Editor's Blog

Blog pic

Another league table, another low

By Andrew Mernin 23/3/2012

Q: What do tackling obesity, football glory and the Eurovision Song Contest have in common?

A: They’re all areas in which we fall woefully short here in Britain when compared to our European counterparts.

And here’s another indicator to add to the list – patents. From Bell to Baylis, we’ve always taken great pride in our inventors and – with the creator of the internet in our parish – who could blame us? But our crown as a nation of inventors is slipping. In fact, rephrase that, it’s already being crushed underfoot by our biggest brains as they scurry off to the US, Japan and Korea.

New figures we received at BQ this week chart a 9.4% drop in the annual number of UK applications submitted to the European Patent Office in 2011.That’s perhaps not so alarming in these troubled times, especially with RnD money so hard to come by.

But what will upset the jingoists in tin helmets, is the comparison with Germany – and France for that matter.

Last year 6,494 patent applications came from the UK, compared to 33,181 from Germany, with 12,107 originating in France.

Even the Netherlands, which has a population of 16.8 million compared to our 62.2 million, had just a few hundred less applications (6,178) than Britain.

Switzerland also outshone us, with 7,786 applications. Among the arguments from experts looking for a reason for our reluctance to invent are a lack of understanding of the patent system and a misconception that its over-complicated and expensive.

Multinationals with centralised RnD facilities that have hoovered up our best young inventors have also been blamed.

At least we’re not Albania though. The land which is best known in these parts for taking Norman Wisdom so closely to its heart had just one patent application last year, a whopping 50% plunge from the two it had in 2010.

Our sources (a patent attorney pal of mine) are still trying to establish exactly what the solitary patent was for. Update to follow.

Here in the UK, though, the patent box initiative could play its part in revitalising the appetite for IP. It offers a reduced level of corporation tax on profits attributed to patents and similar types of intellectual property. The Chancellor announced on Budget day that the system, first drawn up by Labour in 2009, is here to stay.

And the very next day its power delivered a major boost to the economy. As drugmaker GlaxoSmithKline announced plans to invest £500m in a manufacturing plant in Cumbria and create up to 1,000 jobs, is cited the lure of the Patent Box as a deciding factor.

Hopefully its attraction will extend to getting more individuals growing their IP portfolio.

In the meantime, if you are likely to be impacted by the patent box’s powers, here are some fast facts from UDL’s patent expert Martin Vinsome:

Earnings made from overseas sales on products with only UK patents are still eligible for patent box income

Companies can claim patent box benefits retrospectively for any income which arose between patent application date and date the patent was granted, for up to four years

Patent box will initially be restricted to profits derived from patents granted by the UK and European patent offices plus a number of other offices which are yet to be decided

Companies wishing to receive patent income must be actively involved in the patent development cycle and not passive recipients of income-holding patents

All royalties or license fees received for the use of an invention covered by a currently valid qualifying patent will be covered by the patent box, regardless of whether the invention is used by the licensee or embedded into patented products as well as the income embedded in patented products

Click here to read a full BQ feature on the patent box.