"As an intellectual property lawyer, I should love to see the UK become a science and technology superpower with vibrant creative industries attracting investment and expertise from around the world. I just can't see how it is going to happen,"
I read the UK Innovation Strategy very carefully in the hope that it would explain how the UK will become a science and tech superpower in 9 years.
Synopsis
The document is 116 pages long divided as follow:
- Secretary of State's Foreword (pages 4-5);
- "At a glance": a bulleted list of the steps that the government proposes to take (page 6);
- "Introduction: Why do we need an Innovation Strategy?": a summary of the strategy (pages 7 - 10);
- Part 1 "Innovation today" covering "What is innovation?", "Why is innovation important?", "The challenge: Innovation created the modern world, but progress is slowing" and "The opportunity: The UK is ideally placed to lead a renewed global spirit of innovation" (pages 11 to 17);
- Part 2 " Innovation tomorrow" covering "Learning from the pandemic to create the world’s best innovation ecosystem", "Vision 2035: The UK as a global hub for innovation" and "Tracking progress towards our vision" (pages 18 - 21);
- Part 3: "Achieving Vision 2035" covering "Pillar 1: Unleashing Business – We will fuel businesses who want to innovate", "Pillar 2: People – We will make the UK the most exciting place for innovation talent", "Pillar 3: Institutions & Places – We will ensure our research, development & innovation institutions serve the needs of businesses and places across the UK" and "Pillar 4: Missions & Technologies – We will stimulate innovation to tackle major challenges faced by the UK and the world and drive capability in key technologies! (pages 18 - 100);
- Part 4: "Achieving our ambitions – implementation and next steps" (pages 101 - 107);
- Annex A "Innovation institutions" (pages 108 - 113) and
- Annex B: "List of Stakeholders Consulted" (pages 114 and 115).
"The Prime Minister has announced our intention to be a science superpower by 2030, placing science, innovation and technology at the heart of his vision for the UK. This involves being to science and technology what we are to finance: a central hub of the global economy, and the country that the world’s most innovative people and firms make their home."
Although there are signs that it has lost some business to Amsterdam, Dublin, Frankfurt, Madrid, Milan and Paris as a result of the UK's departure from the European Union, London remains one of the world's leading financial centres rivalled only by New York, Shanghai, Hong Kong and Singapore (see The Global Financial Centres Index 29 Long Finance. March 2021. Retrieved 18 March 2021).
A good measure of scientific and technical activity is the number of patent applications sought in a year. According to the World Intellectual Property Indicators for 2019 published by the World Intellectual Property Organization, applicants in China applied for more than 1.5 million parents from the world's top 20 patent offices in 2018. The United States came second with 597,141. Japan followed with 313,567 and South Korea came fourth with 209,992. Companies from those countries. Huawei, Mitsubishi, Samsung, Qualcomm and Oppo, were among the top 5 applicants. China, the USA, Japan and South Korea can fairly be regarded as scientific and technical superpowers. If the UK is to be in science and technology what it is in finance it should aspire to create a similar number of patentable inventions by 2030.
With 29,941 patent applications in the world's top 20 parent offices, the UK lay number 13th. It was ahead of Mexico but behind Taiwan, Germany, India, Russia, Canada, Australia and Brazil. If the UK is to leapfrog over all those countries to join the USA, China, Japan and South Korea as a scientific and technical superpower it has a lot of work to do.
The government acknowledges the magnitude of that task on page 18 in the section headed "The opportunity: The UK is ideally placed to lead a renewed global spirit of
innovation":
- "Business investment in R&D has fallen relative to our international peers.
- There are low rates of technology adoption by firms that lead to underutilised knowledge.
- We are at risk of a ‘brain drain’, the UK being a net exporter of talent.
- Our workforce has skills gaps in some key areas which are at risk of growing in the coming years.
- Our regulatory system often favours incumbent businesses over innovative new ones.
- Growth is increasingly due to consumption, not due to investment.
- Data, research and IP must be safeguarded to maintain competitiveness."
Learning from the Pandemic
Part 2 of the UK Innovation Strategy points to the development of the Oxford/Astra-Zenica vaccine and other medical technologies in response to the pandemic as examples of British scientific and technical prowess and indicators of the way forward to superpower status. The speed with which the Oxford/Astra-Zenica vaccine had been developed and deployed was indeed a substantial achievement despite criticism of its effectiveness and side effects and the delay in obtaining regulatory approval in the USA. However, similar success has been achieved elsewhere. China has developed 7 vaccines that have achieved regulatory approval. Russia has developed another 4. The USA another 3 although the Pfizer–BioNTech and Janssen or Johnson & Johnson were developed in collaboration with German and Dutch scientists. Two vaccines have also been developed by Cuba. Others have been developed by India, Iran, Kazakhstan and Taiwan,
- "Pillar 1: Unleashing business – We will fuel businesses who want to innovate.
- Pillar 2: People – We will make the UK the most exciting place for innovation talent.
- Pillar 3: Institutions & Places – We will ensure our research, development & innovation institutions serve the needs of businesses and places across the UK.
- Pillar 4: Missions & Technologies – We will stimulate innovation to tackle major challenges faced by the UK and the world and drive capability in key technologies."
These are amplified in "At a glance" on page 6:
"Pillar 1: Unleashing Business – We will fuel businesses who want to innovate.
- Increase annual public investment on R&D to a record £22 billion.
- Reduce complexity for innovative companies by developing an online finance and innovation hub between Innovate UK and the British Business Bank.
- Invest £200 million through the British Business Bank’s Life Sciences Investment Programme to target the growth-stage funding gap faced by UK life science companies.
- Consult on how regulation can ensure that the UK is well-placed to extract the best value from innovation.
- Form a new Business Innovation Forum to drive implementation of this Strategy.
- Introduce new High Potential Individual and Scale-up visa routes, and revitalise the Innovator route to attract and retain high-skilled, globally mobile innovation talent.
- Support, through Help to Grow: Management, 30,000 senior managers of small and medium-sized firms to boost their business’ performance, resilience, and growth.
Pillar 2: People – We will make the UK the most exciting place for innovation talent.
Pillar 3: Institutions & Places – We will ensure our research, development and innovation institutions serve the needs of businesses and places across the UK.
- Undertake an independent review, led by Nobel Laureate Professor Sir Paul Nurse, Director of the Francis Crick Institute, looking across the landscape of UK organisations undertaking all forms of research, development and innovation.
- Allocate £127 million through the Strength in Places Fund to develop R&D capacity and support local growth across the UK.
- Invest £25 million of funding to the Connecting Capability Fund to help drive economic growth through university-business innovation.
Pillar 4: Missions & Technologies – We will stimulate innovation to tackle major challenges faced by the UK and the world and drive capability in key technologies.
- Establish a new Innovation Missions programme to tackle some of the most significant issues confronting the UK and the world in the coming years.
- Identify the key seven technology families that will transform our economy in the future.
- Launch new Prosperity Partnerships to establish business-led research projects to develop transformational new technologies, with £59 million of industry, university and government investment."
Those "pillars" are addressed in more detail in Part 3 and repeated for good measure in Part IV.
Intellectual Property
One of the reasons why there are relatively few patent applications from businesses in the UK is the high cost of prosecution and enforcement.
In 2004 the European Patent Office commissioned Roland Berger Market Research to compare the cost of patenting an invention in the UK and 5 other countries with the cost of patenting it in the USA and Japan (see my article Cost of Patents: EPO Report tells us what most of us already knew 23 Dec 2005). In its Study on the Cost of Patenting Roland Berger reported that the cost of patenting an invention consisting of 10 claims on 3 pages, 11 pages of description designating 6 countries including the UK would be €30,530. The cost of patenting the same invention would be €24,100 in the USA and €5,460 in Japan. The cost of patenting in Europe may have fallen as a result of the Agreement on the application of Article 65 of the Convention on the Grant of European Patents in London (OJ EPO p 560 12 Feb 2001) but it is still believed to be higher than in the USA and Japan.
According to TaylorWessing's Patent Map. the typical costs of an infringement claim are between £200,000 and £1 million in England, €200,000 - €800,000 in France, €100,000 - €200,000 on infringement and a similar amount on validity in Germany, €75,000 - €200,000 in the Netherlands and €2,530 - €375,000 in Switzerland. The costs of litigation in the USA will be at least as much as in England because it is also a common law country but it is unusual for lawyers' fees to be awarded against the unsuccessful party. It is arguable that England is the most expensive and possibly the riskiest jurisdiction in the world in which to enforce an intellectual property right.
Governments of both parties have been aware of this problem for at least the last 20 years (see DTI Innovation Report Competing in The Global Economy: The Innovation Challenge 1 Dec 2003). They have also been aware of the solution which was an EU patent to be enforced by an EU patent court. It is for that reason that the UK ratified the Community Patent Convention in 1975. It supported proposals for a Litigation Protocol to the European Patent Convention, a regulation for an EU patent and later the agreement for a unitary patent. Even after the 2016 referendum, the government believed it would be possible to remain party to the agreement. Mr Boris Johnspn in his capacity as Foreign Secretary actually deposited the UK's instrument of ratification on 26 April 2018. Sadly, Amanda Solway MP gave notice of British withdrawal from the Unified Patent Court Agreement just over a year ago (see UK Withdrawal from the UPCA 20 July 2020).
As I argued in Has the Volte-Face on the Unified Patent Court Agreement been worth it? in NIPC Brexit on 6 April 2021 and in other articles, the sudden reversal by Amanda Solway of a longstanding policy on a unitary patent did British industry and science no favours. It has perpetuated the disincentive to patent in this country. Without adequate legal protection for innovation, investment in research and development can be expected to diminish.
The government might have been expected to respond that withdrawal from the Unified Patent Court Agreement was a necessary consequence of Brexit and that losses resulting from withdrawing from Europe will be more than offset by new opportunities elsewhere. I looked carefully to see whether that was the case but I found nothing in the UK Innovation Strategy to suggest that it was. Though the Intellectual Property Office published a press release on 29 July 2021 promising that IP was at the heart of the new innovation strategy, there is very mention of IP at all. The word "patent" occurs twice in the document's 116 pages and there are a few paragraphs under the heading "Safeguarding Intellectual Property" on pages 39 and 40. There is nothing in those paragraphs on reducing the cost of patenting or the cost of enforcing intellectual property rights.
I am not the only commentator to spot that lacuna. Graeme Moore wrote in his comment New Innovation Strategy for the UK for The Patent Lawyer Magazine:
"However, there is a major factor that the UK government’s announcement fails to address satisfactorily – how to better protect the innovations developed in the UK from being copied and exploited by other companies who have not invested in the innovations? This should be at the forefront of the UK government’s mind when committing to spend UK taxpayers’ money on R&D – it’s a key part of ensuring a return on investment."
Conclusion
There are announcements to be welcomed in the Strategy such as the spending promises in Piller 1 and the "new High Potential Individual and Scale-up visa routes" in Pillar 2. But the idea that British companies will be competing with the likes of Huawei, Mitsubishi and Samsung in such fields as artificial intelligence, mobile telecoms, consumer electronics or any other new technology is as fanciful as the garden bridge, an airport in the Thames estuary and a bridge to Northern Ireland.
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