News

March 28, 2013

Patent applications by UK firms flatline

Patent applications by UK businesses flatlined in 2012, according to figures from law firm RPC.

The number of patent applications to the Intellectual Property Office from within the UK reached 15,370 in 2012 — barely more than the 2011 figure of 15,343 and evidence that the new Patent Box tax break has yet to make an impact.

Moreover, this is in stark contrast to UK patent applications by overseas businesses in 2012, which rose by 14% to 7,865 from 6,916 in 2011.

The three countries with the most patents filed in the UK in 2012 all saw significant increases over 2011. The biggest number of files came from the United States, which saw a 26% increase. Japanese applications were second, with an increase of 19%, and applications from Germany, in third place, were up by 27%.

The Patent Box tax relief announced in the Chancellor's 2011 Autumn Statement means that businesses can pay a preferential 10% rate of corporation tax on profits derived from patents from April this year. The relief will be available to profits from patents that are already registered.

Despite this, there has not been a rise in UK patent applications. Paul Joseph, intellectual property and technology partner at RPC, said: "The UK is in danger of falling behind. These figures show that foreign companies, which are unlikely to be able to benefit from the Patent Box, are being more proactive in registering their patents in Britain."

He added: "The UK is now one of the world's most favourable tax jurisdictions for businesses with profits from research and development. However, the very favourable incoming regime doesn't appear to have fed through into more British businesses registering patents in anticipation of exploiting the tax break. It's a shame to see that such a generous tax relief has not had an immediate effect on the number of patents filed, with mere days remaining until it comes into force. The tax break on offer is potentially so valuable, however, that it's hard to imagine that businesses will ignore it for long."