by Robert Carpmael, Patent Attorney and Partner at Marks & Clerk LLP
Nowadays, IP rights like patents and trade marks should no longer just be seen as being defensive or offensive tools that businesses can use against competitors to stop copycats in their tracks'
Instead, they can additionally be used as bargaining tools in disputes and they can be traded, licensed out and used as a source of revenue in many other ways. In particular, when businesses are up for sale (or looking for funding), an important part of any investor’s due diligence will include a full assessment of the strength of the IP rights you own.
In addition to that, as part of its plan to incentivise innovation, the UK Government has also introduced a UK corporation tax relief scheme called the Patent Box. This allows businesses to apply for UK tax relief on worldwide profits made from products that have (qualifying) patent protection.
A report commissioned by the UK Intellectual Property Office and the Department of Business, Innovation and Skills on the role of intellectual property and intangible assets in facilitating business finance was published earlier this year. The report explores the lack of understanding and appreciation of IP and intangibles as an asset, in particular in relation to access to funding for small and medium sized enterprises (SMEs). According to the report, ‘knowledge assets’ aren’t appreciated in mainstream UK lending. The UK is not alone in this problem: some countries such as Malaysia and Singapore are already attempting to address the issue by introducing schemes such as guarantees to facilitate IP-backed lending.
The report recommends the creation of a ‘resource toolkit’ aimed at helping SMEs, lenders and other financiers understand and make more effective use of the value of IP and intangibles. It also recommends the building on existing initiatives such as the Business Finance Partnership, the Enterprise Investment Scheme and the Patent Box. Businesses should look forward to seeing this much needed toolkit for SMEs, lenders and other financiers.
It is also suggested that these goals can be achieved without the need for changes to the UK’s legislative framework, policy priorities or accounting standards, but instead by the market-wide adoption of a number of measures, including:
- the regular identification of IP and intangibles during the financial process;
- the development of more transparent and accessible marketplaces for the trading of IP and intangibles;
- increasing the support for on-going management of IP and intangibles;
- the adaptation of asset-based financing techniques to include IP and intangibles.
A full copy of the report can be downloaded at www.gov.uk/government/publications/banking-on-ip.
It should be appreciated from the above, therefore, that securement of an appropriate and effective IP portfolio, including suitably qualifying patents for your marketed products, is more important than ever.
None of this information constitutes legal advice. You should get your own legal advice for any concerns with compliance or implementing any policies / procedures.
For further information, including details of how to contact Robert Carpmael or his colleagues at Marks & Clerk for more IP advice, please see www.marks-clerk.com.
Précis
Robert Carpmael, Patent Attorney and Partner at Marks & Clerk LLP, explains how IP rights like patents and trade marks can be used for more than just protection against copycats.
