Institutional Changes and Industry Dynamics in the IPR Service Sector: A Small Open Economy Perspective

Patents and other intellectual property rights (IPR) are at the core of innovation studies. Patent attorneys and other IPR experts play an important role in drafting and filing processes yet are usually overlooked in analyses on filing activity. We conduct an exploratory case study to shed light on how IPR service firms adapt to changes in the institutions and competitive environment that overturn the fundamentals of their business. We focus on the sector’s evolution in Finland from 1990 to 2020, and analyse the impacts of globalization, European integration, and digitalization. Accession to the European Patent Convention, introduction of EU trademarks and Registered Community Designs and the London Agreement are identified as significant institutional changes for the industry. IPR register data and expert interviews show that the business has shifted from serving foreign clients filing in Finland to serving Finnish clients filing internationally, increasing the knowledge requirements of local experts. Concurrently, the filing volume has increased due to globalization partially offsetting the disappearance of some sources of revenue following from digitalization and institutional changes aimed at reducing transaction costs for innovators. This has also triggered the development of consulting services relating to technology strategy. We contribute by analysing the sector’s evolution in a small open economy where start-ups typically aim at the global market from the start. Our study also highlights the need to integrate IPR attorneys into the literatures on appropriability and propensity to file IPRs.