New patent law expected to boost export links

By Daniel Hunter

UK small to medium-sized enterprises (SMEs) are expected to grow into Europe with the introduction of a new law which allows businesses to protect intellectual property across the entire EU, according to Andrew Walker, corporate partner at law firm HBJ Gateley.

The new legislation, which will come into force in January 2014, establishes a pan-EU patent law and specialised EU patent court which will help companies and inventors protect their patents across the EU while avoiding multiple litigation cases in differing legal jurisdictions.

It will replace the current system in which innovations have to be patented in each disparate legal jurisdiction, which can be extremely complex and incur significant costs.

Andrew said UK businesses with aspirations to grow across the EU or with technology which is patentable and used across the EU would be attracted by the prospect of quick and cost-effective patent protection throughout the whole EU area. According to HMRC, UK trade with the EU was worth £149.8 billion in 2012, compared with £158.2 billion in 2011.

“There’s never been an EU-wide patent before, so this represents a major change in how companies trading in the EU can protect and defend their IP," Andrew said.

“If you’ve invented a new mobile phone feature, for example, and wanted to launch it across a number of different countries in the EU and have patent protection in those countries, up until now you have had to register patents in every single country. That not only takes a lot of time but it can end up being very expensive, and it can also delay the process of protecting your intellectual property which could allow a competitor to beat you in the ‘race to register’.

“Under the new EU patent, UK SMEs are now in the much more favourable position of being able to protect their inventions across the EU in a single application. This will no doubt provide added reassurance to inventors and businesses in what is becoming an increasingly global market.”

Together with the recently introduced UK Patent Box legislation which, among other things, offers a hugely reduced (10%) corporate tax rate on profits from patents, UK-based companies are now in a much more favourable position when it comes to taking advantage of their in-house patent creations.

The change in legislation will also significantly streamline litigation for those companies which need to defend their patents across the EU, allowing a central court to make decisions applicable across all 25 European Union countries. However, Andrew warned any litigation process, whether centralised or not, is likely to be expensive and might still involve hiring more than one legal representative.

Andrew added: “Litigation is expensive whatever the circumstance. This legislation will make it easier and somewhat cheaper for companies which find themselves in court over EU patent issues and I’d always advise anyone who’s keen to defend their intellectual property to apply for the broadest protection possible.”

British companies look to emerging markets for growth

By Daniel Hunter

Asia has over-taken the European Union as the market in which exporters expect to see the most growth over the next five years, new research from the Institute of Directors (IoD) and the All Party Parliamentary Group on Trade and Investment reveals.

The report, launched yesterday (Tuesday) in the Houses of Parliament, also shows that Asia has moved ahead of North America as a destination for UK exports.

The report presents the findings of a Policy Voice poll of 1,162 IoD members which ran from Wednesday 14th November until Friday 23rd November 2012.

Key Findings

EU is still the top destination for exports…

The European Union remains the market in which most IoD members are active. However, the percentage of IoD members trading in the EU is falling (from 84% to 82% between 2010 and 2012), whereas the percentage in Asia is on the rise (from 39% to 47%). The EU was the only market to see a decrease in activity, with strong growth in the Middle East in particular (38% in 2010 to 44% in 2012). For the first time, IoD members are more likely to trade in emerging Asian markets than with the mature markets of North America (47% to 46%).

…but businesses expect faster growth elsewhere

Asked which markets they expected to deliver export growth over the next five years, Asia came out top, with 50% of IoD exporters optimistic about their prospects there. Compared with two years ago, members are far more pessimistic about future trade with Europe. Only 43% anticipate their export activity to grow in the EU over the next five years, a fall from 58% in 2010.

Exporting remains difficult for small businesses

In order to reduce our trade deficit, more businesses must be encouraged to export. The survey reveals that 57% of IoD members export, considerably higher than the national figure of 31%, indicating that there is scope for more UK companies to begin exporting. Half of members gain less than a third of their turnover from exports, showing that there is also significant potential for expansion by existing exporters.

However, the risks associated with exporting still put off small companies. 35% of businesses said their organisation was just too small to export. Worryingly, 72% of companies which had never exported said they had no plans to do so.

Commenting on the research, Alexander Ehmann, Head of Enterprise Policy at the IoD and author of the report, said: “Given the on-going troubles in Europe, it is perhaps not surprising that exporters are looking to emerging markets for growth. Expansion into new markets is critical if the UK is to address its truly alarming trade deficit. Policy-making should focus first on encouraging those firms for which export activity is only a small part of their business to expand to greater levels.”

Margot James MP, Chair of the APPG on Trade and Investment, said: “I’m delighted that the APPG and the IoD are able to contribute to the debate around Britain’s international trade activity and pleased by the positive conclusions in this report. Growing exports is fundamental to the success of the government strategy of re-balancing the economy, and it is our job to help remove the barriers facing exporters whilst also working to encourage more of our world class British businesses to take their products and services abroad.”

|International Trade News|