Are Intangible Assets and Intellectual Property Rights Still the Elephant in the (Board’s) Room?

Author: Panu Siitonen

First, a US-style disclaimer: this blog is my personal view and does not represent the view of our firm. On that note, I claim that more than half of the boards of Finnish companies do not actually have a clear idea of (or even worse – interest in) their company's intangible assets and the intellectual property rights (“IPR”) protecting them.

In fact, many boards have no idea how the company's key assets could be utilised in the best possible way in the company's business operations and how they could be integrated into the company's business goals. In 2025, this seems incomprehensible, as the significance of companies’ intangible assets has continued to grow from decade to decade and today accounts for close to 90% of the assets on companies’ balance sheets. Furthermore, this trend will not be changing in any other direction in today’s information society.  

It is often said that Finnish companies are good at making inventions and finding innovative solutions, but bad at commercialising them in the international market. Again, I would argue that a very significant factor that contributes to this is that the boards of companies do not have an idea of the companies' key intangible assets, and certainly not of the company's IP strategy, if one has been drawn up in the company. If the company's board does not understand these matters, how can it monitor and, if necessary, ensure that the company's operative management makes the best use of the company's key assets in order to achieve the company's business goals?

A cautionary example of a lack of understanding and strategy is, e.g., the following: a Finnish company gets excited about the possibility of cooperating with a large international company but does not, due to being so excited about this opportunity, enter into a proper non-disclosure agreement or a R&D or product development agreement with the result that a) the company’s trade secrets are leaked to the “cooperator”, who utilises them without remorse in its own operations and in cooperation with third parties, or b) as a result of product development, the Finnish company makes an invention that is patented by the international company, because nothing has been agreed on IPR and to whom they belong in the project.

Another similar example is a situation where the company’s board decides – without consulting the operative management or otherwise investigating the matter in advance – that the brand of the new business is X, and the name of the subsidiary established for that purpose is X Oy and the domain name of the subsidiary’s website must match the chosen brand and company name. After this, it is discovered that the selected X, which in the worst-case scenario the board has already announced to the public, is not free, in which case the alternatives are either a) redeeming X at a very and completely unnecessarily high price or b) choosing a completely new brand and company name – despite the fact that a completely different brand and company name has already been announced in key markets, causing considerable (at least communicational) challenges and harm to starting a new business.

Such examples should serve as a wake-up call to Finnish companies, because if Finnish companies’ perceptions of IP strategy are not up to date and up to par, international players will eat them for breakfast – and reap the money from Finnish innovations. Finnish companies should pay much more attention to their IP strategy and the protection of their IP rights and their freedom to operate, which has become even further emphasised since the new Unified Patent Court (“UPC”) became operational. In fact, if the UPC finds that a company’s product infringes the patent holder’s patent, the sale of the infringing product will not be prohibited and blocked in just one country due to the court’s decision but may be prohibited and blocked in as many as 18 European countries (and possibly even more than 20 countries in the future). Similarly, the provision of a product or service infringing an EU trademark may be prohibited and blocked in all EU Member States.

Furthermore, in the midst of all the buzz about data, it is worth reminding that databases containing a large amount of data that require a significant investment have their own form of intellectual property protection. It entitles the maker of a database to prohibit the extraction or reutilisation of the whole database or a qualitatively or quantitatively substantial part of the contents of the database, the obtaining, verification, or presentation of which has required a qualitatively or quantitatively substantial investment. In my view, this rather effective form of protection, which has been underutilised, is probably not at all familiar to many boards, and certainly not to such boards for whom the utilisation of intangible assets based on target-setting is not in focus. Moreover, if the boards of companies have a rather poor understanding of the utilisation of the intangible assets and the IPR protecting them, one does not need a crystal ball to see what the perception of such boards is regarding the potential of the exploitation of the “oil of the information society”, i.e., data.

Lastly, to boost up the importance and value of IPR and the appetite for obtaining them, I refer to a very recent study published by the European Union Intellectual Property Office (“EUIPO”). In this EU-wide study, the EUIPO compared, among other things, the revenue per employee and the difference in revenue per employee between IPR owners and non-IPR owners. According to the EUIPO’s study, companies that own IPR have, on average, a 23.8% higher revenue per employee than companies that do not. Among large companies, the difference in revenue per employee between IPR owners and non-IPR owners was 16% in favour of IPR owners and, among SMEs, a staggering 44% in favour of IPR owners (and the figures were even higher if the IPR owner had a combination of patents, trademarks, and designs: 27% for large companies and 51% for SMEs). As the study concerned only registrable IPR, one can only imagine what the difference could be when copyright and database right protected IP as well as smartly utilised data is added to the mix. Based on the EUIPO’s study, it should be a no-brainer that all companies want to belong to the “IPR owners” category and, hopefully, Finnish companies also want to become better at obtaining and utilising such rights and, hence, gaining more revenue.       

I hope that the future of many Finnish companies will look different from previous years and that we will have the opportunity to read about Finnish success stories thanks to the fact that the boards of these companies have taken care of proper IP strategy, which has contributed to making such success stores possible. If the board of even one Finnish company decides to draft, amend, or update their IP strategy, this article has served its purpose – and all the better if the strategy has been drafted, amended, or updated in collaboration with IPR professionals and if they are continued to be used as a sounding board for strategy updates before such updates are implemented.