The Oireachtas recently enacted the Knowledge Development Box (Certification of Inventions) Act 2017 (the “2017 Act”). This legislation follows on from the Knowledge Development Box introduced by the Finance Act 2015, which made provision for (among other things) small companies to avail of the Knowledge Development Box with respect to unpatented inventions. Once it is commenced by a Ministerial Order the 2017 Act will empower the Controller of Patents, Designs and Trade Marks (the “Controller of Patents”) to issue certification that an invention is novel, non-obvious and useful, which certification will ensure that the invention falls within the definition of “qualifying assets” for the purposes of the Knowledge Development Box.
This form of certification (referred to as “KDB Certification”) will be available for small companies (referred to in the legislation as a “relevant company”), which meet the following criteria:
- the company has income from intellectual property not exceeding €7.5 million in a 12 month accounting period;
- the company is a member or group turnover of less than €50 million; and
- the company employs fewer than 250 employees.
Part 2 of the 2017 Act sets out the type of inventions a KDB Certificate may be issued in respect of and reflects what inventions patents may be granted in respect of under the Patents Acts 1992 to 2017. In addition, it should be noted that a KDB Certificate may only be issued in respect of one invention or group of inventions if the inventions are linked to form a single inventive concept.
What will be of most interest to small companies and patent attorneys are the rules in relation to the application for KDB certificate and procedure for examination by the control or patents, which are set out in Part 3 of the 2017 Act, which includes a requirement for an opinion as to novelty from a patent attorney in relation to the unpatented invention.
There are requirements for the controller to keep all applications, KDB certificates and refusals to issue KDB certificates confidential subject to any order for discovery made in legal proceedings where that disclosure is desirable in the interest of justice, and any disclosure to the Revenue Commissioners for the purposes of making a determination in relation to any tax, tax refund or tax credit.
Finally, Part 6 of the 2017 Act makes some amendments to the Patents Act 1992 to allow for the grant of patents by the controller of patents following a substantial examination for novelty and thus ensuring that Irish patents will fall within paragraph (a) of the definition of “Qualifying Patent” in section 769G of the Taxes Consolidation Act 1997.