Can you patent software?
One question we regularly get asked by accountants and clients is whether you can patent software and benefit from the reduced 10% rate of corporation tax.
The information technology sector is incredibly fast moving and there are particular considerations when patenting code – some computer-implemented inventions are deemed worthy of patent protection and some are not.
A patent may be granted for inventions which are new, inventive and can be used in industry. However, there is a list of things which are deemed non-inventions for the purposes of the law, which includes scientific theories, mathematical methods, business methods and programs for computers. At this point, you may think there's no hope for computer software, but you'd be wrong.
The boundary is hard to define simply but generally speaking when considering the patentability of computer implemented inventions, you must consider the contribution provided by the computer program. In a nutshell the answer lies in whether it has a direct real world effect or not. If it does have a direct real world effect than it can generally be patentable.
Let’s take for example code which designs a drill bit. It has a real world effect so therefore could potentially be patentable. Taking this further, if the computer software implements methods for controlling say an industrial process or creates a method of processing physical data (e.g. data representing temperature) then it can generally be considered “technical” and therefore patentable.
In addition to this, if the code results in a better computer (for example, providing a better interface, operating at the level of the architecture of the computer and/or resulting in it running more efficiently and effectively as a computer) it may in fact be patentable as there is a real world effect on the computer.
If on the other hand the computer software merely processes data internally to a computer (without having an effect in the real world) such as the design of a billing tariff or online gambling site, it can be much more troublesome and is unlikely to be patentable.
If you want to investigate whether you can patent your software and benefit from an effective tax rate of 10% and you would like a free initial consultation, please email hello@yes.tax
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