Research and Development

The Chancellor's Budget statement on 16 March 2005 included announcements regarding changes to the research and development tax credit, an extension of the low budget film tax relief, and legislation to remove the tax uncertainty surrounding the formation of spinout companies.

The Chancellor's budget statement on 21 March 2007 included announcements about a new right to opt out of the film tax regime, increases in the rates of R&D tax relief, a new 15% remote gaming duty, changes to the way that PAYE and NICs are dealt with within managed service companies, and extra measures to prevent carousel fraud. The budget also includes a change in the law to allow groups of companies which exploit certain intangible assets to transfer that trade within the group as freely as other groups which qualify to grant enterprise management incentive share options.

The Chancellor's Budget statement on 12 March 2008 included announcements that the Finance Bill 2008 will contain the following measures, among others: an anti-avoidance provision to clarify that the "related party" rules in the corporate intangible assets regime are unaffected by any administration, liquidation or other insolvency proceedings (or equivalent arrangements outside the UK); an increase in the rate of tax relief available under the research and development tax credit system, a reduction in the rate of relief under the vaccine research relief (VRR) scheme together with new conditions that will apply to small and medium-sized companies and VRR schemes for the purposes of relief; a scheme to exempt works of art from being taxed under the remittance basis of taxation if they are brought into the UK for public display; and anti-avoidance provisions relating to leased plant and machinery, which may be of interest in relation to IT and outsourcing.

On 2 July 2007, the European Commission published a questionnaire to seek views on a range of issues that might affect access by Europe's information and communication technology (ICT) industries to global markets. The Commission wishes to inform its development of an international strategy for ICT, which would identify trade barriers and business opportunities, and promote the competitiveness of the EU ICT industry globally. In particular, the Commission seeks input on which regulatory issues should be prioritised in dialogue with non-EU countries, the need for harmonised standards, the effectiveness of intellectual rights protection internationally, issues connected with access to the radio spectrum, priority areas for international ICT research and development, and the role of international collaboration. Input is also requested in relation to the impact of social issues (such as the digital divide), global challenges (such as network and information security) and how to improve existing bilateral agreements with third countries. Responses are invited by 17 September 2007 (see Commission press release IP/07/988).

The Royal Society and the Royal Society of Engineering have released their government-commissioned report on nanoscience and nanotechnologies and their impacts. Independently, the European Commission has launched a consultation on its previous Communication on nanotechnology.

The European Commission has published proposals for two Joint Technology Initiatives (JTIs) on Embedded Computing Systems (ARTEMIS) and Innovative Medicines (IMI). JTIs were introduced by the Co-operation programme of the EC's Seventh Research Framework Programme with the aim of creating new partnerships between publicly and privately-funded organisations involved in research. They represent a move away from the traditional case-by-case public funding of projects towards large-scale research programmes dedicated to common strategic research targets. JTIs will be welcomed by the industry which has long criticised the European research agenda for its focus on academic research and its lack of flexibility.

The European Commission has published a Communication setting out its strategy on pre-commercial public procurement of research and development (R&D), which follows on from its 2006 Communication on innovation. The Commission hopes that its Communication will be a starting point for debate within EU member states on where and how to focus pre-commercial procurement of R&D, and it intends to put forward more specific proposals in 2008.

The European Commission has published a Communication on its mid-term review of industrial policy. This follows the launch of the Commission's integrated approach to industrial policy in 2005, which is a key part of the Lisbon strategy (see for example, Legal update, European Commission's plans for legislation overhaul include proposals for IP reforms). New projects set out in the Communication include, among other things, a lead market initiative with a focus on promoting innovative products through a number of strategies including reliance on IP protection; a standards initiative to facilitate market use of R&D results; a clusters initiative to support and encourage cross-border collaborations; and an initiative on competitiveness and market access which includes plans to review the protection of IP rights and other intangibles, and to tackle counterfeiting. Source: IPR Helpdesk, press release, 16 July 2007; European Commission Communication, COM(2007)374, 4 July 2007.

The European Commission has published guidance notes on confidentiality issues that are likely to arise for participants in projects funded by the European Community's seventh research framework programme (FP7). The guidance identifies the issues that parties need to consider at each phase of the project. As well as recommending that non-disclosure agreements be signed at the proposal phase, the guidance covers the confidentiality provisions of the FP7 model grant agreement and explains what precautions should be taken to preserve confidentiality when using and disseminating research results.Source: IPR helpdesk guidance note, 3 July 2007.

The European Commission has issued a report outlining research projects currently being undertaken in the EU in the information and communications field, and which are related to the future development of the internet. The projects are funded by the EC as part of its seventh research framework programme (see Legal update, Seventh European Research Framework Programme adopted). The report describes the projects in four groups relating to different aspects of the development of the internet: converged network infrastructure; software and services architecture; the development of radio frequency identification technology; and user-generated content and three-dimensional technologies. The report emphasises the importance of this research in promoting European industry and taking a lead in the global economy.Source: CORDIS report, 27 August 2008.

The European Commission has published a ten-point programme aimed at fostering innovation within the EU, for debate at the forthcoming summit of European leaders on 20 October 2006.

It's a challenging time for pharmaceutical companies, with several blockbuster products soon to come off patent, increased competition from generic manufacturers and gaps in product pipelines. This has prompted a flurry of licensing and M&A activity, as large pharmaceutical companies compete to secure new products externally. These trends are illustrated in recent research produced by Simmons & Simmons, based on interviews with senior executives from leading global pharmaceutical companies and investment bankers in the sector. "We found a broad consensus in the industry that competition for new products in the market is prompting changes in the commercial terms on which these deals are being done," says Charles Mayo, head of Simmons & Simmons' Life Sciences Group.

The government has created the new Department for Innovation, Universities and Skills (DIUS) by combining a number of functions of the former Department of Trade and Industry (including responsibilities for science and innovation) and the Department for Education and Skills (namely further and higher education, and skills). Headed by John Denham MP, the remit for DIUS is to raise the UK's profile for science, research and innovation by promoting effective investment in these areas and making them an integral part of the government's competitiveness strategy. Source: Department for Innovation, Universities and Skills, 28 June 2007.

The government has published proposals for an overhaul of the tax credit scheme for research and development (R&D) expenditure following responses to a survey conducted among businesses engaged in R&D.

Following the opening of seven HM Revenue & Customs (HMRC) specialist research and development (R&D) tax-credit units for small and medium-sized enterprises (SMEs), in November 2006 (see Legal update, Government announces support for SMEs on R&D tax credits), HMRC has issued a practice note on its approach to handling claims within the specialist units. The note includes a link to a template claim form for SMEs to use and further guidance on preparing claims. HMRC states that it will issue 95% of payable tax credits within 28 days of receiving the claim in the specialist units.Source: HMRC R&D practice note, 18 December 2006.

This note considers the intellectual property aspects of joint ventures and strategic alliances, including collaborative research and development joint ventures.

In this article, we summarise the key business tax changes made by the Finance Act 2008, which received Royal Assent on 21 July 2008. These include wide-ranging reforms of capital gains tax, capital allowances, rates of tax and the taxation of non-domiciliaries which apply from April 2008 and significant changes to HMRC information powers which are likely to come into effect in April 2009.

An update on the implications of the 2009 Pre-Budget Report for IP, IT and communications.

The Procurement of Innovative Technologies and Research Bill, a Private Members' Bill which provided for 2.5% of the research and development budgets of government departments and agencies to be spent in supporting innovative technologies and research, has been withdrawn (see Legal update, Private Members' Bill on procurement of innovative technologies and research for more details of the Bill). The Bill had been introduced under the parliamentary procedure known as the "ten-minute rule", which in practice gives Bills little chance of becoming law, but allows a point to be made on the need for a change in the law or enables parliamentary opinion to be gauged. This Bill had been seen as having a better chance of reaching the statute book than most because it had initially been welcomed by the government.Source: House of Commons Votes and Proceedings, 19 October 2006.

The European Parliament and the Council have adopted a Decision on the seventh research framework programme of the European Community. It provides for research funding of over EUR50 billion for the seven-year period from 2007 to 2013. The funding will be allocated to transnational research projects falling under one of four main themes: co-operation, ideas, people and capacities. Funding can be accessed under rules of participation laid out in a Regulation accompanying the Decision. The adoption of the framework programme will be welcomed by the IT and communications industry, as research in this area has been allocated the lion's share of the funding, amounting to some EUR9 billion.

An overview of the key considerations and steps required in commercialising the intellectual property rights in university research programmes.