As from 2017 the Italian patent box fiscal regime will no longer be applicable to income earned from the use of trademarks, but will still apply to trademarks for which a patent box election was made before end 2016; know how remains eligible.

New rules concerning the application of the Italian patent box fiscal regime came into force on 24 April 2017 (Law decree No. 50/2017 published in the Italian Official Journal Serie Generale No. 95 of 24 April 2017, Supplemento Ordinario No. 20).

The Italian patent box is a special fiscal regime that reduces taxes on the income earned, either directly or through licensing, from the use of intellectual property assets by enterprises that perform research and development activities.

Trademarks no longer eligible as from 2017
Article 56 of the new law provides that as from 2017 patent box benefits will no longer be applicable to trademarks.

Patent box elections concerning trademarks will be considered valid only if made on 31 December 2016 at the latest, as we advised in September 2016. The new law specifically confirms that patent box elections concerning trademarks made on or before 31 December 2016 will continue to be valid for the whole five-year duration of the patent box election.

The new provision excluding trademarks from patent box applicability has been introduced to align the Italian patent box regime with the rules of the Organisation for Economic Cooperation and Development (OECD), which set forth that as from 30 June 2016 patent box regimes should be applicable only to patents, utility models and software enjoying copyright protection.

Joint use of intellectual property assets
Under the new law, the patent box regime is applicable to income earned from joint use of intellectual property assets that are complementary for the purpose of creating a product, a family of products, a process or a group of processes, providing that the intellectual property assets used jointly are all eligible for patent box benefits.

Know how remains eligible
The new law has not excluded know how, defined as “legally protectable processes, formulas and information concerning experiences acquired in the industrial, commercial or scientific fields”, from patent box applicability, in spite of the fact that know how does not fall within the intellectual property assets eligible for patent box benefits as defined by the OECD.

Know how therefore remains eligible for the Italian patent box regime.