What IP Do You Need For Settlement In The UK On An Innovator Founder Visa?

If you are a non-UK looking to set up your business in the UK, you should apply for an innovation visa. This is now the primary route for foreign nationals to start up an innovative new business in the UK and since April 2023 it has replaced the previous entrepreneur visa.

If granted, you can reside in the UK with family members for an initial three years and then apply to extend your stay for a further three years or apply to settle permanently in the UK. Each of these three stages (the initial application, further three-year extension and settlement application) require endorsement (a kind of certification) from an endorsing body (click for the current list of bodies).

1. How do I get an Innovation Visa?

In broad terms, to qualify for this visa, your new business must be:

• Innovative: This means there is a clear and compelling USP (unique selling proposition) not easily replicable by others or there must exist barriers preventing others from entering the same market. A new product, service or technology must be developed within the business (not outsourced) as part of R&D activities and there must be a clear programme for commercialisation;
• Viable: Meaning you have a realistic and achievable business plan based on your available resources, which is demonstrated by funding and research into demand, pricing and other factors, etc. You have sufficient skills, expertise and knowledge; and
• Scalable: Meaning there is scope for growth into national and international markets and potential job creation. You have market research demonstrating a demand for the product / service or the existence of a new market. There is a clear plan showing how production and sales can be scaled to serve this expansion.

2. How do I get settlement based on the Intellectual Property (“IP”) criterion?

To apply for settlement, you must satisfy at least two of the seven “Success criteria” (click for the full list of criteria), one of which relates to IP.

Assuming the business can only satisfy one of the other six criteria, you may want to base your application on the IP criterion, which we discuss in this article.

The IP criterion states:

“the business has engaged in significant research and development activity and has applied for intellectual property protection in the UK”

This is a two-part test, requiring 1. substantial R&D and 2. an application for IP protection in the UK are required. Therefore, a trade mark application alone would not be sufficient.

3. First limb of the IP Criterion : What types of IP are eligible?

Registrable IP

The reference to “an application” in the UK suggests that registrable IP is required, although this appears not to be strictly applied in the case of non-patentable IP.

It should be noted that only an application is required. It is not necessary to have secured registration.

Copyright

Unregistrable IP, such as copyright, seems not to qualify (subject to the comments on non-patentable IP below).

Trade marks

Without any significant scientific R&D (not simply market/consumer research), it seems unlikely that more artistic registrable IP (such as trade marks consisting of a branding style, logos, get up, design of products and their packaging) will fulfil the IP criterion.

Registered Designs

In addition, an application for a registered design may be acceptable, where the technology employed in the design makes a genuine advance in the relevant field, even though it is insufficient to obtain a patent. This might include a new design that is not an invention and does not dictate how the product works, but is registrable as a design in the UK.

A Home Office example of an acceptable IP protection is:

Registering a design patent for a shoe where the design incorporates advances in ergonomic performance supported by scientific trials such as peer-reviewed control trials.

(Note that a “design patent” is a US right, similar to registered design protection in the UK. The terms are interchangeable as both forms of IP protect the aesthetic appearance of a product.)

An unacceptable one is:

Registering for IP protection for a shoe design where development is purely artistic (no significant research and development activity associated), it should be noted that purely “customer research” surveying on styling will not be sufficient in meeting the bar.

These examples illustrate the emphasis on the R&D element of the IP criterion and the need for scientific innovation or advancement in the relevant science. A new and novel product design or a branding style or way of doing business appears to be insufficient. The key is the additional advancement the R&D provides, which is reflected in the creation of IP.

Patents

Patents are the form of IP most likely to reward innovation through significant R&D and new product / process development). Therefore, a patent application will be the easiest form of IP to fulfil both elements of this IP criterion.

As a result, Home Office guidance on what forms of IP qualify (click) focusses mainly on patents, as well as what it calls “non-patentable IP”.

For instance, according to this guidance, this scenario would qualify:

Filing of patent for a new battery technology with evidence of verified and demonstrated new developments advancing the underpinning science in this field.

The guidance recognises that some IP is not patentable and, provided a new product or service has been developed through genuine and credible R&D, in certain cases the lack of patent application appears not to be fatal (see below).

What is non-patentable IP?

Non-patentable IP (usually excluded from patent protection for public policy reasons) includes the following:

• scientific theories or mathematical methods
• a discovery per se that has no practical application or cannot be commercialised
• literary, dramatic, musical or artistic works
• schemes, rules or methods for performing a mental act, doing business or playing a game
• methods of medical treatment, therapy or diagnosis
• ways in which information is presented
• software that has a ‘non-technical’ purpose or effect

4. Second limb of the IP Criterion: What is significant R&D?

In short, the Home Office expects to see “significant R&D” resulting in an innovative new product or service.

As observed above, innovation that results in patent protection being sought and obtained is largely a direct result of significant R&D. As a result, it is likely that most applications for settlement using the IP criterion will be based on a patent application.

To be patentable, an invention must be:

• new (it must not have been made public or published by someone before);
• involve an inventive step (for instance, not an obvious development of something already known); and
• be capable of commercial realisation.

Therefore, if a founder has gone to the expense of filing a patent application, it is generally going to be the result of significant R&D having been carried out.

5. What if I can’t get patent protection (Non-patentable IP)?

The guidance suggests that where a new product or service has been developed through genuine and credible R&D, despite the fact that the underlying IP cannot be patented, the R&D criterion can be met if you can show all of the following:

1. You have undertaken significant research and development within the creation of the development you wish to rely upon, e.g., laboratory research followed by control trials;
2. There is evidence of credible peer-reviewed research outputs evidenced in credible peer-reviewed academic or industry journals showing that you or your company are responsible for the discovery/ advancement you wish to rely on in the specific scientific area; and
3. You have commercialised your technology for your business.

The element that underpins these conditions is that the significant R&D must have resulted in advancement in the specific scientific field, which has been viably commercialised. This suggests that, in the case of non-patentable IP, provided the above three factors are met, settlement can still be obtained, despite the lack of an IP application.

The guidance gives two examples of non-patentable IP (acceptable and not acceptable):

Acceptable:

A company has developed a new testing technology for early-stage diagnosis of a cancer and they intend to sell testing kits to public and private healthcare providers worldwide. They can show that they have been first to publish on the new technology in a prestigious medical journal and the endorsing body has verified that the company has engaged in sustained lab research and testing to develop the product and demonstrate that it works.

The pivotal aspect is the development of significant new primary research or advances within the science.

Research that is primarily conducted through secondary research by way of a review of existing research results or published literature will not meet the R&D requirement.

For instance, this second unacceptable example:

A company has created a new manual for the provision of a sports recovery training programme. Whilst the manual brings together a number of different sports science practices under a new “brand identity” with a manual that has been copyrighted, it does not in itself involve the development of significant new primary research or advances in any of the underlying science. Research is limited to secondary research by way of literature reviews and the merger of techniques the applicant has learned when attending a couple of professional courses. Beyond the copyright there is no wider Intellectual property associated to the business.

It is difficult to predict how copyright (as non-patentable IP) is treated where the above three factors are present, say in the R&D and commercialisation of a new coding language that has commercial applications, for instance, one that drives and controls a novel system to be applied in the medical field to detect diseases.
There could be significant R&D within its creation and testing/evaluation, the findings of such R&D could be published in a reputable scientific journal and its application could then be commercialised. This could be an example of unregistrable copyright (specifically the written computer code), that could be used to fulfil this IP criterion under the heading of non-patentable technology.

“Novelty-destroying” disclosures

To be patentable, an invention must be “new”, in the sense that prior to filing the patent application at the UK IPO, it must never have been made public in any way anywhere in the world.

Therefore, any discussions or correspondence about your patentable invention with anyone including your endorsing body should be marked “private and confidential”.

If you think you have created a patentable invention, it is therefore highly advisable that you seek specialised legal advice regarding the disclosure of your invention and its patentability.

6. What if the IP is shared between two applicants, i.e. co-founders?

In the majority of cases, there will be a single founding innovator. However, what is the situation if there are co-founders?

Home Office guidance states that for innovator teams the same IP cannot be relied upon by multiple migrants. Where IP is used in two applications within the same business, each must be able to demonstrate clearly different R&D projects leading to the development of a further product.

Each product relied upon must have required significant R&D in its own right and not simply represent a subcomponent of a larger filling relied upon by another team member.

Therefore, it seems that if co-founders employ significant R&D to create a single innovative product, process or service, they cannot both use this activity as a basis for individual applications for settlement. It cannot be shared. Separate and distinct R&D needs to be carried out, resulting in two new inventions underpinning two new products or services.

How can we help?

We can:

• apply for intellectual property protection for your innovation as well as advising on registrability;
• guide you on the type and extent of R&D that needs to be carried out to reach the threshold for significant R&D, as well as advise on the form of IP required;
• assist and advise on early-stage investment rounds and venture capital transactions, and help you to apply for SEIS and EIS advance assurance and relief in relation to your new business or start-up concept; and
• apply for British citizenship, business visitor, innovation and investor vistas, and liaise with the endorsing body to facilitate your settlement application and assist with any of your immigration needs.

If you are a new client and would like a free 20-minute no-obligation intro call to discuss any of our services or to receive a fee estimate, do call or email us using our contact form.

This article is intended for general information only, applies to the law at the time of publication, is not specific to the facts of your case and is not intended to be a replacement for legal advice. It is recommended that specific professional advice is sought before relying on any of the information given. © Jonathan Lea Limited.