Government grant schemes: sharing the costs of growing your IP

Have you ever had to allocate your company’s capital resources to one area of your business at the expense of another area?  Could a bit more capital to allocate to that other area of your business help your company reach its potential through growth or expansion? A government grant could be the solution.

Government Assistance

The challenge of starting up or expanding a business is a common goal for many innovative companies and entrepreneurs alike.  This challenge is predominantly dictated by the capital resources available to a company during an expansion phase.  In many cases tough and often compromised decisions must be made due to the limited capital resources.  Such decisions are often irreversible and cannot be put on hold until a later time either for strict legal reasons or simply because it provides your third party competitors with a foot in the door to gain some of your market share.  The result?  A reduction of your competitive advantage over your competitors.

Australian governments at federal and state levels recognise the challenges faced by innovative companies and offer a range of financial assistance programs to assist early stage or expanding businesses reach their potential.  The majority of the available financial assistance programs provide assistance for expenditure on a range of activities including: expanding your business, research and development, innovation and exporting.

Intellectual property funding

From our perspective as intellectual property advisors, it is pleasing to see a number of the financial assistance programs recognising the importance of securing the intellectual property of a company as a vital step in ensuring the competitive advantage of a business is maintained over its competitors.  In this regard, it is to be noted that a number of grant programs provide assistance for expenditure on registering your intellectual property rights.  This extends to companies seeking to develop an export market as financial assistance can be obtained to assist in meeting the costs associated with securing intellectual property rights (e.g. patents, trade marks, registered designs) overseas.

Grant Schemes

A brief summary of several government assistance programs is provided below.  This summary merely represents a snapshot of the available programs.   Accordingly, we would encourage all expanding businesses, from the one-man-band to SME’s to multinationals, to investigate whether or not they entitled to a government grant for their business activities, noting that a single project or business unit may meet the requirements.  You may be pleasantly surprised.

(a)   Commercialisation Australia

Commercialisation Australia is an initiative of the Australian Government.  It is a competitive, merit-based assistance program offering funding and resources to accelerate the business building process for Australian companies, entrepreneurs, researchers and inventors.  It offers a range of funding options as well as multi-layered networking opportunities to help you achieve business success. There are several flexible funding options available to suit your stage of commercialisation, including:

  • Skills and Knowledge – up to $50,000 to access specialist advice and services
  • Experienced Executives – up to $350,000 to engage a CEO or other senior executive
  • Proof of Concept – $50,000 to $250,000 to prove the commercial viability of new IP
  • Early Stage Commercialisation – $50,000 to $2 million to take a new product, service or process to market

Commercialisation Australia also offers a range of professional resources to add value to your business, including:

  • Case Managers – all Commercialisation Australia participants work with a Case Manager to assist them through the commercialisation process. The national network of Case Managers are experienced business builders and understand the challenges of commercialising new intellectual property (IP)
  • Volunteer Business Mentors – successful applicants are linked to mentors willing to share their skills and experience. The qualified mentors include entrepreneurs who have successfully commercialised IP, technology, domain and industry sector experts, and professional investors

(b)   Export Market Development Grants

The Export Market Development Grants (EMDG) scheme is a key Australian Government financial assistance program for aspiring and current exporters. Administered by Austrade, the scheme supports a wide range of industry sectors and products, including inbound tourism and the export of intellectual property and know-how outside Australia.

The EMDG scheme:

  • encourages small and medium sized Australian businesses to develop export markets
  • reimburses up to 50% of eligible export promotion expenses above $10,000 provided that the total expenses are at least $20,000
  • provides up to seven grants to each eligible applicant

To access the scheme for the first time, businesses need to have spent $20,000 over two years on eligible export marketing expenses, including the costs associated with applying for patent and trade mark protection in foreign countries.

Applications for the 2011-12 grant year will open 1 July 2012 and close 30 November 2012.

(c)   Clean Technology Program

The $1.2 billion Clean Technology Program provides incentives for business to reduce emissions and invest in clean energy through the following three components:-

  • Clean Technology Investment Program
  • Clean Technology Food and Foundries Investment Program
  • Clean Technology Innovation Program

(d)   R&D Tax Incentive

The R&D Tax Incentive provides a targeted tax offset designed to encourage more companies to engage in research and development in Australia. The R&D Tax Incentive applies to research and development activities and expenditure in income years commencing on or after 1 July 2011. The R&D Tax Incentive has two core components:-

  • a 45 per cent refundable tax offset (equivalent to a 150 per cent deduction) to eligible entities with an aggregated turnover of less than $20 million per annum
  • a non-refundable 40 per cent tax offset (equivalent to 133 per cent deduction) to all other eligible entities

Applications for registration of activities undertaken in the 2011-12 income year will open on 1 July 2012. Further information on these and other assistance programs is available from Commercialisation Australia and AusIndustry.

How to apply

There are specialist advisors who assist companies in identifying if a grant program is available for their business activities. These advisors are experienced in preparing applications for the government grant programs and know the keys to preparing a thorough and persuasive application, offering the best chance of success. If you would like to investigate whether your company is eligible for a government grant, we would be happy to refer you to an experienced grant advisor.