For most simple transactions, an oral contract is all that suffices.  For anything of any value it is advisable to have a written contract in case you need to make a claim when, for example, goods supplied or the service received is unsatisfactory.

Certain agreements have to be in writing. Examples of these are if you are assigning the benefit of a contract, such as a warranty as to the workmanship in a construction contract, a contract for sale or disposition of an interest in land or transfers of company shares.

Contracts for sale of land or other dispositions in land are of a particular type that under Section 4(2) of the Law of Property (Miscellaneous Provisions) Act 1989 have to comply with specific formalities to be effective.

Some contracts, as well as having to be in writing, must be in a particular form called a “deed”.  A deed has to expressly say that it is a deed and be signed in the right way.  This applies to, for example, leases over three years, legal mortgages and charges, the creation of certain interests in land including freehold and leasehold assignments and grants of easements and appointments of trustees or powers of attorney.

Before entering into any substantial agreement it is advisable that you consult a solicitor to make sure that the agreement you are entering into is in the appropriate form to ensure that it has the effect that you want and that your interests are fully protected.

Trade mark cluttering refers to when trade mark owners hold trade marks that are overly broad or unused. Apart from the monopoly right issue, one of the main problems identified with this practice is the higher search costs effect for later applicants.

The Hargreaves Review raised concerns over “patent thickets” (overlapping patent rights or intellectual property rights) and suggested there may be similar problems for trade marks. It was in light of this that the IPO commissioned the report.

Whilst the report concludes that further investigation will be required to quantify the extent of the problem, initial evidence suggests that applicants do frequently register trade marks in several classes, and larger businesses generally file in more classes than smaller businesses. Furthermore, applicants in specific regulated fields, such as pharmaceuticals, increasingly resort to multiple simultaneous applications to ensure they register at least one trade mark.

In Golden Ocean Group Ltd v Salgaocar Mining Industries PVT Ltd and another [2012] the parties exchanged a series of e-mails in which they agreed to amendments to a standard form document. Despite the fact one of the parties asked the other to provide a complete signed agreement incorporating all the key terms (the document was never created), the court held that the parties had intended to be bound by the terms agreed in the e-mails.

The Court of Appeal held that if a person puts his name on an e-mail to indicate his authority then it will be a signature for the purpose of section 4 of the Statute of Frauds 1677. This is the case where only a first name, initial or even a nickname is used.

The Court of Appeal also held that:

• Section 4 of the Statute of Frauds 1677 did not require the “agreement in writing” to be in a single document or even in a small number of documents.
• A series of negotiating e-mails (or equivalent) properly signed would constitute a guarantee, provided that the parties intended to be bound. This applied even if the parties expected that a formal guarantee document would be drawn up in the future. This scenario was distinguished from the situation where parties negotiate subject to contract and do not intend to be bound until the execution of a formal document.

A lesson from this case is that if you do not want to create an enforceable guarantee while negotiating by email, it is important to make it very clear that you are negotiating “subject to contract” and do not intend to be bound until a formal document is executed.

The following information does not constitute tax advice.

CORPORATION TAX RELIEFS FOR THE CREATIVE SECTORS

The government has announced that it will introduce corporation tax reliefs for the production of culturally British video-games, television animation programmes and high end television productions.

Consultation on the design of the relief will take place over summer 2012. The legislation will be in the Finance Bill 2013 and will take effect from 1 April 2013. The Association for UK Interactive Entertainment welcomes the announcement.

PATENT BOX

The Finance Bill 2012 will include legislation to implement the ‘patent box’. The patent box is the regime which allows companies to elect to apply a 10% rate of corporation tax from 1 April 2013 to a proportion of profits attributable to patents (as well as certain other qualifying IP). The same rate will apply whether paid separately as royalties or embedded in products’ sales prices.

In its first year of operation, the proportion will be 60%, rising by 10% each year to 100% from April 2017.

Following consultation the government has clarified the legislation to achieve the aim that worldwide income from inventions covered by a qualifying UK Intellectual Property Office (IPO) or (EPO) patent is included. In addition, the heads of expenditure included in the amounts that have to be marked up have been clarified and, finally, the small claims safe harbour that previously applied to all companies has been limited to profit-making companies with residual profits of not more than £3 million.

RESEARCH AND DEVELOPMENT

1. Above the line tax credit

The government has confirmed that it intends to introduce an “above the line” R&D tax credit from April 2013 with a minimum rate of 9.1% before tax. Loss-making companies will be able to claim a payable credit. The legislation will be in the Finance Bill 2013 and is intended to encourage R&D activity by larger companies. The government will consult on the detail shortly but has said that it will ensure that R&D incentives for small and medium enterprises (SMEs) are not reduced as a result of this change.

2. Tax relief and vaccine research relief

The government has confirmed that draft legislation to amend the R&D tax credit will form part of the Finance Bill 2012 (to be published on 29 March 2012). The draft legislation will be the same as, or very similar to, the draft legislation published in December 2011.

In relation to SMEs, the legislation will increase the rate of additional deduction to 125%, (giving a total deduction of 225%), reduce the rate of R&D tax credit to 11% and withdraw the vaccine research relief, remove the rule limiting the amount of R&D tax credit to the amount of a company’s PAYE/national insurance contribution liability and clarify the definition of when a company is a “going concern” to confirm that companies in administration or liquidation are excluded from relief.

Tea manufacturer Tea Forte Inc. appealed to OHIM (under Article 53(1)(a) in conjunction with Article 8(1)(b) of Community Trademark Regulation (CTM) 40/94/EEC, now replaced by 207/2009/EC) against the validity of a three dimensional CTM for tea bags. However, the appeal board held that the mark in question was validly registered and not likely to be confused with the appellant’s earlier three dimensional CTM.

The board concluded that there was no likelihood of confusion even with regard to the identical and similar goods in classes 16 and 20, and found that the sole coincidence between the marks was a pyramidal structure with a string. This resulted in a low degree of similarity, particularly due to their different proportions (one being formed from isosceles triangles and the other, equilateral triangles). It was further acknowledged that the use of a pyramidal shape was commonplace for tea bags and that a pyramid was a basic geometric shape.

A trademark owner will need to consider a number of factors before challenging the validity of another mark’s registration. In some cases the potential damage to the appellant’s business from the later mark will justify the risk inherent in legal action, however in other cases owners should ensure they balance such damage against the cost implications of an unsuccessful appeal.