📉 5 Reasons Why Intellectual Property Is More Important During Times of Economic Volatility
When markets turn uncertain, budgets tighten and leadership teams shift to survival mode. But for innovative companies, this is exactly when IP becomes a strategic weapon.
History shows that companies who double down on intellectual property during downturns often emerge stronger, more valuable, and more acquisition-ready than those who cut back.
Here are five reasons why IP protection should be at the top of your strategy during periods of economic volatility:
1. 📊 Valuation Premiums Increase for IP-Backed Companies
In a volatile market, investors and acquirers look for tangible value — and IP delivers just that.
✅ A well-structured patent portfolio can:
Increase perceived company value
Justify higher multiples
Serve as collateral in debt financing
Data point: A study by Ocean Tomo found that in 2020, over 90% of the value of S&P 500 companies came from intangible assets — up from just 17% in 1975.
💡 Takeaway: During a downturn, your IP may be one of your most valuable (and defensible) assets — and one that helps you raise capital when others can’t.
2. 🧠 Competitor Innovation Slows — Giving You Room to Leap Ahead
During economic contractions, many companies pause or reduce R&D and patent filings to save cash.
This creates a window of opportunity:
Lower competition in certain tech sectors
Easier freedom-to-operate
Better positioning in white space
Historical trend: After the 2008 recession, patent filings by large companies dipped temporarily — but those who continued filing (especially SMEs and startups) gained critical ground in their industries.
💡 Takeaway: While others go quiet, your patents can plant the flag in areas they’ll wish they had protected when the market rebounds.
3. 🛡️ IP Strengthens Market Position When Margins Are Squeezed
During downturns, margins shrink and pricing power weakens. IP becomes your tool for:
Blocking copycats (especially offshore)
Protecting premium pricing
Retaining leverage in negotiations and supply chain disputes
Case study: Qualcomm has used its patent portfolio to maintain royalty revenue and strategic leverage — even during downturns in hardware sales.
💡 Takeaway: When margins are thin, patents are a defensive moat. They help you maintain pricing power and market position when every dollar counts.
4. 🧩 IP Makes You More Attractive for M&A and Licensing Deals
In recessions, M&A activity often shifts from high-growth bets to strategic acquisitions. Buyers look for:
Strong IP positions
Exclusive rights to technology
Low-risk, high-value integration
And if you’re not selling? IP becomes a revenue stream through licensing or enforcement.
Stat: During and following the 2008 recession, IP licensing revenues for top U.S. tech companies continued to grow even as product revenues dipped. (Source: PwC/WIPO IP Valuation, Exploitation, and Finance)
💡 Takeaway: IP gives you optionality: license, litigate, or exit on your terms.
5. ⚖️ Patent Filings Are Often Cheaper and More Strategic During a Downturn
Many law firms and patent services reduce fees during tough markets. Plus, with reduced internal distractions, you can:
Audit your existing IP
Prioritize core innovations
Draft stronger, more enforceable patents
And the USPTO doesn’t slow down. In fact, some of the most valuable modern patents were filed during recessions — because innovation doesn’t stop when the market does.
💡 Takeaway: A downturn is the perfect time to strengthen your IP foundation affordably and with intention.
Final Thought: Don’t Just Survive the Downturn — Leverage It
History rewards companies that strategize while others stall. Your intellectual property isn’t just a legal asset — it’s a business multiplier that can carry you through economic storms and position you for long-term success.
Want to assess how strong your IP position is?
🎁Take our free “Patent Readiness Scorecard” quiz or book a free 30-minute IP Strategy Call to find hidden opportunities in your innovation.
