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CIPA JOURNAL Incorporating the transactions of the Chartered Institute of Patent Attorneys

December 2016 / Volume 45 / Number 12

Unintended consequences? Pregabalin: CA could make more pain for pharmacists

Human embryonic stem cells Alex Bajjon and George Schlich

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Six things we love about EPO Oppositions Gwilym Roberts

Management Skills: a business survival kit Marks & Clerk

Report on the uptake of the UK's Patent Box Michael D. Jaeger

The not-so-secret diary of a CIPA President Andrea Brewster

07/12/2016 08:05:40

CIPA JOURNAL

CIPA CONTACTS

Editor Editorial Panel

Alasdair Poore David Barron, Paul Cole, Kristina Cornish, Tibor Gold, Alan White Publications Committee William Jones (Chairman) Production Iain Ross, 020 3289 6445 and advertising (iain@ross-limbe.co.uk) Design Neil Lampert Cover design Jonathan Briggs Contact editor@cipa.org.uk Published on behalf of CIPA by Ross-Limbe Communications. The Institute as a body is not responsible either for the statements made, or for the opinions expressed in this Journal. No papers read before the Institute or extracts from its Proceedings may be published without the express permission of the Council and without the simultaneous acknowledgement of their source. CIPA Journal is sent to all members of the Institute as part of the benefits of membership. It is also available on subscription at £130 per annum (plus postage for overseas addresses: Europe £35, Other £70). Individual copies may be purchased at £14 (plus postage for overseas addresses: Europe £4, Other £6). The Editor welcomes the submission of articles, news and correspondence for possible publications including photographs, tables, charts, etc, when appropriate, and any contributions should be sent by email to editor@cipa.org.uk. Iain Ross (iain@ross-limbe.co.uk) will be pleased to discuss any queries regarding submissions and advertising. Copyright in material submitted for publication Material submitted to the CIPA Journal will be accepted for publication on condition that the author, or each of them, grants the Chartered Institute a non-exclusive licence to publish the material: i. in paper form first; and ii. after paper publication, also on its website www.cipa.org.uk, in the members’ area with the ability for members to download them. When sending material, the author(s) should confirm acceptance of this condition and also that the submission is free of any third party rights or other encumbrances. Past contributors The Institute is in the process of putting on its website past articles not covered by an express agreement as set out above. Any contributor wishing to object to their work being treated in this way should write to the editor at editor@cipa.org.uk. Editorial deadline dates for receiving submissions are on the 10th of the preceding month. Please contact editor@cipa.org.uk to discuss any ideas for articles or submissions.

Tony Rollins President

Stephen Jones Vice-President

Andrea Brewster Immediate Past-President

Chris Mercer Honorary Secretary

Committee Chairs Administrators Vicky Maynard; Business Practice (joint with ITMA) Matt Dixon; Computer Technology Simon Davies; Congress Steering John Brown; Constitutional Alasdair Poore; Designs and Copyright David Musker; Education and Professional Standards Simone Ferrara; Exploitation Catriona Hammer; Informals Ben Charig; Internal Governance Bobby Mukherjee; International Liaison Richard Mair; Life Sciences Simon Wright; Litigation Vicki Salmon; PEB Rob Taylor; Patents Tim Jackson; Protected Titles Lee Davies; Media and Public Relations Jerry Bridge-Butler; Regulatory Affairs Chris Mercer; Textbooks & publications Bill Jones; Trade Marks Keith Howick. Membership Team Leader: Dwaine Hamilton Events Coordinators: Kirsty Burls; Johanna Lynch Membership and Events Coordinator: Charlotte Russell Membership Finance Coordinator: Frances Bleach Chief Executive Lee Davies Executive Assistant Gary McFly Head of Media and Public Affairs Neil Lampert Communications Officer Isabelle Wilton Policy Officer Rebecca Gulbul Head of Education Georgina Sear Education Projects Co-ordinator: Angelina Smith Finance Manager Spurgeon Manuel Finance Administrator Andrew Hewitt General enquiries: 020 7405 9450; mail@cipa.org.uk; www.cipa.org.uk

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Contents 15 24

UP FRONT

ARTICLES

EDUCATION

50 53

Institute events Women in IP group

Update on SPCs

IP Enforcement

Editorial

Alasdair Poore 5

Council Minutes

Lee Davies

Management Skills

Daniel Talbot-Ponsonby, Darren Mossemenear 15

The A Words

Cathy Mack

Alison Madgwick 18

Patent Box

Alexis Harper

Michael D. Jaeger

NEWS

Alexis Harper

Human embryonic stem cells

Alex Bajjon and George Schlich

Future US information disclosure practice EU Pharmaceuticals Guidance

Registration of professional training and activities

Six things we love about Oppositions

A Business and IP Degree in the EU

DECISIONS

Announcements

THE PINKS

EQE update 10

Gwilym Roberts

Kerry Tomlinson

Intellectual Property (Unjustified Threats) Bill

Rebecca Gulbul

Patent decisions

Unified Patent Court Agreement

IPO decisions

Beck Greener

IPO press release Double-sided printing

Going Remote

Heather Lane

IP Pro Bono scheme

Sean Dennehey

PERSONAL

The not-so-secret diary

Andrea Brewster

CIPA's Life Sciences Committee 9

Pregabalin litigation

Maeve Lynch, Rebecca Lawrence

Barker Brettell 33

IPO update

EPO decisions

Bristows 37

59 61 62

Courses and events Recruitment International

Trade marks and other IP

Bird & Bird

Volume 45, number 12

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Patent Box Michael D. Jaeger (Fellow) unpacks HMRC’s report on the initial uptake of the UK’s Patent Box.

he UK’s Patent Box came into effect on 1 April 2013. Under the scheme UK companies are able to pay a reduced rate of Corporation Tax on certain profits derived from patented technology. HM Revenue & Customs (HMRC) published its first report1 on the uptake of the scheme on 14 September 2016, and that report includes a number of notable statistics, which are discussed below. This article considers the published figures and considers their relevance in the wider context of Corporation Tax revenue.

It has taken a while The report details the number of companies benefiting from Patent Box and the extent to which they have done so in the first year of the scheme, namely the fiscal year 2013-142. More than two years have passed since the end of the fiscal year under consideration. Why has it taken HMRC such a long time to compile a report on the take-up of the scheme? The reason for the delay in reporting on that year’s Patent Box claims is as follows. Companies are able to notify HMRC that they wish to benefit from Patent Box within two years after the end of the accounting period in which the relevant profits arise3. This means that where a company’s fiscal year ended on 31 March 2014, it can file a Patent Box claim by 31 March 2016, which makes the delay understandable. However, if a company’s accounting year runs in parallel with the calendar year then for the year 2014, the first three months of which coincide with the last three months of the first year of Patent Box’s implementation, the company would be able to claim Patent Box relief until the end of 2016. For such companies it appears that the HMRC’s report may be premature, rather than late. One must conclude from the release of the report that HMRC believes that the majority of companies who intend to claim Patent Box relief for the 2013-14 fiscal year had done so by the time that the report was compiled. 18

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Timeline for the next report The report states4 that HMRC is considering if it will be feasible to publish provisional statistics gathered only one year after the end of the relevant fiscal year. This would mean that by autumn 2017 we should have sight of full figures for the 2014-15 fiscal year as well as provisional figures for the 201516 fiscal year. Presumably HMRC is confident that the bulk of the Patent Box claims will have been made within 12 months of the accounting period in which the relevant profits and income arise, reinforcing the final point made in the previous paragraph.

A drop in the ocean The total amount of Patent Box relief claimed by companies in 2013-14 was £342.9 million5. To put this into perspective, Corporation Tax receipts in 2013/14 were £39.6 billion6. This equates to around 115 times the value of the Patent Box relief. Of this £39.6 billion, £3.3 billion came from North Sea companies7, leaving £36.3 billion coming from other companies, equivalent to a multiple of 105 times the Patent Box relief.

A disappointing take-up When the scheme was first proposed, the Government undertook an impact assessment, in which it forecast that the fiscal impact of Patent Box would be £500m in the 2013-14 fiscal year8. Since the actual figure for claims was only 69% of the anticipated figure, this shows that take-up was lower than expected. In a similar vein, a mere 700 companies9 claimed Patent Box relief. This is a drop in the ocean when considering that 1,117,780 companies10 paid Corporation Tax in 2013/14. This means that only 1 in every 1,600 of the Corporation Tax paying companies took advantage of the Patent Box scheme. www.cipa.org.uk

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ARTICLE

PATENT BOX

Company size and Patent Box Companies

Relief claimed under Patent Box

Company size

Number

Number as a percentage of total

Amount (£ million)

Amount as a percentage of total

Large

225

32.1%

327.2

95.4%

Medium

175

25.0%

11.8

3.4%

Small

170

24.3%

3.0

0.9%

Micro

120

17.1%

0.9

0.3%

Unknown

0.7%

0.1

0.0%

All

70011

100%

342.912

100%

Patent Box relief by industry sector Companies

Relief claimed under Patent Box

Industry Sector

Number

Number as a percentage of total

Amount (£ million)17

Amount as a percentage of total

Manufacturing

445

63.6%

216.9

63.3%

Construction

2.1%

–

Wholesale & Retail and Transport

115

16.4%

34.7

10.1%

Information & Communication, Financial & Insurance and Real Estate

3.6%

58.5

17.1%

Professional, Scientific & Technical

9.3%

21.6

6.3%

Admin & Support Services, Education, Health and Other

5.0%

–

All

700

100%

342.9

100%

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