4. What is the tax regime for licensing and sublicensing your company's patent?

In accordance with the provisions of article 39 terdecies , 1 of Code général des impôts , the long-term capital gains regime, which provides for a reduced rate of taxation, is applicable to licensing and sub-licensing transactions relating to patents and patentable inventions.

Generally speaking, the application of the long-term capital gains regime presupposes that the patents and rights concerned :

• are valid, which means that they have not fallen into the public domain;

• have the character of fixed assets;

• and have been held for at least two years when acquired for valuable consideration.