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LimeGreenIP News

UK Treasury to get a grip on public sector IP

Just before Christmas the UK government announced the launch of a study looking at how the public sector’s strong record of developing valuable technology can benefit as many people as possible. This is the government’s first step in taking forward the plans set out in its October 2018 report – “Getting smart about intellectual property and other intangibles in the public sector”. The report, published as a supplementary report to the 2018 Budget on 29 October, sets out how the government is looking to “get a better financial, economic and social return” on its “knowledge assets” (“KAs“) including patents, brands, software, data, expertise and organisational know-how. Examples given include novel cybersecurity products and a new test for detecting Ebola.

The government’s KAs are currently valued at £34.5 billion or 2% of total public sector assets in 2017. However, the report suggests that this could be a huge undervaluation with the real value at around £150 billion. These assets, the report suggests, could be generating around £5 billion in financial, economic and social benefits per year if properly exploited. The report sets out ten recommendations on how to overcome barriers to realising the value of public sector innovations. These include: establishing a central source of support, creating a network of experts, new approaches to valuing knowledge assets, establishing a central repository of assets and their value, registering valuable IP, publishing an annual report, designing best practice protocols, maximising the value of its data, creating effective partnerships with the private sector and creating incentives for developing knowledge assets.

The key take-away from the report is the government’s clear intention to monetise its intangible assets in a way it has not done before. This appears to be a shift in governmental thinking, perhaps towards some sort of structured licensing model with stricter control on government IP and away from the structures we have seen in the past which either failed to monetise government IP at all, or placed little control on the assets. As the ideas set out in the report are developed, government will need to be mindful of where any proposals sit within a variety of legal contexts. At present, for example, State aid rules could prevent the Government from licensing IP at below market rates (though in theory this could be changed by Brexit).

Another key point to come out of the report is the government’s intention to encourage public sector organisations to partner and contract with the private sector. This is perhaps also reflected in the government’s intention to introduce targeted relief for the cost of intellectual property-rich acquisitions by UK companies (in Chapter 3 of the Budget). If this in fact materialises, opportunities for private sector players are inevitable. Recommendations are by no means promises but as the government begins to better appreciate its intangible assets, IP stakeholders may want to keep one eye on the public sector.