IP FAQs & Reference – Details
An introduction to patents (FAQ)
What is a patent?
A patent is an agreement between you and the state that can prevent others from exploiting your invention for up to 20 years, subject to annual renewal. In exchange for this monopoly, the state discloses your idea. Details of a patent application are made public around 18 months after it is filed.
You should not publicly disclose your invention or use or sell your invention before a patent application has been filed at the UK Intellectual Property Office (UKIPO), as this will almost certainly invalidate any patent eventually granted.
Requirements for grant
To be granted a patent an invention must be:
- inventive (not obvious)
- have practical (industrial) application.
UK patent timescales and costs
The cost to file a patent in the UK can range from approximately £3,000 to £6,000 depending on complexity, technology and industry sector. It can take several weeks to prepare an application, and two to five years for a patent to be granted, again depending on complexity, technology and industry sector (a further minimum cost of around £1,500 to £3,000).
Timeframes and costs may differ considerably depending on variables such as the complexity of your invention, its industry sector and challengers from competitors. We endeavour at all times to balance an understanding of the law, complex methodological and/or scientific issues and the budget constraints of a business. For an indication of costs for your specific situation please contact us for more information.
Filing a patent application at the UKIPO
We work with you to write a specification which describes your invention in broad terms to define the scope of the monopoly you hope to obtain ('the claims') and a description of the practical form(s) of your invention, usually with the aid of drawings ('the specific description').
The UKIPO examine your application to ensure all formalities have been met. At this stage it is normal practice to request a 'preliminary examination' and to pay a fee for the UKIPO to carry out a search to see whether the invention is indeed new. From the search results we can advise you on the likelihood of obtaining a patent and whether the application is worth pursuing. If it looks like your invention is already known, you may consider withdrawing your application.
If it looks likely that your invention may be patentable, then you will need to consider whether you wish to pursue patent protection only in the UK or whether you wish to also seek protection in other countries.
Global patent protection
Once your application is filed at the UKIPO it is given a 'priority date'.
You will need to decide whether you want to pursue patent protection in other countries within 12 months of the 'priority date'. The 'priority date' allows you to 'back date' any corresponding applications you might make overseas over the next 12 months.
At this stage it is possible to update your patent application to include any further developments, preferred features or extra information you may need to include. However, if the development has proceeded to such an extent that you have in effect a further invention or inventions, then fresh patent applications may need to be filed.
We can help you to pursue patent protection in any country you need. To get overseas protection, ultimately a separate patent is needed for each country. However certain international conventions exist between countries which help to reduce the burden upon applicants, by providing a centralised patent application and/or patent granting procedure.
Two such conventions are the Patent Co-operation Treaty (PCT), administered by the International Bureau in Geneva and the European Patent Convention (EPC), administered by the European Patent Office (EPO) in the Hague and in Munich.
It is worthwhile to stress that the PCT and EPC systems are complementary rather than alternative systems. Which system you select will depend on which countries you need patent protection in.
PCT - advantages and disadvantages
The PCT provides a centralised filing system. It includes over 100 jurisdictions worldwide, of which the EPO is just one.
- By filing one international patent application, in English, it is possible to simultaneously seek protection for an invention in each of a large number of countries throughout the world.
- We can comply with a number of formalities in a centralised manner when preparing the application, in accordance with the international standards effective under the PCT. However the PCT does not provide a centralised granting system, and national and/or regional applications must subsequently be pursued for a patent to be granted.
- Extra time is given (at least 8 months more, but frequently 18 months more, compared with not using the PCT) to investigate the commercial possibilities of the invention.
- You have the option to get (in addition to an 'international search report') an 'international preliminary examination report'. This provides information about the patentability of the invention before you incur any costs associated with pursuing patent protection in any of the countries designated in the PCT application.
- The overall cost of the PCT route is higher than pursuing separate national applications from the outset.
EPO - advantages and disadvantages
The EPO provides a centralised filing and granting system for patents in 38 European states, plus 10 extension states, which include all European countries.
- By filing a single application in one of the official languages of the EPO (English, French or German) in a unitary procedure before the EPO it is possible to secure granted patents in as many of the contracting states as you care to designate.
- A European patent affords the same rights in the designated contracting states as a national patent granted in any of these states.
- This route is a cost-effective, efficient and time-saving way of applying for patent protection in several different European countries
- European patents include common terms, scopes of protection and binding text.
- Every European patent has undergone substantive examination and can be obtained for certain countries which may otherwise operate only a registration system.
After deciding whether or not to pursue patent protection in other countries, you also need to decide how and whether to continue with the UK application. If you have filed an international or European patent application and designated the UK then you could choose to abandon your UK patent application. However, there are often good reasons for maintaining your UK application which we can discuss with you at the time.
Patent examination and grant procedure
The patent offices of major industrialised countries examine applications in detail to ensure that the inventions disclosed are new, non-obvious and have practical application.
They also examine applications to ensure they comply with other legal requirements. This process is often called 'substantive examination'. Often a fee must be paid to request substantive examination.
The patent offices will usually raise objections to the application at this stage. Hence, further costs can be incurred in overcoming the objections raised by the patent office. The specification may have to be amended in order to take into account the objections, for example the scope of the monopoly claimed may be too broad in view of any earlier documents found in the search.
When all objections raised by the patent office have been overcome, the specification will be granted and published in its finally accepted form.
The normal life of a patent is 20 years from the application date. Annual renewal fees are payable in most countries to keep the granted patent in force. Some patent offices also levy renewal fees on pending applications.
UK Patent Box
Under the Patent Box scheme, a company can apply a lower rate of corporation tax to profits earned from its patented inventions.
This is an opt-in scheme that can reduce corporation tax payable from 23% to 10% on profits made by any company in the UK that can be attributed to qualifying patents. This relief has been introduced on a sliding scale over 5 years, starting at 60% and reaching 100% in 2017.
If you hold eligible patents or patent applications or exclusively license patents, then you may be able to reduce your corporation tax bill by using the Patent Box. Eligible patents include among others, those granted by the EPO and UKIPO. As an opt-in scheme you must elect in in writing within two years of the end of the accounting period.
The profits on any product that has some part of it covered by a patent owned by you or exclusively licensed by you would be eligible for the scheme.
It may be appropriate to adjust your IP strategy to ensure that new products are covered by patents and that you record relevant information on any profits attributable to qualifying patents.
If you have patents that are due to expire or that you plan to sell, you need to elect into the Patent Box scheme while they are still valid and owned by you if you are to claim any relief from the profits of these patents.
Although relief is only available on granted patents, profits attributable to patent applications can be counted under the scheme retrospectively once the patent is granted. In order to do this you need to include the calculations of profits for the patent application in the tax returns for the relevant years.
If a patent is revoked any savings on corporation tax are not repayable.
It is important to note that your entire corporation tax will not reduce from 23% to 10% - only a certain proportion of your profits will be considered to be due to qualifying IP while other amounts (eg, due to marketing assets and routine profits) will be deducted from this proportion.
Unified Patent Court and unitary patent
Together, the unitary patent (UP) and Unified Patent Court (UPC) will comprise the biggest change to the patent landscape in Europe for more than 30 years. Most member states of the European Union (EU) have agreed to take part in the new system (subject to ratification), which is likely to come into effect some time in around late 2015 or 2016. However, for the time being at least, Spain and Italy are not part of the unitary patent, and Poland has not signed up to the UPC.
The unitary patent will provide a single patent right across all participating EU member states. It will be obtained in much the same way as conventional European patents, the option for ‘unitary patent protection’ being selected at grant if desired.
A unitary patent will be a lot cheaper than EU wide protection under the current system but it is not clear how cost effective it will be or how it might affect the current filing strategies of many businesses. Only once we know the fees involved, particularly renewal fees, will such issues become clearer.
The Unified Patent Court will be the litigation forum for unitary patents and, subject to an opt out for a transitional period, all European patents. This will have significant implications for all holders of European patents, who should be actively considering the impact on their portfolios.
For recent UP and UPC updates visit www.dyoung.com/unitarypatent