A recent survey by KfW Research reveals that a modest proportion of small and medium-sized enterprises (SMEs) in Germany hold patents or registered trademark rights. Specifically, nine percent of these businesses possess trademark rights, while only three percent have patents. This translates to approximately 350,000 businesses with trademarks and 100,000 with patents out of the total 3.84 million SMEs in the country. Due to some overlaps, just under 400,000 SMEs can utilize either trademarks or patents.
The KfW SME Panel survey indicates that patent applications are predominantly found among larger SMEs with at least 50 employees, those engaged in research and development (R&D), and manufacturing enterprises. Additionally, companies operating internationally are over three times more likely to own patents compared to those focusing solely on the German market.
"International markets are particularly competitive. Businesses with global operations must therefore take particular steps to protect their innovations,” stated Dr Dirk Schumacher, Chief Economist of KfW.
Trademark rights are somewhat more evenly distributed across SMEs but remain concentrated among large SMEs and R&D-intensive manufacturing firms. Notably, seven percent of small businesses with fewer than five employees have trademarks, whereas only two percent hold patents.
Regionally focused businesses tend to prioritize trademarks less than those operating nationwide due to the importance of brand reputation when direct interactions between suppliers and customers are limited.
"It is easier for larger businesses to shoulder the costs incurred in legal disputes to assert patent claims and the costs of building a brand reputation than it is for smaller businesses. Larger enterprises also have more resources such as specialised employees who are able to work in this area,” added Dr Dirk Schumacher.
In countries like France, Sweden, and the Netherlands, intangible assets such as patents and trademark rights serve as credit collateral with banks positively influencing borrowing operations. Although this practice is not yet widespread in Germany, investments in intangible assets are becoming increasingly significant within the SME sector. However, 23 percent of German SMEs acknowledge that their inability to provide necessary loan collateral hinders successful loan negotiations.
"It is a good idea to continue investigating whether collateralising bank loans with patents and trademark rights can also be established in Germany in the medium to long term," said Dr Dirk Schumacher.
KfW supports small and mid-sized companies through various promotional programs on behalf of the German Federal Government.