Glasshouse Advisory’s R&D Tax and EMDG practices have transferred to leading independent assurance, tax and advisory firm, Grant Thornton.
Different State and Federal Government funding programs take different approaches to helping to finance IP costs.
The EMDG program assists small to medium sized Australian businesses by reimbursing up to 50% of eligible costs associated with the development of export opportunities. Businesses can access a total of eight grants, up to a maximum of $1.2 million of total grant funding, or up to $150,000 per grant.
The costs of registration and/or insurance of eligible IP in overseas jurisdictions can be claimed under the program, up to a cap of $50,000.
To claim IP costs, an applicant must be able to demonstrate that the IP was actively marketed overseas during the grant period. This might be in the form of email correspondence with potential buyers/licensees, meeting notes, emails with organisations directly connected to overseas licencing/marketing activities, etc. You do not have to have been initially successful in selling or licencing your IP to receive the grant.
As the EMDG program runs on a cash basis, the timing of the payment of your patent expenses is important. It requires that the amounts in relation to IP expenses are paid by the business before the end of the financial year to be eligible for the next grant period.
The Federal Government’s R&D Tax Incentive program provides up to a 43.5% cash offset on costs incurred on eligible R&D activities. Under the program, there are two categories of activities that are eligible for a tax offset - core R&D activities and supporting R&D activities.
‘Commercial, legal and administrative aspects of patenting, licensing or other activities’ are specifically excluded from being core R&D activities but can be considered supporting R&D activities where they are undertaken for the dominant purpose of supporting the core R&D.
There are many purposes for which a business may seek patent protection, including:
To determine what the dominant purpose was for patenting, you need to consider all the reasons you had for filing a patent. If the most important reason for seeking the patent was to support the ongoing R&D activities, the patent costs may be claimable.
From time to time, both Federal and State Governments offer grant funding programs that cover the reasonable costs of securing IP protection. Such programs typically align with a government’s specific policy objectives such as advanced manufacturing or biotechnology. The availability of such programs varies.
If you would like to discuss the potential to access funding in relation to the costs of protecting your IP, please get in touch with one of our experts.