Happy New Year !!

I am delighted to say that Stratagem has had a very positive start to 2014 and we have been joined by our new Attorney, Kevin Hanson, expanding the Physical Sciences and Engineering side of our business.

Kevin is an experienced mechanical engineer and trainee patent attorney who, quite unusually in the patent profession, is also working towards qualification as a solicitor.  Kevin is due to qualify as a graduate of the Chartered Institute of Legal Executives (CILEX) in 2014 and to be admitted on to the Roll of Solicitors by the end of 2015. Kevin’s education will also see him awarded the Higher Courts Litigation Certificate by the Intellectual Property Regulation Board (IPREG) upon his qualification as a Chartered Patent Attorney. Kevin’s unique blend of skills makes him well placed to advise on IP agreements, IP commercialisation and on the enforcement of IP rights, as well as on the protection of engineering related inventions.  Welcome Kevin!

Last December we held a very successful joint Seminar with Colin Hailey from Confluence Tax -  'Patent Box - Your Questions Answered'.  This took place at the CIPA offices in London.  Thank you everyone for attending and making this a very successful event.  Through some of our lobbying,  the BIA have agreed to help us try to obtain a change in legislation to get patent costs clearly covered by the  R&D Tax Credit regimen. We believe even if such tax credits were capped it would make a significant difference to many of our clients trying to afford patent protection whilst also funding early stage R&D. Do please contact Stratagem should you need any further advice in either respect.

Valuing a Patent Estate.

Patents are expensive.

A question often asked by people who have to pay the bills is ‘what are these patents actually worth?’. Unfortunately the answer is not straightforward to calculate. As with the valuation of anything unique, the value changes over time, and includes an element of unquantifiable value in deterring competitors from copying your products. The value of patents may be anything from the pessimistic ‘nothing until they are granted’, through ‘the cost value spent to date in filing and prosecuting the rights’ (i.e. the replacement value) through to the optimistic ‘total value of all claimed products sold over the 20 year life of the patent’.

A further consideration with the UK Patent Box tax regime is that a GB patent may be worth up to 10% of the corporation tax paid on any product sales where the products are covered by the patent claims.

The easiest answer to give to the question of ‘what are these patents worth’, especially for early stage companies who are still in development, is simply ‘whatever someone else is willing to pay for them’. As with most transactions, the value to the buyer often depends on how the assets are presented.

For assistance with transactions involving patent rights, or if you are interested in a commercially focussed review of the worth of your patents, contact Stratagem.

Banking on IP? Not yet…

In a report commissioned by the UK Intellectual Property Office (UKIPO) and welcomed by the Business Secretary Vince Cable, the lack of finance available to SMEs based upon Intellectual Property (IP) and other intangible assets was recognised.

Whilst equity investors, such as venture capital companies, include the value of IP when assessing the quality and attractiveness of investment opportunities, other routes to finance are much more reluctant to do so.  The report concludes that currently in the UK “IP and intangibles are, in effect, unbankable”. 

The report notes that change is inevitable, since this is a huge missed opportunity. Whilst not advocating any legislative amendments, it makes a series of 10 recommendations to encourage change.  These include:

• Creating a toolkit to help SMEs, lenders and other financiers identify, understand and make more effective use of their IP

• Making it easier for businesses to recognize and show what IP they have when looking for funding

• Developing templates and providing advice which help banks and others understand the cash flow and business value of IP, rather than viewing it only as a sunk cost

• Supporting the development of more accessible and effective IP marketplaces

• Ensuring businesses adopt appropriate IP management  practices so that lenders can monitor the IP once credit has been granted

Whilst this report has been warmly welcomed, it is now unclear how, or even by whom, the recommendations will be implemented.  Given the estimated shortage of finance for SMEs in the 2012 Breedon Report was between £84 billion and £191 billion over the next five years, we hope that these recommendations are put into action at the earliest opportunity. 

If and when these recommendations are implemented, Stratagem IPM will be able to assist clients in preparing to seek funding based upon their IP.  Our routine services include IP audits, valuations and management strategies; all of which are recommended by the report.

Global Patent Prosecution Highway

The UK Intellectual Property Office is one of 17 international intellectual property office s to participate in a pilot for the Global Patent Prosecution Highway (GPHH), which began on 6 January 2014.  The pilot operates in the same way as the existing bilateral Patent Prosecution Highway agreements, but allows applicants who have had a set of claims found allowable by one participating office to ask that pending applications at any or all of the other participating offices be accelerated.

As well as simplifying the patent protection process, businesses will benefit from a reduction in the time and money spent doing so.

Stratagem will actively manage portfolios and advise if this should be part of your IP strategy.