Patent Box

Patent Box

In an effort to make the UK a more attractive base for innovative businesses, the government introduced an initiative several years ago called the 'Patent Box'. Here are answers to some questions you might have.

1. What is Patent Box? 

It is a government scheme which will reduce corporation tax payable on profits for worldwide sales of patented products to 10%. 

2. Am I entitled to the relief? 

You need to have a qualifying patent covering your product. Examples of qualifying patents are granted UK and European patents. 

3. I don’t have a patent but I’m developing an innovative new product. What do I need to do to get a patent?

It is vital you do not tell anybody about your product (other than under an obligation of confidentiality) as this will prevent you obtaining a UK patent. Consult a patent attorney about protecting the product with a patent. Patent attorneys are trained to prepare patent applications covering new products with a view to preventing competitors making anything too similar to your inventive product. 

4. Will it take long to get a patent and will this stop me claiming relief? 

UK patents are commonly granted within two years of filing, and can be granted considerably more quickly. Patent box relief is only available for granted patents but relief can be backdated for up to 6 years once grant is obtained. A granted patent can be effective for 20 years meaning there is potentially 20 years of relief to be claimed. 

5. What can I patent? 

Almost anything that involves some sort of technical innovation can be patented. Ways of presenting information or of doing business can’t generally be protected, but most other things can, including computer software. The devil is in the detail and a patent attorney will advise you whether it is possible to protect something. If in doubt ask - there are often aspects that can be protected. 

6. I have modified the casing of my product to make it look more appealing. Can I get a patent? 

Probably not. Patents cover technically innovative products and processes that have not previously been done anywhere in the world. Even if there is no technical innovation, other protection might be possible, such as a registered design, but this will not qualify for patent box relief. 

7. I’ve come up with a new process. Can I get patent box relief? 

Processes can be patented but they are currently subject to a lower rate of relief although this is still under discussion. Products made by an innovative process can often be patented as well, possibly allowing you to claim full relief for the product. 

8. Any other requirements? 

Yes, you will need to formally enter into the Patent Box regime and certain qualifying criteria need to be met. Most UK-based SME’s who exploit their own inventions will qualify. 

9. Will any other types of product registration or protection qualify for patent box relief? 

Certain other rights will qualify such as plant variety rights, Supplementary Protection Certificates (SPCs), rights to advertise or sell pesticides, and rights conferred by authorisations in relation to medicinal and veterinary products. Brands and registered designs will not. 

10. Are there things I might need to watch out for? 

You may have to pay accountancy fees to claim the relief and patent attorney fees to get your patent – but don’t forget, most of the cost is in the initial set-up. Potentially you will be able to claim patent box relief for the life of the patent, 20 years. If you already have a patent and have modified your product since getting the patent, it would be worthwhile checking that the patent still covers your product. If you need your patent assessed to see which of your products it covers, let us know.