F1PART 8AProfits arising from the exploitation of patents etc

CHAPTER 7Supplementary

Cost-sharing arrangements

357GCApplication of this Part in relation to cost-sharing arrangements

(1)

This section applies where a company is a party to an arrangement under which—

(a)

one of the parties to the arrangement holds a qualifying IP right or an exclusive licence in respect of such a right,

(b)

each of the parties to the arrangement is required to contribute to the cost of, or perform activities for the purpose of, creating or developing the invention or any item or process incorporating the invention,

(c)

under the arrangement each of those parties—

(i)

is entitled to a share of any income attributable to the right or licence, or

(ii)

has one or more rights in respect of the invention, and

(d)

the amount of any income received by each of those parties is proportionate to its participation in the arrangement as described in paragraph (b).

(2)

The company is to be treated for the purposes of this Part as if it held the qualifying IP right or (as the case may be) the exclusive licence in respect of the qualifying IP right.

(3)

But this section does not apply where the arrangement produces for the company a return within section 357CB(1)(c).

(4)

The reference in subsection (1)(b) to developing the invention includes developing ways in which the invention may be used or applied.