Overseas companies—particularly from the US, Japan and Germany—are increasingly registering patents in the UK.
However, patent applications by British firms flatlined in 2012, despite the “patent box” tax break announced in the Chancellor’s 2011 Autumn Statement, which gave businesses a preferential 10% (rather than the usual 24%) corporation tax rate on profits derived from registered patents from 1 April 2013.
The UK Intellectual Property Office received 15,370 applications from within the UK last year—just 27 more than the previous year.
By contrast, it received 7,865 applications from overseas, a jump of 14%, from 6,916 in 2011. The US, Japan and Germany filed the most patents, and the US and Germany both filed over a quarter more than in the previous year.
Paul Joseph, intellectual property and technology partner at Reynolds Porter Chamberlain, said: “The patent box means that 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. 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. The UK is in danger of falling behind.”
“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.”
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