- Hacker Young study identifies obtaining more AI patents as key to UK’s future growth
- System for obtaining patents stacked against SMEs
Accounting firm UHY Hacker Young recently warned that the UK risks falling behind competitors as a global AI technology hub, and warned the government that new policy initiatives are required to encourage businesses to patent their intellectual property.
While the UK is currently fourth in the global pecking order for blockchain patents (11% of the total in 2017), the picture is very different for AI patents. UHY Hacker Young found that the UK filed just 2 patents from a total of 649 with WIPO (World Intellectual Property Organisation) last year, less than 1% of the total. AI has been identified as a key sector for delivering future economic growth.
GovGrant, which helps businesses claim for the government’s ‘Patent Box’ scheme, shares these concerns, and CEO Luke Hamm warned the UK will continue to lag world leader China, which filed 473 AI patents with WIPO last year, if policymakers continue to ‘woefully under-protect our IP.’
The Patent Box scheme is designed to reward companies that develop, retain and exploit patents in the UK. It is administered by HMRC. The tax on profits from patented inventions is reduced to 10%. It may be that the patented element of the product or process is minor, but 100% of a company’s worldwide profits arising from product income should qualify for 10% corporation tax.
Latest figures from HMRC showed that SMEs only received £43m of the £950m of government support for IP in 2017, but Luke said this low take up underlined the fact that SMEs need the most help from the government.
Luke identified four measures the government could take to materially improve Patent Box:
- Support moves value intellectual property as an intangible asset on a business’ balance sheet.
- To support businesses that are granted patents by the Patents Office, by defending UK patents against raids from foreign competitors, including litigation funding.
- Make the application system open and transparent and widen patent box to other IP mechanisms for SMEs who are less likely to hold patents.
- Expand Patent Box to other intellectual properties, particularly in the software sector, where it is notoriously hard to obtain patents.
He welcomed the government’s announcement last April of £1bn extra funding to increase R&D in the AI sector, but said that, without better patent protection for new inventions, the investment was at risk from foreign competitors taking the IP for themselves, or from the application system remaining off limits to many SMEs wishing to protect their IP.
He also called for a broader change in attitude towards patents among business leaders who, he said, often treated their intellectual property as a trophy, rather than commercial opportunity to be fully monetised.
He endorsed Hacker Young’s view that ‘with the formal Brexit date on the horizon, the government needs to ensure the UK remains an attractive place for tech businesses, and that meant reforming the way the UK manages its IP.’