IP Advance: IP audits recommended as UK SME funding scheme outlined

Jo Alderson and James Talbot of Pinsent Masons were commenting after the UK Intellectual Property Office (IPO) announced a new scheme, ‘IP Advance’, that offers UK SMEs the chance to apply for up to £4,500 of funding towards the cost of engaging IP professionals to conduct IP audits of, and develop IP strategies for, their organisation.

Taking a holistic view of the business, an IP audit identifies what IP there is, how it is created or acquired and captured, who owns it, and what protections are in place or available for the IP. The IP professional conducting the IP audit typically provides a report summarising the findings and makes recommendations to strengthen the business’ IP processes and protections, such as applying for a trade mark or patent, improving internal processes, entering into IP assignments with previous contractors, or modifying IP provisions in its standard agreements.”

Talbot said: “Completing an IP audit is a simple way of providing a roadmap for the next steps a business should take to protect and commercialise its IP portfolio. IP audits are also useful when looking for investment in or to sell a business, as the report acts as a clear overview of the business’ IP assets which will be of interest to a potential investor or purchaser, as well as demonstrating the business’ understanding of, and investment taken to protect its, valuable IP.”

"The type and amount of funding available for IP audits had become a little unclear in recent months and so the UK IPO's launch of IP Advance is very welcome, providing growing businesses with funding to help them to get to grips with their IP and understand the value it can offer,” he said.

The ‘IP Advance’ scheme was launched by the IPO in July. It is a two-tiered funding programme whereby eligible SMEs can apply, on the one hand, for £2,250 including VAT towards an IP audit to be conducted by a qualified IP professional, and on the other hand, £2,250 including VAT for an IP professional to help them progress an IP strategy and implement recommendations set out in an IP audit report.

To receive funding for the IP audit, SMEs must contribute £750 including VAT towards the total cost of the audit. Funding for the strategy work is provided on a "matched funding" basis, so SMEs need to contribute 50% towards the costs of the services carried out by the IP professional. A business can apply for one or both tiers of funding – they do not need to have obtained funding for the audit to be eligible for funding towards the strategy work.

To qualify for funding, a business must be classed as an SME – a company with a turnover of less than £36m, a balance sheet total less than £18m and fewer than 250 employees – and will need to be enrolled at one of a select number of organisations, depending on which nation the business is based in within the UK – see table below for more information.

When assessing eligibility for funding, the organisations will look at a business' ability to implement any recommendations from the IP audit. The IPO recommends SMEs complete its IP health check prior to making a funding application.

Alderson said: “IP is a crucial part of the value and success of most businesses, whether in the innovative ideas behind your products, creative content, computer code, secret processes, confidential information or recognisable brand names. Investors and acquirers will also look at your IP assets when valuing a business, so identifying and protecting IP and formulating an IP strategy is a crucial step for any SME.”

“A business can only fully unlock the value of its IP through a clear strategy to identify, capture, protect and commercialise its IP. It is important to get your IP strategy in a good shape as early as possible in your journey and so it is great that the UK IPO can offer this financial support to SMEs,” she said.