Productivity and Innovation Credit (PIC) Scheme now covers costs incurred in certain IPOS proceedings

Under the PIC Scheme as it currently stands:

• Eligible business entities registered in Singapore enjoy 400% tax deductions/allowances for qualifying expenditure incurred in any of Six Qualifying Activities from the Years of Assessment (YAs) 2011 to 2018.
• For YA 2013 to YA 2018 (after which the PIC scheme will lapse), eligible businesses can also exercise an irrevocable option to convert qualifying expenditure of up to $100,000 for each YA into cash.  For qualifying expenditure incurred on or after 1 Aug 2016, the cash payout conversion rate will be reduced from 60% to 40%. 

The Six Qualifying Activities include, in particular, registration of patents, trade marks, designs and plant varieties. Under this head, businesses were allowed to claim the tax reliefs and cash payouts for costs incurred in the filing of applications to register their IP and prosecuting the applications to grant.

However, apart from merely filing and prosecuting the applications, a business may be required to institute or defend proceedings before the relevant Registry in order to secure protection for its IP.  

Take, for example, a trade mark application: 

• If the Examiner considers the application mark to conflict with an earlier mark, she may cite the earlier mark against the application.  If the applicant is unable to overcome the citation by way of arguments, it may wish to start opposition or invalidation proceedings against the earlier mark, for the earlier mark to be removed from the register.
• Further, assuming the application is accepted by the Examiner, it will be published for opposition. If opposition proceedings are brought against the application, it will be necessary for the applicant to defend the opposition proceedings. The application will proceed to grant only if he is successful in doing so.

Accordingly, the costs incurred in these proceedings could also rightfully be regarded part of the costs for obtaining registration of IP.

In line with this thinking, the Intellectual Property Office of Singapore (IPOS) recently announced that the PIC scheme will now also cover costs incurred in certain IPOS proceedings including, for example, trade mark oppositions, invalidations and revocations in attempts to overcome citations by the Registrar, defending the trade mark application in an opposition after acceptance, ex parte hearings. IPOS's notice did not expressly mention patent, design and plant varieties proceedings, but these are likely to also be covered seeing as the PIC scheme also covers these other types of IP.

The PIC scheme will not cover costs incurred for proceedings that a business was party to either prior to the application for registration of its IP, or after the application has proceeded to registration or has been refused by the Registrar. Accordingly, the understanding is that the starting or defending of proceedings must be connected to the process for registering the IP.