What is intellectual property, in plain terms?

Intellectual property is the legal ownership of something you created rather than something you can physically hold. It comes in four main forms. A patent covers how something works and lets you stop others using that method for around twenty years. A trade mark covers your name and logo. A registered design covers how a product looks. A trade secret covers valuable information you keep confidential, such as a recipe, a dataset or a process.

Does owning intellectual property make it easier to raise money?

Yes, and the effect has been measured. The European Patent Office and the EU Intellectual Property Office studied European startups in a joint 2023 report. Companies that had applied for both patents and trade marks were 3.5 times more likely to raise seed funding, the first professional round, and 10.2 times more likely to raise Series A or Series B funding, the rounds that follow, than companies with no intellectual property at all.

How does intellectual property increase the value of a company?

It works through the numbers a buyer or investor looks at. Ocean Tomo's 2025 study found that about 92 percent of the combined value of the 500 largest listed US companies now sits in things you cannot touch, such as brands, software, data and patents, compared with 17 percent in 1975. And a study of more than 127,000 European companies found that those owning intellectual property earn 20 percent more revenue per employee than those that do not, rising to 68 percent more for small and medium sized companies.

Does intellectual property make a sale or flotation more likely?

The same 2023 European study found that companies which had applied for patents or trade marks were more than twice as likely to be acquired or to float on a stock market. Trade marks alone put companies at 2.1 times, patents alone at 2.4 times, and holding both at 3.2 times.

We are a software or AI company. Can we own anything?

Usually more than founders expect. Computer technology is now the largest single field of patenting in the world, at 13.2 percent of all filings, according to WIPO's World Intellectual Property Indicators 2025. Where a patent is not available, the thing worth owning is normally the training data, the test set, the way you process data, your fine tuning method, your customer usage data or your brand. Those are protected by keeping them confidential, by contract, and by trade marks rather than by a patent.

Is it too late if we have already launched?

It depends on what you showed publicly and when. In most countries a patent has to be applied for before the idea is made public. A public demonstration, a conference talk, a pitch deck sent without a confidentiality agreement or a published code repository can permanently remove your right to patent whatever was shown. Anything you never made public can still be protected, and in the United States there is a limited grace period after disclosure. The order of work is: stop the leak, then apply, then license.

Which industries benefit most from owning intellectual property?

Biotechnology files the most in Europe, with 48 percent of startups applying for a patent and 47 percent for a trade mark. Science and engineering, healthcare and manufacturing all sit around 40 percent. But the largest measured benefit appears in ordinary, low technology industries, where small companies that applied for a European patent were 172 percent more likely to enter a period of high growth, against 110 percent in high technology industries. The benefit is bigger there because almost nobody in those industries files.

Why Intellectual Property Matters More in the Age of AI

Start here

The four things you can own, explained.

Intellectual property is a legal term for ownership of something you created that has no physical form. If you have never dealt with it before, these four are the whole vocabulary. Almost every business decision in this area is about which of them applies to what you have built.

You do not need all four. Most companies need two, chosen deliberately, and most companies have none because nobody ever sat down and looked.

One term worth knowing before you read on: filing or applying means submitting a formal application to a government office, which then examines it and either grants or refuses the right. It is a process, not a purchase, and it takes time.

A patent covers how something worksIf you invented a new method or mechanism, a patent gives you the right to stop anyone else using it, usually for twenty years. It has to be genuinely new and not an obvious step for someone skilled in your field.
A trade mark covers your name and logoIt stops competitors trading under a name customers would confuse with yours. It is the cheapest right to obtain and the one most companies leave until a rebrand forces the issue.
A registered design covers how a product looksShape, pattern, arrangement, the look of an interface. Often overlooked, and frequently the fastest right to obtain in consumer and hardware businesses.
A trade secret covers what you keep confidentialA dataset, a recipe, a manufacturing tolerance, a customer list. There is nothing to file. It is protected by controlling who sees it and by contract, and it lasts as long as it stays secret.
And one thing that is not automatic: who owns the workWork done by an employee usually belongs to the company. Work done by a contractor often does not, unless the contract says so in writing. This is the single most common gap found when a buyer inspects a company.

What changed

Building something first no longer protects you.

For the last thirty years, the thing that protected a technology company was that building it was difficult. Hiring the engineers was hard, the work took years, and the time it took a competitor to catch up was, in practice, the business model.

That gap has closed. A capable person using AI coding tools can now reproduce a working version of most software products in weeks rather than years. Features that took a team a quarter to ship can be copied over a weekend. Being first is no longer a wall, because everybody became fast at the same time.

What did not change is ownership. AI can reproduce your product. It cannot give itself permission to use your patented method, cannot lawfully take the dataset you spent four years collecting, and cannot trade under your name. Those are legal facts, and no amount of computing power removes them.

The financial markets have already adjusted to this. Ocean Tomo has tracked what makes up the value of the 500 largest listed US companies for fifty years. In 1975, physical assets such as factories, machinery and stock accounted for 83% of that value. By the end of 2025 they accounted for 8%, and the remaining 92% was intangible: brands, software, data, patents and know how. Buyers are now almost entirely paying for things nobody can touch. The question is whether you can prove you own yours.

Your code is not a barrierIt is the single most reproducible thing you own. Anything AI can rewrite cheaply does not stop anyone.
Your data might beThe records you have gathered, the labels you added, the real customer failures you learned from. Expensive to collect, impossible to copy, and almost never protected deliberately.
Your method might beThe specific way you made the thing work reliably at scale. If that is new and not obvious, it can be patented. There were 19.7 million patents in force around the world at the end of 2024.
Your name certainly is27% of the European startups studied had applied for a trade mark, more than any other right. It is the cheapest protection available.
None of it counts until it is written downContractor work that was never assigned, secrets that were never documented, inventions that were never filed. All of them are treated as worth nothing when a buyer inspects the company.

The three measured effects

What owning intellectual property does to funding, to value, and to your exit.

Three things change. All three have been measured across tens of thousands of real companies rather than argued from opinion.

NoneNo IP

3.5xFirst round

10.2xRounds after

EFFECT ONE

You become far more likely to raise money.

The European Patent Office and the EU Intellectual Property Office followed European startups through their funding rounds. Companies with trade marks alone were 4.3 times more likely to raise a Series A or B round, the rounds that follow the first professional investment. Patents alone made them 6.4 times more likely. Both together, 10.2 times. At the first round the same pattern held at 2.5, 2.9 and 3.5 times. Applying for European rights rather than rights in one country only widened the gap again.

REVENUE PER EMPLOYEE +20% IF YOU HOLD PATENTS +36% SMALLER COMPANIES +68% SMALLER COMPANIES, ALL RIGHTS +98%

EFFECT TWO

Your company earns more, and valuation follows earnings.

Across more than 127,000 European companies, those owning intellectual property earned 20% more revenue for every employee than those owning none, and paid staff 19% more. Companies holding patents specifically earned 36% more. For small and medium sized companies the gap is far wider: 68% more revenue per employee, 75% for those holding patents and trade marks together, and 98%, close to double, for those holding patents, trade marks and registered designs. Investors and buyers apply a multiple to earnings, so stronger earnings per head raise the price of the company.

WHAT YOU OWN $ WHO PAYS

3.2xMore likely to sell or float

EFFECT THREE

You become more likely to sell the company or float it.

The same study found that applying for patents or trade marks made a successful exit for investors, meaning an acquisition or a stock market listing, more than twice as likely. Trade marks alone put companies at 2.1 times, patents alone at 2.4 times, and holding both at 3.2 times. Set against a base rate where roughly one company in a thousand reaches a real listing or high value acquisition, tripling those odds is not a small adjustment.

Sources: EPO and EUIPO, Patents, trade marks and startup finance, October 2023. EPO and EUIPO, Intellectual property rights and firm performance in the EU, February 2021.

Competition

How owning it keeps competitors out, and how you win with it.

A patent is not a certificate for the wall. It is a legal right to stop somebody doing something, and its commercial value is entirely in what that right lets you do that a competitor cannot.

Competitors have to build it a worse way

A granted patent removes one route to the market. Your competitor now ships an inferior version, pays you for permission, or spends a year engineering their way around you. All three outcomes are good for you, and the third buys back the time that AI took away.

You stop competing on price alone

A product anyone can copy ends up competing on price and losing customers at renewal. A product built on something you own competes on access instead. That is why companies owning intellectual property earn 20% more per employee and can pay 19% more for better people than the copy can.

You can charge other companies to use it

Once the right exists, the same asset can be sold more than once. This is called licensing: you keep ownership and charge a fee for permission to use it. It can be sold into an industry you do not serve, a country you will never sell into, or to the large incumbent who would rather pay than fight. The cost of supplying it is close to nothing.

This matters most in ordinary industries, not just deep technology.

The usual assumption is that patents matter enormously in science and hardly at all in normal businesses. When the effect was measured, close to the opposite was true.

The European Patent Office and the EU Intellectual Property Office followed European small and medium sized companies to see which ones went on to grow quickly. In high technology industries, a company that had applied for a European patent was 110% more likely to enter a period of high growth. In low technology industries, the same application made a company 172% more likely. The effect is larger precisely where almost nobody files, because the rarity is what sets you apart.

The same work found that trade marks are the foundation of most portfolios rather than an afterthought. In everyday consumer goods, applying for a European trade mark made high growth 62% more likely, and combinations built around a trade mark outperformed every other combination. Intellectual property is not one thing you buy. It is a small set of rights that work better together than separately.

Applied for at least one right21% more likely to grow, 10% more likely to become a high growth company
Applied for a European right rather than a national one26% more likely to grow, 17% more likely to become a high growth company
European patent, technology industries110% more likely to hit a period of high growth
European patent, ordinary industries172% more likely to hit a period of high growth
European trade mark, everyday consumer goods62% more likely to hit a period of high growth

The benefit most companies miss

Licensing: how what you own becomes a second revenue line.

Everything above is about protection. This is about income. Licensing means you keep ownership of the thing and charge somebody else a fee for permission to use it. You do not sell it, you do not lose it, and you can do it many times over with the same asset.

Most innovation companies treat their patents as a cost. Legal fees go out every year, nothing comes back, and the portfolio sits on the balance sheet doing nothing. That is a decision, not a fact. The same patent that stops a competitor can also be rented to them.

The economics are unusual. Once the right exists, supplying it to another company costs you almost nothing. There is no factory, no stock, no delivery. A licence signed in a market you do not serve is close to pure margin, and it arrives without any of the effort that your product revenue takes.

This is not a niche activity. Companies pay each other for permission to use intellectual property on a very large scale, and the buyers are usually the incumbents in your sector who would rather pay a fee than spend two years engineering around you or risk being stopped.

It is also the part almost nobody inside a company owns. Lawyers file the patents. Finance counts the cost. Nobody is responsible for making the portfolio earn. That is the specific job we fill.

See how the Chief IP Officer position works ↗

Sell into industries you will never serveYour technology may solve a problem in three sectors. You can only sell properly into one. Licensing covers the other two without hiring a single person.
Sell into countries you will never enterA licensee already has the customers, the distribution and the local relationships. You supply the permission and take a share.
Charge the incumbent instead of fighting themThe large company already using your approach has two options once you own it: pay you, or stop. Most large companies choose to pay.
Turn the portfolio from a cost into incomeRenewal fees go out every year regardless. Licensing is what makes the same portfolio pay for itself and then some.
Borrow against itIntellectual property can be used as security for finance in the same way property can. Position Imaging raised $30 million in October 2023 in a facility secured against its patents.

Industry by industry

What you can own in your industry.

The middle column shows how many companies in each sector actually apply for these rights, measured across European startups by the European Patent Office and the EU Intellectual Property Office in 2023. The right hand column is what we most often find valuable and unprotected when we look inside a company in that sector.

Sector	How many companies apply	What is usually worth owning
Biotechnology and life sciences	The highest of any sector in Europe. 48% apply for a patent, 47% for a trade mark, 31% hold both.	Test and screening methods, compound libraries, formulations and dosing, the manufacturing process, new uses for an existing drug, and the clinical data itself.
Healthcare and medical devices	40% hold a patent or a trade mark. 20% apply for patents, 40% for trade marks.	The physical design of the device, how it takes a measurement, the regulatory approval file, the software that turns a reading into a diagnosis, and long term patient outcome data.
Artificial intelligence and machine learning	36% use trade marks. Patent use is far below the value being created in the sector.	Training and test datasets, how data is collected and labelled, your method of adapting a model to a specific task, how you make it run cheaply, how multiple models are coordinated, safety and filtering systems, and the trained model itself kept confidential.
Science, engineering and industrial technology	Second highest at 47% overall. 38% trade marks, 25% patents.	Control systems, calibration methods, the tolerances and materials you settled on, custom tooling, and the service data coming back from equipment in the field.
Manufacturing and advanced materials	40% hold a patent or a trade mark. 20% apply for patents, 36% for trade marks.	The production process itself, improvements that raise output, the composition of a material, custom jigs and fixtures, the registered look of the product, and supplier know how.
Energy, climate and sustainability	Energy: 19% patents, 36% trade marks. Sustainability: 17% and 37%.	Battery and storage chemistry, power conversion electronics, methods for balancing and forecasting demand on a grid, monitoring hardware, and the method used to measure and verify carbon claims.
Information technology and business software	20% apply for patents, although computer technology is now the largest single field of patenting worldwide at 13.2% of all filings.	Architecture that solves a genuine technical problem, methods for searching and retrieving information, security and encryption implementation, systems that make different software work together, and the registered look of the interface.
Media, entertainment and creative technology	21% apply for patents, the highest outside the science and engineering sectors.	Compression and streaming technology, rendering and capture systems, rights management software, the ownership chain behind your catalogue, and trade marks on characters and formats.
Financial services, payments and insurance	Low patent use relative to the value of the sector, and heavy reliance on brand.	Risk and pricing models, fraud detection methods, the architecture behind settlement and reconciliation, underwriting data, and the brand, which in this sector is close to a licence to operate.
Agriculture, food and natural resources	Agriculture: 36% trade marks. Natural resources: 18% patents, 35% trade marks.	Plant variety rights, formulation and preservation methods, sensing and yield prediction, protected regional names, packaging designs, and recipes kept confidential.
Mobility, transport and logistics	Steady patent use, and consistently weak protection of data.	Routing and scheduling software, components of a self driving system, vehicle telemetry data, charging and battery swap infrastructure, and fleet maintenance prediction models.
Consumer goods and ordinary industries	Very few apply, and that is exactly the point. A European patent made a high growth period 172% more likely in these industries.	Registered designs, the overall look and feel of the product, packaging, the way your supply chain works, and the brand. Combinations built around a trade mark outperformed every other combination.

Where to start

What to do first, second and third.

Almost nobody needs a five year intellectual property strategy. Most companies need four weeks of honest work followed by a decision. When we look inside an innovation business, the inventions sitting unprotected in the engineering backlog usually outnumber the ones already protected.

The failure we see is almost never a weak patent. It is a strong invention that was demonstrated publicly before anyone applied, or a critical piece of software written by a contractor whose contract never transferred ownership to the company. Neither can be fixed afterwards, and both surface during due diligence, the inspection a buyer or investor runs before committing.

See how the Chief IP Officer position works ↗

1. Stop the leakWritten agreements transferring ownership from every employee and contractor, confidentiality agreements before demonstrations, and control over who can see sensitive material. This costs almost nothing and it is the only step that cannot be done later.
2. Find what you already haveSit with your engineers and list everything difficult you solved. Most companies find four to nine things worth protecting that they had stopped noticing.
3. Rank by commercial use, not by how clever it isProtect the things a competitor would have to do, not the things that were interesting to build. A patent nobody would ever need to use is a cost with no return.
4. Build a small set, not a single trophyTrade mark first, then patent, then design. Combinations built around a trade mark outperformed every single right in the growth data.
5. Then charge other people to use itLicensing into industries and countries you will never serve yourself. This is the step that turns a dormant asset into a revenue line.

Sources

Every number on this page, and where it came from.

Funding odds, exit odds, and how many companies apply by sector

European Patent Office and European Union Intellectual Property Office, Patents, trade marks and startup finance, October 2023. Funding figures from charts E3 and E4, exit figures from chart E5, sector filing rates from the accompanying press release of 17 October 2023.
Full report (PDF) · Press release (PDF)

Revenue per employee, wages, and results for smaller companies

European Union Intellectual Property Office and European Patent Office, Intellectual property rights and firm performance in the European Union, February 2021. Based on more than 127,000 companies, covering 2007 to 2019.
Study page

High growth odds by industry and by type of right

European Union Intellectual Property Office and European Patent Office, High-growth firms and intellectual property rights: the IPR profile of high-potential SMEs in Europe, 2019.
Full report (PDF)

The 92% figure for intangible value in the S&P 500

Ocean Tomo, Intangible Asset Market Value Study, 2025 release, covering fifty years of United States market data.
Study results

Global filings, patents in force, and the share held by computer technology

World Intellectual Property Organization, World Intellectual Property Indicators 2025, published 12 November 2025, covering calendar year 2024.
Patents highlights

Digital Global Systems figures

Patent portfolio independently valued at approximately $18 billion as of 15 November 2025; 725 patent assets made up of 571 US issued or allowed, 144 pending and 10 foreign; $25 million raised at a $12 billion enterprise value. Company announcement, 26 February 2026.
Company announcement

Position Imaging figures

More than 50 active patents and more than 30 pending applications, over $90 million raised, and technology cited by more than 20 global technology leaders, from Position Imaging's own company profile. The $30 million financing secured against the intellectual property, from GT Investment Partners in October 2023, was reported in Business NH Magazine.
Company profile · 2023 financing

Growth in generative AI patents

World Intellectual Property Organization, Patent Landscape Report: Generative Artificial Intelligence, July 2024. Generative AI patent families grew from 733 in 2014 to more than 14,000 in 2023, an increase of over 800% since the transformer architecture behind modern AI models was published in 2017.
Full report (PDF)

AI can copy what you built.
It cannot copy what you own.

If you own intellectual property, this is what it is actually worth.

The four things you can own, explained.

Building something first no longer protects you.

What owning intellectual property does to funding, to value, and to your exit.

You become far more likely to raise money.

Your company earns more, and valuation follows earnings.

You become more likely to sell the company or float it.

What happened when our client owned the patents: DGS.

How owning it keeps competitors out, and how you win with it.

Competitors have to build it a worse way

You stop competing on price alone

You can charge other companies to use it

This matters most in ordinary industries, not just deep technology.

Licensing: how what you own becomes a second revenue line.

Applying late is the same as not applying at all.

What you can own in your industry.

What to do first, second and third.

What happened when our client licensed the patents: Position Imaging.

Common questions, answered plainly.

Every number on this page, and where it came from.

Operators, not consultants.

AI can copy what you built.It cannot copy what you own.

If you own intellectual property, this is what it is actually worth.

The four things you can own, explained.

Building something first no longer protects you.

What owning intellectual property does to funding, to value, and to your exit.

You become far more likely to raise money.

Your company earns more, and valuation follows earnings.

You become more likely to sell the company or float it.

What happened when our client owned the patents: DGS.

How owning it keeps competitors out, and how you win with it.

Competitors have to build it a worse way

You stop competing on price alone

You can charge other companies to use it

This matters most in ordinary industries, not just deep technology.

Licensing: how what you own becomes a second revenue line.

Applying late is the same as not applying at all.

What you can own in your industry.

What to do first, second and third.

What happened when our client licensed the patents: Position Imaging.

Common questions, answered plainly.

Every number on this page, and where it came from.

Operators, not consultants.

AI can copy what you built.
It cannot copy what you own.