N. 12, Dec.2003 -Jan. 2004 
IP & RTD: Articles 

Intellectual Property in European Technology Incubators
Esteban Burrone
WIPO, SMEs Division
 
Business incubators may generally be defined as institutions that assist entrepreneurs in developing their business ideas, from inception to commercialization and the establishment of new enterprises. Business incubators, therefore, nurture young firms, helping them to grow and survive during the start-up phase, which is usually the period during which they are most vulnerable. They generally provide the necessary infrastructure in terms of research laboratories and office space as well as various kinds of business development services, depending on the incubator. Technology incubators are business incubators that deal specifically with new technology-based firms (NTBFs), such as firms established for the purpose of commercializing a new technology or providing an innovative service.

For incubator tenants (i.e. the NTBFs hosted within an incubator), intellectual property may be a key tool for enhancing their chances of survival in the marketplace. NTBFs generally have limited capital and assets and largely depend on their innovative capacity and human capital. An innovative idea as expressed in its business plan will usually be the main asset of the company during its start-up phase and the basis on which it will seek funds to take the product or service to market. For such enterprises, access to high-quality and affordable services and advice on intellectual property is crucial, particularly during the start-up phase. Incubators, therefore, offer the perfect setting to provide or facilitate access to IP support to new technology-based firms.

In order to obtain information on the manner in which European technology incubators deal with IP issues, WIPO conducted a survey in 2003 contacting over 160 European technology incubators1. The survey was aimed at understanding the extent to which technology incubators are providing IP services to their tenants and in which manner such services are provided. The survey also sought to find out whether incubators consider IP important at the time of selecting tenants and whether incubators provide any financial support during the application process. Over 43% of incubators contacted replied to the survey providing a useful sample from which to draw conclusions. A similar survey was also conducted in the Republic of Korea, providing interesting data for comparison.

The WIPO survey revealed that the majority of incubators surveyed - 60 percent - have staff responsible for providing intellectual property (IP) assistance. The survey also revealed that some 57 percent of these technology incubators consider IP ownership or a license to use the IP of others very important or quite important at the time of selecting tenants for the incubator. While the skills of the managers and the quality of the business plan remain the most crucial factors in selecting tenants, these figures demonstrate that a start-up company or entrepreneur that has not protected its innovative technology, has not conducted a patent search to verify whether its inventions are infringing on third party rights or has not requested a license to use a given proprietary technology, may face problems in taking a new product or service to market and is therefore less likely to be admitted into a technology incubator.

The WIPO survey of European technology incubators also shows that while few incubators provide financial support for the IP application procedure, 40 percent provide assistance in-kind, for example by providing services free-of-charge or at a subsidized rate.

The survey also indicates that the types of IP services offered by incubators to tenant firms and the mode of provision vary significantly from incubator to incubator. Incubators often act as a first line of support for tenants, relying on the assistance of external service providers, such as private law firms, government agencies, university technology transfer offices, venture capitalists or other relevant institutions, for more specialised support. A significant number of incubators provide basic advice on preparing trademark applications, protecting trade secrets and searching patent databases, but are generally less likely to assist in tasks requiring greater technical or legal expertise such as drafting patent applications, licensing and technology transfer, valuation of IP assets or enforcement of IP rights, for which they generally rely on external partners or provide no assistance at all. The network of partner institutions to which the incubator is linked is therefore crucial in ensuring that tenants have access to high-quality advice in a range of areas relating to IP.

Interestingly, comparisons with the survey in the Republic of Korea show that the same percentage of incubators consider IP important at the time of selecting tenants, while a larger proportion (77%) have a focal point on IP. An important difference between the two surveys is the greater importance attached to patents by Korean incubators and the fact that all incubators surveyed provide assistance (directly or through external partners) on the preparation of patent applications, which is considered a crucial task for any new technology-based firm.

The results of the survey show a fairly good level of awareness of European technology incubators on the importance of providing support on IP to their tenants. However, a number of incubator managers expressed the need for further training on the subject matter as well as the importance of establishing stronger links with other innovation centers, universities and other relevant institutions in order to better meet the needs of their tenants in a field that remains obscure to many.

The WIPO Survey of European Technology Incubators can be downloaded from the SME website at: www.wipo.int







1. A database containing information on over 700 European incubators is available on the CORDIS web site at: www.cordis.lu/incubators(«)