Could you benefit from the patent box?
Businesses do not always apply to patent their inventions. They may consider the cost to be prohibitive and trust their ability to keep the invention secret. Alternatively, they may consider technological developments in their sector to be so fast moving that there is no point in patenting. Or reliance may be placed on other intellectual property rights, such as copyright (common in the software industry). Many businesses may not even appreciate that they have created a patent or process that is potentially patentable. As a result, the UK ‘underpatents’. The advent of the patent box — which came into effect last April but has so far had a low profile — should prompt a re-think. Even if the commercial benefits of patenting may be marginal, the tax break should incentivise businesses to start patenting. It is important to emphasise that the invention need not be world changing — a new generation of smartphone, for instance, or a pharmaceutical wonderdrug. A new brew basket for an espresso machine, for instance, might be eligible, or the process for creating a new type of drink.
The patent box enables companies with qualifying patents to tax the profits arising from those patents at an elective reduced corporation tax rate of 10 per cent. The regime is being phased in so that the full reduction will not be available until 2017. Until then, companies seeking the reduction must apply an appropriate percentage to the profits earned from patented inventions at a transitional rate. For the period 1 April 2014 to 31 March 2015, the rate is 70 per cent; it will be 80 per cent from 1 April 2015 to 31 March 2016.
To be eligible, the company must own or exclusively license-in patents granted by the UK Intellectual Property Office, the European Patent Office or the following countries in the European Economic Area: Austria, Bulgaria, the Czech Republic, Denmark, Estonia, Finland, Germany, Hungary, Poland, Portugal, Romania, Slovakia, Sweden…
If you are registered and logged in to the site, click on the link below to read the rest of the Walker Morris briefing. If not, please register or sign in with your details below.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from Walker Morris
News from The Lawyer
Briefings from Walker Morris
The Court of Justice of the European Union has ruled that the one-off provision of incorrect information to a consumer is a ‘misleading commercial practice’.
From 1 October this year, landlords who let English properties will have to be wary of a change to the law introduced by the Deregulation Act 2015.
Analysis from The Lawyer
Which firms are cutting it in this era of slimline rosters, and who are the GC new brooms making clean sweeps? The Lawyer can reveal all
The law school war shows no signs of ending. But we have, perhaps, reached the end of the beginning.