Keep calm and carry on patenting

IP arguably sits on the periphery of any discussions about what a post-Brexit UK will look like, but that hasn’t stopped the country’s patent-granting authority from getting on with its job

With the UK’s departure from the EU all but in motion and new intellectual property minister Jo Johnson the brother of key Brexit campaigner Boris, it’s difficult to talk about patents in any other context, let alone work on improving or developing the practical aspects of this area of law. But that’s exactly what the UK IP Office (UKIPO) has been doing. The UKIPO has made strides in the face of change, for example, by tackling its application backlog and hiring 150 examiners in the last three years.

According to Guy Robinson, deputy director of innovation at the UKIPO, the office is already seeing progress in this area and is meeting its target for accelerated actions. He says the office “expects to see improvements in the timeliness of routine cases”.

The UKIPO is also a key player in boosting industry and innovation. As part of the UK government’s department for business, energy and industrial strategy, Robinson says the office is “closely aligned and forms part of government policy making”, and the new IP minister, Jo Johnson, also has innovation and industrial strategy in his portfolio.

Robinson adds: “Managing and protecting IP proactively is increasingly becoming an automatic element of doing business, not a specialised area for a limited number of firms.”

The UKIPO also undertakes joint activities with the HM Revenue & Customs (HMRC) on the Patent Box.

Robinson says that the scheme, which offers a coporation tax discount on profits derived from research and development conducted on UK shores, has helped sectors that were previously not generally IP aware. In total, £342.9 million in relief has been claimed under the Patent Box since its inception in 2013, with nearly 700 enterprises participating.

There is a worry, however, that the Patent Box only benefits large corporations, at a time when the small business is regarded as integral to the economy, post-Brexit or otherwise.

According to HMRC, nearly one third (32.1 percent) of enterprises using the scheme are considered ‘large’, while only 25 percent fill out the next tier, ‘medium’.

That amounts to roughly 225 large enterprises claiming relief under the Patent Box, compared to around 175 medium enterprises. While this gap isn’t huge, large enterprises hold a staggering lead over medium-sized enterprises when it comes to the amount of relief claimed under the Patent Box. Large enterprises take nearly £327.2 million (95.4 percent) of the relief, compared to £11.8 million (3.4 percent) for medium-sized enterprises, and just £3 million (0.9 percent) for small enterprises.

It’s not clear why this trend exists, but the UKIPO is working on promoting awareness among small- and medium-sized enterprises (SMEs) to boost their participation.

Robinson says: “IP protection offers all firms confidence to innovate so SMEs need to be IP savvy.”

“Firms which manage their IP rights effectively, treating it with the same care and attention they would devote to other areas of their balance sheet, tend to have significantly better chances of survival and growth.”

According to Robinson, 2010 saw IP-intensive industries generate 27 percent of the UK’s employment and 37 percent of its GDP.

“IP also has a role to play in addressing the UK’s productivity challenge,” he says. “The use of patents and trademarks is associated with better creation, transfer and use of knowledge and higher firm productivity.”

The UKIPO is working towards this, and Robinson says that the office has schemes in place to “ensure that SMEs can access the advice and support needed to recognise, understand and maximise the value of IP to their business”.

“This includes ‘IP for Business’, a range of tools and guidance designed to provide all businesses and advisors with the basic information they need on IP to identify issues and then signpost to sources of more in-depth IPO advice when needed.”

Breaking Brexit

Looking to the post-Brexit future, though, he can’t give much away. Robinson says: “UKIPO policy and legal teams are working with colleagues in DExEU [the dedicated ‘Brexit’ government department] alongside their responsibility for existing EU business.”

The UKIPO has also released a fact sheet on the future of IP law and practice following the referendum outcome, in a bid to allay any fears.

According to the UKIPO, most IP rights will be unaffected by Brexit, and many will continue to comply with EU directives. As for patents, the referendum result has “no impact on UK businesses’ ability to apply to the European Patent Office (EPO) for patent protection”.

“It will remain possible to obtain patents from the EPO which apply in the UK. Existing European patents covering the UK are also unaffected. British exit from the EU will not affect the current European patent system as governed by the European Patent Convention.”

“The UK remains a signatory state of the Unified Patent Court (UPC) at present. On 28 November 2016, the UK government confirmed its intention to proceed with arrangements to ratify the UPC.”

Yet, despite this guidance, several issues, including the UK’s future in the upcoming unitary patent system, remain uncertain.

Despite the UK’s confirmation of ratification, and the UPC’s preparatory committee hoping for a December 2017 start date, several other factors have added to the confusion.

Most recently, the UK government’s long awaited Brexit whitepaper offered some clarity, suggesting that the country will accept the supremacy of the Court of Justice of the EU (CJEU) in matters of the UPC.

Section 2.3 of the whitepaper said that the UK government will “bring an end to the jurisdiction of the CJEU in the UK”.

But it added that the UK will “continue to honour [its] international commitments and follow international law”.

This commitment could potentially encompass the commitments the UK has to the UPC and the unitary patent system.

A tricky year lays ahead for UK IP, and amid the political blizzard that is Brexit, the hope is that those in charge of navigation don’t lose sight of it.
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