The Effect of Patentability on the Patent Box and What is Barred from Patent Protection in the UK


Predominantly, Patentability is the consideration of whether the subject-matter of an invention is eligible for Patent protection; however, Patentability may also involve consideration of whether the subject-matter meets the requirements of novelty, inventiveness and/or industrial application.

 

Here we consider Patentability from the eligibility point of view, in particular following a recent update on the Patent Box.  Although the concept of reduced-rate corporation tax is attractive to all companies subject to UK corporation tax, one can only receive the reduction once a Patent has been granted, and it should be borne in mind that not all inventions are Patentable and, therefore, not all inventions will lead to corporation tax reductions through the Patent Box.

 

In the following paragraphs we will identify, briefly, the types of inventions which are barred from being granted a Patent in the UK.

 

The UK Patents Act, Section 2, states:

  • It is hereby declared that the following (among other things) are not inventions for the purposes of this Act, that is to say, anything which consists of
  • (a) a discovery, scientific theory or mathematical method;
  • (b) a literary, dramatic, musical or artistic work or any other aesthetic creation whatsoever;
  • (c) a scheme, rule or method for performing a mental act, playing a game or doing business, or a program for a computer;
  • (d) the presentation of information;
  • but the foregoing provision shall prevent anything from being treated as an invention for the purposes of this Act only to the extent that a patent or application for a patent relates to that thing as such.

The inclusion of the term ‘as such’ (underlined above) directs one to consider these exclusions narrowly, such that utility of excluded subject-matter or its inclusion with subject-matter which is not excluded will likely surpass this eligibility hurdle, but the invention will still need to be novel and inventive for a Patent to be granted.

 

In addition to the above, Section 4 of the Act provides a further limitation to Patentability and states:

  • (2) An invention of a method of treatment of the human or animal body by surgery or therapy or of diagnosis practised on the human or animal body shall not be taken to be capable of industrial application.

 Which above paragraph is, however, clarified by:

  • (3) Subsection (2) above shall not prevent a product consisting of a substance or composition being treated as capable of industrial application merely because it is invented for use in any such method.

Further still, additional limitations to Patentability in relation to Biotechnological inventions are indicated in Schedule A2 of the Act.

 

The way the law stands, inventions falling within the excluded subject-matter categories may struggle to gain grant of a Patent, and in many cases will be refused Patent protection – as such, no reduced-rate corporation tax benefit would be received.  It is important, therefore, to note that if any of the exclusions apparently apply to your invention, you should seek advice from a Registered or Chartered Patent Attorney.

 

It is not all bad news, because anything else (i.e. not precluded from Patentability as per the above) is by definition Patentable subject-matter – as long as it is also novel and inventive.

 

Further, those working in the fields of human and veterinary medicines, plant breeding and plant varieties will be pleased to know that the Patent Box is applicable to Supplementary Protection Certificates (which are an extension to Patent protection for medicinal and plant protection products only); Plant Breeders’ and Plant Variety Rights; Medicinal and Veterinary Products with Marketing Authorisations and Marketing or Data Protection; and Plant Protection Products with Data Protection Benefits and, therefore, you could well have non-Patent protected Intellectual Property upon which to base a Patent Box claim.

 

Please remember that the present Patent Box closes to new Applicants on the 30th June 2016 and if one wishes to take advantage of this, one must have a valid UK Patent or UK Patent Application by that date (or a Patent or Patent Application from a specified list of other non-UK territories), and one must after the filing of a Patent Application elect into the Patent Box within the specified time limit, preferably by that deadline or in practice not normally more than a year following the filing of the relevant tax return, and your Accountant will need to advise upon this aspect and the financial benefits of the Patent Box to your company.

 

It is noteworthy, that R&D Tax Relief is not in the same way limited by what is not eligible for Patent protection. 

 

March 2016 © Burrows Chambers Associates

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