Hong Kong as an intellectual property trading hub
For more than a decade, Hong Kong has been trying to build itself up as a regional intellectual property trading hub. Government of the HKSAR and the Hong Kong Trade Development Council has been organizing the Business of IP Asia Forum to attract IP professionals from all over the world to share updates on the IP laws and practice as well as to explore collaboration opportunities. The 12th Business of Asia IP Forum was held in December 2023.
To further enhance this initiative, consultations on patent law and practice had been going on for a number of years with the focus on modernization and competitiveness. Finally, in 2019 the original grant patent system for standard patents, the refined short-term patent system and interim regulatory measure of prohibiting use of certain confusing or misleading titles and descriptions relating to patent practice in the Hong Kong SAR were implemented. Maximum protection for patent here in Hong Kong is 20 years. The first standard patent was granted in 2021, within 14 months after the application of the relevant patent. Intellectual property protection now covers copyright, trademark, design and patent.
There is a plan to strengthen the patent office by employing more patent examiners and creating a talent pool to help HK gradually conduct more substantive patent examinations by 2030. An amount of HK$10 million was allocated in the 2023-2024 budget for this purpose.
“Patent Box’ Tax Incentive will be introduced and a bill to amend the Inland Revenue Ordinance (Cap 112) is expected to be tabled to the Legislative Council in the first part of 2024. The Tax Incentive aims to:
- encourage HK businesses to increase investment in research & development (R&D) activities;
- to commercialise the R&D results with a view to creating more profits;
- to ensure that inventions are protected through patents and related IP assets;
- ensure that HK is competitive enough that patents and all eligible IP assets are not attracted to be relocated to other jurisdictions.
Assessable profits derived in Hong Kong from the following eligible IP assets will be entitled to the Patent Box tax benefits:
- patents;
- copyrighted software; and
- plant variety rights.
A liberal approach will be used to include applications for patents and plant variety rights granted in or outside of Hong Kong as the eligible IP assets.
If the patent is not a Hong Kong patent, application should be made for original grant patent or short-term patent in respect of the invention related to the subject patent.
It is expected the concessionary tax rate is 5%. This will definitely put Hong Kong in a more competitive position compared with other jurisdictions.
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