Copyright Laws and Regulations Report 2025 A Deep Dive into Cyprus’ IP Box: Trends and Opportunities

Cyprus, strategically positioned at the intersection of Europe, Africa, and the Middle East, has steadily risen to prominence as a prime location for technology companies seeking an optimal business environment.  Central to this appeal is the country’s Intellectual Property (IP) Box regime, which offers significant benefits for companies with intangible assets such as patents and copyrights.  These businesses often require an IP holding structure to manage and license their IP, generating revenue through royalties.

Choosing the proper jurisdiction for such an IP holding entity is crucial, as it ensures comprehensive asset protection, favourable conditions for asset development, tax efficiency, and a flexible legal framework.  Cyprus has become a top choice for multinational corporations thanks to its efficient tax regime, business-friendly environment, and strong adherence to global standards set by the European Union (EU), the Organization for Economic Cooperation and Development (OECD), and the World Intellectual Property Organisation (WIPO).  These factors make Cyprus a key player in the global IP landscape, particularly in 2024 and 2025.

2.1 What is the IP Box Regime?

The IP Box Regime, also known as the innovation box or patent box, is a corporate tax framework adopted by many countries.  Its main purpose is stimulating research and development by offering favourable tax treatment on income from patents, licences, royalties, or the sale and transfer of qualifying IP assets.  This tax advantage reduces liabilities compared to other business income.  The term IP covers a broad spectrum of intellectual creations, including, but not limited to:

Software programs.
Innovative algorithms and formulas.
Inventions.
Trade secrets.
Expertise.
Manufacturing processes.
Marketing strategies.
Creative works.
Designs.
Graphics.
Labels and business-related innovations.

Cyprus IP Box Regime stands out with one of the most competitive tax rates in the EU making it particularly attractive for companies managing large IP portfolios.  This regime promotes innovation and strengthens Cyprus’ position as a key hub for IP-driven businesses.

2.2 Two kinds of IP Box Regimes in Europe

In Europe, there are two distinct types of IP Box regimes:

The first type applies reduced tax rates to qualifying revenue, as seen in countries like France, the Netherlands, and the UK.
The second type, used by Spain, Luxembourg, Belgium, Hungary, and Cyprus, excludes a specific portion of revenue.  This approach is further divided into two categories/schemes:

one that exempts a percentage of total revenue; and
another that exempts a portion of net earnings.

Cyprus IP Box Regime complies with both EU and OECD guidelines, positioning the country as a highly attractive option for businesses involved with IP.  But what exactly is it about Cyprus that is capturing the interest of the global tech sector?

In Cyprus, the IP Box Regime enables companies that develop IP assets to qualify for substantial tax benefits.  The degree of advantage a company gains depends on the type of IP created and the nature of the expenses incurred during its development.  The tax office provides deductions on the income generated from royalties or licences linked to that IP.

3.1 Qualifying assets of IP Box in Cyprus

A company will be eligible to take advantage of the IP Box if the IP is a “qualifying intangible asset”.

These qualifying assets are:

Patents, as defined in the Patents Law.
Computer software.
Other IP Assets that are legally protected and fall within one of the following categories:

utility models, IP assets that protect plants and genetic material, orphan drug designations and extensions of protections for patents; and
non-obvious, useful and novel, where the person utilising them in furtherance of a business does not generate annual gross revenues in excess of €7,500,000 from all intangible assets (€50,000,000 in case of a group of companies), which are certified as such by an appropriate authority, in Cyprus or abroad.

Business labels (including brand names), legal rights to public presence, trademarks, photo copyrights, and other IP legal rights used to market products and services are not considered qualifying intangible assets.

3.2 Accounting records

Any person who claims the benefit under the IP Box Regime should maintain proper books and records for each intangible property in accordance with the laws of Cyprus.

3.3 Qualifying persons

Taxpayers, tax-resident permanent establishments (PEs) of non-tax residents, and foreign PEs subject to tax in Cyprus are all qualifying persons.

3.4 Overall income

The sum of all earnings generated from Qualifying IP in a tax year, less the direct expenses incurred in gaining those earnings, is called Overall Income (OI).

The term OI includes (but is not limited to) the following:

Royalties or other amounts connected to the use of the Qualifying IP.
Any type of amount received as a licence for the use of a Qualifying IP.
Any amount of money received from compensation or insurance for the Qualifying Intellectual Property.
Any embedded income generated from selling goods, services or procedures relating directly to the Qualifying IPs.

Direct expenses may include:

All costs incurred in earning the income from the qualifying intangible asset directly or indirectly.
The amortisation of the cost of the intangible asset.
The notional interest deduction on equity contributed to funding the development of the qualifying intangible asset.

The gain from the sale of a Qualifying IP is fully exempt from tax and is not included in the Total Income.

3.5 Qualifying Expenditure

“Qualifying Expenditure” for qualifying intangible assets is the total amount of R&D expenses sustained in any tax year, entirely and exclusively for developing, creating or improving qualifying intangible assets.  The costs must be directly associated with the qualifying intangible assets.

Qualifying Expenditures include, but are not limited to, the following:

Direct costs.
Wages and salaries.
Indirect costs incurred entirely and exclusively for the development of the IP.
General expenses for research and development (R&D).
Costs for material related to R&D activities.
Costs associated with outsourcing R&D to non-related parties.

These costs do not consist of:

The cost of the acquisition of intangible properties.
The rate of interest paid out or due.
Expenses connected to the purchase or construction of the IP.
Amounts of money paid or due directly or indirectly to a relevant person to perform R&D tasks, regardless of whether these amounts relate to the cost-sharing agreement (i.e. contracting out to related parties).
Costs not directly linked to a specific qualified intangible asset.

3.6 Uplift Expenditure

The Uplift Expenditure (UE) will be included in the above costs, which means the reduction of the lowest of the following two:

30% of the eligible expenses.
The overall amount of the cost of purchase and outsourcing to associated participants for R&D regarding the qualified intangible asset.

Considering that the company will adopt an operational model that will enable the IP income to enjoy the tax benefits explained above, combined with the fact that Cyprus’ corporate income tax rate is 12.5%, will effectively result in a low tax liability for the company.

3.7 Qualifying Profit

Qualifying profit is the profit which is eligible for tax benefit.  This benefit takes the form of a deduction of up to 80%.

The qualifying profit figure is calculated using a formula that considers the type of expenditure incurred in the development of the IP.  This formula is known as the nexus fraction calculation.

In other words, the type of expenditure incurred in developing the IP will affect the level of tax benefit the company is eligible to receive.

3.8 Ensuring tax compliance

Companies incorporated in Cyprus have the distinct advantage of seeking an advanced tax ruling from the tax office.  This procedure is instrumental in ensuring strict adherence to both the prevailing tax legislation and circulars issued by the Cyprus tax office.

The company presents the specific case to the tax office during this process to ensure the correct tax treatment.  The company must apply the expenses and the income and reply to any requests from the tax office to confirm the treatment.

The tax ruling process takes approximately one month, with the expedited process starting from the day of filing the request with the Cyprus tax office.

In summary, to benefit from the scheme and gain the best of it, the Cypriot company should fully use its own resources to develop IP assets.  The type of expenditure associated with the IP development will define the benefit level received.  Outsourcing development to related parties or acquiring a readymade IP asset will not qualify for benefit under the IP Box Regime.  This is because not all expenses incurred by the company are qualifying expenditures.

Principal Features of the IP Box Regime in Cyprus

80% exemption of qualified profit from the exploitation of IP assets: In Cyprus, companies can deduct 80% of their qualifying profit from using intangible assets for tax purposes.  This leaves only 20% of the income from IP subject to taxation.  Given Cyprus’ low corporate tax rate of 12.5%, which is among the most competitive in the EU, businesses benefit from an effective tax rate of just 2.5%.
0% tax on the profit from the disposal of IP assets as a capital nature transaction: On 17 July 2020, the Cypriot House of Representatives approved amendments to Section 9(1)(l) of the Income Tax Law, revising the tax treatment of intangible assets.  The amendments stipulate that capital gains from the disposal of intangible assets will not be taxed if the transaction is considered capital in nature.  Furthermore, from 1 January 2020, the requirement to prepare a balancing statement upon the disposal of IP has been eliminated.
Amortisation period of up to 20 years: A corporation can deduct capital expenditures related to the acquisition or development of IP in the first year the cost is incurred, as well as in subsequent years.  These costs may be amortised over a period of up to 20 years, excluding goodwill and IP that falls under the transitional provisions of the previous Cyprus IP Box Regime, which still follow the old tax amortisation rules.  This method can effectively reduce the tax rate to below 2%.

In deciding where to base your IP, you should weigh the pros and cons of each jurisdiction to maximise your business outcomes (data as of July 2024, [Hyperlink]” style=”color:#56c7aa; text-decoration:underline”>[Hyperlink] ).

Cyprus

Belgium

Hungary

Luxembourg

Netherlands

France

United Kingdom

Effective Tax Rate

2.50%

3.75%

4.5%

4.99%

9%

10%

10%

Statutory Corporate Income Tax Rate

12.5%

25.0%

9%

24.94%

25.8%

25.83%

25%

Qualifying IP Assets

Patents, computer software, utility models, other IP assets such as non-obvious, useful or novel rights

Patents and supplementary patent certificates, copyrighted software

Patents, utility model protection, copyrighted software

Patents, trademarks, designs, domain names, models and software copyrights, brands for services for goods such as productions and marketing know-how

Self-developed IP relating to patents, copyrighted software or approved R&D

Patents, utility certificates, copyrighted software inventions

Patents and rights similar to it

Ineligible IP Assets

Business names, trademarks, image rights, marketing activities

Know-how, trademarks, designs, models, formulas and processes

Designs

Formulas, copyrights (other than software)

Trademarks, brands and acquired IP

Non-patentable inventions, R&D activities

Trademarks, copyrights and designs

Internally Developed or Acquired?

Internally developed and acquired IP

Self-developed IP rights or acquired or licensed from third parties

Internally developed and acquired IP

Internally developed and acquired IP, but not IP acquired from a related party

Self-developed only

Internally developed and acquired IP

Internally developed and acquired IP

Limitations on Where R&D Takes Place

Some

Some

None

None

Some

None

None

Qualifying Revenue

Royalty, licensing fees, compensation income, trading profits from the disposal of IP, and capital nature gains from the disposal are not subject to any tax

Patent income

Royalties

Royalties net of costs (amortisation, R&D costs, interest)

Net income from qualifying assets

Net results derived from licensing, sublicensing or selling of qualifying IP rights

Net income from qualifying IP

Deduction Rate

80%

85%

50%

80%

None – reduced tax rate

None-reduced tax rate

None – reduced tax rate

Overall Limit of Deduction

None

100% of pre-tax income

50% of pre-tax income

None

None

None

None

Gains on Disposal Included

Yes

No

Yes

Yes

Yes

Yes

Yes

4.1 IP Box Comparison Summary

The Cyprus IP Box Regime provides an effective tax rate of 2.5% on income derived from IP assets.  Its nearest competitors, Belgium (3.75%), Hungary (4.5%), and Luxembourg (4.99%), are all almost double that amount, while the Netherlands (9%), France (10%), and the United Kingdom (10%), all seem to be significantly behind Cyprus.

Additionally, Cyprus distinguishes itself by offering a more comprehensive regime that applies to a broader spectrum of income compared to other European IP Box schemes, many of which restrict their benefits solely to income from patents and supplementary patent certificates.

Although countries like Belgium, Hungary, Luxembourg, the Netherlands, and the United Kingdom provide partial exemptions on capital gains from IP asset disposals, these provisions are generally less favourable than those under the Cyprus scheme.  The limitations on qualifying assets and the reduced deduction rates in these jurisdictions make them less attractive to IP holders, further enhancing Cyprus’ appeal as a top jurisdiction for IP tax optimisation.

Cyprus’ robust business environment is driven by several factors, including its strategic location, high living standards, infrastructure, skilled workforce, and favourable tax system.  Investors and entrepreneurs find Cyprus attractive due to its low operating costs and favourable tax environment and infrastructure.  Investors must establish real economic substance here to enjoy all of Cyprus’ benefits.  Some of these elements are discussed below.

5.1 A Business-oriented tax framework with full compliance

Cyprus provides a highly conducive environment for businesses to prosper.  The nation aligns itself meticulously with the rigorous standards and prerequisites set forth by both the EU and the OECD.  Cyprus’ tax legislation, in accordance with international best practices, ensures a tax administration characterised by transparency and accountability.

Moreover, Cyprus boasts an extensive network of double-tax treaties.  These treaties serve as instrumental tools, allowing businesses to significantly reduce their tax liabilities and facilitating the smooth flow of commerce across borders.  By establishing a stable and foreseeable tax framework, enterprises can strategically plan for their expansion and growth initiatives while concurrently adhering to the exacting requirements stipulated by the OECD and EU.

5.2 Unlocking market opportunities through Cyprus’ prime geolocation

Investing in Cyprus is an excellent choice for foreign companies and international investors looking for access to European markets throughout the EU.  Being a member of the Eurozone since 2008 and with more than 40 trade agreements with the EU, the island maintains a welcoming business environment, excellent location, and accessibility to Europe and other significant regional business centres.

5.3 Skilled, multilingual, and highly competent workforce

Companies considering establishing a presence in Cyprus can take advantage of numerous talent-related incentives.  These include:

Visa-free access to the EU labour market.
Streamlined procedures for tapping into the international talent pool.
Tax incentives available to individuals willing to relocate and commence work in Cyprus for the first time.
Recent changes to simplify the naturalisation process.
Recently enhanced immigration policies that facilitate the recruitment of third-country nationals, with provisions for family reunification rights.

In addition to these incentives, Cyprus offers a high quality of living that is marked by exceptional healthcare and education systems.  These attributes render Cyprus an appealing destination for both employees and high-net-worth individuals.

5.4 An attractive corporate and income tax regime

Cyprus’ tax regime has long been a magnet for organisations worldwide, drawing them to its shores.  This attraction arises from a wealth of advantages, deductions, and exemptions that position Cyprus’ tax framework as one of the most appealing and competitive globally.

Several opportunities are given to businesses, which include:

A notably low corporation tax rate of a flat 12.5%, ranking among the lowest in the EU.
An extensive and advantageous Double Tax Treaty network covering more than 60 countries.
Access to all EU Tax Directives (as Cyprus is a member of the EU).
Dividend income exemptions based on relaxed conditions.
Capital gains exemptions across all industries, except for Real Estate transactions within Cyprus.
No withholding taxes applied to outbound dividends, royalties, or interest payments.
Tax-free gains from trading in securities.
Notional interest deduction on taxable profits derived from newly acquired capital invested in Cypriot companies.
The option to exempt foreign permanent establishment profits from taxation.
Tax neutrality on foreign exchange gains or losses.
Attractive tax arrangements for non-domiciled individuals and international professionals.
Tax deductions offered for investments in start-up ventures.
No succession or inheritance taxes.
A tax-free policy for intra-EU transactions.
A pension tax with a low rate of 5% for amounts exceeding €3,420.
Favourable real estate transfer fees, taxes and stamp duty.
Corporate tax relief of up to 75% on holdings.
Deductions for losses incurred in external business activities or restructuring efforts in the corporate tax return.

While Cyprus’ tax system is undeniably alluring, its financial stability further reinforces its appeal as the optimal choice for companies and investors navigating the intricacies of a globally interconnected economy.

Furthermore, the government remains committed to exploring novel avenues to enhance investment opportunities on the island, creating a fertile ground for foreign investors aiming to expand further the development of critical industries.

5.5 Personal income tax

All Cyprus tax residents are taxed on all income earned in or out of the country.  This income includes worldwide earned income.  Non-residents of Cyprus are taxed on income earned from sources in Cyprus.

An individual is a tax resident in Cyprus if one of the conditions listed below applies:

The ‘183-day rule’ for Cyprus tax residency is fulfilled for people who spend more than 183 days in any one calendar year in Cyprus, with no additional criteria being relevant.
The ‘60-day rule’ for Cyprus tax residency is met for people who, cumulatively, in the applicable tax year:

do not stay in any other single state for a duration longer than 183 days in total;
are not considered tax citizens by any other region;
live in Cyprus for a minimum of 60 days; and
have other specified Cyprus connections.

To fulfil the fourth requirement, the individual should establish a company in Cyprus and/or ensure they are hired as an employee in Cyprus and/or keep an office (director) of a company tax resident in Cyprus at any time in the tax year, provided that such is not discontinued during the tax year.  Additionally, the individual should maintain a permanent home in Cyprus that is owned or leased by the individual in the tax year.

Taxation and incentives for Cyprus tax residents (physical persons)

Tax exemptions on personal income up to €19,500.
Dividends are not taxable under Cyprus Income Tax.
Gains from the sale of securities in Cyprus are not taxed, provided no real estate is involved.
Gains from the sale of immovable property not located in the Republic of Cyprus are not taxed in Cyprus.
Any remuneration received from salaried services rendered outside Cyprus for more than 90 days in a tax year to a non-Cyprus resident employer or a permanent foreign establishment of a Cyprus resident employer is not taxable in Cyprus.

Significant tax exemptions and incentives for new tax residents (physical persons) in Cyprus

Exemptions of the remuneration from employment:

A non-resident employee may be eligible for a 50% salary tax deduction if employed in Cyprus.  The exemption is applied for seventeen years, provided the income exceeds €55,000 annually.

5.6 Cost-effective business operations

Cyprus boasts significantly lower labour costs for technical and professional talent compared to other major EU capitals.  Consequently, conducting business in Cyprus generally incurs substantially lower operational expenses within a globally competitive business landscape.

As of June 2023, living in Cyprus is relatively inexpensive compared to other nations.  According to Numbeo’s worldwide ranking for cost of living, Cyprus is ranked 37th out of 135.

Furthermore, Cyprus offers some of Europe’s most competitively priced office rental rates, which is particularly advantageous for businesses aiming to minimise their operational expenditures.  Keeping operational costs as low as possible is crucial for the success of modern companies, and Cyprus provides a business location where it is possible to keep operating costs to a minimum. 

5.7 Corporate headquarters relocation to Cyprus

Cyprus is becoming an increasingly sought-after destination for the relocation of company headquarters.  This is owing to its conducive environment for international corporations seeking to establish their operational base.  The Cypriot government has proactively introduced a range of incentives designed to attract more international enterprises to the country, and numerous fintech companies have already undertaken successful relocations.  Noteworthy industries that have chosen to anchor their headquarters in Cyprus include:

Fintech and electronic money institutions.
Foreign exchange.
Maritime and shipping.
Gaming and entertainment.
Information and communication technology (ICT).
Crypto and blockchain (comprising brokers, exchanges, and related entities).
Private equity firms and investment funds.
Family offices.

The list of prominent companies that have made Cyprus their new home is impressive.  It includes esteemed entities such as EcommBX, EcommPay, Nexters, Exness, Wargaming, My Games, Celestyal Cruises, Nielsen, eToro, Amdocs, Argo Group Limited, Thomson Reuters and Sykes, among others.

6.1 Robust IP asset protection

The legislation of Cyprus is based on English common law, which is in line with European legislation.  In this regard, Cyprus meets all the requirements and standards of the WIPO and the European Union Intellectual Property Office.  Moreover, Cyprus is a signatory of the following International Conventions:

The Bern Convention on the Protection of Literary and Artistic Works.
The Convention Establishing the WIPO.
European Community Trademarks.
The Madrid Agreement and Protocol on the Registration of Trademarks at International Level.
The Paris Convention on the Protection of Industrial Property.
The Patent Cooperation Treaty.
The Phonograms convention for safeguarding phonograph producers against unauthorised duplications.
The Rome Convention, which protects performers for producers of phonograms and broadcasting organisations.
The Trademark Law Treaty.
The WIPO Beijing Treaty on Audio-visual Performances.
The WIPO Performance and Phonograms Treaty.

6.2 Cyprus is open to new ideas

Cyprus generally welcomes new ideas, and there are few restrictions on development.  Furthermore, businesspeople are encouraged to develop and invest in innovative products and services.  In addition, Cyprus offers tax incentives to promote the development of novel products and services, strengthening the Cypriot entrepreneurial ecosystem.

As we look ahead to 2025, the IP landscape continues to evolve, with new legislative updates and business opportunities emerging globally.  Cyprus remains a focal point for businesses seeking tax-efficient solutions to manage their IP portfolios.  With its updated IP Box Regime, which aligns with EU and OECD standards, Cyprus offers an appealing environment for companies focused on technological innovation and intangible assets.  The regime’s ability to provide significant tax reductions on IP income continues to attract a wide range of businesses, particularly as global regulations tighten around IP.

7.1 Growth of IP-driven businesses

The rise of tech companies and startups that rely heavily on IP continues to shape the business environment in Cyprus.  Cyprus is committed to maintaining a business-friendly climate, and more companies in sectors like software development, fintech, and life sciences are taking advantage of the Cyprus IP Box.  By leveraging the regime’s low effective tax rates – potentially under 2% – these businesses can reduce costs while accelerating growth through R&D reinvestment.  Cyprus has also seen an influx of new IP-focused startups, benefiting from the ease of doing business and access to international markets.

7.2 Increased focus on tech and digital innovation

In 2025, emerging technologies such as artificial intelligence (AI), blockchain, and green technology are creating vast opportunities for IP development.  Cyprus is particularly well-positioned to support this surge in digital innovation, offering an IP Box Regime that accommodates the unique tax needs of these cutting-edge sectors.  Recent legislative changes have expanded the scope of qualifying IP, ensuring that businesses in high-growth industries can benefit from significant tax relief.  As Cyprus continues attracting companies involved in digital transformation and green technology, its IP Box Regime provides a robust framework for developing and commercialising new technologies, further strengthening the island’s reputation as a hub for innovation.

To put things into perspective, we have set out some numerical examples illustrating how, under the new IP regime in Cyprus, one would reach the stage at which QP would qualify for an 80% notional deduction.

The significant factors in the examples are:

whether the asset was internally developed or whether it was acquired; and
whether R&D costs were outsourced to related parties or third parties.

The following scenarios will be examined:

The asset is developed or improved internally, with R&D costs being undertaken by the company itself.
The asset is acquired, and subsequent R&D costs for asset improvements are outsourced to non-related parties.
The asset is acquired, and the following R&D costs for improvements are outsourced to related parties.

For the examples, the following figures are used:

Scenario I

Scenario II

Scenario III

Overall Income (OI) from qualifying IP

€1,200,000

€1,200,000

€1,200,000

 Cost of acquisition of the asset

N/A

€350,000

€350,000

  R&D costs incurred internally

€600,000

N/A

N/A

 R&D costs outsourced to non-related parties

N/A

€250,000

N/A

 R&D costs outsourced to related parties

N/A

N/A

€250,000

Overall Expenditure (OE)

€600,000

€600,000

€600,000

Qualifying Expenditure (QE)

€600,000

€250,000

N/A

 30% of the qualifying expenditure

€180,000

€75,000

0

 The total cost of acquisition + Cost of outsourcing to related parties

0

€350,000

€600,000

Uplift Expenditure (UE)

0

 €75,000

0 

Applying the above figures to the formula for calculation of the Qualifying Profit (QP) and the tax benefit of up to 80% as a notional deduction, we have:

QP

Notional Deduction (80% of QP)

 

Scenario I:

€1,200,000 x [(€600,000 + €0) / €600,000]

€1,200,000

€960,000

Scenario II:

€1,200,000 x [(€250,000 + €75,000) / €600,000]

€650,000

€520,000

Scenario III:

€1,200,000 x [(€0 + €0) / €600,000]

€0

€0

As a result, the IP tax benefit will be:

Scenario I: The taxable profit will be decreased by €960,000 notional expense – 2.5% effective corporate tax rate.
Scenario II: The taxable profit will be reduced by €520,000 notional expenditure – 7.08% effective corporate tax rate.
Scenario III: No notional expense applies – 12.5% effective corporate tax rate.

First, you must set up a company in Cyprus.
You then need to consider the eligibility of the IP.
Develop the IP asset with your own resources either internally or outsource it to third parties and recognise the asset on the Statement of Financial Position of the company holding this asset.
You must fully comply with company statutory obligations and meet all business requirements needed from a regulatory legal and banking perspective in Cyprus (i.e., own a registered office, open a bank account, keep proper records and books for the company, prepare audit and financial statements and tax returns of the company, relocate or employ people for the company, etc.).

Cyprus stands out as a premier jurisdiction for IP asset management, offering a powerful combination of solid IP protections and competitive tax planning opportunities.  Businesses operating in Cyprus can rely on a legal framework that ensures the security of their IP assets.  At the same time, the country’s efficient tax regime helps them streamline their financial strategies for maximum benefit.  This perfect synergy of strong IP rights and tax advantages makes Cyprus a preferred choice for corporations seeking to profitably manage and grow their IP portfolios.

Our expert team in Cyprus is committed to supporting international companies by helping them navigate the country’s favourable IP laws, ensuring optimal protection and financial gain from their IP assets.