The government policies regarding IP-backed financing vary across different countries, with some providing a conducive regulatory environment while others still face challenges in this regard. In this comparative perspective, we will discuss the policies and steps taken by China, Switzerland, UK, Jamaica, and Singapore to encourage IP-backed financing.
In China, the government has been actively promoting IP-based financing as a means of supporting innovation and entrepreneurship. The China National Intellectual Property Administration (CNIPA) launched platforms which provides IP-backed loans to small and medium-sized enterprises (SMEs). The platform allows SMEs to use their IP assets as collateral for loans, providing them with access to financing that they may not have otherwise been able to obtain.
In Switzerland, IP-backed financing is well-established, with several banks offering IP-based loans to SMEs. The Swiss Federal Institute of Intellectual Property (IPI) provides a platform for IP valuation and licensing, which helps SMEs to monetize their IP assets. Additionally, the Swiss government has established the Innovation Fund, which provides funding to SMEs that have innovative ideas or technologies. The fund can be used for a variety of purposes, including IP-based financing.
In the UK, the government has introduced several initiatives to encourage IP-backed financing. HM Revenue and Customs (HMRC) provides a ‘Patent Box’ scheme, which allows companies to reduce their corporation tax by using their patented inventions as collateral. Additionally, the HMRC has established the ‘Seed Enterprise Investment Scheme,’ which provides tax incentives for investors who invest in qualifying companies that have innovative ideas or technologies.
In Jamaica, access to IP-based financing remains limited, but the government is taking steps to establish a conducive regulatory environment. In 2013, the Security Interests in Personal Property Act was passed, which makes it easier for businesses to use IP assets as collateral for loans. Additionally, the Patents and Designs Act and the Trade Marks (Amendments) Act were enacted in 2020 and 2021, which together have established an enabling environment to facilitate the introduction of IP-backed financing instruments. The Development Bank of Jamaica has introduced initiatives to provide funding for high-potential entrepreneurs and innovations that startups and SMEs could leverage to monetize their IP.
In Singapore, IP-backed financing is well-established, with several banks offering IP-based loans to SMEs. The Intellectual Property Office of Singapore (IPOS) provides a platform for IP valuation and licensing, which helps SMEs to monetize their IP assets. Singapore has granted tax concessions to enhance the environment for holding or developing IP. Under Section 19B of the Singapore Income Tax Act, companies can claim writing down allowances on capital expenditure incurred in acquiring qualifying intellectual property rights (IPRs) for use in their trade or business.
Conclusion
While all five countries have taken steps to encourage IP-backed financing, there are some differences in their approaches. In conclusion, IP-backed financing can be an effective means of supporting innovation and entrepreneurship, and governments around the world are taking steps to encourage its adoption. By providing a conducive regulatory environment and offering support programs, governments can help SMEs to monetize their IP assets and access the financing they need to grow and succeed.