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How can IP be commercialised? Section 1 Assignment -v- Licence – which is the better option? Well, basically this depends. The type of IP, its value, potential, your plans, the costs involved, competition and its relevance to other research areas are all factors which may need to be considered. Figure 2 contains a comparison of some of the advantages and disadvantages of assigning or licensing your IP. Figure 2 ConcernAssignment Licence Future use Once assigned, you will lose all your rights to the IP. This means that if you or any other research group needs to use the assigned IP or any part of it for future research and development, in most cases, the consent of the new owner of the IP will need to be obtained and you may even need to pay for such further use. When you allow someone else to use your IP, you will still retain ownership. You can therefore limit the extent to which the IP can be used. Depending on the nature of the licence you may still be able to continue to use the IP or you may negotiate certain areas in which you need to continue to use it. Tax When you sell IP, you are deemed to make a disposal for capital gains tax (CGT) purposes and you will be liable to pay the tax. (If your research institution is assigning it may be a charitable institution and be exempt from CGT). Depending on your tax income band, the CGT rate is currently 18% or 28%. However, as of April 2013, the CGT rate for income derived from qualifying patents will gradually be reduced to 10% in 2017. Please speak to your IP commercialisation organisation for further information. The grant of a licence does not automatically amount to an outright disposal of your IP, therefore capital gains tax will not be payable on any money you may receive pursuant to any licence you enter into (although corporation or income tax may be payable on such money). However, if an exclusive licence is granted of IP created prior to 31 March 2002, capital gains tax may be payable and advice should be sought. 3 7 7 7 3

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