From dots to dollars: what Nanoco’s patent fight with LG tells us about IP strategy

The recent legal action by Manchester-based Nanoco Group against electronics giant LG may seem, on the surface, like just another tech dispute. Scratch beneath that, and it highlights much broader issues – particularly for smaller, IP-rich businesses navigating global markets.

Nanoco, a spinout from the University of Manchester, alleges LG infringed patents relating to its cadmium-free quantum dot technology – a safer, more environmentally friendly alternative to traditional display materials. If the story sounds familiar, it’s because Nanoco secured a $150 million settlement with Samsung over similar claims last year.

While the David v. Goliath angle makes headlines, the real lesson here is less about drama and more about preparation, strategy, and value.

Intellectual property as a strategic asset

For Nanoco, patents are not an add-on or defensive tool – they are central to the business model. In sectors like advanced materials, biotech, and software, a company’s most valuable assets are often intangible. Without the IP, there is no real moat around the technology and little to stop competitors with more resources from moving in.

The real takeaway here isn’t that Nanoco filed patents, it’s that they knew how and when to use them. Their ability to pursue large-scale litigation against Samsung, and now LG, stems from having a well-constructed portfolio and a clear sense of how it supports their commercial position.

Plenty of early-stage companies file patents. Fewer take the time to think about whether their IP is aligned with the direction of the market, where enforcement risks might come from, or how to turn that IP into leverage – whether in funding rounds, partnerships, or disputes.

The cost of waiting too long

One of the more uncomfortable truths in this space is that many businesses only start taking IP seriously when something goes wrong – when a competitor files a patent they thought they’d already covered, when a licensing deal falls through, or when they discover someone has quietly incorporated their tech into a product line.

By that point, options tend to narrow. Enforcement becomes expensive, time-consuming, and uncertain. It’s no surprise that companies like Nanoco are turning to litigation funding and specialist backers – but this only works if you’ve done the groundwork years before.

The message here is simple: don’t wait. A proactive approach to IP, grounded in the realities of the business, will always cost less and deliver more than playing catch-up later on.

Thinking like the big players: what a proper IP strategy looks like

A major takeaway from the Nanoco case is that small companies must think like large corporates when it comes to IP. Big players treat IP as a core strategic asset. They monitor competitors, file defensively and offensively, and align their R&D pipeline with patenting activity.

Early-stage and scaling businesses often sit lower on the IP maturity curve, not due to a lack of interest but because of limited budgets and headcount. This can lead to under-protected ideas, misalignment with commercial goals, and vulnerability to better-resourced rivals.

Adopting a strategic IP mindset doesn’t mean building a legal department. It means being intentional. Early investment in strategy can level the playing field, protect key assets, and unlock hidden value.

For companies serious about scale or exit, IP deserves the same rigor as finance or operations.

There are practical steps that can materially shift how IP contributes to growth:

• Comprehensive IP audit: Review all registered and unregistered rights, including patents, trademarks, and trade secrets, to ensure protection is up to date and risks are managed.
• Innovation harvesting: Identify additional patent opportunities to strengthen coverage and support tax efficiency (e.g., via Patent Box).
• Market and competitor mapping: Flag risks, overlaps, and potential infringement early to inform strategic decisions.
• IP strategy implementation: Establish a clear, forward-looking IP strategy that aligns with your business goals and lays the groundwork for long-term value creation.

None of this needs to be overly complex. With the right advice, smaller businesses can punch above their weight and avoid the all-too-common mistakes that derail otherwise promising companies.

A broader lesson for the UK innovation ecosystem

Nanoco’s case is a reminder that UK innovation can compete globally, but only if it’s properly protected. University spinouts and smaller tech firms often drive breakthrough ideas, but IP is where value capture really happens.

As investment in science and technology grows, now is a critical time for founders and boards to ask if their IP strategy is fit for purpose, not just for protection but to support growth, funding, and exit ambitions.

We’ve seen too many great ideas fail to realize their potential because of avoidable IP missteps. Equally, we’ve seen the right advice at the right time make a transformational difference.

So, whether you’re looking to protect, enforce, commercialize, or exit, it’s worth taking stock. IP is too important to leave as an afterthought.

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