The 'Patent Box', which featured in the pre-Budget report, has been introduced to boost the incentives associated with innovation and patenting products.
The 10% level of tax will apply from April 2013 with the aim of ensuring the UK remains "an attractive location for innovation".
Tim Webb, executive director of Picon, said: "It's a positive move and one that will hopefully encourage SMEs to get more from their inventions by patenting them."
His thoughts were echoed by Graham Harris, managing director of Tech-ni-fold and founder of the Tri-Creaser finishing product.
Harris said: "People need to earn from their inventions but the costs associated with patenting products are often too high. You are effectively penalised for your success.
"So this is absolutely a good move and one that will encourage innovation within the industry."
However, Picon's Webb said there is likely to be a large number of practical questions associated with the new legislation.
"If the patent forms part of a larger product or machine, it will be interesting to see how the legislation assesses if the income comes from that particular patent."
The new legislation will be set out in the Finance Bill 2011.
Print industry welcomes new patent legislation
New legislation that aims to drive innovation by offering a reduced rate on income from patents has been deemed a "positive and encouraging move" by print industry confederation Picon.
