Green patents and green trademarks as indicators of green innovation

Identifying green innovations and the firms that generate them is crucial for understanding the role of technology and innovation in the transition to a green economy. Information from intellectual property rights, particularly patent and trademark data, offer an objective, transparent, fast and cost-effective way to identify green innovations, especially when compared to traditional survey-based methods. However, the validity of this identification method is not yet fully established. Not all innovations can be protected through intellectual property rights and some firms may deliberately choose not to pursue formal protection. This study uses patent, trademark and survey data from two distinct samples of SMEs and mid-cap firms from Germany and Italy to investigate whether green patents and green trademarks can effectively identify green innovative firms. The findings reveal that relying solely on patent- and trademark-based measures of green innovation leads to the exclusion of many green innovative firms. In the larger and more representative Italian sample, we observe that only about 1 % of firms have filed a green patent, and 1.65 % have registered a green trademark in the five years prior to the survey. While green trademarks remain a valuable indicator of various types of green innovation, green patents do not prove to be a strong measure of green innovation—at least in a broad industry sample. The predictive power of green trademarks is strongest for identifying green product innovation, particularly within samples of small yet established firms. In contrast, the predictive value of green patents diminishes when considering a firm's total patent portfolio. The findings of our study are relevant for policymakers and investors seeking to identify green innovative firms.