Innovative businesses in the UK have long been criticised for not filing enough patents, which could be preventing them from realising their commercial potential
With another economic recession looming, changing this behaviour could be critical to building back a successful economy.
It’s difficult to say why innovative businesses in the UK, many of which are small and medium-sized enterprises (SMEs), aren’t switched on to the value of intellectual property (IP) protection.
Unlike Japan, one of the world’s top filing nations, where WIPO data shows that resident domestic patent filings totalled about 227,000 in 2020, UK-based innovators only filed about 18,000 patent applications at the UK Intellectual Property Office (UKIPO) in the same year.
Analysis of European patent filing data reveals that UK innovators are lagging behind compared to their counterparts in countries such as France, Germany and Sweden. For example, the European Patent Office’s (EPO) Patent Index report reveals that companies in France filed nearly twice as many European patents per head of population as their UK-based counterparts in 2021. Those in Germany filed three times as many, and in Sweden, five times as many.
It remains unclear how the Government intends to make it ‘easier to protect and enforce IP’
Encouraging patent-filing activity
To encourage more patent-filing activity, the Government recently published an IPO Strategy to 2026, which sets out an ambition to adapt the IP system to ensure it keeps pace with technological and market changes and articulates the value of IP to society, ensuring it is treated as an asset. The strategy also highlights the importance of harnessing the value of IP in order to achieve the world’s net zero goals. There is a lack of detail, however, and it remains unclear how the Government intends to make it ‘easier to protect and enforce IP’.
The lack of patent-filing activity at this level is particularly concerning
For an economy with a high proportion of SMEs, the lack of patent-filing activity at this level is particularly concerning and could mean that commercial potential born in the UK is being realised elsewhere. The reluctance to file is due to several factors – while cost is one, a lack of understanding about how and when to secure patent protection and a misguided belief that being first to market will bring all the commercial advantage the business needs, may be to blame. In the UK, there is also a preponderance of innovation activity in industries that tend not to attract a high volume of patents anyway, such as the finance and defence sectors.
While it makes sense to start by understanding why SMEs aren’t filing more patents, there are wider political and socio-cultural issues that could be favouring some economies over others. In France, for example, publicly-funded research institutes, such as Le Centre national de la recherche scientifique (CNRS), top the patent filing statistics. Also, France has a tradition of respecting and promoting scientists and engineers, which makes top decision-makers in industry and government more likely to be scientifically literate than their equivalents in the UK. This could in part explain why the volume of European patents filed by companies based in France continued to grow through the pandemic years, while those filed by UK-based companies dipped.
Government intervention necessary
Clear government intervention is going to be needed to support a change in attitude to IP ownership. In Germany, for example, the system is structured to drive patent-filing behaviour by requiring employers to compensate employee-inventors, or allow them to file patents and take ownership of their innovations, if their employer fails to do so. In the US, a ‘grace period’ is designed to facilitate IP ownership by allowing early-stage innovators to file patents up to 12 months from the date of disclosure, protecting their route to market.
As innovative businesses around the world focus on the push to net zero by 2050, it is important to change perceptions of IP ownership and raise awareness of its value to society as a whole. For the UK, there is a real opportunity to become a world leader in fast-developing net-zero technologies, such as batteries and hydrogen, and strengthen our economic future.
Written by Jim Ribeiro, a partner and patent attorney at European intellectual property firm, Withers & Rogers.
