In the past, R&D-led businesses have regarded some of their inventions as not worth patenting as they have a commercial lifespan of just two or three years – a view taken because the time the patent is granted (a process which takes between 1.5 and four years), the product is likely to have been superceded.
But the situation is likely to change with the incoming patent box, expected to go live in April 2013.
“The tax relief that will soon be available could persuade some R&D-led businesses to think again about the benefits of patent protection and this could bring other unexpected benefits,” says Karl Barnfather, patent attorney at Withers & Rogers.
“As a by-product of their increased interest in filing, it may be possible for some businesses to make more of their innovation by seeking to license it to businesses in related markets. In some instances, there are considerable untapped commercial opportunities available to those that opt to do more to protect their intellectual property.”
Indeed, from April 2013, any profits from inventions that are protected by a UK patent will be taxable at a significantly lower rate of Corporation Tax – just ten per cent, down from 28 per cent currently and from 24 per cent in April 2013.
As long as an application for the invention has been filed, when the patent is granted it will be possible to claim back relief to the date of filing.
While obtaining a patent application can take up to four years from start to finish, it is possible to accelerate applications at no extra cost in order to achieve the minimum 1.5 years from the date of filing.
Barnfather urges businesses to review their pipeline of R&D projects:
“Businesses should consider their future product development activity and may wish to carry out an intellectual property audit in order to establish how much there is to gain from taking a more proactive patent strategy.”
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