M1In F2sections 524 to F5528—

• F6“income from patents” means—

  1. a

     any royalty or other sum paid in respect of the use of a patent; and

  2. b

     any amount on which tax is payable for any accounting period by virtue of section 524 or 525 above or section 472(5) of, or paragraph 100 of Schedule 3 to, the Capital Allowances Act,

  but does not include any amount chargeable to income tax.

• F3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• “patent rights” means the right to do or authorise the doing of anything which would, but for that right, be an infringement of a patent;

• “United Kingdom patent” means a patent granted under the laws of the United Kingdom.

Subject to subsection (3) below, in F2sections 524 to F7528 any reference to the sale of part of patent rights includes a reference to the grant of a licence in respect of the patent in question, and any reference to the purchase of patent rights includes a reference to the acquisition of a licence in respect of a patent.

If a licence granted by a person entitled to any patent rights is a licence to exercise those rights to the exclusion of the grantor and all other persons for the whole of the remainder of the term for which the right subsists, the grantor shall be treated for the purposes of F2sections 524 to F7528 as thereby selling the whole of the rights.

Where, under sections 46 to 49 of the Patents Act 1949 F1, sections 55 to 59 of the Patents Act 1977 or any corresponding provisions of the law of any country outside the United Kingdom, an invention which is the subject of a patent is made, used, or exercised or vended by or for the service of the Crown or the government of the country concerned, F2sections 524 to F7528 shall have effect as if the making, user, exercise or vending of the invention had taken place in pursuance of a licence, and any sums paid in respect thereof shall be treated accordingly.

Expenditure incurred in obtaining a right to acquire in the future patent rights as respects any invention in respect of which the patent has not yet been granted shall be deemed for all the purposes of F2sections 524 to F7528 to be expenditure on the purchase of patent rights, and if the patent rights are subsequently acquired the expenditure shall be deemed for those purposes to have been expenditure on the purchase of those rights.

Any sum received from a person which by virtue of subsection (5) above is deemed to be expenditure incurred by him on the purchase of patent rights shall be deemed to be proceeds of a sale of patent rights.

M2In F4section 531“know-how” means any industrial information and techniques likely to assist in the manufacture or processing of goods or materials, or in the working of a mine, oil-well or other source of mineral deposits (including the searching for, discovery or testing of deposits or the winning of access thereto), or in the carrying out of any agricultural, forestry or fishing operations.