2017 Federal Budget – A Possible Boon for New Patentees

Marc LampertExpert Insights, News, Patents

As the Trudeau Liberal government prepares to present its first Federal budget in 2017, there are forecasts that an emphasis of the budget will be on promoting innovation.  One such forecasted proposal includes creating an incentivized patent program. Importantly for innovators, if implemented as forecasted, this program is projected to subsidize the expenses incurred by small and medium-sized business in obtaining a first patent.

Currently, the specifics of the potential patent subsidy are unclear. However, it would appear that the Federal government would be looking to emulate at least some aspects of the patent box tax break, implemented provincially this year by the Quebec government, at a Federal level. Under the Quebec system, income from innovation is taxed at 4 per cent, instead of at 11.8 per cent that would generally apply. Income from innovation is determined as the share of a company’s income derived from patents embodied in the products it sells. The share is determined by how much the firm spent in Quebec on research and development, including labour, in developing or acquiring the patents. In some cases, a qualifying patent does not have to have been granted, but merely applied for in any competent jurisdiction.

Accordingly, the acquisition of a first patent in the upcoming year may become extremely attractive to small and medium-sized businesses across Canada. In order to take full advantage of the opportunities presented by a possible subsidy, it is highly valuable to use a firm that is familiar and experienced with working with startups, small and medium-sized businesses to protect their innovation. BHOLE IP LAW is a boutique IP firm located in downtown Toronto, Canada and practices in all areas of IP, including developing business-minded patent strategies for startups, small and medium-sized businesses. The firm works extensively in the digital innovation space, as well as in biotech and chemical engineering. It is considered a national leader is the emerging areas of machine learning and neural networks, augmented reality hardware and software, and image processing; and further administers portfolios in sectors including energy, water treatment, cryptography, manufacturing processes, and materials. BHOLE IP LAW provides competitive fees and, importantly, takes pride in its responsive and advisory approach.

**The information provided herein is a general background of legal concepts, does not constitute legal or tax advice, and should not be relied upon as legal or tax advice. Bhole IP Law, and the author, make no express or implied representations or warranties in respect of the information, including but not limited to the accuracy of the information. Note that while Bhole IP Law is a firm of Canadian lawyers authorized to practice before the United States Patent and Trademark Office, we are not U.S. lawyers nor lawyers in any other jurisdiction. As such, other foreign counsel may need to be consulted for U.S. or foreign legal matters.**