IP Cases & Commentary – Details
01 June 2012
Planning for the Patent Box Strategies for Accelerating Granted Patents in the UK
The Patent Box places a potentially extremely high financial value on a granted UK patent (see notes 1 & 2 below), whereas a pending patent application has no value under the scheme. The race for getting granted UK patents is therefore now on. For UK manufacturing companies, profits arising from sales of products will be eligible for reduced corporation tax if and only if a granted UK patent is in force for some element of the product.
Because of the relative slowness of the European Patent Office (EPO) as a patent granting authority, the Patent Box directs attention on to the UK Intellectual Property Office (UK IPO) which has a range of existing procedures for obtaining quick grant. An optimised process for obtaining rapid grant of a UK national patent involves:
- Requesting combined search and examination
- Requesting accelerated search and examination
- Requesting early publication
- Responding immediately to the combined search and examination report.
Each of these points is now discussed.
1. Requesting combined search and examination
The combined search and examination (CSE) procedure is a long-standing option offered by the UK IPO which works extremely well. The UK IPO’s internal target is to issue a CSE within four months of request, which typically means within four months of filing, since CSE requests are usually made on filing. Our experience is that this target is normally met.
2. Requesting accelerated search and examination
Requesting accelerated search and/or examination is a formless, no-cost procedure in which the applicant merely has to provide a sensible reason, such as knowledge of an infringing product, a planned investment round or support for licence negotiations. Recently, the UK IPO declared that when an invention relates to environmental technology that itself is also a valid reason for acceleration, this being called the ‘Green Channel’. By way of example, on 14 March of this year we filed an application using the Green Channel and the CSE report was issued 11 working days later!
3. Requesting early publication
Requesting early publication is a further necessary step for securing early grant of a UK patent, since without such a request the earliest grant can take place is about two years from filing. The early publication should be early enough that grant is not delayed, but very early publication may be damaging to the applicant’s wider interests, since the published application forms part of the state of the art in the usual way. Typically, we would advise not to request early publication on filing, but to make the request when responding to the CSE report to leave open the possibility of re-filing the patent application to take account of the CSE report.
4. Responding imediately to the combined search and examination report
Responding quickly to the combined search and examination report will obviously move things forward, but is also significant in that it exhausts the applicant’s duty to disclose the results of searches made by other patent offices on corresponding patent applications (see note 3 below). More generally, additional iterations of the examination process caused by the need to take account of fresh prior art should be avoided. In respect of timings, this means the UK publication request should be made at the latest about seven months from filing (with publication taking place six weeks later) so that UK grant can pre-date the earliest likely issuance of the PCT search report which is 15 months from priority.
What about converting existing pending applications into UK patents in time for April 2013? For European patent applications the EPO offers a ‘Programme for Accelerated prosecution of European patent applications’ (PACE) (see note 4 below), similar to the UK IPO scheme. For pending international (PCT) patent applications, the best way forward is to make an early entry into the UK national phase. The UK application can then be prosecuted using the general measures described above or through a specific acceleration option called ‘PCT(UK) Fast Track’ which can be used if the PCT application has received a positive International Preliminary Report on Patentability (IPRP).
In summary, there will be large numbers of UK-based companies for whom the corporation tax savings obtainable through the Patent Box will vastly outweigh patenting costs. For these companies there will be a reversal of the current burden on the engineering and scientific side of the business to justify the patent costs. Instead, chief executives and chief financial officers will be demanding UK patents from their engineers and scientists unless there are convincing reasons why the company’s product innovations are clearly unpatentable. However, optimal use of the Patent Box will require careful long term advance planning and coordination between a company’s tax advisers and patent advisers and relevant management. For example, there is a potentially complex interaction with the R&D Tax Credit scheme which will need to be modelled.