Corporation Tax Act 2010 section 357F

Licences conferring exclusive rights

Section 357F is an anti-avoidance provision that prevents a licence from being treated as an exclusive licence for the purposes of the Patent Box regime where the exclusivity has been contrived primarily to gain access to the regime's benefits.

• A licence that confers exclusive rights over a qualifying IP right will not be treated as an exclusive licence if the main purpose, or one of the main purposes, of granting that exclusivity is to ensure the licence qualifies as exclusive under the Patent Box rules.
• This targets arrangements entered into for non-commercial reasons, for example where the exclusivity relates to a spurious or artificial commercial right.
• Even if the licence technically grants rights to the exclusion of all other persons, it will be disregarded as an exclusive licence if the purpose test is failed.
• This provision is one of several anti-avoidance rules in Chapter 6 of Part 8A (sections 357F to 357FB) designed to protect the integrity of the Patent Box regime.