Presentation of the study carried out by the Ecole des Mines for France Brevets: "Is the constitution of a patent portfolio a success factor for a start-up? » : Not having patents means depriving yourself of a significant factor of success for a start-up.
France Brevets presents an important study carried out by the Ecole des MINES whose objective is to understand if the constitution of a patent portfolio is a factor of success or for a start-up.
No study to date in Europe has been able to shed light on this reality. France Brevets therefore worked with Yann Ménière from MINES ParisTech to analyse the reality of the facts.
Yann Ménière, Professor at the Ecole des MINES ParisTech, said "If you put yourself in the shoes of venture capital funds, the data show that patents are a relevant criterion for investment. The absence of patents should therefore reduce a start-up's chances of attracting smart investors."
A sample of 829 start-ups in which at least one of the 9 most active investment funds in France has invested was selected. All transactions that took place between 2002 and 2012 were analysed, identifying what constitutes a success for an investor, i.e. an IPO, a merger or an acquisition. Two major questions were asked: is patent ownership a good indicator for future investors? Is it an indicator of a start-up's chances of success?
The results of this study thus demonstrate that the intellectual property system aims to foster an environment conducive to the success of start-ups.
The impact of patents has been analysed at two points in the life of start-ups:
Early - at the time of their first fund raising; a start-up that has built up a portfolio of patents has a 50% chance of success within 10 years of its first fund raising. This percentage drops to 30% for a start-up with no patents, i.e. twice as many chances of success for a start-up with patents.
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Later - by limiting the sample to start-ups still in business six years after their first fund raising, the results are even more edifying: 30% of success for a start-up with patents and only 8% for a start-up without patents, i.e. three to four times more chances of success for a start-up with patents.
With a factor of 1 to 3, building up a patent portfolio is an even more important success factor in the field of biotechnology and software.
The nature of the patent portfolio will of course influence this success factor. Thus the chances of success will increase by :
- 20% for companies that have chosen to extend their patents to the United States and Japan in addition to Europe ;
- 50% for companies with the highest scoring portfolios using Thomson Reuters' scoring methodology ;
- 100 % for companies with the largest patent portfolios in size.
Jean-Charles Hourcade, Managing Director of France Brevets, said : "Thanks to this study, we were able to quantify a hunch that seemed obvious to us. An investor is going to want to make sure that his investment is secure against third parties who would be likely to copy the technology he has invested in, and the patent is the main vehicle for this. »
Jean Schmitt, Managing Partner of Jolt Capital : "The start-up companies Sensitive Objects and Autentec are two examples that support the results of this study. The first, Sensitive Objects, has developed an acoustic touch screen technology, the licensing of its patents to the Tyco company brought in more than 70M$ while the company's turnover did not exceed 1M$. On the other hand, the start-up Authentec was bought by Apple for $360 million (one of the very few major exits from a European VC fund to Apple) for its portfolio of 400 patents, relating to the fingerprint sensors offered today in all the iPhone. »
Read the complete study (in English)
About France Brevets
Equally owned by the French State and Caisse des Dépôts, France Brevets raised its first €100 million fund in March 2011. France Brevets' mission is to help French research, both public and private, to make better use of its patent portfolios, in particular by launching internationally-oriented licensing programs. France Brevets' action is based on a logic of partnership with rights holders and offers them, through the skills and amounts that the fund can mobilize, the opportunity to highlight their innovation, generate new revenues and consolidate a competitive advantage thanks to their patents. France Brevets' priority areas of intervention are the Information and Communication Technologies sector in the broadest sense, Aeronautics and Space, New Energies, Chemistry, Materials, Life Sciences and the Environment.
For more information, visit www.francebrevets.com
