The Patent Box: Is It Big Enough?

10 February 2012 marked the closure of the UK government's period of consultation on the draft legislation for a 'Patent Box', which would aim to stimulate the UK economy by enhancing the desirability of the UK as a location for R&D.

The legislation, currently due to come into effect on 1 April 2013, is intended to lower the rate of corporation tax from 26% to 10% (although this is due to be lowered anyway to 24% by 1 April 2013) for profits made from patented technology. It is intended to operate as an 'opt in' scheme, in which companies holding patents can participate if their company structure and income from patents would provide a tax advantage by doing so.

In response to stakeholders pointing out that patents may be commercialised throughout a lifespan of up to 20 years, the Patent Box will be available to companies with existing patents rather than, as first proposed, only those patents that have seen commercialisation since November 2010. However, the