Corporation Tax Act 2010 section 357BA

Meaning of "exclusive licence"

Section 357BA defines what constitutes an "exclusive licence" for the purposes of the Patent Box regime, setting out the minimum rights that must be conferred and how intra-group transfers of such licences are treated.

• An exclusive licence must grant rights to the exclusion of all other persons, including the proprietor, in at least one whole country or territory.
• The licence holder must also have either the right to bring infringement proceedings independently or the right to receive all or the greater part of any damages awarded for such infringement.
• Where a group company holding an exclusive licence transfers all of its rights under that licence to another group member, the receiving company is treated as holding the exclusive licence, even if enforcement, assignment or sub-licensing rights are retained by the transferring company.
• An anti-avoidance rule in section 357F prevents a licence from qualifying as exclusive where the rights were conferred mainly to secure eligibility for the Patent Box regime.