Protecting Intellectual Property: British, European and American Patents and Trade Marks of Selected UK Companies

The paper begins with a discussion of the nature and relationship of trade marks to patents. We ask whether trade marks should be classed as market improving intellectual property (IP) or as private intangible assets. Our empirical aims are to document the acquisition of these two kinds of IP by UK firms and to investigate the Schumpeterian relationship between firm size and IP. We use a newly constructed data set which traces firm ownership of IP both directly and via subsidiary companies. We begin by looking at trends in IP protection by all applicants of any nationality in Britain and Europe in comparison with known trends for the USA. There was considerable similarity across all the measures and across geographical areas in the rank order of IP by product class, although consumer product groups were more represented in trade marks, whereas production technology is more important in patents. These features suggest common global patterns of demand and technological activity. However very different time trends are observed for British patent publications, which fell while all other indicators rose; furthermore chemical products moved down the rank order, in contrast to remaining a principal group for patents in Europe. We then present the IP performance of selected panels of UK production and financial firms. A key finding is confirmation that the rate of British patenting by these UK production firms fell sharply in the period and this was not compensated by a rise in patenting via Europe, despite a rapid rise in the overall level of patents granted by this route. A small rise in US patents was not enough to outweigh the falls in UK and Europe. In contrast, for production firms trade mark applications rose, especially during the mid-90s; this feature was also observed for the financial firm sample. The size distribution of IP in comparison to that of either sales or employment supports other studies in finding the opposite of the Schumpeterian hypothesis that size promotes innovation. For these two samples smaller firms are more than proportionately active in acquiring IP assets. Acknowledgements This study began as part of an ESRC project ‘The Economic Role and Value of Trade Marks’ (grant number L325253036). We are grateful to the UK Patent Office for access to the archive of UK patent publications and to St. Peter’s College for accommodation and administration for this project. Further work on this and related topics is now being financed by the Leverhulme Trust. An earlier version of this paper benefited from comments from seminar participants in the series ‘Intellectual Property in the New Millennium’ organised by the Oxford Intellectual Property Research Centre, of which all three authors are members.