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How does intellectual property protection affect innovation
Brand Protection
4 mins

How does intellectual property protection affect innovation

Table of Contents:


    Innovation is the complex process of taking an idea to the market and analyzing which intellectual property (IP) rights apply to ensure your idea remains unique. IP rights like patents, trademarks, copyrights, and trade secrets protect innovative products and services that help the global economy grow. 

    Research shows that IP rights are a supporting factor for prosperity.  A recently published study from the European Union Intellectual Property Office (EUIPO) has found that small and medium-sized enterprises (SMEs) that own IP rights have a 68 percent higher revenue per employee than those that do not own any IP rights. 

    In this article, we uncover how intellectual property protection affects innovation. Additionally, we explain the advantages of registering intellectual properties for companies of all sizes and how businesses can start protecting their ideas.  

    Why are intellectual property rights important for innovation?

    Intellectual property is one of the most important assets of a company and crucial for innovation: 

    Protect the uniqueness of a product or service

    IP rights manifest a company’s inventions–including goods and services–and help define the uniqueness of their products. Some IP rights come automatically with the creation of a product, others need formal registration. 

    The most important IPs for brands to consider are copyrights, patents, and trademarks. A copyright protects the original works of the creator. This can be literary work, music, art, software codes, and more. Copyright protection doesn’t need formal registration as creators are automatically granted protection for their work. Patents need formal registration and protect new inventions like designs, processes, or utility types. Trademarks need to be registered too and protect brand names, symbols, color schemes, and other marks that make the source of a company’s products distinguishable from others. 

    Trade secrets are another form of intellectual property that can be important in the innovation process. They are used to protect the “know-how” of a business in the sense that for example, a company’s employees may have the legal duty to keep certain information confidential.

    Legally empower the idea

    Innovation needs a structured framework and registering your IP ensures that your ideas are legally protected when marketing them. This becomes especially important for companies planning to export their products to new markets. Additionally, registered IP rights provide legal protection against counterfeits. When brands find fake copies of their products, they can prove and claim that they are the IP owners and can take legal steps when necessary.  

    Give a competitive advantage to similar businesses

    IP rights give businesses a competitive advantage because they set your company apart from others. IP holders can control who is allowed to use their intellectual property which gives them leverage. Companies with registered IPs can also earn extra income by licensing or selling their inventions. Moreover, protected IP rights add value to your business which strengthens your position when considering to sell your business or merge with another company. Having a competitive advantage through protected IP rights also makes it easier for business owners to get external fundings from investors or banks.     

    The benefits of protected IP rights outweigh potential drawbacks

    Some people might argue that registering IP rights have a downside. In fact, there are a few obstacles that might arise with protecting your intellectual property. First of all, you need to pay fees for registering IPs like patents and trademarks. Additional costs might come up when you decide to work with a lawyer for legal advice. However, some of those costs are more plannable when you work with a brand protection company that has a transparent pricing model. 

    You also need to bear in mind that having intellectual property rights in place might entail infringement or piracy. While this can pose a serious risk for brands, it is still safer to have IP protection than to leave your inventions unprotected and free to copy for others. 

    How does intellectual property protection affect innovation?

    To understand how IP protection affects innovation we need to take a step back and look at how innovation processes work. Innovation starts with an idea that goes through a research and development (R&D) phase before entering the commercial phase where products are launched on the market. 

    IP protection is crucial during that process because companies want to make sure that their ideas and knowledge are legally protected along the way towards bringing a product to the market. It can take millions of dollars and many years of R&D before an idea is successfully turned into a product and that work should be defended. 

    During the R&D phase, Patents, copyrights, and trade secrets can be a strategic tool to shield your IP from potential competitors that try to infringe on your innovative ideas. Trademarks can protect your business identity in the commercial phase to make your products distinguishable from the competition. 

    Overall, brands are well off taking a holistic IP approach that will help a company better protect its products and innovations. In that sense, companies should register and protect various IP rights to cover all aspects of their intellectual properties and ideally bundle resources on a brand protection platform that safeguards brand reputation from piracy and other threats. 

    IP registration as a tool against illicit sellings

    To make the advantages of registering intellectual properties more visible, let’s take a look at a few examples from the business world of how brands implement IP registrations to protect their innovations against illicit selling purposes. The examples show the variety of possible IP registrations including sounds, color schemes, and the uniqueness of tools. 

    The famous US brand Zippo has registered a trademark on the Zippos lighter ‘click’ which makes the well-known sound officially unique and belonging to its inventor. 

    The innovative mattress producer Purple pursues a holistic IP approach by registering different IP rights like utility and design patents including the registration of its brand-defining color. 

    Plier producer Channel Lock registered its IP for each kind of its tools which illustrates that IPs can also be applied for individual items within a company’s product portfolio. 

    Next steps 

    Registering your intellectual property helps to foster innovation both within your company and throughout the broader economic environment. Bear in mind that your innovation will be  shielded as soon as you register an intellectual property for it. While registered IPs can still be infringed, it is an essential first step in safeguarding your brand. 

    Start protecting your idea by developing your IP portfolio that’s tailored to your needs. Red Points helps you to register and protect your IP rights on the platform. We monitor and remove trademark infringements around the clock and across marketplaces so that you can focus on growing your business.

    Get in touch with us and learn more about our trademark monitoring software.


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