Types of Intellectual Property Rights Eligible for UK Patent Box Tax Relief
The UK Patent Box tax relief is designed to encourage companies to keep and commercialise intellectual property within the UK by offering a reduced Corporation Tax rate on profits earned from patented inventions and certain other innovations. Here, we outline the types of intellectual property (IP) rights that qualify for this beneficial tax regime.
Eligible Patents
To benefit from the Patent Box, a company must hold qualifying IP rights. The most common type of qualifying IP is a patent. The patents must be granted by one of the following authorities
UK Intellectual Property Office
European Patent Office
Patent offices of certain European Economic Area (EEA) countries, including Austria, Bulgaria, Czech Republic, Denmark, Estonia, Finland, Germany, Hungary, Poland, Portugal, Romania, Slovakia, and Sweden.
Supplementary Protection Certificates
In addition to patents, granted supplementary protection certificates (SPCs) are also eligible for Patent Box relief. SPCs extend the protection of patented inventions, particularly in the pharmaceutical and plant protection sectors, beyond the normal expiry of the patent
Plant Variety Rights
UK or European plant variety rights are another category of IP that qualifies for the Patent Box. These rights protect new varieties of plants that are distinct, uniform, and stable, providing exclusive control over the propagation of the plant variety
Plant Breeder’s Rights
Similar to plant variety rights, UK or European plant breeder’s rights are eligible for Patent Box relief. These rights are granted to breeders of new plant varieties, giving them exclusive control over the commercial use of the variety
Marketing and Data Exclusivity Rights
Certain marketing or data exclusivity rights under a medicinal, plant protection, or veterinary marketing authorisation can also qualify for the Patent Box. These rights provide a period during which generic competitors cannot rely on the innovator's data to obtain marketing approval for their products
Exclusive Licensing
Companies can also benefit from the Patent Box if they hold an exclusive licence to use another entity's patented technology. To qualify, the licence must grant the company rights to develop, exploit, and defend the patented invention, and must provide exclusivity throughout an entire national territory
Development Condition
For any of the above IP rights to qualify, the company must meet the development condition. This means the company must have made a significant contribution to the creation or development of the patented invention or a product incorporating the patented invention
By understanding and leveraging these qualifying IP rights, companies can significantly reduce their Corporation Tax rate on profits derived from their innovative activities, thereby fostering further innovation and growth within the UK.
For more detailed information and assistance with Patent Box tax relief, please contact me at will@rainfordir.co.uk or book a call using the link below.