The value of intellectual property in defence tech: strategic importance of innovation, patents, and Know-How

The Ukrainian Defence Tech sector has already attracted the attention of the global market, with several Ukrainian companies being included in international rankings 100 Startups to Watch in 2026 

However, start-ups face a common challenge: the technology is already operational, the investor is interested, and the international partner is ready to cooperate, but the rights to the technology have not been properly secured. This creates risks of losing control over the technology, complicates investment attraction, and, in some cases, hinders entry into international markets.

At the same time, the proper and timely structuring of intellectual property assets significantly enhances a company’s value and investment attractiveness.

Key Considerations for Patenting in Defence Tech 

Patent protection is one of the key legal mechanisms for protecting technical solutions in the field of defence innovation. A patent grants its owner exclusive proprietary rights to exploit an invention or a utility model, as well as the right to authorise or prohibit the use of the respective solution by third parties.

In the Defence Tech sector, patent protection may be appropriate for technical solutions relating to unmanned systems, signal processing and navigation, equipment designs, materials, components, control systems, and integrated hardware-software systems. At the same time, not every element of a technology should be disclosed through a patent application.

Patenting in the Defence Tech sector has a number of specific features. First and foremost, the time required to obtain legal protection should be taken into account. Although the average examination period for a patent application in Ukraine is approximately 24 months, the procedure may take longer in complex cases or where the examining authority is subject to a significant workload, depending on the complexity of the invention. A utility model is generally registered much more quickly; however, it is not a substitute for a comprehensive patent strategy for technologies that have long-term commercial value or are intended for international scaling.

Equally important is compliance with the novelty requirement. To qualify for patent protection, a technical solution must not have been publicly disclosed prior to the filing date of the patent application. Demonstrating the technology at exhibitions, conferences, or presentations to potential investors or partners, as well as any other public disclosure of technical information without appropriate confidentiality measures, may jeopardise the possibility of obtaining patent protection. Although the law provides for a limited grace period in respect of certain disclosures, relying on it as a primary strategy is inadvisable, as the circumstances of such disclosure will need to be substantiated.

Practical Example: A company demonstrates a prototype guidance system to a foreign partner and provides a presentation containing its technical specifications without first entering into a non-disclosure agreement (NDA) or filing a patent application. As a result, obtaining patent protection may become more difficult or even impossible, while the partner gains access to the information without any clearly defined restrictions on its use.

In addition, it is essential to assess whether the technology involves restricted information, state secrets, export control requirements, or regulatory regimes governing the transfer of defence technologies to foreign persons. For this reason, companies often adopt a combined approach: key technical solutions are protected by patents, while the most sensitive elements of the technology are retained as know-how or protected as trade secrets. 

Know-How and Trade Secrets: Protection Regime, Documentation, and Access Control

Due to the public disclosure associated with patent applications and the sensitive nature of defence technologies, a significant proportion of Defence Tech developments are, in practice, protected not by patents but through know-how or trade secret protection. 

Such assets may include:

• Software algorithms;
• Technical specifications, system architecture, and integration parameters;
• Manufacturing processes, equipment configuration, and quality control procedures;
• Testing, optimisation, and technology validation methods;
• Data obtained from research, battlefield operations, or field testing.

Whereas patents require registration, know-how does not. However, effective protection is available only where the company can demonstrate that the information has commercial value, is not publicly available, and is subject to an effective confidentiality regime. An NDA alone is not sufficient. Companies should also implement internal policies governing access to information, confidentiality markings for sensitive materials, restrictions on access to repositories, access logs, procedures for working with contractors, and rules governing the transfer of technical documentation.

An NDA should define not only the scope of confidential information but also the permitted purpose of its use, the confidentiality period, the procedures and rules governing its use, return and destruction, liability for breach, the applicable law, and the jurisdiction or arbitration mechanism for dispute resolution. In the context of international negotiations, these provisions are of fundamental importance: without a clear dispute resolution mechanism, even a well-drafted non-disclosure obligation may prove difficult to enforce. 

How to Confirm the Chain of Title to Developed Technologies?

Employment agreements and internal policies should expressly provide for the creation of employee-generated intellectual property and the assignment of proprietary intellectual property rights to the employer. As a general rule, the proprietary rights to an intellectual property object created in the course of performing employment duties are jointly owned by the employee and the employer, unless otherwise provided by contract. From an investor’s perspective, such joint ownership is often regarded as a red flag where the company cannot produce documentation confirming its exclusive control over the technology.

For external contractors, a general provision on the performance of services or works is insufficient. The agreement should expressly specify the ownership of the proprietary intellectual property rights to the work results, the timing and scope of their assignment to the customer, whether such rights are included in the agreed remuneration, whether the contractor may reuse any components, and the contractor’s representations and warranties regarding the non-infringement of third-party rights. 

Practical Example: A programmer working as an individual entrepreneur developed a module for a drone control system, but the agreement contained only a description of the services without any assignment of proprietary intellectual property rights. During due diligence, the investor questioned whether the company had the right to use, modify, and license the module as part of its product.

Where technical solutions require enhanced protection, the relevant intellectual property assets should also be registered as:

• an invention or a utility model;
• software as a copyright-protected work;
• technical documentation as a copyright-protected work and/or a trade secret.

At the same time, copyright registration for software does not protect the underlying idea, functionality, or algorithm as such. Copyright protects only the specific form of expression, including, in particular, the source code. Accordingly, algorithms, system logic, model training methods, and optimisation parameters often require a separate protection regime: patent protection, where the solution is technical in nature and patentable, or protection as know-how.

An optimal IP strategy typically combines patent protection, copyright protection for software and technical documentation, trade secret protection, and properly structured contractual arrangements governing intellectual property rights with employees, founders, and contractors.

Licensing and Technology Transfer: How to Avoid Losing Intellectual Property Rights in Partnerships

For Defence Tech companies, intellectual property is not only a means of protecting technology but also a mechanism for its commercialisation. Where intellectual property rights have been properly secured, a company can scale its product through licensing, manufacturing partnerships, joint development projects, integration with the platforms of foreign manufacturers, or participation in international defence innovation support programmes.

In such projects, it is essential to distinguish at least three categories of intellectual property rights: the company’s pre-existing intellectual property (background IP), the results generated under the joint project (foreground IP), and subsequent improvements or modifications to the technology (improvements). Unless these categories are clearly allocated at the outset of the collaboration, the parties may face disputes over the ownership of new versions of the product, test data, code modifications, or adaptations for a particular platform.

The licensing model should align with the company’s business objectives. A licence may be exclusive, non-exclusive, or limited by territory, field of use, customer category, term, number of products, sublicensing rights, or access to the source code. In the Defence Tech sector, it is particularly important to separately regulate integration with the partner’s equipment, access to technical documentation, restrictions on reverse engineering, maintenance and support services, audits of the use of the technology, and the consequences of termination of the agreement.

Joint development projects often require a license-back arrangement. For example, a partner may be granted the right to use the results of the joint project for a specific platform or market, while the Ukrainian company retains the right to use its underlying technologies and any subsequent modifications in other products. Without such a mechanism, the company may effectively restrict its own ability to further develop and commercialise its technology once the partnership has ended.

Practical Example: A Ukrainian company provides a foreign manufacturer with a navigation module for integration into the manufacturer’s platform. If the agreement does not limit the use of the module to a specific platform, territory, or customer, the partner may interpret the licence more broadly than the company intended. Furthermore, if the agreement does not address ownership of modifications, the partner may develop a derivative version of the technology and claim separate rights to it.

For the international transfer of defence technologies, it is also necessary to assess compliance with export control requirements, sanctions restrictions, end-user requirements, restrictions on the transfer of technical information, and the regulatory framework governing access to restricted information. These issues should not be deferred until the final stage of negotiations, as they may determine whether the transaction can proceed at all.

Therefore, What Should Be Done First?

For Defence Tech companies, intellectual property is a strategic asset that simultaneously protects the technology, confirms the company’s ownership of it, and provides the foundation for its commercialisation. Before entering into negotiations with an investor or an international partner, companies should conduct an IP audit and answer five fundamental questions:

• Which intellectual property assets have been created, and by whom;
• Have the proprietary intellectual property rights been assigned to the company by its founders, employees, and contractors;
• Which elements should be patented, and which should be retained as know-how;
• Is there an effective confidentiality regime in place for sensitive technical information;
• Are the company’s licensing and partnership agreements in place to support the secure scaling of the technology.

Such preparation reduces legal risks, enhances the company’s value, and enables Ukrainian Defence Tech companies to bring their technologies to the global market without losing control over their intellectual property. At the same time, a balanced approach to the use of patents, know-how, and licensing mechanisms facilitates investment, international cooperation, and the scaling of Ukrainian technologies in global markets.

 Resilience Media. 100 Startups to Watch in 2026. Available at the following link: https://www.resiliencemedia.co.uk/