Answer first: Small and medium-sized enterprises (SMEs) are vital innovators globally, contributing significantly to economies and crisis responses such as COVID-19. Frank Tietze, Head of the IP Management Laboratory at the University of Cambridge, illustrates how strategic intellectual property (IP) management underpins SME succes…
AI & IP context for IP teams
Small and medium-sized enterprises (SMEs) constitute a substantial portion of economies worldwide, playing a critical role in innovation across diverse sectors. Frank Tietze, Head of the Intellectual Property Management Laboratory at the University of Cambridge’s Department of Engineering, emphasizes the importance of intellectual property (IP) in enabling SMEs to thrive and innovate.
During the COVID-19 pandemic, SMEs have demonstrated their innovative capacity by contributing to the development of essential products. Notable examples include Germany’s BioNTech, which developed a COVID-19 vaccine, and BenevolentAI, which identified a treatment that received FDA approval. SMEs have also been instrumental in creating many digital communication tools widely used today.
Key takeaways for SMEs leveraging intellectual property
- Confirm how the development affects ai & ip ownership, enforcement, licensing, or portfolio records.
- Separate confirmed facts from legal interpretation before advising business teams.
- Map deadlines, affected assets, contracts, and evidence files to the responsible internal owner.
- Use the issue as a prompt for monitoring, filing strategy, dispute preparation, or member education.
Practical analysis
Tietze highlights that various forms of IP—patents, trademarks, design rights, and copyrights—are crucial assets for SMEs. Empirical studies indicate that firms, particularly SMEs, perform better when they actively manage their IP portfolios. This is especially true for high-growth “Gazelle” companies and startups in their early stages.
One illustrative case is SwiftKey, an AI company founded in 2008 by University of Cambridge alumni. In 2016, Microsoft acquired SwiftKey for USD 250 million. Tietze notes that SwiftKey’s strategic hiring of an experienced IP manager in 2013 was pivotal. Gareth Jones, with prior experience at Vodafone and IBM, ensured SwiftKey’s IP was robust enough to withstand the rigorous due diligence of multinational acquirers. Tietze suggests that without such IP management, SwiftKey’s valuation might have been significantly lower—potentially around USD 50 million.
Another compelling example comes from Nutriset, a French humanitarian SME focused on nutrition for vulnerable populations in developing countries. Nutriset leveraged patents to protect its local franchisees in Africa from competition by large northern companies producing cheaper copycat products. This IP strategy enabled Nutriset to establish local manufacturing, create approximately 400 permanent jobs, and positively impact about one million children in 2020. Nutriset’s approach combined patent protection with sharing complementary know-how and trademarks to foster sustainable local development.
Tietze underscores that IP can drive both economic success and social impact. However, many SMEs perceive patenting as prohibitively expensive. While patenting does incur costs, these must be weighed against the value of intangible assets, which often constitute over 70% of a company’s core assets. For example, maintaining a patent family across up to 10 countries for 10 years typically costs around GBP 50,000 (approximately USD 70,000), a sum comparable to a senior R&D engineer’s annual salary.
Beyond patents, SMEs generate various IP assets including software code, website content, confidential know-how, algorithms, data, and trademarks. Despite this, many SMEs lack a comprehensive understanding of IP rights and their strategic use.
Tietze offers a useful analogy: IP rights are like a front door to a house. Without it, owners cannot control access or use of their property. IP rights empower owners to decide who can use their innovations, whether to restrict access, share freely, or monetize through licensing.
While abundant IP information is available online, SMEs often struggle to find practical tools that help them explore strategic IP options aligned with business goals. Independent IP advice can also be costly and difficult to access.
To address this, Tietze’s team at Cambridge developed accessible toolkits such as an IP road-mapping tool. Co-created with over 20 SMEs and startups, this workshop-based approach uses visual templates to guide executives through structured discussions on optimal IP use.
Open innovation collaborations present additional IP challenges for SMEs. Increasingly, SMEs partner with large multinationals and universities in projects funded by entities like the European Commission. These collaborations require careful negotiation of background and foreground IP ownership and risk assessments, often against partners with extensive legal resources.
Tietze’s ongoing POINT project, funded by the European Commission, surveys European SMEs to identify IP-related challenges in collaborative innovation. Preliminary findings reveal a lack of tailored support for SMEs in navigating IP issues within open innovation frameworks.
Tietze advocates for enhanced, targeted assistance to SMEs beyond generic online licensing templates or contract guides. Such support would better equip SMEs to leverage IP strategically, fostering growth and innovation in the next generation of successful enterprises.
Related IIPLA reading
University of Cambridge Expert Highlights Strategic IP Use by SMEs to Drive Innovation and Growth Small and medium-sized enterprises (SMEs) are vital innovators globally, contributing significantly to economies and crisis responses such as COVID-19. Frank Tietze, Head of the IP Management Laboratory at the Universit... Read the full IIPLA blog post: https://iipla.org/blog/university-of-cambridge-expert-highlights-strategic-ip-use-by-smes-to-drive-innovation-and-growth