When markets turn uncertain, budgets tighten and leadership teams shift to survival mode. But for innovative companies, this time 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, despite being an intangible asset, delivers just that. A well-structured patent portfolio can increase perceived company value, justify higher multiples, and 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 reduction creates a window of opportunity when there is lower competition in certain tech sectors, when companies have easier freedom-to-operate, and when there is 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 competitors 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, and 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, and low-risk, high-value integration. 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 own terms.

5. Patent Filings Are Often More Strategic During a Downturn

With reduced internal distractions, you can audit your existing IP to make sure you are fully protected, prioritize core innovations, and draft stronger, more enforceable patents. 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.

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 no cost IP Strategy Call to find hidden opportunities in your innovation.

Curtis Wadsworth is a Partner at Jordon Voytek and leads the firm’s IP practice. He focuses his practice on IP, including patents.  He is available to assist businesses of all sizes with intellectual property protection legal needs.  Please contact Curtis directly at Curtis@JordonVoytek.com, or by phone at 412.425.5192.