Firm Size and the Use of Intellectual Property Rights

Posted: 9 Nov 2009

See all articles by Paul H. Jensen

Paul H. Jensen

University of Melbourne - Melbourne Institute of Applied Economic and Social Research

Elizabeth Webster

Swinburne University of Technology; University of Melbourne - Melbourne Institute: Applied Economic & Social Research

Date Written: 2006

Abstract

There is some evidence that small European firms areless likely to patent their innovations than large firms. This studyinvestigates whether firm size affects the intensity of intellectual property(patents, trademarks, and registered designs) use in Australia. If there isunderinvestment in innovative activities by SMEs (small- and medium-sizedenterprises), an important source of creative potential in Australia's economyis possibly being neglected. Definitions of innovation, arguments for market failure in innovation, andwhy size-related issues affect a firm's ability to use intellectual propertyare first examined. Data on intellectual property applications and employment(as measure of potential innovativeness) for Australian industry from 1989 to2001 were collected. Examined were: (1) whether the SME sector has a lower rate of actual topotential innovation, and (2) whether the SME sector has a lower rate ofintellectual property usage to potential innovation. It was found, given theirinnovation potential, that SMEs are more likely to apply for patents,trademarks, and designs than large enterprises. This finding may indicate that the SME sector: (1) actually has a higherrate of innovation intensity than larger firms, and (2) SMEs have a greaterincentive than large firms to obtain intellectual property protection.(TNM)

Keywords: Intellectual property, Patents, Trademarks, Firm size, Innovation process, Patent productivity

Suggested Citation

Jensen, Paul H. and Webster, Elizabeth M., Firm Size and the Use of Intellectual Property Rights (2006). University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship, Available at SSRN: https://ssrn.com/abstract=1502455

Paul H. Jensen

University of Melbourne - Melbourne Institute of Applied Economic and Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

Elizabeth M. Webster

Swinburne University of Technology ( email )

Cnr Wakefield and William Streets, Hawthorn Victor
3122 Victoria, Victoria 3122
Australia

University of Melbourne - Melbourne Institute: Applied Economic & Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

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