Taxes, Patents and the Nuclear Option

Illinois Journal of Law, Technology & Policy, Forthcoming

35 Pages Posted: 24 May 2008

See all articles by Max Stul Oppenheimer

Max Stul Oppenheimer

University of Baltimore - School of Law


Periodically, as industries discover that the patent statute applies to them, there are calls for industry-specific exemptions or special treatment, based on a perception that the patent system is ill-suited to the particular industry. The tax planning industry is the latest to encounter the patent system, and has reacted according to the general pattern. The reaction is all the more understandable in this particular case: while patent practitioners inhabit a world governed by a statute of broad principles and few specific exceptions, tax practitioners may be more familiar and comfortable with the concept of industry-specific rules.

The concerns expressed by those who fear that tax strategy patents pose a significant threat result from a fundamental misunderstanding of patent law. As a system which can grant government sanctioned monopolies, the patent statute includes significant hurdles to patentability to ensure that such monopolies are granted only in exchange for meaningful contributions to the public. Those hurdles are particularly well-suited to deal with tax strategy patents.

To explain why tax strategy patents pose no serious threat, this article begins with a brief history of the emergence of and reactions to tax strategy patents, followed by an overview of the U.S. patent system's objectives and methods. Then this article traces how a tax strategy patent application would be handled by the U.S. Patent and Trademark Office and, if issued, the rights it would confer on its owner. Although the analysis demonstrates that tax strategy patents are likely to be valueless, suggestions are offered for helping to assure that the patent system responds appropriately in evaluating tax strategy patent applications.

Keywords: tax, patents, tax strategy patents, intellectual property

JEL Classification: A10, B4

Suggested Citation

Oppenheimer, Max Stul, Taxes, Patents and the Nuclear Option. Illinois Journal of Law, Technology & Policy, Forthcoming, Available at SSRN:

Max Stul Oppenheimer (Contact Author)

University of Baltimore - School of Law ( email )

1420 N. Charles Street
Baltimore, MD 21218
United States

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