Unicorns: what, how, who, how many, where and why IP does not find its place among them

10 June 2022

Despite the available capital and the sensitivity of not protecting themselves from free riders or competitors, a large majority of unicorns fail to register their IP rights.

10 June 2022

Alibaba, Tencent, Uber, Facebook, Xiaomi, Dropbox, Pinterest…

Let’s see what they are at a conceptual level, what their names are, how many they are and where they are located. Finally, we will ask ourselves what does PI paint in all this.


When I set out to research unicorn companies, I had a slight idea of what they might be. I realized that they are companies that have a very strong technological component and that break into a sector that is little explored and in a short time.

Regardless of whether some of them are just projects that have a future path, it is an attractive type of company where IP lawyers will have to adapt to give the right advice. They are business projects with enough risk for investors to think twice.

For professionals who are dedicated to the legal protection of Innovation and Technology, unicorn companies are a guide, especially the challenges and solutions that we will face.

But why do we use this word “unicorn”? The word unicorn helps us to understand why they are such “special” companies. In the Industrial Property jargon, the term unicorn is also used to define those patents that have a special value above the average.

It is common knowledge that most patents that are developed do not have a value that offers almost unavoidable protection against competitors. However, unicorn patents are those that by themselves completely block entry into a high-value market.

And exactly that, blocking entry to competitors, is what unicorn companies do. Others are unable to penetrate that market. Unicorn companies protect themselves from other competitors by the sophistication of the technology. Like what Intellectual Property is intended to do.


Supported by private funding (not stock market), related to social networking/internet, start-ups and relatively young staff. Possibly they do not generate income in the short term, but with a lot of potential in the long term due to their technological progress. In other words, as rare as a unicorn. But they do exist.

They are usually companies that are born to develop technology derived from the use of the Internet, and in general from the most advanced technology available. They reach a capitalization of 1 billion euros, but do not go public. When Facebook goes public, it is no longer a unicorn.

We could also define it as a company that has suddenly had tremendous success. A disruptive business model.

These disruptive business models are reflected in the way they manage their IP.

Comparatively, there are differences in such management depending on where these unicorn companies have sprouted.


We have already seen what they are and how they differ from other “normal” companies. Let us now see what they are called and where they “live”. In emerging markets such as Latin America, unicorn companies are emerging.
E.U. vs. Latin America.

On the one hand, in the Western world (Spain) we have Wallbox, Glovo, Cabify, or Travelperk. We also have Idealista, Jobandtalent, Edreams, but they are companies with more than 10 years since their foundation. Outside Spain, at the European level, we have companies like Gorillas, Wiz or Clubhouse.

On the other hand, let’s look at their equivalents in an emerging region such as Latin America. Twenty years ago, Mercadolibre (Argentina), Despegar (Brazil) and Globant (Argentina) were born. Today everything is different. According to LAVCA (Association Private Capital Investment in Latin America), 50% of the unicorn companies are Brazilian, 22% Mexican and 8% Colombian. All of them sharing an investment of 4.6 billion euros.

And the culprits (and the industries they develop) are: a) in BRAZIL: Petlove, Dock (Fintech), Único(cybersecurity), Neon (Fintech), Creditas (Fintech), Facily (e-commerce), Olist (e-commerce), Merama (e-commerce), bitcoin market (crypto), CargoX (logistics),Cloudwalk (Fintech), Movile, MadeiraMadeira, Wildlife Studios, iFood (logistics & distribution) Ebanx (Fintech), Loft (Proptech), QuintoAndar (Proptech); b )MEXICO: Clara (Fintech), Konfio (Fintech), Kavak (Marketplace), Clip (Fintech), Bitso (crypto); and c) COLOMBIA: Habi (proptech), Rappi (logistics & distribution).
Brazil and Latin America in general are positioned as an incubator of unicorn companies in recent years compared to more consolidated markets such as the EU.

USA vs China

If among all these young companies there is cutting-edge technology that can unbalance a sector, it cannot be that the USA or China are not involved.

For years we have been left with the impression that the USA designs or invents while China simply manufactures (or copies).

This is no longer the case. According to the 1000 unicorn companies that have appeared in 2021, we have seen how 50% come from the USA and almost 20% from China. Innovation is no longer an exclusive feature of Americans or Europeans. The Asian giant is starting to take it seriously.

In these forums of unicorn companies, little is said about the management or non-management of IP in these companies with such a technological profile.

The comparison between USA and CHINA and the numbers they have in patent registrations, gives us a slight idea of what is happening.

For example, BAIDU, which is the GOOGLE in China, we started to see some activity in patent registration around 2012 with a “few” domestic applications, when it was founded in 1999.

It is not until 2019 that they come to accumulate more than 3500 PCT patents in China. In 2021 for the first time they extend their rights to USA, Korea, USA, Japan.

In the BYTEDANCE group (TIKTOK) the same thing happens: No activity until 2018 to pass to 700 PCT registered in 2019.

Finally we use the case of DIDI and UBER to see the differences in numbers and how they have evolved.

DIDI has hardly any activity in terms of patent registration. In 2015 we see that they reach 65 priority applications in China, to in 2018 go to 704 applications in 1 year.

UBER on the other hand, has 55 in 2015 and 222 in 2017. These registrations have their reflection in foreign applications (about 1800) where the order the 5 countries where they register more are: Brazil, Argentina, Canada, New Zealand, United Kingdom and Mexico.

In China, in addition to these three “big ones” there are many more. The same happens in Latin America, the best-known countries do protect their IP but not in the proportion they should. It is similar in more consolidated economies such as the E.U. or the USA.

Their technological ferocity is clear. But what about their protection of intangibles? It does not seem to correspond.

Why is it that these companies do not protect their IP according to their possibilities?

On the one hand, there are these unicorn companies. These are young, with a lot of investment capital behind them, based on software development, also related to consumer & internet, e-commerce and financial services without an established culture of IP registration.

On the other side, there are (the former unicorns) with a solid IP base with numbers that reflect the value and therefore peace of mind it offers to its investors. Some examples of the number of applications: Facebook in the USA has applied for about 7500 patents, Linkedin for about 1400, Groupon for 1100, Twitter for 670 and GoPro for 1850.

According to the CB Insights report, in the first group (unicorn companies) the value offered by these companies is not properly reflected in IP protection policies. In this report, which focuses on unicorns from the USA, 30% of the companies do not have any protected assets at all. Some 60% have 10 or fewer patents.


Unicorns. A very IP world concept.

We know that they are strategically interesting. They are looking for opportunities especially in the most dynamic markets. Emerging economies, especially China and Brazil seem to be good allies. Both are also emerging as world powers in value generation and forerunners of all disruptive technologies.

The technology they hide is highly prized. They have investors with strong capital who are willing to take the risk of not having, at least at the beginning, a solid base in intangible protection.

Once the projects take off, they seem to abandon that unicorn status as they mature, and some go public.

In either case, IP remains an unfinished business. Despite the capital available and the sensitivity of not protecting themselves against free riders or competitors, a large majority of unicorns fail to register their IP rights.

5/5 - (1 vote)

Borja Barrutieta

Lawyer.International Relations Department.Legal Advice Department.


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