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3 September 2018Copyright

Panasonic EU relocation won’t have major IP impact: lawyers

Panasonic’s decision to move its European headquarters from the UK to the Netherlands will not have a major impact on the company’s IP strategy, lawyers have claimed.

Panasonic’s European headquarters are currently located in London. However, the electronics company plans on moving them to Amsterdam on October 1.

Last week, Japan-based the  Nikkei Asian Reviewreported that Panasonic will be relocating its European headquarters. The online publication said that the decision is over fears Japan could treat the UK as a tax haven if the UK lowers its corporate tax rate post-Brexit.

According to the Nikkei Asian Review, this could mean that Panasonic would have to pay a higher tax rate in Japan.

Bas Berghuis van Woortman, partner at Simmons & Simmons’ Amsterdam office, told WIPR that Panasonic’s relocation of its European headquarters to the Netherlands could provide the company with a “passport” to sell products in the EU.

“Generally, international companies have complex tax structures and there will have to be amendments to reflect any changes in the group’s structure and location,” said van Woortman.

However, he added that Panasonic will not necessarily have to redesign its IP strategy as the company’s headquarters will remain within the EU.

“Staying in the UK would probably require a more significant overhaul of strategy and structure,” continued van Woortman.

He explained that the Dutch government supports innovation by providing tax benefit initiatives.

For example, the Netherlands offers an innovation box. This allows profits created from a company’s IP assets to be taxed at an effective corporate income rate of 7%. This is in place of the statutory rate of 20% to 25%, according to van Woortman.

“Generally, intangibles developed by large taxpayers will qualify for the innovation box in a research and development (R&D) declaration and, briefly, a patent can be obtained,” he explained.

“A further benefit of an R&D declaration is a payroll tax incentive on the cost-side of the R&D (payroll tax credit of 14% to 40% of the salary costs of employees performing R&D activities),” he said.

In addition, costs incurred through IP development may be fully depreciated, instead of capitalised and depreciated over several years, said van Woortman.

Avi Freeman, partner at UK-based law firm Beck Greener, agreed that Panasonic will not be required to change much of its IP strategy upon moving to the Netherlands.

“Importantly, the right to file applications for most types of IP is unaffected by the base jurisdiction of the filing entity,” he told WIPR.

“Certainly, this is the case for European patent applications and EU-registered designs and trademarks.”

Freeman added that although it will leave the EU, the UK will continue to uphold strong IP protection.

“The UK has of course ratified the Unified Patent Court Agreement, so the UK will continue to be a leader in European IP after Brexit, so I do not read too much IP strategy into this move.”

Panasonic is not the only entity to relocate from the UK to the Netherlands in light of the vote on Brexit.

As reported by WIPR’s sister site  LSIPR, following a vote by EU ministers in November 2017, the European Medicines Agency will move to Amsterdam.

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