18.11.2024
The commercial exploitation of patents can provide companies with a decisive competitive advantage. This is not yet fully understood. We need a change in IPR culture in Finland,” says Kai-Erik Elers, IPR Sales Lead at VTT.
According to the most critical estimates, only around five per cent of the world’s patents have been commercially exploited. This means that huge business opportunities have remained unused – in Finland, too.
According to Kai-Erik Elers, IPR Sales Lead at VTT Technical Research Centre of Finland, the failure to commercialise intellectual property rights is reflected in Finland’s GDP and as an obstacle to the growth of companies’ international business operations.
“The significance of IPR for business is not yet fully understood. Many companies have patents but lack an understanding of the protection they provide. Competitors’ patents are also not sufficiently known about. Companies that are actively engaged in product development and research may apply for only a few patents per year, even if more intellectual property rights are being created,” says Elers.
“In most of our industries, IPR is seen primarily as a cost rather than a potential independent source of revenue.”
Elers has extensive experience in IPR commercialisation and portfolio building. This work also took him to the United States for seven years. According to Elers, Finland can learn from the United States, where the strategic importance of IPR, for example, has already been widely recognised.
“IPR is the lifeblood of technology companies in North America. This is because the legislation on defending patents is highly advanced there, among other aspects. American companies see a major risk in not defending the results of research and development. Therefore, licensing in and out is also seen as both an opportunity and a way of minimising risks.”
Licensing is a concrete tool for value creation
The value of a company is often measured through the market value of its IPR. The commercialisation of IPR is a concrete way to create such value. Licensing is suitable for start-ups with low net sales, growing companies and listed companies alike.
“In Finland, licensing is often perceived as difficult, probably because of a lack of expertise and the fact that licensing is quite rare. Generally, companies don’t licence their IPR to others and try to avoid acquiring licences from others,” Elers points out.
“The significance of IPR for business is not yet fully understood, and competitors’ patents are not sufficiently known about.”
The licensing process requires diverse expertise in international patent and contract law and in valuation techniques. Knowledge of technology and good negotiation skills are also necessary.
“The content and structure of the agreement play a key role in risk management. The legal weight of the terms and conditions and their impact on the value and feasibility of the agreement must be understood during the negotiations. Instead of trying to manage everything on their own, companies should proactively seek support from IPR lawyers.”
“You cannot sell your neighbour’s car”
The first step in commercialising IPR is knowing and understanding your own intellectual property rights.
“You cannot license something you don’t own. You cannot sell your neighbour’s car, at least not without permission,” Elers points out.
If the company has already accumulated an IP portfolio, it is important to categorise its content: the most valuable patents, unused but potential patents, and those that could be exploited in other industries or for non-competing uses.
IPR strategy is a key tool for companies. It determines how and why a company manages, acquires and protects its intellectual property rights and how IPR can be used to create added value. According to Elers, it cannot be stressed enough that the IP strategy must be in line with the company’s business strategy.
“With the right kind of strategy and competence development, Finnish companies can strengthen their position in international markets. However, this requires a change in culture and a readiness to invest in IP as a key part of business.”
Kai-Erik Elers works as IPR Sales Lead at VTT. He has 25 years of experience in intellectual property rights. He holds a doctorate in metallisation processes for microprocessors.
VTT is a research, development and innovation partner owned by the Finnish state. It is also one of Europe’s leading research institutes.
