Intellectual property is key to UK's future

The government must pass a series of key regulations if the UK is to retain its place as a leader in developing and exploiting intellectual property (IP), according to the CBI.

The business group wants the research and development (R&D) tax credit to be extended, and serious consideration to be given to introducing a "royalty box " system - where revenues from certain areas of IP, such as drug patents, are taxed at a lower rate, encouraging investment.

Speaking at the CBI’s East of England annual dinner at AirSpace in Duxford in Cambridge last night, CBI president Helen Alexander said the development and exploitation of IP will play an important role in the UK’s economic recovery.

“We want to see future tax changes have to pass a test, which is: Will it make the UK a more attractive place for businesses to invest in, develop and exploit IP?," she said.

"We must have a stable and competitive tax framework if we’re to incentivise IP development and exploitation. Change and uncertainty undermine the confidence of those making long-term investment decisions."

The UK's current R&D tax credit scheme works well, but other countries are fast catching up, said Alexander.

“The US has recently decided that its R&D tax credit is such an important part of its business landscape that it will make the credit permanent. Competing with the US is never easy, and so any plans to remove the UK’s R&D tax credit should be rejected out of hand as dangerously short-sighted," she said.

Other CBI proposals to ensure the UK is a world-leader in IP include:

• Giving the Intellectual Property Office (IPO) a single, clear mission to act as a “champion for IP-intensive companies” across government.
• The IP architecture for patents, copyright, designs and trademarks must be made “fit for purpose” for all businesses in the global economy. This will require specific actions such as the introduction of a community patent within the European Union.
• The quality and quantity of graduates, particularly with science, technology, engineering and maths skills, must be increased as a matter of urgency, and the government should take more steps to improve collaboration between universities and business co-ordinated by the IPO.
• The government must take action to ensure a supply of venture capital funding to IP-intensive startup companies.

Commenting on the release of the report David Lammy IP Minister said:

"The UK Government is committed to ensuring that the system remains relevant and a stimulus to innovation. I want to see the creation of the right kind of environment for businesses to flourish to promote sustained investment and employment."

More details will feature in a further CBI report to be launched later this month, called Ripe for success: making the UK the place to develop and exploit IP.