“On one hand, they have to maintain continuity of strategy. But they also have to be good at continuously improving.” While Porter was referring to the need to keep customer interest and demand high, the protection of intellectual property (IP) plays an important role in this.
But, following stagnation in British firms filing to protect their IP in recent years, the UK has seen an increase in competitive filing from foreign countries such as China (a country incentivised to file UK patents). The UK has a great background in innovation, but it must keep innovating and securing its IP, or face losing its competitive advantage.
While UK businesses actually increased the number of patents they filed with the European Patent Office in 2017, the country’s overall share of patent applications remains very low. And in the same period Asian businesses significantly increased their European applications.
To illustrate this, China’s patent filings increased from 6,486 in 2008 to 50,517 in 2017, an increase of close to 800%. In the same period the UK only increased its patent fillings from 7,172 to 7,530.
IP holds the key
A patent held by a company will last for 20 years, after which it can be copied and the patent can be secured by a competing business. It is only by continually making improvements to an innovation (and filing for patents) that protection around a product or process can last indefinitely.
This type of product development helps you to keep your IP safe. As soon as we slow down on our research and innovation, it’s only a question of time before UK businesses lose ground to foreign competitors. Once an original patent lapses, a competing foreign company could easily get a patent granted on an improvement and then you’re locked out of that patent.
If the UK does not uphold its level of innovation, it may start to leave gaps in its IP and, as time progresses, the country might find it loses both its patent landscape and its competitive edge.
The result: UK businesses will lose opportunities to cross-license IP, lose the ability to claim much-needed patent box tax concessions, and get squeezed out of the markets they helped to create.
Learning from China
The past few years have seen China become one of the world’s leading innovators. According to
the World Intellectual Property Organization, in 2016 China filed more patent applications than the US, Japan, South Korea and the EU combined! And there are certainly lessons to learn from China’s proactive approach to IP filing.
In the UK the investment for IP is front-loaded, and with a first-to-file system it’s pretty simple – you may have a great idea, but you face a considerable initial outlay to secure the IP protection.
China has tackled this issue by actively incentivising its businesses and start-ups to file across the world in other nations. China offers a grant to help fund the patent application, which is followed by a second bonus grant if successful. I believe the UK should follow this lead. If a business has genuine prospects of success, upfront funding to help gain IP protection across the world is surely beneficial to all involved.
By using IP competitively, we can maintain our home advantage while also gaining a foothold in new markets. Countries such as India are still relatively cheap to file in, and securing patents in countries that are likely to see huge growth over the next 10 to 15 years could be very important for both production and sales.
Ultimately, we need to think more carefully about where we are filing as a nation of innovators. We don’t want to lose hold of the innovation that has made Britain great and miss out on the opportunities to exploit emerging markets.
Content published by Professional Engineering does not necessarily represent the views of the Institution of Mechanical Engineers.