Engineering news
The government's Patent Box scheme should be embraced by engineering companies, experts have said, as new research highlighted the importance that intellectual property plays in the economic performance of European businesses.
Patents attorneys said that the Patent Box, which was set up to encourage innovation and the development of intellectual property by providing tax breaks on profits generated by products with patents, had initially been conceived as a means of encouraging pharmaceutical companies to continue to carry out R&D on British shores, but that the scheme was being adopted by companies in other industries.
“Engineering companies and manufacturers are taking a keen interest in Patent Box and we would encourage them to continue to develop IP that can generate tax breaks further down the line,” said Paul Foot, a partner at Withers & Rogers, a leading firm of patent and trade mark attorneys.
His comments came as the European Patent Office (EPO) released details of a study that found that nearly half (40%) of economic activity in the EU is generated by intellectual property-intensive industries. According to the report, about half of all EU sectors rely heavily on intellectual property. Engineering, the automotive sector and pharmaceuticals are among the top 20, the report said. Remuneration in IP-intensive industries is comparatively high, and these sectors also account for approximately 90% of the EU's trade with the rest of the world, the research said.
EU internal market and services commissioner Michel Barnier said: “I am convinced that intellectual property rights play a hugely important role in stimulating innovation and creativity, and I welcome the publication of this study. It will help us to further underpin our evidence-based policy making. What this study shows us is that the use of intellectual property rights in the economy is ubiquitous: from high-tech industries to manufacturers of sports goods, games, toys and computer games, all are making intensive use of not just one, but often several types of IP rights.”
Benoît Battistelli, president of the EPO, added: “This report shows that the benefits of patent and other IPRs is not just economic theory. For innovative companies intangible assets have become extremely important. Especially for SMEs, but also research centres and universities, patents often open the door to capital and business partners. In order to remain competitive in the global economy, Europe needs to encourage even further the development and use of new technology and innovations.”
The British Patent Box scheme has also been welcomed by technology and design consultancy Cambridge Design Partnership and patent and trade mark attorney firm Marks & Clerk. They found that the scheme was likely to help encourage big business to remain in the UK, but argued that the government should do more to help SMEs with incentives to encourage innovation. Schemes in Europe similar to Patent Box had indeed led to an increase in patent applications, the researchers said.
David Lewis, technology business development manager, Cambridge Design Partnership, said: “Our research has revealed that the Patent Box has the potential to deliver significant benefits for companies participating in the scheme. By financially incentivising patent filing it should also encourage creativity and innovation, increasing the focus on technology development to enhance the UK’s competitive advantage. Our work has, however, highlighted that the government needs to work harder to ensure SMEs are aware of the scheme as larger corporations seize the opportunity.”