How patents can help agri-tech companies explore new markets

IP and agri-tech

 

The UK is a hub for agri-tech innovation. The 2020 Agriculture Act incentivises farmers and land owners to improve environmental quality, boost productivity and maximise the potential of the land to produce high quality food more sustainably. In April this year, the UK Agri-Tech Centre was launched to broaden access to agri-tech opportunities, drive development and business growth and help the sector reach greater heights.

 

In a recent article, Keith Packer (Managing Director of British Sugar) noted that in one area – sugar beet – advances in technology and breeding have increased agricultural productivity in the UK four-fold in the past century. “By adapting and embracing new technologies, we know we can deliver increased food security and more green growth,” he wrote.

 

Much of agri-tech innovation can be protected by patents or other IP rights (such as design rights and, in certain countries, utility models). According to data published by the World Intellectual Property Organization (WIPO) in 2024, there were nearly 730,000 agri-tech-related patent and utility model applications worldwide in the five years from 2017 to 2021, with a peak of 165,621 in 2020.

 

Another WIPO report, published in September 2024, found that investment in agrifood technology (comprising both agri-tech and food tech) increased from $3 billion in 2012 to almost $30 billion in 2022. The report stated that most of this growth came in agri-tech, driven especially by increasing interest in agricultural automation and Internet of Things technologies.

 

 

Obtaining a patent

 

Patents offer a number of benefits to agri-tech companies, particularly small and medium-sized companies, start-ups and individual entrepreneurs. They provide a legally enforceable and recognised right to stop others from using, making or selling an invention without authorisation for a period of 20 years. They also provide reassurance to investors and business partners, and they are an asset that can be sold, licensed or even used to raise finance.

 

While national patent laws vary, there are four main requirements for patentability: the invention must be new (novelty); it must be non-obvious (inventive step); it must be industrially applicable; and it must be fully disclosed in the patent application.

 

Apart from a very small number of exceptions, any invention can be patented – from a new genetic engineering tool to a satellite-based monitoring system – provided these criteria are met. (Utility models are a different form of IP right available in some countries, such as Germany and China, but not the UK. They have a lower threshold for examination and a shorter term compared to patents and consequently are of less interest to most companies and investors.)

 

Patents are generally examined, granted and enforced nationally, which can make international patenting expensive and burdensome. However, there are some opportunities to extend protection more cost-effectively. A European patent provides a means to obtain a bundle of national rights covering up to 45 countries including the UK. The new Unitary Patent (launched in June 2023) provides a single right covering 18 EU Member States, which can be enforced in the new Unified Patent Court. Though the UK is not part of the Unitary Patent system, qualified patent attorneys in the UK can advise and represent clients in relation to all its aspects.

 

There are also tools that facilitate protection worldwide, enabling costs to be managed and ensuring that future patent applications in other jurisdictions benefit from the priority date of the first one. For example, the Patent Cooperation Treaty covers 158 contracting states (the newest one, Urugay, joins the system on 7 January 2025).

 

Reaching new markets

 

While most businesses focus on their own country initially, many innovations are likely to have potential applications in other markets too. This is particularly so in agri-tech given that agriculture is a universal industry. Many innovations will have an impact even though climate, soil and crops vary from one region to another.

 

It is important therefore to think at an early stage about securing patent protection in key markets. Even if you have no plans to manufacture or sell in a particular country or region, a granted patent enables you to obtain revenue by licensing your technology to third parties and to obtain leverage in negotiations with joint venture partners or competitors. Licensing to a specialist manufacturer or a company that has a strong market position can often be more lucrative and lower risk than entering a new market directly.

Revenues can also be earned by licensing patents to businesses in areas that a company is not itself active in.

 

Impact of patents

 

All agri-tech businesses should consider the benefits of patent protection to protect their competitive advantage, create new business opportunities and make the most of benefits such as tax incentives (for example the Patent Box and R&D tax credits in the UK).

 

Research conducted by the European Patent Office and EU Intellectual Property Office has found strong links between ownership of IP rights and commercial success. A study published in 2021 showed that firms that own patents have on average 36% higher revenue per employee than firms that do not. They also pay on average 53% higher wages.

 

As farmers look to innovation to boost productivity and sustainability, and with the government keen to sign more free-trade deals with countries all round the world, now is a golden period for the UK agri-tech sector. Strategic use of patents will help agri-tech businesses to make the most of the opportunities available and reap the benefits of their significant investment in R&D.