of these barriers can be addressed by publicpolicy.

Science and Public Policy (2014) pp. 1–12 doi:10.1093/scipol/scu038

� The Author 2014. Published by Oxford University Press. All rights reserved. For Permissions, please email: journals.permissions@oup.com

Science and Public Policy Advance Access published July 3, 2014

The structure of the paper is as follows: Sections 2 and 3present the benefits of IP rights to SMEs and the barriersSMEs may face in exploiting IP benefits. Section 4 willlook at various statistics pertaining to the use of IP bySMEs in selected countries. Section 5 presents a frame-work to assess whether governments need to take actionto address this issue. Section 5 also includes some examplesof government initiatives. Conclusions are drawn inSection 6.

2. Benefits of IP rights to SMEs

Intangible assets are becoming more and more importantfor companies, and it has become crucial for SMEs to findways to make the best use of this type of assets (WIPO2010; Cusmano and Dean 2011). One way to benefit fromintangible assets is to obtain and maintain IP protection.Different studies confirm the benefits of IP rights forcompanies, including for SMEs. Some of the mainbenefits of IP rights for SMEs can be summarized asfollows (WIPO 2003, 2004; Cardullo 2004; OECD 2006;Hanel 2008; Hughes and Mina 2010; Cusmano and Dean2011; Shukla et al. 2011; De Rassenfosse 2012; Czarnitzkiet al. 2014):

. IP rights protect SMEs’ technologies from infringementby other companies; IP rights provide the exclusiveright to prevent others from commercially using aninvention, design, trademark or literary or artisticwork.

. IP rights could show that the SME’s technology isunlikely to infringe patents owned by competitors.This could help securing equity investment fromventure capitalists.

. R&D is both costly and risky, and SMEs undertakingR&D usually face financing constraints. In this respect,IP rights (often patents) turn out to be a valuable toolthat can help finance innovation by attracting venturecapital and other financial sources. Patents are seen asan increasingly important factor in investment deci-sions by venture capitalists, which may influenceSMEs’ patenting decisions in the future.

. It is important to note that while all companies faceconstraints in financing R&D to some extent, theseconstraints are more acute for SMEs that usuallylack a stable and high level of cash flow, physicalassets, and a significant success record with which toattract loans.

. Firms, especially SMEs, use patents to signal theirgrowth prospects to potential investors. Early IP pro-tection can be used as a signal to reduce informationasymmetry between inventors and investors by helpinginvestors to better differentiate between good and badprojects. Without these IP signals, investors may avoidprojects that seem to be too risky, leading to a sub-optimal level of investment in R&D. Signalling the

value of IP to attract financing is often more importantfor SMEs than large firms since SMEs often have fewerother assets of value.

. IP can also be used as collateral to secure funding.

. IP could generate an income for SMEs through thelicensing, sale, or commercialization of IP-protectedproducts or services.

. In the event of a sale, merger or acquisition, IP assetscould raise the value of an SME.

. IP rights can differentiate a SME’s products andservices from other companies and make them easilyrecognizable in the market. In this sense, holding IPrights could guarantee a certain degree of market ex-clusivity and a higher market share.

. IP rights may be used to enhance the reputation of acompany as a technology leader through access to, orownership of, key patented technologies or throughcreating a corporate identity by a trademark andbranding strategy.

. IP rights may be used to obtain access to new markets.

. Some studies suggest that firms that use IP innovatemore frequently than other companies. Also, the usersof IP rights reported more often than the non-usersthat their innovation allowed them to maintain orincrease profitability.

. IP could help avoiding wasteful investments in R&Dby consulting patent databases and learning aboutrecent technological developments.

Despite these positive effects, research shows that SMEsdo not use IP rights as effectively as large companies do.

3. Challenges facing SMEs in using IP rights

Two main reasons are usually put forward for why the useof IP increases with the size of the company. The firstreason relates to the innovative activity of companies:small companies are less likely to innovate than largeones, and when they innovate, it is less likely to be anoriginal innovation worthy of protecting by IP (Baldwinand Hanel 2003). The second reason relates to the financialconstraints facing smaller companies since the cost of pro-tection and enforcement of IP—including the cost oflearning, obtaining and maintaining IP rights, monitoringwhether infringement occurs, and litigation—is relativelyhigh for smaller companies (European Commission 2001).Various reasons mentioned for the under-utilization of IPrights by SMEs can be summarized as follows (WIPO2003, 2004; Rogers 2007; Maheshwari et al. 2007; Hanel2008; Hughes and Mina 2010; Andersen and Rossi 2011;Cusmano and Dean 2011; Shukla et al. 2011; DeRassenfosse 2012):

. SMEs generally invest less in innovation. One reason isthat since they cannot diversify risk as large firms dowith many product lines for R&D investment, R&D

2 of 12 . R. Nikzad

investment is more risky for them. SMEs also facehigher liquidity and resource constraints which affecttheir ability to undertake R&D investment with a longpay-back period.

. Costs of IP application, consulting with IP specialists,and litigation are relatively high for SMEs comparedto their turnover. Regarding this factor, the costs ofobtaining IP protection may be perceived by manySMEs as exceeding the potential benefits to beobtained from protection, particularly consideringthat a significant part of the costs may be incurredbefore the product has reached the market.Therefore, they see less potential return to IP. The per-ception of high costs and the difficulty of monitoringthe use of their IP rights in the marketplace, enforce-ment of IP rights, and other litigation issues areanother barrier for SMEs compared to largecompanies.

. Costs of learning and exploiting the IP system maydiscourage SMEs from using it as frequently as largefirms.

. Lack of awareness, knowledge, expertise, and a soundIP strategy is a common limitation which causes SMEsto apply for less IP per innovation.

. The valuation of IP rights is another challenge for bothinventors and investors. Many SMEs rely exclusivelyon trade secrets to protect their IP, which makesfinancing for SMEs more difficult as trade secrets areeven more difficult to value than formal IP rights.

. Some of the monetization techniques, for example, thesale and licence-back and the securitization of royaltystreams, are too complex and costly for SMEs toimplement.

. For high-tech SMEs, the delay in obtaining patentsleaves a great degree of uncertainty and makes itmore difficult to find financial support or partners forexploiting the invention.

. SMEs face even more challenges using IP rights whenoperating internationally due to higher costs such as:legal overheads, multiple filings, regulatory and tech-nical differences across countries. There can also beconfusion about what can and cannot be patented indifferent IP offices.

4. Empirical evidence on the use of IP bySMEs

As mentioned earlier, despite the potential benefits of IPrights for SMEs, various surveys and studies show thatmost SMEs—in both developed and developingcountries—do not use the IP system as efficiently as largecompanies do. The way that SMEs use IP rights dependson their technology area and the competitive conditionsunder which they operate, and varies widely fromcompany to company, sector to sector, country to

country, and over time. However, overall, they are lesslikely to use IP as a means of protecting their rights thanother means such as: confidentiality, secrecy or being firstto market (Arundel and Kabla 1998; EuropeanCommission 2001; WIPO 2004, 2010; Giuri et al. 2007;Hughes and Mina 2010; Cusmano and Dean 2011;United Nations 2011). Although in the sub-sample ofR&D performing SMEs, patents score better than thatof non-R&D performers, they still lag behind confidenti-ality agreements, lead-time advantages and secrecy(Hughes and Mina 2010).

Various studies in Canada also confirm that the use ofIP is positively correlated with the size of companies (DeMelto et al. 1980; Baldwin 1997; Baldwin and Hanel 2003;Hanel 2008). We now take a closer look at the distributionand exploitation of IP by SMEs compared to largecompanies in different countries.

4.1 SMEs and the use of IP: A worldwide perspective

According to a survey of European inventors (Giuri et al.2007), large companies have disproportionally morepatents than SMEs such that while about 70.6% of allpatents in Europe belong to large companies, only 8.8%of the patents belong to medium-sized companies and13.7% to small companies (see Table 1). Moreover, astudy on the use of the IP system by SMEs in Norwayshows that small companies not only apply for patentsless often than large enterprises, but that when theyapply for a patent, their success rate (in terms of beinggranted the patent) is significantly lower (WIPO 2004).Another study shows that while 28.3% of SMEs inAustralia use secrecy or confidentiality agreements, only8.2% of SMEs use patents (Cusmano and Dean 2011).

The survey also found that large companies usually seekIP advice from external patent or trademark attorneys orexternal solicitors, while the main source of advice forSMEs is the IP office. Micro-companies rely on advicefrom solicitors, the IP office and external patent and trade-mark attorneys.

The UK Intellectual Property Office (UKIPO) surveyshows a 10–40% increase in spending on IP from 2006to 2010. However, larger companies accounted for thelargest increase in IP spending. The other finding wasthat, on average, only about 11% of UK companies spe-cifically assign responsibility for managing IP rights

Table 1. Share of patent by employment size in Europe (PatVal-EU

survey)

Large Medium Small Public/private institutes Other Total

Total 70.6% 8.8% 13.7% 6.2% 0.7% 100%

Source: Giuri et al. (2007).

Small and medium-sized enterprises . 3 of 12

internally. While this ratio was about 43% for largecompanies, the majority of SMEs and micro-enterprisesdid not have active IP management. In terms of awarenessmethods, the UKIPO’s study suggests that the mostpreferred delivery method of IP advice to UK companies,for both large companies and SMEs, is websites followedby email bulletins, where both are very cost-effective. Also,brochures are not significantly different in popularity fromemail bulletins for micro-firms (see Fig. 1).

According to literature surveys by Hall et al. (2013,forthcoming), the results from UK CommunityInnovation Surveys in 1998–2006 show that only 10–11% of firms rate formal IP or patent protection as ofmedium or high importance, whereas about 20% ratesome form of informal IP or secrecy as important.Moreover, about half the innovating firms do not thinkthat IP is of much importance. Among UK companiesthat conduct some form of R&D and report to have hadan innovation, only around 4% apply for a patent.According to these literature surveys, the 2008 USNational Science Foundation’s new Business R&D andInnovation Survey shows similar results for US firms bysuggesting that only a small fraction of all firms find anyform of IP important to them. The 2008 Berkeley PatentSurvey which specifically targeted small, new companies inthe USA suggests that while for some industries, such asbio-technology, patenting is a vital part of corporatestrategy, firms in other sectors, notably software, essen-tially avoid the patent system. This survey also foundthat start-ups value the reputation effect that patent own-ership may bring to them. Finally, in a survey of smallFinnish companies, 25% report that patents are the mostimportant appropriability mechanism and only 15%report secrecy to be the most important mechanism.However, this contrasts with the information on theactual use of these mechanisms where 62% of companiesindicate that they rely on secrecy and only 16% report thatthey patent. One caveat of these literature surveys is thatthey do not distinguish between large and small companiesin terms of using IP rights.

On a different note, Plehn-Dujowich (2009) concludesthat small firms have more patent counts and citationsper dollar of R&D than large firms. One reason hementions for this results is that small firms specialize inproduct innovations while large firms focus on process

innovations, and it has been argued that product innov-ations are patented more heavily than process innovations(Arundel and Kabla 1998).

4.2 Canadian SMEs landscape

According to the SME Financing Data Initiative (2009),Canada had about 1.6 million SMEs in 2007.2 Thisconstituted around 80% of total businesses in Canada.Almost 85% of the SMEs operated in the service sectorwhile the remainder operated in the goods-producingsectors. Small businesses, or firms with fewer than 100 em-ployees, represented 99.5% of SMEs in 2007. The distri-bution of SMEs by the number of employees variesconsiderably from sector to sector. SMEs in the profes-sional services and agriculture/primary sectors areusually smaller (0–4 employees) than those in themanufacturing and wholesale/retail sectors. Table 4presents the distribution of SMEs by industries. In termsof geographical distribution, 37% of SMEs are located inOntario, 20% in Quebec, 22% in the prairies (Manitoba,Saskatchewan, and Alberta), 15% in British Columbia,and 6% in the Atlantic provinces (New Brunswick,Newfoundland, Nova Scotia and Prince Edward Island).This ratio matches closely with the population distributionamong provinces.

4.3 SMEs and the use of IP in Canada

There is a more or less similar picture in Canada as inother countries in terms of the use of IP rights by SMEs.This section draws on different surveys and studies to il-lustrate the use of IP by SMEs in Canada. Canada has alow share of patenting firms in total firms in general, and alow share of patenting SMEs in particular compared toother industrialized countries (Squicciarini and Dernis2013). Fig. 2 compares countries using this measure.Studies suggest that Canadian companies use patents andtrademarks to a lesser degree than other countries evenwhen adjusted by gross domestic product (Nikzad2013a,b).

The 1993 Survey of Innovation and AdvancedTechnology found that in Canada, trademarks were themost popular form of protection, followed by patentsand trade secrets, industrial designs and copyrights. Also,

Figure 1. Replies to the question ‘How would you like to see advice and information on IP provided?’ (% of respondents).Source: UKIPO (2010).

4 of 12 . R. Nikzad

large companies are more likely than the small ones to

introduce a world-first innovation, and foreign-owned

companies irrespective of their size, industry or type of

innovation had more often used IP instruments than had

Canadian-owned companies (Baldwin 1997). De Melto

et al. (1980) also found that foreign-controlled companies

(especially those under US control) patented significantly

more than their domestically controlled counterparts.The Canadian Intellectual Property Office (CIPO) con-

ducted two surveys (in 2006 and 2008) to assess the use of

IP rights among Canadian SMEs. The 2006 survey had

targeted all SMEs, while the 2008 survey targeted exclu-

sively the environmental sector SMEs with 5–499 em-

ployees. According to the 2008 SME Awareness Survey

targeting the environmental sector (CIPO 2008), only

13% of SMEs of this sector had filed for IP protection

in the period 2006–7. This number was 4% when a

similar survey was run by CIPO targeting SMEs in all

sectors in 2006. This relatively low IP use by SMEs is in

contrast with, for example, Hanel (2008) who shows that

two-thirds of large manufacturing companies in Canada

used at least one of the several IP rights in the period

1997–9.3 Moreover, while 52% (38%) of respondents in

2008 (2006) reported that they were fairly familiar with

the term IP, about 65% of businesses surveyed were not

aware of the organization responsible for registering IP

rights in Canada, only 41% of those familiar were able

to name three types of IP protection, and just 65% were

able to name two or more. This suggests that the level of

familiarity measured in the survey should be interpreted

with caution (CIPO 2008). In terms of awareness methods,

among different approaches4 the survey offered to target

and educate SMEs on the use of IP, only the internet/

website option received greater than 50% (65%) of re-

sponses that indicated that it would be ‘useful’. In terms

of the economic value of IP for SMEs, the survey found

that:

. 67% of SMEs agreed that IP assets make their

company more competitive.

. 55% of SMEs agreed that IP assets increase their

company’s market share.. Approximately 40% of SMEs agreed that IP assets

increase export sales (39%), leverage financing (41%),

and provide competitive intelligence (42%).. 77% of businesses who said they had IP assets believed

that it had increased the value of their company.

According to the Survey of Intellectual Property

Management (SIPM) on IP-intensive industries, large en-

terprises were more likely to use patents, copyrights or

trademarks than smaller enterprises. More specifically, in

2010, 22.5% of the largest enterprises held or used patents

compared with 2.5% of the smallest enterprises; 1.2% of

the largest enterprises held or used trademarks compared

with 11.2% of the smallest; and 24.8% of the largest en-

terprises held or used copyrights compared with 12.1% of

the smallest (see Table 5). SIPM targeted Canadian enter-

prises with revenues larger than $100,000 in nine selected

IP-intensive industries.5 A sample of 3,085 enterprises was

selected to represent the population of 59,824 enterprises

across these industries.Another survey with pertinent questions on IP is the

2011 Survey on Financing and Growth of SMEs6 (see

Tables 6–9). This survey is based on the responses of en-

terprises that in 2011 employed 1–499 employees and

generated an annual gross revenue of less than $50

million. Tables 6–9 present the findings of this survey.

The survey shows that trade secrets (4%) and non-disclos-

ure agreements (9%) were more popular than patents

(1.5%) in protecting the SME’s product. Also, the main

reason for holding IP protection was to prevent new

product(s) from being copied (62.2%). Moreover, the

main reason for not seeking any IP protection was that

IP protection was not needed or relevant for the business

(82.6%). The main destination of Canadian SMEs for pro-

tecting IP was Canada (88%) followed by the USA

(23.4%), which is different from the behavior of average

Canadian companies that mostly target the USA for

patents (Nikzad 2013a).

Figure 2. Share of patenting firms in total firms, by employee size class (2009).Source: Squicciarini and Dernis (2013).

Small and medium-sized enterprises . 5 of 12

According to the survey, larger firms had a larger IPportfolio and were more likely to have a formal IPstrategy and seek external IP advice. On average, 4% ofSMEs had a formal IP strategy. Also, 2.4% of SMEs soldor licensed out at least one IP to another business, while5.1% bought or licensed at least one IP from anotherbusiness. In terms of providing collateral to obtainfinancing, 48% of SMEs used business assets, 26% usedpersonal assets, and only 1% used IP. The manufacturingindustry scored better (4%) in using IP to obtain financing.

The survey shows a considerable difference between ex-porters and non-exporters in terms of the use of IP.Compared with non-exporters, exporters were at leastthree times more likely to hold an IP portfolio, seventimes more likely to sell or licence their IP to anotherbusiness, twice as likely to buy or license IP fromanother firm, and roughly four times more likely to havea formal IP strategy in place, seek external IP advice, anduse IP databases. This finding also confirms the finding byBaldwin and Hanel (2003) that exporters are more inten-sive innovators than non-exporters, and that when theexport orientation of firms is controlled for, the innovationdifference between domestic and foreign-owned firmsbecomes statistically insignificant. Moreover, the surveyshows that the firms that described themselves as innov-ators were three times more likely to hold at least one typeof IP rights and four times more likely to have a formal IPstrategy.

In an attempt to better understand the IP needs ofSMEs, CIPO organized a series of roundtables with in-novative SMEs. The SMEs invited to take part in theseries of roundtable sessions were largely recipients offunding from the National Research Council Canada’sIndustrial Research Assistance Program (NRC-IRAP)who had received program funding of $25,000 or morein the period 2008–11, or were in the initial stage ofseeking NRC-IRAP assistance (i.e. innovative firms). Atotal of 90 SMEs took part in the roundtable sessions,where the participants were small business owners,mostly with less than 50 employees, and 42% of themwere patent users, 24% were IP users other than patents,and 34% were non-users of IP. Some of the main findingsof these roundtables are as follows (CIPO 2012, 2013). Thefindings are consistent with the findings of previoussurveys:

. The decision whether or not to seek formal IP protec-tion is most strongly influenced by cost, the technologyat stake and the potential markets. Yet, trade secretswere perceived by many as the best method to protecttheir innovations.

. SME’s use of the IP system depends on the SME’slevel of IP knowledge and the industry sector theyare in. The IP system is primarily used to defendagainst infringement or to leverage funding. Many par-ticipants indicated that owning IP provides extra

Table 3. Percentage of UK companies rating method of protecting

innovations as ‘essential’ in 2010 (2006*)

No. of employees 0–9 10–49 50–249 250+ Total

Patents 8% 7% 10% 9% 8%

(13%) (13%) (11%) (18%) (13%)

Trademarks 8% 8% 15% 20% 8%

(13%) (15%) (21%) (33%) (13%)

Copyright 14% 11% 13% 15% 14%

(23%) (16%) (17%) (21%) (22%)

Registered designs 5% 6% 8% 10% 5%

(10%) (11%) (7%) (9%) (10%)

Confidentiality agreements 19% 17% 25% 31% 19%

(27%) (30%) (30%) (41%) (27%)

Secrecy 13% 11% 15% 17% 13%

(19%) (22%) (18%) (33%) (19%)

Complexity of design 5% 9% 12% 10% 5%

(7%) (5%) (6%) (9%) (7%)

Lead-time over competitors 10% 9% 9% 10% 10%

(14%) (18%) (17%) (21%) (15%)

*Numbers in brackets are for year 2006

Source: UKIPO (2010).

Table 2. Percentage of UK companies owning or creating IP rights in

2010 (2006*)

No. of employees 0–9 10–49 50–249 250+ Total

Patents 9% 16% 28% 31% 10%

(7%) (17%) (29%) (41%) (9%)

Trademarks 9% 16% 28% 31% 10%

(7%) (17%) (29%) (41%) (9%)

Copyright 9% 16% 28% 31% 10%

(7%) (17%) (29%) (41%) (9%)

Database rights 9% 16% 28% 31% 10%

(7%) (17%) (29%) (41%) (9%)

Others 9% 16% 28% 31% 10%

(7%) (17%) (29%) (41%) (9%)

*Numbers in brackets are for year 2006

Source: UKIPO (2010).

Table 4. Distribution of SMEs by industry, 2007

Sector SMEs

Agriculture/primary 11%

Manufacturing 4%

Wholesale/retail 15%

Professional services 11%

Knowledge-based industry 6%

Accommodation and food services 5%

Other service sector 48%

Total 100%

Source: SME Financing Data Initiative (2009).

6 of 12 . R. Nikzad

leverage in marketing their business to potential clients(i.e. they use their IP as a way to brand their companyas being innovative and leading-edge). A number ofpatent owners indicated that many investors will noteven talk to inventors who do not have a patent ontheir invention.

. However, only a limited number of participants saidthey calculated the value of their IP portfolio, andthen for the sole purpose of obtaining funding orwhen preparing their business exit strategy. This is

due to the difficulties associated with calculating thevalue of IP.

. Participants said the main barriers in seeking IP pro-tection are costs and the complexity of the IP system.The costs associated with filing for IP, including agentfees, translation and maintenance, were viewed by mostparticipating SMEs as an impediment in seeking IPprotection.

. Market size is an important criterion in the decisionabout where to file. Many roundtable participants who

Table 5. Use of patents in IP-intensive industries (2010)

Total $100,000–$249,999 $250,000–$4,999,999 $5,000,000

or greater

All enterprises that held or used patents 5.3% 2.5% 6.1% 22.5%

Licensed patents to others 0.7% 0.1% 1.0% 2.8%

Obtained patents through purchase,

mergers and acquisitions, or partnership

1.3% 0.4% 1.0% 10.9%

Patent owned by foreign head office 0.6% 0.0% 0.1% 8.1%

All enterprises that held or used trademarks 19.9% 11.2% 27.4% 41.2%

All enterprises that held or used copyrights 18.3% 12.1% 24.9% 24.8%

Source: Statistics Canada, CANSIM (SIPM).

Table 7. Reason for holding IP protection

Prevent new

product(s) or service(s)

from being copied

Improve chances

of securing

financing

Enhance business

reputation or

product image

Prevent legal action against

business related to patents

or other IP protections

Obtain

licensing

revenues

Other

62.2% 11.6% 62.0% 38.6% 11.1% 14.3%

Source: 2011 Survey on Financing and Growth of SMEs (see Note 6).

Table 8. Reason for not seeking any IP protection

No need/not

relevant for

business

Unaware

of relevant

IP type

Concerns

regarding

disclosure

Cost of

application

Cost of

enforcement

or litigation

Complexity of

application

process

Uncertain

commercialization

prospects

Other

82.6% 7.9% 1.6% 3.5% 3.3% 3.8% 3.2% 1.2%

Source: 2011 Survey on Financing and Growth of SMEs (see Note 6).

Table 6. Use of IP rights by SMEs as of December 2011

Registered trademarks Patents Registered

industrial designs

Trade

secrets

Non-disclosure

agreements

Any other type

of IP

Held at least one

type of IP

7.9% 1.5% 0.7% 4.0% 9.0% 2.6% 15.8%

Source: 2011 Survey on Financing and Growth of SMEs (see Note 6).

Small and medium-sized enterprises . 7 of 12

are users of the patent system tend to select the USAas their primary filing country, often because of thesize of the US market and the availability and flexibil-ity of the provisional patent application option.

. The majority of participants agreed on the need toconsult with an IP professional to guide themthrough the IP granting system. Very few participantshad ever dealt with CIPO directly.

. Despite their use of the IP system, a majority of par-ticipants had limited or no knowledge of CIPO.

Finally, according to a joint effort between CIPO andStatistics Canada7 (Neville et al. 2011), SMEs in the prov-inces of Ontario and Quebec were the most active patentapplicants accounting for 39% and 28% of all SME patentapplications, respectively. Alberta was the next largestprovince accounting for 13% of SME patent applications.Manitoba (2%), Saskatchewan (3%) and the Atlanticprovinces (3%) were the provinces where SMEs were theleast likely to apply for a patent. This distribution for SMEpatent applications is not significantly different from thedistribution of total patent applications across provinces.

As the above statistics suggest, Canadian SMEs use IPrights to a lesser degree than large companies, and IPrights are not an important tool that SMEs use to attractthe finance they need. There may be several reasons for thisbehavior. First, statistics show that SMEs and micro-companies are generally less innovative than largecompanies, and as such, they do not have innovations topatent or to use other sorts of IP rights to protect them.Second, compared with other countries, there is a tendencyamong Canadian companies in general, and amongCanadian SMEs in particular, to underuse the IP system.Surveys show that Canadian companies prefer tradesecrets and disclosure agreements over patents as themeans of protecting their products. Third, SMEs appearto have limited awareness about the role and importanceof IP. Fourth, even when they want to use IP rights, thecosts and complexity of the IP system are importantbarriers. Lack of suitable venture capital and otherfinancing vehicles in Canada and the interest in the USmarket are other reasons for this low use of IP rights byCanadian SMEs. These findings were also confirmed in arecent study by the Standing Committee on Industry,Science and Technology of the House ofCommons (Parliament of Canada 2013). It has also been

argued that Canadian courts and regulations have a morerestrictive interpretation of IP rights than US courts,which may be an additional barrier for SMEs to applyfor IP rights in Canada (Melnitzer 2003; Maheshwariet al. 2007).

Finally, it is important to notice that innovative SMEs,export-oriented SMEs, and foreign-owned SMEs are muchmore likely to use IP rights. The Appendix provides acomparison of the use of patents by small and largecompanies in different countries.

4.4. Strategic use of patents

This section points to some other differences betweenSMEs and large companies in terms of using patents.A survey of companies with 9,216 patented files in theperiod 1993–7 in six European countries (Germany,France, the UK, Italy, the Netherlands and Spain) foundthat, regardless of the size of the company, patents wereused for internal, industrial and commercial purposes bythe company (50.5%); to block other companies (18.7%);not used but not ‘blocking’ (i.e. ‘sleeping’ patents: 17.4%);licensed (6.4%); both licensed and internally used by thecompany (4.0%); and used for cross-licensing agreements(3.0%) (Hughes and Mina 2010).

Some differences between SMEs and large companies inusing patents are as follows. In a survey of European in-ventors, small companies trade more than 25% of theirpatents and leave less than 20% of their patents unused.Medium-sized companies actively use 65% of theirpatents, trade about 10%, and leave 25% unused.Meanwhile, large companies trade less than 10% of theirpatents and leave 40% of them unused (Giuri et al. 2007).There are different explanations for this behavior (DeRassenfosse 2012). First, monetary motives are shown tobe highly important to SMEs. Although the main motiv-ation to patent is to protect against imitation, SMEs con-sistently report a higher reliance on patents to attractinvestors or to earn licensing revenues as compared withlarger companies. Companies who want to convince in-vestors will patent their invention even if they could keepit secret. This is particularly true for SMEs. Second, SMEshave a higher proportion of their patent portfolio that islicensed and have a lower share of patents that are leftunused. This is in contrast to large companies thatmainly file patents to prevent imitation and to protecttheir freedom of operation. One of the reasons often men-tioned is that small firms generally lack the manufacturingand marketing capabilities required to commercialize anew technology, and therefore prefer licensing their tech-nology to appropriate the returns on innovation. Anotherreason is that since IP rights are relatively expensive forSMEs, these companies will be very selective whendeciding to apply for IP protection (Hughes and Mina2010).

Table 9. Country where IP protection held

Canada USA Europe Other

88.0% 23.4% 7.5% 4.4%

Source: 2011 Survey on Financing and Growth of SMEs (see Note 6).

8 of 12 . R. Nikzad

5. A framework for a government’scourse of action

This section provides a framework to determine if a gov-ernment’s course of action on a policy issue is necessaryand desirable. The first question that should be asked is ifthere is a potential role for government to play in theselected area. In general, the private sector is the funda-mental source of wealth and wellbeing of a country.However, government could also have a key role to playin increasing the wellbeing of the nation when there ismarket failure. This includes cases where the free marketcannot achieve the optimal outcome due to externalities,public goods, information asymmetries, or non-competi-tive markets. Examples of this category include: providingthe necessary rules of conduct and framework policies,defense policing and security, health care, environmentprotection, education, etc. Achieving some social valuesmay also require government involvement and course ofaction. An example of this category includes reducingincome inequality.

Second, government involvement should be aligned withthe government’s objectives tries to achieve in that specificarea. In general, governments deliver policies to achievecertain economic and social outcomes, with the ultimategoal of improving the wellbeing of citizens. In terms of themain objectives of the Government of Canada, they can bedefined as:8,9

. improving the quality of life and standard of living ofCanadians

. creating good jobs, new opportunities, and prosperityfor Canadian families

. creating the right economic conditions to encouragefirms to invest and flourish; keeping taxes low forjob-creating businesses

. helping Canadian businesses and entrepreneurs toinnovate and thrive in the modern economy; support-ing entrepreneurs, innovators and world-class research;and creating economic growth and jobs throughinnovation

. supporting small businesses and skills training

. expanding trade and opening new markets forCanadian businesses

. investing for sustainable growth

. having sound public finances

Third, it should be assessed if government’s course ofaction can actually improve the situation. There are neces-sary and sufficient conditions for government to intervene.The necessary condition is based on market failure as men-tioned above. However, government should intervene onlyif it can improve the situation (sufficient condition). Animportant challenge in this regard is that there should beenough harmonization among different policies, depart-ments, and levels of government (federal, provincial, andmunicipal) so that different government policies do not

cancel out or offset each other’s effects. Another conditionthat the government should meet is with regards to thefinancing of the policy: in any case, the benefits of theaction should be equal or higher than the cost of theaction, including the tax burden it may impose.10

Included in the costs of the government’s course ofaction should be potential social costs and any othersocio-economic trade-offs (i.e. direct and indirect impactson other economic and social outcomes). In general, gov-ernments should not intervene if the necessary and suffi-cient conditions are not met.

Applying this framework to the issue of SMEs and IPsuggests that there is sufficient evidence for potential gov-ernment intervention in this area. On one the hand, asSections 3 and 4 argue, the use of IP by SMEs is subjectto market failure factors such as:

. information asymmetry between inventors and in-vestors in terms of the value of the right

. imbalance between SMEs and large companies in termsof litigation, enforcement, and the complexity of the IPsystem

. lack of awareness among SMEs about the benefits andapplications of IP

. not-so-competitive business environment compared toother countries (e.g. the USA)

. lack of financial means to encourage the use of IP

. the positive externality and public good nature of in-novation and IP

This means free market forces alone cannot make SMEsuse and benefit from IP rights as much as large companiesdo. This market failure may adversely affect the investment,innovation, economic growth, and job creation by SMEs,which are among the main objectives of the Government ofCanada. Moreover, since Canada’s main trade partnershave been actively working in this area in recent years,active government policies could help SMEs to be in abetter position in international markets. The conclusion isthat government needs to take more actions to encouragethe use of IP by SMEs. Moreover, the studies presented inSection 4 suggest that SMEs leave a lower share of theirpatents unused and engage less in strategic patenting thanlarge companies. Even though this issue needs moreresearch, this anecdotal evidence may suggest even moregovernment support for SMEs to exploit IP rights thanfor large companies. In what follows, some suggestionand policy tools are provided to encourage the use and ex-ploitation of IP by SMEs (Hanel 2008; Jarboe and Furrow2008; OECD 2010; WIPO 2010; Andersen and Rossi 2011;Cusmano and Dean 2011; CIPO 2012; De Rassenfosse2012; Parliament of Canada 2013):

. Government should raise awareness and knowledge ofIP for SMEs. Examples of these programs in othercountries include the Enterprise Europe Network andIPeuropAware in Europe.

Small and medium-sized enterprises . 9 of 12

. Policies should address the financial constraints SMEsface in the use of formal IP rights. Some governmentsprovide financial support to cover parts of IP costs ofSMEs. Examples include the National ResearchAgency of Finland, the Federal Ministry ofEducation and Research of Germany, and theKorean Intellectual Property Office. This could alsobe done, for example, by providing guidelines oneligible IP-related costs through funding or tax incen-tive programs such as NRC-IRAP or the ScientificResearch and Experimental Development Program.

. Making the IP system more SME-friendly is a commonsuggestion in SME and IP studies. This could includethe development of comprehensive and user-friendlywebsites, promotional information materials, guidesand training packages, and organizing trainingseminars for specific target audiences.

. Government could consider creating application fasttracks and accelerating the granting process especiallyin industries where innovation occurs at a rapid rate.

. Government should improve litigation and enforce-ment mechanisms by reducing the time and cost ofthe IP enforcement procedures to increase SMEs’ con-fidence in the enforcement mechanisms. One problemthat needs to be addressed is the shortage of IP expertsin the judicial system. The creation of a patent litiga-tion insurance system for SMEs to reduce the costs ofbringing a patent-infringement case forward for SMEsis another example to consider. This has been imple-mented by the Danish Patent and Trademark Office.

. Making IP (especially patents) a better tradable good isanother suggestion that will facilitate the use of IP ascollateral and will make it easier to find potentiallicensees.

. The level of information among governments andpolicy-makers about SMEs’ practices in managing IPshould be improved.

. Although CIPO has the patent prosecution highway inplace, which accelerates and reduces the costs of exam-ination for patent applications under certain condi-tions, it is commonly stated that the US provisionalpatent application provides additional flexibility forSMEs.

. A small but significant number of countries provide theoption of ‘utility model’ protection, which is particu-larly suitable for SMEs.11 It is expected that allowingthe use of utility models encourages SMEs to rely moreon the IP system than on trade secrets.

We should also pay attention to some potential draw-backs. First and foremost, it is important to keep in mindthat the main objective here should be to improve innov-ation, economic growth, and the wellbeing of the nation,not merely pursuing policies to increase the number ofpatents and other IP rights held by SMEs. There shouldbe sufficient harmonization between IP policy and other

economic and innovation policies such that we observe

increased innovation and economic growth in the

economy as a whole, not just more protection for SMEs.

It should be noted that, as Section 4 suggests, not all SMEs

are innovative or intend to grow. Also, not all policies lead

to the intended objectives. For example, the experience of

some national IP offices (e.g. the Danish Patent and

Trademark Office) suggests that a reduction of fees for

SMEs did not necessarily lead to an increased number of

SMEs’ patent applications (WIPO 2004). The OECD’s rec-

ommendation is that the cost structure of IP applications

should be such that on the one hand, SMEs face less fi-

nancial burden when applying for IP rights, and on the

other hand, the fee structure maintains its function to

induce self-selection by potential applicants and discour-

age valueless applications (Cusmano and Dean 2011).

6. Conclusions

Research shows that SMEs do not use IP rights as effect-

ively as large companies do as a result of different market

failures. This opens room for governments to take a course

of actions to address this issue. Considering the objectives

of the Government of Canada in boosting innovation, job

creation, and economic growth, this is an area where the

government could play a more active role. This issue

becomes particularly important when all other

industrialized countries and Canada’s main trade

partners have started active policies to encourage the use

of IP by SMEs. Some policy suggestions which could

support the use of IP by SMEs include:

. more active promotion of IP awareness and capacity

building activities for SMEs. making, obtaining and enforcing IP rights should be

less costly for SMEs. making IP (especially patents) a better tradable good

Some considerations to keep in mind are that innovative

SMEs, export-oriented SMEs, and foreign-owned SMEs

are much more likely to use IP rights, and that the main

objective of the suggested policies should be to improve

innovation, economic growth, and the wellbeing of the

nation, not merely increasing the number of patent and

other IP applications by SMEs.This topic is relatively new in Canada and there is not

much empirical research to address the challenges of SMEs

in using IP. One shortcoming in this area is the lack of

comprehensive data. Despite some informative surveys on

IP,12 there is no survey that addresses all important aspects

of IP for SMEs in all sectors of the economy to provide

comparable data with other countries. This lack of data

limits the ability of studies to undertake meaningful bench-

marking of IP utilization by SMEs with that of other

countries or over time.

10 of 12 . R. Nikzad

Acknowledgements

This paper reflects the author’s opinion and does not rep-resent Industry Canada and/or the Government ofCanada. The author would like to thank Munir Sheikh,Christine Franklin, Elias Collette, and Richard Leclerc fortheir helpful comments on an earlier version of this paper.However, the author alone is responsible for the contentand errors.

Notes

1. The definition of small, medium, and large companiesin the survey (PatVal-EU) is as follows: small= lessthan 100 employees; medium=100–250 employees;and large=more than 250 employees.

2. The SME Financing Data Initiative defines SMEs asfirms with fewer than 500 employees and an annualincome less than $50 million, with a few exceptionssuch as unincorporated firms with less than $30,000revenue, non-profit organizations have also beenexcluded.

3. This study includes enterprises with at least 20 em-ployees and a gross business income over $250,000.

4. These options included fairs/trade shows/exhibits, in-formation sessions, printed publications, toll-free line,internet/website, and a visit to the company by an IPexpert.

5. The industries include: information and communica-tion technology, life sciences, energy and mining,chemical manufacturing, transportation equipmentmanufacturing, broadcasting (except the internet),publishing (except software publishers), and motionpicture and sound recording <http://www.ic.gc.ca/eic/site/eas-aes.nsf/eng/h_ra02210.html> accessed 30October 2013.

6. Results of the survey are available at <http://www.ic.gc.ca/eic/site/061.nsf/eng/02775.html> accessed 30October 2013.

7. Statistics Canada, with patent data provided by CIPO,merged Canadian patent applicants with SME datafor 2001–6. The match rate with Statistics Canadadata was 69%. This analysis only includes Canadianpatent applicants that apply for a patent in Canada.Therefore, this study excludes Canadian patent appli-cants that only seek international markets. SMEs aredefined as firms that have fewer than 250 employeesand less than $50 million in annual revenues in thisjoint effort.

8. See Department of Finance (2006) ‘AdvantageCanada: Building a strong economy for Canadians’<http://www.fin.gc.ca/ec2006/pdf/plane.pdf>accessed 30 October 2013.

9. See Government of Canada ‘Canada’s economicaction plan’ <www.actionplan.gc.ca> accessed 30October 2013.

10. Empirical studies suggest that the cost of collecting 1$

by government through taxation varies from 15¢ per

dollar raised by an efficient sales tax to over a dollar

lost for each dollar raised through capital taxes.11. According to WIPO, a utility model is:

. . . an exclusive right granted for an invention,

which allows the right holder to prevent others

from commercially using the protected invention,

without his authorization, for a limited period of

time. WIPO ‘Protecting innovations by utility

models’ <http://www.wipo.int/sme/en/ip_business/

utility_models/utility_models.htm> accessed 30

October 2013.

12. Some recent surveys on IP in Canada include: the 2008

SME Awareness Survey by CIPO, the 2011 SIMP, and

the 2011 Survey on Financing and Growth of SMEs

(see Note 6).

References

Andersen, B. and Rossi, F. (2011) ‘United Kingdom:Intellectual asset management strategies for diverse innov-ations’, Intellectual Assets and Innovation: The SMEDimension, OECD (ed.), pp. 111–140. Paris: OECD.

Arundel, A. and Kabla, I. (1998) ‘What percentage of innov-ations are patented? Empirical estimates for European firms’,Research Policy, 27: 127–41.

Baldwin, J. (1997) ‘Innovation and intellectual property’,Statistics Canada, Catalogue 88-515-XPE. Ottawa: StatisticsCanada.

—— and Hanel, P. (2003) Innovation and Knowledge Creation inan Open Economy. Cambridge, UK: CUP.

Cardullo, M. W. (2004) ‘Intellectual property – The basis forventure capital investments’. Geneva: World IntellectualProperty Organisation.

CIPO. (2008) ‘Final Report: 2008 SME Awareness Survey’.Ottawa: Canadian Intellectual Property Office, <http://www.ic.gc.ca/eic/site/icgc.nsf/eng/04458.html> accessed 30October 2013.

—— (2012) ‘Intellectual property roundtable discussions withinnovative Canadian SMEs’. Ottawa: Canadian IntellectualProperty Office, <http://www.cipo.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/wr03646.html> accessed 30October 2013.

—— (2013) ‘CIPO Roundtables – Second Wave (November–December 2012)’. Ottawa: Canadian Intellectual PropertyOffice, <http://www.cipo.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/wr03650.html> accessed 30 October2013.

Cusmano, L. and Dean, B. (2011) ‘Intellectual asset manage-ment, innovation and SMEs’, Intellectual Assets andInnovation: The SME Dimension, pp. 15–35. Paris: OECD.

Czarnitzki, D., Hall, B. H. and Hottenrott, H. (2014) ‘Patentsas quality signals? The implications for financing constraintson R&D’, NBER Working Paper, 19947.

De Melto, D., McMullen, K. E. and Wills, R. M. (1980)‘Preliminary Report: Innovation and technological changein five Canadian industries’, Discussion Paper No.176.Ottawa, Ont.: Economic Council of Canada.

Small and medium-sized enterprises . 11 of 12

De Rassenfosse, G. (2012) ‘How SMEs exploit their intellectualproperty assets: Evidence from survey data’, Small BusinessEconomics, 39: 437–52.

European Commission. (2001) Building an Innovative Economyin Europe: A Review of 12 Studies of Innovation Policy andPractice in Today’s Europe. Brussels: European Commission.

Giuri, P., Mariani, M., Brusoni, S., Crespi, G. et al. (2007)‘Inventors and invention processes in Europe: Results fromthe PatVal-EU survey’, Research Policy, 36: 1105–6.

Hall, B., Helmers, C., Rogers, M. and Sena, V. (2013) ‘Theimportance (or not) of patents to UK firms’, OxfordEconomic Papers, <http://oep.oxfordjournals.org/content/early/2013/04/12/oep.gpt012.abstract> accessed 30 October2013.

——, ——, —— and —— (forthcoming) ‘The choice betweenformal and informal intellectual property: A review’, Journalof Economic Literature.

Hanel, P. (2008) ‘The use of intellectual property rights andinnovation by manufacturing firms in Canada’, Economicsof Innovation and New Technology, 17: 285–309.

Hughes, A. and Mina, A. (2010) ‘The impact of the patentsystem on SMEs’. Newport, UK: UK Intellectual PropertyOffice.

Jarboe, K. P. and Furrow, R. (2008) ‘Intangible AssetMonetization: The Promise and the Reality’, AthenaAlliance Working Paper #03.

Maheshawari, B., Kumar, V. and Vedmani, V. (2007) ‘Patentingin Canadian and medium-sized enterprises: Inhibiting factorsand effective strategies’. Ottawa: Eric Sprott School ofBusiness, Carleton University, <http://luxor.acadiau.ca/library/ASAC/v28/25/25_65.pdf> accessed 30 October 2013.

Melnitzer, J. (2003) ‘Higher life forms finds little protection inCanada’, Corporate Legal Times, 13/136: 28–30.

Neville, M., Nikzad, R. and Collette, E. (2011) ‘SME Report:Findings from the identification of SMEs in patent adminis-trative data’, paper presented at the Canadian EconomicAssociation Conference, held 2–5 June 20111, Ottawa,Canada.

Nikzad, R. (2013a) ‘Canadian patent profile: Some explorationsin patent statistics’, World Patent Information, 35/3: 201–8.

—— (2013b) ‘Trademark treaties and international trade’,International Journal of Intellectual Property Management,6/3: 233–46.

OECD. (2006) ‘Valuation and exploitation of intellectualproperty’, STI Working Paper 2006/5.

—— (2010) SME and Entrepreneurship Policies and Programmesin Poland. Paris: OECD.

Parliament of Canada. (2013) ‘Intellectual property regime inCanada’, Report of the Standing Committee on Industry,Science and Technology, The House of Commons,Parliament of Canada. Ottawa: Parliament of Canada.

Plehn-Dujowich, J. M. (2009) ‘Firm size and types of innov-ation’, Economics of Innovation and New Technology, 18:205–23.

Rogers, M., Helmers, C. and Greenhalgh, C. (2007) ‘A com-parison of the use and value of patents and trade-marks inlarge and small firms’. Oxford, UK: Oxford IntellectualProperty Research Centre.

Shukla, R., Oparah, D. and Kiatkulpiboone, T. (2011) ‘TheUnited States: Balancing robust protection with rapid innov-ation’, Intellectual Assets and Innovation: The SMEDimension, OECD (ed.), pp. 141–67. Paris: OECD.

SME Financing Data Initiative. (2009) ‘Key small businessfinancing statistics’. Gatineau, QC, Canada: IndustryCanada, <http://www.sme-fdi.gc.ca/eic/site/sme_fdi-prf_pme.nsf/eng/h_01250.html> accessed 30 October 2013.

Squicciarini, M. and Dernis, H. (2013) ‘A cross-country char-acterisation of the patenting behaviour of firms based onmatched firm and patent data’, OECD Working Paper.Paris: OECD.

UKIPO. (2010) ‘UK Intellectual Property Awareness Survey2010’. Newport, UK: UK Intellectual Property Office.

United Nations. (2011) ‘Intellectual property commercialization:Policy options and practical instruments’. Geneva: UnitedNations Economic Commission for Europe.

WIPO. (2003) ‘Secrets of intellectual property: A guide for smalland medium-sized exporters’. Geneva: World IntellectualProperty Organization.

—— (2004) ‘Intellectual property rights and innovation in smalland medium enterprises’. Geneva: World Intellectual PropertyOrganization.

—— (2010) ‘Intellectual property (IP) support for small andmedium sized enterprises (SMEs): Needs assessment question-naire: A brief presentation of the findings and recommenda-tions’. Geneva: World Intellectual Property Organization.

Appendix: Use of patents (IP) by SMEs

Study Country Findings

Giuri et al. (2007) Europe 70.6% of patents belong to large companies, 8.8% to medium-sized

companies; 13.7% to small companies

Cusmano and Dean (2011) Australia 28.3% of SMEs use secrecy or confidentiality agreements; only 8.2%

of SMEs use patents

UKIPO (2010) UK 9–16% of companies with less than 49 employees use patents; 28%

with 50–249 employees; 31% with 250 employees and higher

CIPO (2008) Canada (all SMEs) 4% of SMEs filed for IP protection

CIPO (2008) Canada (environmental sector SMEs) 13% of SMEs filed for IP protection in period 2006–7

Hanel (2008) Canada (large manufacturing companies) Two-thirds of large manufacturing companies used at least one of

the several IP rights in period 1997–9

Survey of IP

Management (2010)

Canada (9 IP-intensive industries) 2.5–6.1% of SMEs held or used patents; 22.5% of large companies

held or used patents

Survey on Financing and

Growth of SMEs (2011)

Canada (SMEs only) 1.5% of SMEs used patents

12 of 12 . R. Nikzad