License to Thrill: Innovation in the IP Value Chain

Note: Map above does not include industry incumbents.

Why Now?

As AI accelerates innovation, IP is no longer festering in the legal back-office – it’s front and centre in defining company value. In fact, up to 90% of the S&P 500’s market cap is now tied to intangible assets, with patents and trademarks central to competitive moats, monetisation models, and R&D returns.¹ ²Despite this, much of the IP management ecosystem still runs on legacy tech, largely dominated by the incumbents of Clarivate, Anaqua, Questel and LexisNexis, opening up a vast opportunity for new innovation.

This isn’t just a legal function, it’s a strategic one: when used well, IP rights have the power to open the door to competitive differentiation, partnerships, innovation collaboration, business model regeneration and outsized return on investment in R&D. Conversely, poorly drafted claims at best are a sink of time and money, but also can lead to costly lawsuits or settlements for patent breach or cease to operate orders.

AI’s impact means more inventions to protect across a sprawl of new companies, whilst also making it easier to violate trademarks and copyrights, as deepfakes proliferate across the internet. Companies are also waking up to the opportunity to license the data behind their IP as AI-first companies look to build competitive moats through proprietary combinations of data sets.

IP rights management is inherently a global challenge, given protection must be sought individually in each country, but Europe is taking a leading role on the global stage for IP. While the European Patent Office (EPO) ranks fifth globally in volume – with just under 200,000 filings annually – over 65% of those filings come from non-European residents, underscoring Europe’s role as a key market for international innovators._³ Europe’s innovators undoubtedly have global ambitions too, given patents from inventors in the UK, France, Italy, Switzerland and more exceed the global average of 3.3 patent offices applied to. The European Union Intellectual Property Office (EUIPO) is supporting EU-based SMEs to protect their assets from early in their journey by reimbursing some of their legal costs through their SME Fund.⁴ From this leading position, there’s a clear need for European-centric businesses to help their fellow European companies navigate the global complex, fragmented legal terrain.

The IP Stack: Where the Value Lies

We see five key opportunity areas where software is redefining how IP is created, protected, and commercialised:

1. Prior Art Searching & Innovation Harvesting: Automating the Baseline

The first line of defense in any IP strategy is knowing what already exists – for innovators to judge patentability before investing time and money, for patent attorneys to draft distinct claims, for patent offices to test applications, and for rights owners to test the boundaries of their Freedom to Operate. Today, prior art searches are time-consuming and manual – especially in complex domains like semiconductors or telecom with compounding patents.

AI-powered tools like Ankar use semantic search across massive databases to surface relevant prior art faster, improving outcomes and enabling more robust IP filings. Traditional methods and open source tools still use Lexicode search that often prove to be incomprehensive, and high profile cases may turn to outsourced, offshore efforts to expedite efforts. Patent attorneys consistently flagged this as the most promising area for automation, with one noting: “If you can do it better at scale then it’s a better product, not just cheaper. Better visibility means more Davids can take on Goliaths.” Over time, these state-of-the-art tools will likely become tablestakes, rather than simply a nice-to-have, since companies without them will be at a disadvantage, wasting time and money on an application that has not been thoroughly vetted for infringing art. Ankar’s platform also builds a ‘bill of IP’ for innovations, ensuring complex devices with many layers of IP are thoroughly protected. This addresses a pain point felt more keenly by in-house IP management teams who need to interpret the cross-reference between product development and patent data. Finally, R&D teams can also benefit from collaborative tools that help them and IP teams knowledge share to understand what may be powerful IP to protect. US companies Garden and Patsnap help innovation teams efficiently harvest inventive concepts and scope freedom to operate.

2. Drafting & Filing: Compressing the 40-Hour Week

Patent drafting is a painstaking process involving multiple iterations between inventors, in-house counsel, and external attorneys. AI solutions like Solve Intelligence and DeepIP can reduce drafting time by up to 60% from today’s 30-40 hours, while maintaining legal quality – unlike up to 80% of patents in the market that are invalid from poor claim structuring. Converting drawings into robust claims requires technical precision, and all the harder when it is chemical or biological formulations – however, Ankar and Solve Intelligence have both deepened their product, beyond just mechanical drawings, to serve these sectors.

Attorneys are cautiously optimistic. Concerns naturally remain around AI “hallucinations” particularly for such novel inventions, and fitting into existing collaborative workflows with the network of stakeholders. However, these tools act as time savers and enablers – especially for smaller firms or overworked teams – and careful prompt engineering allows attorneys to ensure claims are robustly structured. They also can shift the onus from attorneys to inventors, the very same inventors who want to focus on inventions and are usually less interested in explaining their invention to someone else who inevitably will get it wrong, eating further into precious inventing time.

Once a patent is filed, it enters the prosecution phase, where it’s examined by a national patent office. This process typically spans 12-30 months, depending on levels of opposition, and each round of responding to comments can take 5-7 hours of expert time. Here too, next-gen startups are expanding their footprint. Solve Intelligence and DeepIP, as well as ClaimWise, support automated response drafting to office actions, leveraging historical examiner behaviour and generative AI to recommend revised language, cite relevant prior art, or suggest narrower claims. This functionality enables patent attorneys to maintain momentum in the application process, lower overall cost-to-serve, and reduce backlogs. In high-volume filing environments – particularly for portfolios across multiple jurisdictions – this capability is quickly moving from “nice to have” to “must have.”

3. Monetization: Licensing in the Age of AI

Once granted, patents become powerful revenue assets. But many SMEs lack the resources to license effectively, particularly if they are not actually making use of their own IP. Platforms like Ankar and Garden, mentioned above, help identify and unlock new licensing opportunities based on potential infringements.

In the new age of AI, marketplaces like Human Native connect copyright holders with AI startups hungry for proprietary data sets while Valyu Network tracks and monetises AI crawlers interacting with your content. Meanwhile, AI also enables superior monitoring for trademark or copyright infringements – with video monitoring solutions such as Ceartas DMCA or Oriane seeking unlicensed reproduction of content across the internet.

4. Portfolio Ops: Managing What’s Already Yours

Renewals, deadlines, and jurisdictional nuances make IP management a minefield. Solutions like Righthub (recently acquired by Anaqua) and PatentRenewal aim to simplify this with automated workflows, global compliance logic, and direct integration with patent offices, ensuring timely renewals. With the cost to maintain a blooming patent portfolio so high, both in renewal fees and the overall management of it, companies should routinely prune the portfolio and concentrate their resources on the most valuable, enforceable rights_⁵. Analytics solutions can help to prioritise use cases. For companies with growing portfolios, this isn’t just back-office hygiene – it’s risk management and cost control.

5. Service-as-Software: Automation Without Losing the Lawyer

AI-enabled legal service firms are redefining the delivery of IP services by integrating automation directly into their practice models. Companies like Lightbringer exemplify this shift, offering a hybrid approach that combines AI-driven tools, for inventors to self-serve, with expert legal oversight, to ensure legal robustness. This model not only accelerates the patenting process but also reduces costs, making high-quality IP protection more accessible to startups and small businesses.

Challenges to Scaling

Innovation in IP is happening – but scaling a business in this space is far from simple. Three core hurdles stand out:

1. Legal Risk Aversion

The legal industry can be conservative by nature, and most services bill by the hour. Automation that reduces time spent can feel like cannibalising revenue – except in IP, where flat-fee pricing dominates drafting and prosecution of patents, meaning efficiency can boost margins or drive down costs. Lawyers have virtually no margin for error in their work and can’t risk downtime of the tools they are using under tight deadlines. Trusted relationships between clients and attorneys, or law firms and third party services, are difficult to disrupt so 10x better results are a must-have to even open the conversation to adoption.

Today’s tools can’t be presented as a ‘miracle cure’ and instead deployed with awareness of the learning curve on the part of attorney: enhancing their prompt engineering skills, sharing best practices with their peers and understanding it is an iterative process and a new module of talent development, that time must be carved out for alongside day-to-day work. AI tools are often viewed as a replacement for junior talent but should instead be seen as a companion, still requiring critical and strategic thinking to maximise effectiveness. And fundamentally, lawyers are widely regarded as one of the most trusted professions – even if a tech model can do a faster job, there is a vision of trust around lawyers that does mean they must sign it off.

Given that IP rights inherently rely on novelty, there is enormous sensitivity to the privacy of invention disclosures. Robust security controls must be upheld, for instance on-prem or private cloud deployment, and data must not be used to train models – with the measures taken to ensure security clearly communicated. Be it inventors worried about leaks or IP practitioners that also risk reputational damage, this is one of the biggest points of friction we have consistently heard from potential buyers.

2. Fragmented Buyers, Long Sales Cycles

At corporates, ambiguity around who owns the IP process (Is it Legal? R&D? Business Development? Marketing?) slows sales and often stalls implementation. In large law firms where IP is just one of many practice areas, IT and procurement teams can be reluctant to approve new tools that only serve a single department – especially when substantial firm-wide LegalTech investments have already been made. Several attorneys we spoke with expressed frustration at the sheer number of tools available, making it difficult to know what’s already in place and what’s worth adopting.

The market is also highly concentrated at the top and fragmented below; 50 top firms in Europe were responsible for drafting 40% of all European patents last year. It’s a similar story in the US where also just ~260 companies hold half the US patent stock, with names like Samsung, Huawei and Apple leading the pack.^{6 7 8} These large players may look like golden geese, but they are slow to move, locked into incumbent relationships, and risk-averse by nature. Moreover, experimental AI spend in LegalTech remains low compared to other sectors, often restricted to internal use and not billable work. Junior associates may champion tools, but senior partners hold the purse strings and often don’t see the RoI – especially when retiring soon. As a result, new entrants often wedge in with highly specific point solutions – but this creates challenges for buyers who prefer platform consolidation over a patchwork of niche tools. In response, incumbents are on an acquisition spree, looking to bolt on innovation rather than build in-house. For instance, Anaqua added renewal management platform Righthub to their portfolio in May this year. 2024 saw Questel acquire qatent and Clarivate acquire Rowan Patents to bolster their AI capabilities, whilst in 2023 LexisNexis expanded their patent analytics offering through acquiring Cipher.^{9 10 11 12}

3. Patent Office Bottlenecks

Even if tech shortens patent drafting time by 20 hours, or cuts hours of time responding to each round of office actions, it may have no effect on overall timelines of 2-3 years from patent application to being granted when offices around the world are struggling with the workload – the US PTO alone has 800k+ backlogged applications.¹³ AI has a role to play internally in these institutions, for instance helping route applications to the right examiner, but many vendors avoid selling into bureaucratic systems with long sales cycles.¹⁴ ¹⁵ For deep-tech patents, where robustness is critical to the value, time to file is less critical but, for fast moving software companies, there are benefits to simply filing quickly and then being able to carry on with their core activities. Speed alone isn’t enough to make a case for AI tools: they must enhance the quality of IP rights or allow firms to achieve margin improvements.

What Makes a Winner in IP Tech?

So what makes a winner in IP Tech? Startups that succeed here build viral products that combine rock-solid outputs with seamless, collaborative UX, to drive adoption in risk-averse environments. They also tend to pick a clear wedge into the value chain – prior art search, drafting, renewals – and expand from there, rather than trying to replace the entire legacy stack overnight, although connecting with data and workflows across the company helps to embed deeply into the organisation. Alternatively, layering on value-add tech-enabled services elevates challengers to being strategic partners to the innovators of today and tomorrow.

The IP space is primed for disruption. From patent search to royalty management, GenAI and automation are unlocking meaningful efficiency gains – and new business models. But navigating entrenched behaviour, fragmented buying centres, and high trust thresholds makes this an arena for builders who deeply understand both law and tech.

If you’re one of them, we’d love to hear from you – reach out to Evgenia, Henry, Skye, or Zoe.