Ferragamo Partners with Italian Revenue Body for IP-Specific Tax Breaks

 

Ferragamo Partners
Ferragamo Partners

Salvatore Ferragamo has taken a pioneering role in terms of participation in Italy’s Patent Box, an optional benefit that reduces taxation for income derived from the direct use or license of intellectual property (“IP”) assets. Enacted in December 2014, the Patent Box is aimed at protecting Italian IP property and boosting the country’s profile as an attractive home for foreign investment and R&D activity.

Italian companies that perform research and development (“R&D”) activities in order to maintain, enhance or develop their IP assets, including copyrights, trademarks, and patents, are eligible for the tax break. Design house Salvatore Ferragamo, which holds an array of Italian and international IP rights – including design patents for handbags, watches and perfume bottles – is one of the first big name fashion brands to pair with the Italian Revenue Agency to form a preliminary agreement in connection with the Patent Box regime. Parties’ specific deal defines the method for calculation of the quota of Ferragamo’s income exempt from income taxes for the purposes of the Patent Box in relation to the direct use of its IP assets.

While the Patent Box program is new to Italy, it follows the recent European trend to assess appealing tax measures in order to attract foreign investments and relocate IP assets. Some European countries – including France, Spain, United Kingdom, Luxembourg, the Netherlands, Belgium and Ireland – have already developed similar systems. Differing from most of them, though, the Italian Patent Box has wider and more specific advantages targeted to the Italian market.

The qualifying intangible assets entitled for the Italian patent box regime specifically include: (1) trademarks; (2) industrial patents, utility models, biotech inventions, patents for plant varieties, semiconductors and topographies; (3) business, commercial, industrial and scientific information and know-how that can be held as secret and which are capable of legal protection; (4) formulae and processes; (5) design models that are legally protected; and (6) software protected by copyright.

Ever the vigilant protector of its IP rights, Ferragamo made headlines in May 2015 when it filed suit against former Los Angeles Rams football quarterback Vince Ferragamo, accusing him of infringing its trademarks by operating a similarly-named winery. According to Ferragamo SpA’s complaint, which was filed in the Southern District of New York, a federal court in Manhattan, Vince Ferragamo is selling wine with the Tenuta di Ferragamo name, and is likely to confuse consumers (the key inquiry in a trademark infringement action) into believing the two are connected or that Ferragamo SpA has endorsed the venture.