Reducing Corporation Tax Using Intellectual Property

December 05, 2012

April 2013 sees the introduction of a ‘Patent Box’ in the UK that will enable companies to apply a lower rate of Corporation Tax (10 %) to profits earned from their patented inventions. In this article we look at what intellectual property is included within the Patent Box and what companies will qualify for this new tax scheme.

A company will be able to benefit from the Patent Box if the company owns or has exclusive license to a patent granted by the: • UK Intellectual Property Office • European Patent Office • following countries in the European Economic Area: Austria, Bulgaria, Czech Republic, Denmark, Estonia, Finland, Germany, Hungary, Poland, Portugal, Romania, Slovakia, and Sweden. In addition to patents, the Patent Box shall also cover Supplementary Protection Certificates (SPC’s), Regulatory Data Protection and Plant Variety Rights. A company will be entitled to benefit from the Patent Box if it is liable to pay Corporation Tax and makes a profit from exploiting patented inventions. The company must also own the patent and have undertaken qualifying development by making a significant contribution to either the creation or development of the patented invention, or a product incorporating the patented invention. If your company holds licenses to use others' technology it may still be able to benefit from the Patent Box. However, the company must have: • rights to develop, exploit and defend rights in the patented invention • one or more rights to the exclusion of all other persons (including the licensor) • exclusivity throughout at least an entire national territory • the ability to bring infringement proceedings to defend its rights or be entitled to most of the damages awarded in successful proceedings relating to its rights. Here at Swindell and Pearson Ltd, we are experienced at preparing, filing and prosecuting patent applications and will be able to help you take advantage of the Patent Box. If your company has an existing portfolio of patents, we can help you determine which of your products are covered by your patents. If you are thinking of filing a patent application but are concerned about the timescales in obtaining grant of the patent, rest assured that we are experienced in accelerating prosecution of patent applications. If you wish further advice in relation to the Patent Box, and/or how this could affect your patenting strategy, please contact your usual patent contact at Swindell & Pearson Ltd or Lee Thould at [email protected].

Swindell & Pearson has been helping businesses and individuals protect and defend their ideas, innovations and brands for over 130 years. With its head office in Derby, the firm also has offices in Stoke, Wolverhampton, Stafford, Sheffield and Burton. To find out how Swindell & Pearson can help you with any intellectual property requirements please get in touch via [email protected] or by telephone on 01332 367 051.