How to find an idea for an innovative business?

How to find an idea for an innovative business?

30 May 2023 - Emilia Wojciechowska

According to the European Patent Office, the dynamics of growth in the number of Polish patent applications is impressive. Our country ranks second in this respect, following Portugal (according to the report for 2021). Although you can still hear that Poland is not a particularly innovative country due to a rather small number of patent applications being filed, the future may look more optimistic. Our scientists are successful in an international arena. Therefore, the problem is not the lack of talented individuals. What we need is better conditions and facilities for innovative companies to develop, so as to unlock the enormous potential inherent in the patent system. Currently, only 30% of patents are being commercialised, and the rest are waiting for investors… These patents are a source of ideas and a great chance for entrepreneurs who seek to grow their business quickly and significantly. The total value of funds for co-financing for innovative companies under the SMART path alone (as part the European Funds for a Modern Economy programme) has amounted to as much as PLN 10.67 billion this year! There are four paths and many more support programmes for innovators. Plenty of options to choose from!

When devoting our time and energy to searching for an idea for our own profitable business, we closely observe the market and new consumer needs. We look at reality both locally and globally. We look for ideas in the private and public spheres, we try to find gaps in new technologies… A business idea will be good when it is novel and responds to some specific needs of its target group. And when it is innovative, then we already have a recipe for great success. To exploit the potential of innovation, it is worth taking a creative approach. Inventions are not only great discoveries, but it often happens that a minor improvement in the existing solution which is used by a seemingly narrow group of users will turn out to meet the needs of hundreds of thousands, or even millions of users. This type of thinking about innovation is made possible by today’s communication and sales channels. Not only great inventions lead to big business.

In Poland, there is a compelling need to establish a more effective institutional structure for technology transfer and commercialisation. In particular, this should involve two key measures to be taken: firstly, a success-based financial incentive system for researchers should be created, e.g., with a clear and transparent distribution of license fees, and secondly, proactive organisations granting licenses to private sector companies and start-ups need to be developed. Alternatively, elements of competition or/and technology consolidation would help achieve an effective scale. The implementation of such a structure would provide universities and research institutes with more opportunities to patent innovations with commercial potential.[1]

Meanwhile, the untapped potential of innovations will be mainly used by determined and agile entrepreneurs. Since they are in the minority, they have a lot to gain. The resources for this purpose that our country has at is disposal or offers are funds and numerous tax reliefs for innovative companies.

Gold mine for businesses

More and more companies are being established on the market which offer their assistance in the area of acquisition and strategic management of European and national funds and tax reliefs. Given the multiplicity and diversity of solutions to support innovative business, using such services seems reasonable.

This year, companies which focus on innovation can claim R&D tax relief and, its natural complement, IPBox relief. There are also many EU programmes, such as the European Funds for a Modern Economy (FENG), whose main goal is to activate cooperation between business and science and support the competitiveness of Polish SMEs. FENG offers support to entrepreneurs at various stages and in various aspects of their activity. The support can be provided both for technical solutions serving to implement the R&D infrastructure, as well as for activities promoting the development of green economy.

FEnIKS, or European Funds for Infrastructure, Climate and Environment, is another EU programme whose main goal is to support entrepreneurs in attaining sustainable development objectives. This is a direction that is worth taking interest in for many reasons, one of them being that databases of patent offices contain numerous unused solutions designed to facilitate sustainable manufacturing and technologies.

In addition, entrepreneurs who plan to develop and expand their businesses can count on the support in the form of, among others, CIT/PIT relief for a new investment project as part of their enterprise for as long as 15 years! The amount of the relief is up to 70% of the value of the investment project planned. To qualify for the relief, it is worth applying to the Polish Investment Zone programme.

Other interesting forms of support offered to innovative entrepreneurs include: robotization tax relief, which allows you to additionally deduct 50% of the deductible costs incurred for robotization from the tax base; relief for prototypes, under which you can deduct 30% of eligible costs (up to 10% of income); relief for innovative employees, which entitles you to reduce advance income tax payments and flat-rate income tax withheld from salaries of employees directly involved in R&D work; or relief for expansion, with which you can reduce the costs spent on marketing and promotion of your products. It may be applied to eligible costs of up to PLN 1 million, which for a CIT payer means savings of PLN 190,000 each year.

Entrepreneurs should not be afraid to contact trusted consulting companies, as such companies’ experience can help solve many of their problems related to the development or implementation of innovations. In addition, the comprehensive assistance provided by consultants does not have to be limited to acquiring and accounting for financial or tax support for an investment project but may also include assistance in finding the right research staff and facilitating access to many institutions, contractors or clients – the recipients of innovations. You also need to verify what the actual chances for the entrepreneur to obtain investment co-financing are, since a lot of information regarding this topic in the media may be misleading, says Ziemowit Grygierczyk from Zaga European Funds.

However, we will not benefit from the support without the idea for a profitable business. Where to look for it?

Ideas at your fingertips

Patent databases are an almost perfect source of ideas and knowledge about innovative solutions. The solutions disclosed there (patents, but also utility models) are protected by industrial property rights and, as a result, enjoy exclusivity on the commercial market. Bearing in mind that only one third of the solutions protected by the right to monopoly are commercialised, it is worth taking your time to search these sources.

As declared by the Patent Office of the Republic of Poland: We have taken active measures to make the registers  accessible to enable all interested parties to get acquainted with the essence of technical and non-technical solutions subject to protection. This is indispensable in many cases, e.g., when planning the company’s development strategy or verifying the programme of research into a given problem.

Recently, after many years, we have completed the digitization of registration documents, the final phase of which was carried out as part of the system project of the Electronic Services Platform of the Patent Office of the Republic of Poland (PUEUP). In total, 750,000 registration documents have been digitized! All registers are now available in electronic form.

In addition to publicly available patent databases and an electronic database of patents protected in Poland, all interested parties can use foreign databases, covering the territories of specific countries, as well as those European or American ones and the ones operating worldwide. This is connected with the fact that patent protection is territorial in nature. From the investor’s point of view, this means that you should first search patent databases for precisely those markets in which you plan to grow your business.

If you plan to conduct business in Europe, it is also worth getting acquainted with the new patent system as part of which the Unified Patent Court begins its operation from 1 June this year. Such knowledge is crucial particularly for entrepreneurs, exporters and inventors or licensees of patent rights.

Patent attorney – your business advisor

Having relevant legal knowledge and technical experience, a patent attorney may provide you with invaluable assistance in this area. The support offered by such an expert comes in the form of knowledge as regards the market potential (owing to his or her access to and ability to effectively search specialised patent databases) and the commercialisation process of a protected invention. The patent attorney will devise a strategy for the development and protection of intellectual property rights for a new or existing company to enable its development and expansion through the optimal use of the IP rights. Importantly, the patent attorney will also help you protect yourself against unfair competition. And since such competition often takes surprising forms, you should be prepared for everything. But after all, the stakes are high.

For the undecided – the faster way

When you are still not sure whether you should take that direction and explore vast databases containing descriptions of patents and utility models, it is worth taking interest in various initiatives launched to popularise and inform of what is happening at Polish universities and scientific institutes. More and more often, transfer centres and technology brokers are established, whose task is, among other things, to support researchers and students in transforming innovative inventions and technologies created at the universities into business. Such centres as well as annual fairs, exhibitions or competitions are a wonderful opportunity to meet and talk with inventors.

One of such events is an ongoing competition called Eureka! Discovering Polish Inventions, organised by the editorial board of Dziennik Gazeta Prawna. The idea behind this initiative is to present newly developed solutions that have the potential to be applied in practice and to be used in economy sectors and/or in manufacturing.

According to Paweł Kocańda, Patent Attorney, a good example of a solution with a great commercial potential submitted for the competition is a manufacturing method and a mixture used to manufacture biodegradable packaging from waste generated in the production of oil. Such a type of packaging can be used to transport food, e.g., pizza. After serving its purpose, it will biodegrade within a maximum of 30 days.

For the development of a company to manufacture such a solution, you can obtain co-financing from the European Union and claim up to three tax reliefs. You can commission a professional patent attorney to draw up a license agreement with the Lodz University of Technology (as the solution was created by its team of researchers) and a strategy for the development and protection of your brand.

Although a recipe for success is not simple, the path to success for innovative entrepreneurs is open. With a bit of enterprise and determination in the pursuit of your goal along with an opportunity to use help from many highly qualified advisors, this success can be achieved. Seize the moment to plunge into the world of innovation, as long as competition is not too fierce yet. It is never the case that everything has already been invented. To paraphrase Albert Einstein’s words, there is always someone who does not know that something cannot be done, and he will do it.

[1] Enhancing intellectual property use for a stronger innovation ecosystem in Poland, OECDPublishing

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