Intellectual property rights as a competitive advantage for technology companies

In the technology industry, the success of companies is based less and less on physical assets and increasingly on intangible assets. Over the past 15 years, investments in intangible assets have grown significantly faster than investments in physical assets. Whereas traditional industries compete on production capacity and raw materials, technology companies compete on expertise, innovation and recognizable products and services.

In this operating environment, intellectual property (IP) rights are not just a legal protection measure, but a key part of a company’s business strategy. They affect the company’s competitive position, value determination and legal risk management. This article examines the strategic importance of intellectual property rights for technology companies through three interrelated themes: the development of the legal system, financial dimensions and practical risk management.

Intellectual property rights as part of a company’s intangible assets

The optimal use of intellectual property rights requires an understanding of the purposes and legal nature of the different forms of protection. Patents protect technical inventions, copyrights protect software and other works, trademarks protect unique brand identifiers and trade secrets protect confidential company information.

Appropriately protected intellectual property rights can restrict competitors’ access to the market, extend the commercial life cycle of innovations and enable licensing-based business. A clear and consistent IP portfolio also strengthens a company’s position in negotiations with investors, financiers and other partners.

The development of the legal system and its impact on corporate decision-making

The European intellectual property rights system has undergone considerable changes in recent years. In the summer of 2023, a new unitary patent system came into force, which allows for unitary patent protection in EU member states participating in the unitary patent system upon request for a granted European patent. At the same time, the Unified Patent Court began operating, handling disputes relating to unitary patents and classic European patents.

During its first year of operation, more than 445 cases were filed with the court, and the number of cases increased by approximately 85 percent. By October 2024, 206 patent infringement cases and 50 patent revocation claims were pending. The Finnish local division began operating in Helsinki in 2023, contributing to the rapid growth in the number of patents in force in Finland. By February 2025, there were already more than 100,000 patents in force in Finland.

There is also a lot of activity in the EU with regard to trademarks. According to statistics from the European Union Intellectual Property Office (EUIPO), 18,070 objections relating to EU trademark applications were processed in 2024. Approximately 60% of the cases were resolved without a formal decision, which indicates that trademark owners are seeking to resolve disputes amicably. In addition, a total of 165,884 EU trademark applications were filed between January and November 2024.

In many ways, the development of these systems has made it easier to protect and manage intellectual property rights. At the same time, however, it has increased companies’ exposure to claims and legal disputes. This highlights the importance of proactive and systematic IP management.

Intellectual property rights and corporate financing

In the financial market, the importance of intellectual property rights in determining a company’s value is increasingly recognized. Investors, particularly those investing in technology companies, assess companies’ potential based on their intangible assets. A clear IP strategy and a documented IP portfolio support the valuation of a company and reduce uncertainty among investors.

In certain situations, intellectual property rights can also be used as collateral for financing. Patents and other registered rights can serve as collateral, particularly in specialized financing arrangements.

Licensing is an established way of exploiting intellectual property rights financially. When a company controls its rights and the terms of their use, it can grant rights of use to third parties and create long-term revenue streams.

Strategic IP management and risk management

Both developments in the legal system and the expectations of the financial market emphasise the importance of systematic IP management. An effective intellectual property strategy starts with business objectives: a company must identify which of its solutions and activities can be protected and which forms of protection are appropriate. A single product or service may be covered by several different forms of protection at the same time. For example, a technical device may contain patented solutions, copyright-protected software code, registered trademarks and trade secrets.

Comprehensive IP management requires systematic mapping as well as careful documentation and contract management. These are key risk management tools. Unclear ownership or incomplete contract terms are common causes of intellectual property disputes. Particular attention must be paid to situations where third parties are involved in the development work. Employment, subcontracting and licensing agreements must clearly define the creation, ownership and rights of use of intellectual property rights. In addition, the use of any third-party code and materials must be properly documented.

Risk management also includes taking into account the rights of other operators. Monitoring competitors’ intellectual property registrations helps to identify potential infringement risks and understand market developments. Proactive action is usually more cost-effective than retrospective disputes.

In international operations, it should be noted that intellectual property rights are often regional. In such cases, protection must be sought separately in the countries or regions where the company operates or intends to operate.

Towards proactive IP management

The importance of intellectual property rights in the technology industry continues to grow. New technologies, such as artificial intelligence, raise questions about the subject of protection and the suitability of the means of protection used.

For technology companies, intellectual property rights are not only a legal obligation but also an essential part of business planning and risk management. Companies that invest in proactive IP management can build a sustainable competitive advantage, improve their eligibility for financing and support the long-term commercialization of their innovations, regardless of the market or legal system in which they operate.

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