S.357A (1) of the Corporation Tax Act 2010 as amended by
para 1 (1) of Schedule 2 of the Finance Act 2012 provides:
"A company may elect that any relevant IP profits of a trade of the company for an accounting period for which it is a qualifying company are chargeable at a lower rate of corporation tax."
In order to be a "qualifying company" a company must either hold
qualifying IP rights or an exclusive licence in respect of such rights (see s.357B (1)). S.357B (4) further provides that a "qualifying IP right" must be a right to which s.357BB applies.
S.357BB (1) lists the following rights:
"(a) a patent granted under the Patents Act 1977,
(b) a patent granted under the European Patent Convention,
(c) a right of a specified description which corresponds to a right within paragraph (a) or (b) and is granted under the law of a specified EEA state,
(d) a supplementary protection certificate,
(e) any plant breeders’ rights granted in accordance with Part 1 of the Plant Varieties Act 1997,
(f) any Community plant variety rights granted under Council Regulation (EC) No 2100/94."
It would seem that British patents and European patents designating any of the parties to the European Patent Convention would fall within the scope of the Act. These would seem to cover some important countries that are outside the EU such as as Norway, Switzerland and Turkey as well as others that are within it such as Belgium, France, Italy, the Netherlands and Spain. Some 38 countries are party to the EPC (see
"Member States of the European Patent Organization"). Unified patents (that is to say European patents granted for the territories of most of the EU) would also seem to be covered by s.357BB (1) (b). For more information on the proposed unified patent, see my article
"Unified Patent Court Comes One Step Closer" 17 Aug 2013 NIPC Law).
S.357BB (1) (c) refers to patents granted by certain "specified EEA states". The adjective "specified" is interpreted by s.357BB (7) as "specified in an order made by the Treasury." That order is
The Profits from Patents (EEA Rights) Order 2013 (SI 2013 No 420) which was made on 26 Feb 2013 and came into force on 1 April 2013.
Art 2 (2) of that Order designates the following EEA states:
Austria
Bulgaria
Czech Republic
Denmark
Estonia
Finland
Germany
Hungary
Poland
Portugal
Romania
Slovakia
Sweden.
This patents granted by the patent offices of each of those states would be covered.
A “supplementary protection certificate” is defined by s.357BB (7) as a
"certificate issued under—
(a) Council Regulation (EC) No 469/2009 of the European Parliament and of the Council of 6 May 2009 concerning the supplementary protection certificate for medicinal products, or
(b) Regulation (EC) No 1610/96 of the European Parliament and of the Council of 23 July 1996 concerning the creation of a supplementary protection certificate for plant protection products."
Such a certificate extends the protection of a patented active ingredient or combination of active ingredients present in a pharmaceutical or plant protection product after the expiry of the patent. It does not not extend the term of a patent, but gives similar protection. It protects the specific pharmaceutical or plant protection product authorized, and any use of the active ingredient in an authorized pharmaceutical or plant protection product while the certificate is in force that is protected by the patent. The certificate enters into force when the patent expires. The legal basis for such certifications are the above EU regulations. Interestingly, a supplemental protection certificate granted by the French, Italian, Spanish and other patent offices would seem to qualify for the concession even though national patents granted by those offices would not. For more information see the
"Supplementary Protection Certificates" page on the IPO website and the leaflet
"Supplementary Protection Certificates Guide For Applicants".
The concession extends to British and Community
plant breeders' rights (s.357BB (e) and (f))
. Plant breeders' rights protect new plant varieties by enabling preventing anyone other than the rights holders from producing, selling, importing and exporting the protected plants and seeds. British plant breeders' rights are administered not by the Intellectual Property Office but by the Department for Food, Environment and Rural Affairs (see the Department's
plant varieties page) under the
Plant Varieties Act 1997. Community (or EU) plant breeders' rights are administered by the
Community Plant Variety Office in Angers under
Council Regulation (EC) No 2100/94 (the Community plant varieties regulation).
Should anyone wish to discuss this article or the patent box in general, please call me on 020 7404 5252 or send me a message through my
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