Could you benefit from tax incentives for innovation?

research and development innovationsInnovation can be a powerful driving force for businesses, offering opportunities for growth and expansion.  For smaller organisations, taking the decision to invest in the necessary research and development can seem daunting, but the UK government offer a number of financial incentives to encourage investment and promote innovation.

Knowledge Transfer Partnerships

If you don’t have the expertise in-house, or feel you would benefit from some external academic knowledge and experience, you might like to consider a Knowledge Transfer Partnership (KTP).

A KTP is a partnership between your business and an academic institution (such as university, further education college or research and technology organisation), enabling you to access skills and expertise to help your business develop.  A KTP is part-funded by a Government grant with SME’s only expected to contribute about a third of the costs involved in a project.

KTPs can help business to:

  • find innovative solutions for business challenges
  • enhance your competitive advantage
  • expand market opportunities
  • generate a significant increase in profit
  • improve business performance
  • use graduates to accelerate innovation
  • get advice and support from experts

University of Essex Knowledge Transfer Partnerships

For more information visit http://www.ktponline.org.uk/

Enhanced Corporation Tax Relief for Research and Development

Enhanced Corporation Tax relief is available for expenditure on eligible Research and Development (R&D) activities.

For small and medium sized entities this relief can be as much as 225% of their expenditure on R&D, every £1 spent attracts tax relief of £2.25. For larger entities the relief reduces to 130%.

Eligible R&D activities are those that seek to achieve a scientific or technological advance and the qualifying costs include the following:

–          Employee costs relating to the R&D activities
–          Materials used for the purpose of the R&D
–          The cost of utilities used in the R&D activities

For more information visit the HMRC website at http://www.hmrc.gov.uk/ct/forms-rates/claims/randd.htm

Patent Box

Patent Box allows companies to apply a lower rate of Corporation Tax to profits earned from their patents. The relief is being phased in from April 2013 with the full benefit of 10% Corporation Tax being available from April 2017.

To qualify for Patent Box a company must have been involved with the development of the patent and must own or exclusively license them.

All granted UK and European patents qualify for Patent Box regardless of when they were granted, as well as patents from the following countries in the European Economic Area: Austria, Estonia, Hungary, Romania, Bulgaria, Finland, Poland, Slovakia, Czech Republic, Germany, Portugal, Sweden, Denmark

Qualifying income can arise from a number of sources including:

  • The sale of patented products or a product incorporating a patented invention including the sale of spare parts of such products even if the spare part itself is not patented.
  • Licence fees and royalties from a right granted over the patent.
  • Proceeds from the sale or exclusive licence of the patent.
  • Income received as compensation for patent infringement.
  • A notional royalty where a patented process or patented tool is used to generate profits that would not themselves qualify for the Patent Box relief.

For more information visit the HMRC website at http://www.hmrc.gov.uk/ct/forms-rates/claims/patent-box.htm

Could Patent Box work for you?

Previously companies may have felt that it was not worth the expense of applying for a patent, especially if the product was likely to have a relatively short life span.  With the total cost for securing a UK patent grant likely to be around £3000 to £3500, it may be that Patent Box allows the cost benefit calculations to swing back towards aquiring a patent.

Patent Box also shifts the focus of patent protection away from trying to establish as broad a protection for the product as possible: a more narrow focus can make it easier to get a granted patent while still allowing a company to make a claim using the Patent Box regime.

“Having a granted Patent is a prerequisite for anyone wishing to take advantage of the Patent Box scheme. However, potential users of the scheme need to bear in mind that a patent application must be filed before any public disclosure of the invention takes place. You cannot wait until you are sure you have a commercially successful product before deciding to patent it, in order to get the Patent Box tax breaks. So, SMEs will need to be pro-active in determining at an early stage in product development process, which inventions to patent.”
Jerry Walder – Partner

For more information and advice about how you could take advantage of the Patent Box scheme please contact Sanderson & Co.

 

Setting your IP GOAL – Leveraging your IP Rights

The importance of developing an IP strategyYour Intellectual Property (IP) rights can provide a number of significant benefits to your company.

The most obvious benefit is that they can prevent your competitors from copying your products or brands, but they can also be used to generate revenue through licensing or selling your IP rights to others.

It is important to have a  complete strategy for your business when it comes to IP.  Your comprehensive IP strategy should consider four main areas:

In our previous three posts we have discussed Generating IP, Obtaining IP rights and Avoiding IP rights; in this final post in the series we discuss ways in which Sanderson & Co. can help you with Leveraging your IP rights.

Passive Approach

What are your competitors doing?

If you are aware of your competitor’s products and brands, then you can be in a better position to assert your rights against those products and brands. Sanderson & Co. can monitor the products and brands of your competitors and can help you to identify potential infringements. We can also provide an assessment of the strength of your IP rights and advise on the likelihood of there being an infringement.

Collaborative Approach

Do you want to compromise?

Sometimes the most appropriate approach is to grant a licence or assignment of your IP rights to a potential infringer.  Sanderson & Co. can assist with negotiating licences or assignments of IP rights, and we can be on hand to review licence and assignment agreements to ensure that they are suitable for your needs from an IP perspective.  We can also work with solicitors on the wider commercial aspects of a deal.

Pro-active Approach

Is further action needed?

Ultimately it may be necessary to assert your IP rights against others. However, this must be done in the right way so as to be effective and so as to avoid you being accused of making groundless threats.

At Sanderson & Co. we can help you to assert your rights in the right way, for example by sending appropriately worded warning letters. We can also assist with providing arguments to present during court proceedings for infringement actions.

The above are just some of the ways in which Sanderson & Co. can help you to achieve your GOAL of a comprehensive IP strategy.

If you would like any advice regarding Leveraging IP or any of the other topics in this series of blogs, then do not hesitate to contact Sanderson & Co. to book a free 30-minute consultation. Please remember to mention this blog when booking your consultation.

Setting your IP GOAL – Avoiding IP rights of others

The importance of developing an IP strategyIntellectual Property (IP) rights can be a powerful tool for your business, but also for your competitors’ businesses!

Your business needs to be aware of what other people are doing so that you can avoid infringing their IP rights, find ways to work with them or oppose their rights when necessary.

It is important to have a  complete strategy for your business when it comes to IP.  At Sanderson &Co. we believe that a comprehensive IP strategy should consider four main areas:

In this four-part series of blogs we will explain how we can help you to achieve your IP GOAL.

In our previous post we discussed Obtaining IP rights.  This week we discuss ways in which Sanderson & Co. can help you with Avoiding the IP rights of others.

Passive Approach

Do you know what IP rights your competitors have?

If you are aware of your competitors’ IP rights, then you can be in a better position to avoid infringing those rights. Intellectual Property searches for existing IP rights are a good starting point to enable you to identify the IP rights of others. These searches can be tailored to a particular product or brand and to particular competitors.

As well as carrying out IP searches, Sanderson & Co. can also monitor the various IP offices’ registers for IP rights being granted to your competitors.

We can help you to identify IP rights that may affect your business, and help you to avoid those rights by suggesting ways to “work around” them.

Collaborative Approach

Can you reach a compromise? Would licensing be a solution?

We understand that sometimes it is not possible or desirable to work around the IP rights of others. In these cases, you may be able to seek a licence or assignment of the IP rights in question.

Sanderson & Co. can co-ordinate the negotiation of licences or assignments of IP rights, and we can be on hand to review licence and assignment agreements to ensure that they are suitable for your needs from an IP perspective.

Pro-active Approach

Is further action needed?

IP rights are not infallible and it may be that the IP rights granted to your competitors should not have been granted to them. At Sanderson & Co. we can help you to challenge the IP rights of others either at the IP office in question or during court proceedings.

For example, European patents can be opposed during the nine months following grant of the patent. Trade Mark applications can also be opposed after registration. Sanderson & Co. can file these oppositions so that spurious IP rights can be cancelled. We can also assist with providing arguments to present before or during court proceedings.

The above are just some of the ways in which Sanderson & Co. can help you to achieve your GOAL of a comprehensive IP strategy.

If you would like any advice regarding Generating IP or any of the other topics in this series of blogs, then do not hesitate to contact Sanderson & Co. to book a free 30-minute consultation. Please remember to mention this blog when booking your consultation.

In our next piece we will be discussing Leveraging your IP rights.

Setting your IP GOAL – Obtaining IP rights for your company

The importance of developing an IP strategyIntellectual Property (IP) rights can provide a number of significant benefits to your company.  So how can you make sure that you secure strong IP protection for your business?

It is important to have a complete strategy for your business when it comes to IP.  At  Sanderson & Co. we believe that a comprehensive IP strategy should consider four main areas:

In this four-part series of blogs we will explain how we can help you to achieve your IP GOAL.

In our previous post we discussed Generating IP.  This week we discuss ways in which Sanderson & Co. can help you with Obtaining IP rights.

Geography

Where should I apply for protection?

Registered IP rights, such as Patents, Trade Marks and Designs, are generally only granted for specific countries or regions. For example, a UK patent will only be enforceable in the UK. The costs and requirements for obtaining IP rights in different countries or regions can vary dramatically, but Sanderson & Co. can discuss with you possible filing strategies for obtaining registered IP rights based on your budget, your market and your competitors activities.

Drafting

What should I try to protect?

Registered IP applications can be complicated documents and it is important to get these documents right from the outset.  Sanderson & Co. provide a complete drafting service including providing drawings.  We could also provide you with templates to help reduce your costs for drafting applications. In either case, you will be involved in the drafting process throughout, ensuring that your application is complete and accurate.

Prosecution

I’ve filed an application… What happens next?

Prosecution is the process from filing an application for registered IP rights through to the granting of those rights. This can be a complex process and it is extremely common for objections to be made to the application by the IP Office involved. Sanderson & Co. can help to guide you through this process. Together we can decide on a strategy for responding to any objections raised that still provides you with useful protection for your products or brands. Sanderson & Co. can also be responsible for monitoring any letters sent and deadlines set by the IP Office in question, removing the burden of your doing this yourself.

Purchasing IP Rights

What are we getting?

Another way of obtaining IP rights is to purchase those rights from others. However, IP rights are not always as good as they appear to be and so it is important to assess any IP rights before agreeing to purchase them.  Sanderson & Co. can carry out due diligence assessments of IP rights including assessing the validity and scope of protection provided by the IP rights in question so that you can be more certain that you are getting a good deal.

The above are just some of the ways in which Sanderson & Co. can help you to achieve your GOAL of a comprehensive IP strategy.

If you would like any advice regarding Generating IP or any of the other topics in this series of blogs, then do not hesitate to contact Sanderson & Co. to book a free 30-minute consultation. Please remember to mention this blog when booking your consultation.

In our next piece we will be discussing Avoiding the IP rights of others.

Setting your IP GOAL – How to generate IP rights for your company

The importance of developing an IP strategyDeveloping and maintaining a strategic approach to your business’s IP rights could be the difference between your company thriving or being overtaken by the competition.

Intellectual Property (IP) rights can provide a number of significant benefits to your company.

  1. IP rights can provide protection against a competitor using your products or brands
  2. Registered IP rights can be an asset.  They can help convince financial institutions to invest in a business, enabling more money to be raised for development.
  3. IP rights can be used to generate revenue through licensing or selling your IP rights to others.
  4. Your IP rights could potentially also be used as a bargaining tool if you are accused of infringing another company’s IP rights.
  5. Registered IP can enhance the “cutting-edge” reputation of your business.
  6. You may be able to benefit from a reduced rate of corporation tax on profits generated by products that relate to your patents using the UK Patent Box scheme.

On the other hand, the IP rights of others can cause your company problems if they are not identified and assessed early enough, or if those IP rights are not handled in the right way.

It is therefore important to have a complete strategy for your business when it comes to IP.  At  Sanderson & Co. we believe that a comprehensive IP strategy should consider four main areas:

We can help you develop an IP strategy specific to your business that covers all four of these areas.

In this four-part series of blogs we will explain how we can help you to achieve your IP GOAL.

Generating IP for your business.

1. Innovation Awareness

Do your employees know what IP is and do you encourage your employees to generate IP?

With a basic knowledge of IP and with suitable incentives, employees may be more likely to identify when they have created something that could be worth protecting.  To help your employees to identify when they may have generated useful IP,  Sanderson & Co can run seminars that are tailored specifically to the aims of your company and that set-out the basics of IP.  We can also discuss with you ways to encourage your employees to create IP and tell you about the IP that they have created.

This IP could then be used to protect your products or brand or to generate income through licences and assignments.

2. Innovation Capture

Do you know what IP has been generated by your employees?

Your employees may be thinking of new ideas all the time but those ideas may be overlooked if they are only mentioned to you in passing.  Sanderson & Co can help you keep track of the IP that is developed by your employees by providing you with forms tailored to your business that can be used to record IP. These forms may sound simple but collecting the right information is not always straightforward. These forms are also a useful tool which can be used by you or us when assessing how best to utilise any IP.

3. Innovation Assessment

Do you know what is worth protecting?

Some ideas are worth protecting whereas others are less useful or are not protectable, and it is not always easy to spot when useful IP has been created. IP rights can be complicated, but Sanderson & Co. can help you to identify whether a particular idea can be protected and is worth protecting.  We can also provide advice on which types of protection are suitable for a particular idea.  We can also carry out searches to help you to decide if your idea is sufficiently original.

The above are just some of the ways in which Sanderson & Co. can help you to achieve your GOAL of a comprehensive IP strategy.

If you would like any advice regarding Generating IP or any of the other topics in this series of blogs, then do not hesitate to contact Sanderson & Co. to book a free 30-minute consultation. Please remember to mention this blog when booking your consultation.

Next week we will be discussing Obtaining IP rights…

Mediation offers cost-effective resolution of IP disputes

IP Litigation can be prohibitively expensive for small companies who may have limited resources available.  Equally, for larger organisations, mediation can offer significant cost savings when compared to litigation, freeing up funds for other uses.

IP litigation vs. mediationIP disputes are often well suited to mediation.  For example, with a patent dispute involving competing products, the best solution may be to formulate a cross licensing agreement between the parties.

This is easier for a 3rd party mediator to help negotiate than for a court.

So why don’t more companies use mediation?

  • The parties involved prefer to feel that they are in a position of strength
  • Concern that by suggesting mediation you admitting a weak position and may encourage an aggressive approach by the opposition
  • Fears that mediation is a waste of time and money
  • Fears that the only solution from the mediation process will to admit they are in the wrong
  • If feelings are running strong the parties involved may struggle to avoid posturing and an aggressive approach

An experienced mediator can help to create an atmosphere where both sides of the dispute can reduce posturing and promote a sense of trust and openness, and a wish to find a resolution to the problem.

The UK IPO recently relaunched the IP Office Mediation Service with the aim of making the process of mediation more transparent and easier to access.

According to statistics from the WIPO Arbitration & Mediation Center a high proportion of mediation cases result in a settlement, and for the vast majority of disputes, mediation is far more cost-effective than arbitration or litigation.

James Sanderson says; “Mediation may not work, or be appropriate, in every case but it should not be ignored or considered as a sign of weakness.  All businesses need to consider the financial impact of litigation before going down that path.  If you consider another party to be in blatant infringement of your IP rights and want your day in court then we can help you outline your case and support you during the process.  If somebody else is claiming that you are infringing their IP a close examination of the case may mean that mediation can help you find a solution to the issue which is acceptable to both parties.”

For more information, or advice please contact Sanderson & Co.

Useful links:

UK IPO Mediation Service – http://www.ipo.gov.uk/ipenforce/ipenforce-dispute/ipenforce-mediation.htm

WIPO Arbitration & Mediation Center http://www.wipo.int/amc/en/

http://www.wipo.int/amc/en/mediation/why-mediation.html

Little blue pills and the value of good patent protection

Aviagra-pills-pfizer-logos of 21st Jun 2013, Viagra is out of patent, opening the door for generic pharmaceutical manufacturers to take a share of a market estimated at around £1.5 billion a year.

Viagra was first developed in the UK by Pfizer at its research facility in Sandwich, Kent and was covered by three separate patents.

  • The first patent was filed in June 1991 after they created a new compound that showed a potential benefit to customers suffering from cardiac conditions such as angina.  During trials it was shown to be not very effective at treating angina, but the volunteers began asking for extra supplies of the drug as they were discovering it had a rather useful side-effect…
  • In May 1994 a second patent was filed and granted covering a discovery for its use as a treatment for impotence.   This patent was however rescinded in 2000 following a challenge by Eli Lilly and Icos Corporation.  The judge ruled that Pfizer’s 1993 patent was “invalid for obviousness” because the breakthrough was based on knowledge that was in the public domain.
  • A third patent was filed in 1997 relating to a process of mass-producing the compound.

James Sanderson, Senior Partner at Sanderson & Co says, “Good patent protection relies on a balance between careful definition and development of claims, while trying to limit the possibilities for competitors to find alternatives to your product.”

Pharmaceuticals are very expensive to develop and manufacturers have a relatively short window in which to take advantage of a successful product.  The company must use the success of one product to offset against the development costs of the products that don’t make it through the development and testing phases.

“Management of a company’s intellectual property portfolio must take into account the commercial life span of products and the patents that protect them.  For a successful product like Viagra, management of the transition into the post-patent phase of its life-cycle will be vital.” says James.

Prices for the drug are expected to fall dramatically but there will continue to be a market for Viagra for many years to come and Pfizer has now launched a non-branded version of sildenafil to directly compete with the dozens of other companies launching their own versions.

This is good news for the NHS, which currently spends £40 million each year on the drug.  The price reduction is also expected to help to end the market in dangerous counterfeit tablets and may also lead to an increase in availability through the NHS which currently only allows doctors to prescribe it to patients with certain medical conditions.

For advice on IP portfolio management and how to get the most out your intellectual property, please contact Sanderson & Co.

Read more: http://www.dailymail.co.uk/health/article-2345878/Countdown-cheap-Viagra-From-midnight-tonight-drug-available-little-60p-tablet.html#ixzz2X8jX0PjV

Last chance to share your views on ‘Superfast’ patent processing service

The government’s consultation period on plans to bring in a new ‘superfast’ patent processing service, which will be capable of granting patents in just 90 days, ends on 12th June.

Currently it can take a number of years to gain patent protection. While for some applicants this allows them time to develop strategy and commercial decisions relating to their invention, this is not always going to be the case.  For some applicants a reduction in the time it takes for their patent to be granted would be beneficial.

The IPO currently offers a free acceleration services which means a patent can be granted in less than a year.  The new system could see applicants obtaining a granted patent in as little as 90 days.

The superfast service would be available to applicants upon payment of an official fee of around £3500 – £4000.

James Sanderson says, “These proposals will be of great interest to some applicants as it would allow them to get protection for their inventions as quickly as possible. The suggested fees are quite high and will therefore need to be weighed up against the benefits of achieving protection earlier than would be possible otherwise.”

Intellectual Property Minister Lord Younger said:

Inspiration and inventive thoughts can emerge at any time, but acting on them quickly can often be the catalyst for making a real difference to the success or otherwise of an idea. Government is committed to making it easy for innovators to turn their ideas into business growth. I am sure this will help to create a streamlined and flexible patent service and bring more choice for those who use it.”

The consultation seeks views on:

  • the principles on which such a service could be based
  • the conditions that would apply in order to use the superfast service
  • the details of how such a service should work in practice, including fees
  • the usefulness of existing patent acceleration services.

The consultation period concludes on 12th June 2013.

The consultation document can be found at www.ipo.gov.uk/consult-2013-superfast  

Useful links:

http://news.bis.gov.uk/Press-Releases/New-proposals-to-introduce-superfast-patent-service-68b2f.aspx

Will Patent Box stimulate British innovation?

When the UK government proposed the introduction of the Patent Box scheme in 2009 their aim was twofold:  to encourage British companies to invest in innovation to stimulate the economy and strengthen manufacturing industry, and to make it more attractive for international companies to base their R&D in the UK.   With the Patent Box scheme now up and running will it achieve its goals?

What is Patent Box?

Essentially Patent Box allows companies to apply a lower rate of Corporation Tax to profits earned from their patents.   The relief is being phased in from April 2013 with the full benefit of 10% Corporation Tax being available from April 2017.

To qualify for Patent Box a company must have been involved with the development of the patent and must own or exclusively license them.

Qualifying patents

All granted UK and European patents qualify for Patent Box regardless of when they were granted, as well as patents from the following countries in the European Economic Area: Austria, Estonia, Hungary, Romania, Bulgaria, Finland, Poland, Slovakia, Czech Republic, Germany, Portugal, Sweden, Denmark

Qualifying income

To qualify, income can arise from a number of sources including:

  • Selling patented products
  • Licensing out patent rights
  • Selling patented rights
  • Income arising from infringement of your patent rights – e.g. damages awarded
  • Income from use of a patented manufacturing process
  • Income from provision of a service reliant on a patented tool

You cannot qualify for Patent Box on the basis of a patent application but once the patent has been granted you can claim for profits that have been generated up to 6 years prior to grant.  However, only profits arising after April 2013 will qualify.

Will it work?

For the large multinational companies that generate large profits from a range of patented innovations it is a significant step by the government to encourage them to employ the highly skilled staff required for R&D in this country.  The pharmaceutical giant GSK is investing £500 million in its UK manufacturing network and will create around 1,000 jobs directly in response to the Patent Box system.

“When implemented, the patent box has the potential to transform the way in which the UK is viewed by companies such as GSK as a location for new investments in high added-value R&D and manufacturing,” commented GSK chief executive Andrew Witty in an article in Pharmafile .

For smaller SME companies, less experienced in making sure they are taking full advantage of their IP, it will be a little harder to get to grips with.   Although some question whether a 10% rate of tax is sufficiently small to encourage businesses, the relatively small investment in patenting your innovations can potentially reap large rewards in the longer term.

As with all IP, a granted Patent is an asset for the company and tax breaks associated with it can only be beneficial.

“Having a granted Patent is a prerequisite for anyone wishing to take advantage of the Patent Box scheme.  However, potential users of the scheme need to bear in mind that a patent application must be filed before any public disclosure of the invention takes place.  You cannot wait until you are sure you have a commercially successful product before deciding to patent it, in order to get the Patent Box tax breaks.  So, SMEs will need to be pro-active in determining at an early stage in product development process, which inventions to patent.” – Jerry Walder, Partner at Sandersons.

For advice or more information about whether the Patent Box could help you contact Sanderson & Co

See also:

http://www.ipo.gov.uk/types/patent/p-patentbox.htm

http://www.hmrc.gov.uk/ct/forms-rates/claims/patent-box.htm