What is a patent for?

Patents are designed to help you stop a competitor using new and inventive technology you have created without permission. You file a patent application explaining the new technology and claiming specifically which aspect(s) of it you wish to protect. This is examined by the patent office to see if the technology is patentable. If granted, the patent then gives you a limited time monopoly (usually 20 years from filing) over the claimed technology. To get a granted patent, the patent office must find the claimed technology to be new and inventive over anything already in the public domain. The patent application is also published.

Can you patent fintech?

In the UK and Europe, as long as the technology solves a “technical” rather than “business” or “administrative” problem, you should be able to obtain a patent if the technology is new and inventive. So, for example, new fintech solving a technical problem such as improved data processing efficiency, an improved interactive user interface or improved cyber security may well be patentable. On the other hand, new fintech which purely solves a business problem, such as a better automated investment portfolio selection, will not be patentable.

What the benefits of patents?

Protecting your business: patents can help you stop competitors copying innovative technology in your products. They can also perform a defensive function: you having patents can reduce the risk of patent-holding competitors trying to assert their patents against you (in case you respond in kind).

Helping secure investment: potential investors often see patents as an additional asset to your business, especially if they cover a unique and useful feature of your product.

Patent Box

If your company pays UK corporation tax on profits from exploiting patented inventions (for example, by selling a patent product), there is the potential to reduce the corporation tax rate to 10% (from the current main rate of 25%) using the UK’s Patent Box scheme. According to analysis from HM Revenue and Customs (HMRC), an estimated 1,600 companies in the UK saved a total of £1.469 billion in the 2022-2023 tax year using the Patent Box. On average, this represents a single year tax saving of almost £1 million per company. Given the cost of obtaining and maintaining a granted patent over its lifetime is typically in the tens of thousands of pounds, this represents a significant potential return on investment.

Useful links

• UK Government guidance, “Use the Patent Box to reduce your Corporation Tax on profits”: www.gov.uk/guidance
• HMRC Patent Box relief statistics, September 2024: www.gov.uk/government/statistics