Enforcing IPR rights for patents impossible for small businesses – it will bankrupt them.

In this connection, a number of arguments become important. First, SMEs reliance on patents as a source of competitive advantage may be hindered by costs that either on average or at the margin are higher than those for large firms. Secondly, the ability to recognise and develop an efficient level of protection through patenting may be hindered in SMEs because they do not have sufficient internal competence to manage effectively this aspect of their business development. Finally, it may be argued that even where SMEs are able to recognise the importance of patenting and to put in place appropriate patents, they may be at a substantial disadvantage in enforcing their IP rights. This is 2 particularly likely to be the case with respect to larger firms who not only may have a sufficiently deep pocket to protect their own IP or challenge the IP of SMEs, but may have greater competence at both designing and defending their own patent position against emergent rival patents. Although the mainstream economic rationale is broadly accepted, a number of firm-specific and sector-dependent factors make the role of strong IP through patents and its effects on the strategy and performance of SMEs rather controversial.