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Thinking Outside the Patent Box
By Christopher J Sherliker

The government has announced plans to reduce tax on the products of new patents by almost two-thirds. Paralegal Tristan Sherliker looks at the benefits for businesses and inventors.

Under the new policy, called the Patent Box system, corporation tax (usually 28 percent) will be reduced to only 10 percent for profits earned from new patents.

Large technology corporations habitually outsource their patenting operations to other countries such as Germany, where the tax rate is lower than it historically has been in the UK. The Patent Box system means that staying in the UK is a good plan, and could lead to significant benefits for the recovering economy.

It is not just the corporations that will benefit though. The plans come at a time when many small businesses are still recovering from the recession. Rather than being an expensive procedure for those businesses, patents have suddenly become a quick commercial boon. The new policy could well mean that patents pay for themselves several times over just from the tax saving, enabling inventors and technical start-ups to invest in their intellectual property with confidence.

When considered alongside the Prime Minister’s recent Silicon Roundabout announcement, and the newly-commissioned government Intellectual Property Review, the Patent Box system adds credibility to the claim that the government intends to make the UK a technology capital for Europe.

Given this chain of developments, it is clear that that there has never been a better time to register patents, trade marks and designs.

Added: 3rd February 2011

Christopher J Sherliker is a partner for Silverman Sherliker LLP who provide legal solutions across a spectrum of requirements.  Find out more about Silverman Sherliker LLP.

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