Breathing Life into Inactive Patents

Study highlights strategies that could help European countries take full advantage of their researchers’ intellectual property.

Breathing Life into Inactive Patents

EUROPEAN SCIENTISTS ARE excellent at making new discoveries. Their big challenge? Getting those discoveries to market. A recent report explains that the European scientific community is plagued by a phenomenon commonly known as “the Valley of Death,” in which scientific researchers cannot attract the necessary investments to find markets for their discoveries.

The report was written by scholars from IESE Business School in Barcelona in Spain, Oxford University in the United Kingdom, Università degli Studi di Perugia in Italy, the European Commission, and other institutions. In their analysis, the co-authors discovered that 95 percent of existing European patents are inactive—largely because their inventors lack capital. This could be because private investors view scientific discoveries as too risky, believe they will cost too much to develop, or think they will take too long to come to market.

However, investors who take the risk could reap largely untapped rewards. According to the study, the 5 percent of European patents that have been commercialized help drive more than 40 percent of Europe’s gross domestic product. Moreover, since 2013, investment in other types of startups has increased from US$19 billion to $134 billion, which indicates that more venture capitalists are looking for ideas to support.

The report outlines three strategies to help researchers attract more of this funding. First, European leaders need to create “co-investment funds” that support the market validation of discoveries and bring together corporations and investors interested in science-based startups. Second, financial institutions need to adapt existing investment mechanisms to better support technology transfer activities.

Finally, European government and academic institutions must do more to strengthen the technology transfer environment. For policymakers, this would mean aligning and simplifying the regulatory frameworks that affect European startups. And for academics, this would mean doing more to engage with industry and share best practices.

Read the report, “Corporate Venturing: Insights for European Leaders in Government, University and Industry.