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Patent Box Services

The UK Government have introduced a Patent Box that will enable companies to apply a lower rate of Corporation Tax (eventually 10%) to worldwide profits earned after 1st April 2013 from their patented inventions. The Patent Box is an optional tax regime and a company must elect into the Patent Box to take advantage.

Here at Swindell and Pearson Ltd, we can help you maximise your benefit from the Patent Box in the following ways:

  • We can review your patent portfolio to help you determine which of your products and processes are protected by patents and are therefore eligible under the Patent Box
  • We can support your accountants as they advise you how best to make use of the Patent Box tax relief
  • We can carry out an I.P. audit to determine whether there are any patentable products or processes owned by your company. Where you have a new product or process, we can assist you by drafting a patent application for your invention
  • We can prosecute your patent application to ensure that you obtain suitable protection to utilise the Patent Box. We are also experienced at accelerating the grant of patent applications
  • We offer a renewal service to help you maintain your patents in force

F.A.Q.

Some frequently asked questions on the Patent Box:

What patents qualify?

A company can benefit from the Patent Box if it owns or exclusively licenses-in patents granted by the UK Intellectual Property Office, the European Patent Office, and the patent offices of: Austria, Bulgaria, Czech Republic, Denmark, Estonia, Finland, Germany, Hungary, Poland, Portugal, Romania, Slovakia and Sweden.

Who will qualify?

The company must be liable to pay UK Corporation Tax and be one of:

  • The proprietor of the patent
  • The exclusive licensee of the patent
  • A company that has acquired the patent
  • A company in a group of companies
  • A company who has been involved in a partnership, joint venture or a cost sharing arrangement with the proprietor

What is the 'development condition'?

The aim of the development condition is to limit the Patent Box to companies which have been properly involved in the innovation lying behind the patent or the application of the patented invention. However, if the company is in a group, another group company can satisfy the development condition. The definition of qualifying development requires:

  • creating, or significantly contributing to the creation of, the patented invention; or
  • performing a significant amount of activity to develop the patented invention, any product incorporating the patented invention, or any process incorporating the patented invention

What is the 'active ownership condition'?

In addition to the 'development condition', a company must satisfy the ‘active ownership condition’ which requires that a company must be involved in the planning and decision making activities associated with developing or exploiting substantially all of its qualifying IP portfolio. Where a company satisfies the development condition only because of the activity of a fellow group company, that company must show that it plays an active role in managing the qualifying IP rights it holds. Relevant activities include:

  • Deciding on whether to maintain protection in particular jurisdictions
  • Granting licences
  • Researching alternative applications for the innovation
  • Licensing others to research alternative applications

What are the requirements for an exclusive license?

The license must satisfy the following criteria:

  • Rights to develop and exploit the patented invention
  • One or more rights to the exclusion of all other parties
  • Exclusivity throughout at least an entire national territory
  • Must be able to bring infringement proceedings or be entitled to most of the damages awarded in successful proceedings

What income is included within the Patent Box?

Income from the following sources is relevant to the Patent Box calculation:

  • Sales of patented products
  • Licensing out patent rights
  • Selling patent rights
  • Damages, insurance, or other compensation related to patent rights
  • Notional royalty from use of a patented process, or from a process using a patented tool

It is important to note that the Patent Box applies to the sale by the company of items incorporating a qualifying item (or designed to incorporate a qualifying item, if sold together with that item as a single unit and at a single price) and items wholly or mainly designed to be incorporated into a qualifying item.

It is also important to bear in mind that if the company qualifies for Patent Box relief, this will apply to profits earned anywhere in the world.

Patents

Trade Marks

Designs

  • Company Number: 1616604. Registered Office: 48 Friar Gate, Derby, DE1 1GY, England. Regulated by IPReg.