As suggested by Sir James Dyson in his report entitled "Ingenious Britain" (March 2010), the UK government will give British businesses tax breaks from April 2013 to encourage them to patent their innovations. The initiative called the "Patent Box" will tax income attributable to patented inventions at the reduced rate of 10%.
Whilst a tax reduction is always welcome in its own right, it is hoped that the measure will encourage both innovation, and the patenting of that innovation. In the current economic climate, this is important as history teaches us that we can innovate out of recession. Even when business conditions are tough, there will still be customers with money to spend, but they may need the encouragement of new "must-have" products to persuade them to part with their money.
Retailers are generally reporting poor sales, but innovative new products still fly from the shelves. There are queues at Apple™ stores to acquire IPhones™ and IPads™, and the new generation of HD, digital, flat screen TVs are selling well. However, car sales, in general, are flat, perhaps because this year's models are indistinguishable from last year's.
The stated aim of the Patent Box is to provide an incentive to commercialise existing patents and to encourage the development of new innovative patented products. The idea is to reward successful patent innovation in the UK to encourage companies to be actively involved in a development cycle which involves both innovation and the patenting of that innovation.
It is encouraging that the government has recognised that to be successful in the market place, it is not sufficient to develop a new "must-have" product or service. The secret to innovating out of a recession is also for the innovator to keep control of that product or service. This means acquiring and retaining appropriate intellectual property (IP) rights, such as patents, designs and trade marks.
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