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Law Assessment Answer
Assignment Task:
Our Earth Pty Ltd, Legal Action Against Coffee Bean Pty Ltd
Our Earth Pty Ltd, an Australian owned company, are the manufacturers of a specially designed bio-degradable, disposable coffee cup made from sustainable materials. They are currently the sole supplier to coffee shops in Australia. During the year Our Earth Pty Ltd discovered that Coffee Bean Pty Ltd, the owner of a chain of coffee shops Australia wide, had been contracting an overseas company to manufacture a similar cup based on their design, for a cheaper price. Coffee Bean Pty Ltd hadnt informed its customers that it was not the original Australian made Our Earth product that they were using.
As Our Earth Pty Ltd has a design patent over the cup they decided to take legal action against Coffee Bean Pty Ltd. As a result of the action, the following amounts were payable by Coffee Bean Pty Ltd to Our Earth Pty Ltd in the year ended 30 June 2019:
$300,000 damages for design patent infringement
$200,000 for expected lost revenue over the 12 month period that Coffee Bean Pty Ltd had been using the other product
$15,000 interest received on the damages payout
$40,000 reimbursement of legal fees incurred by Our Earth Pty Ltd
Required
:
Advise Our Earth Pty Ltd of the taxation consequences of the above transactions.
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