Responding to Tax Strategy Patents
Ellen P. Aprill
Loyola Law School Los Angeles
Proceedings of the Fifth-Ninth Tax Institute, Gould School of Law, USC, 2007
Loyola-LA Legal Studies Paper No. 2007-26
Recently, patents for tax strategies have drawn attention from Congress, tax policymakers, the press and tax practitioners. The phenomenon of tax strategy patents worries many tax practitioners as a matter of both policy and practice. This article reviews four categories of concerns - patent policy, the nature of our tax system, tax policy, and the impact on the tax profession. It then considers four possible kinds of responses - prohibiting patents on tax strategies, granting immunity for infringements of tax strategy patents, reforming the patent process, and relying on changes to the tax law - such concerns suggest. In the course of this review, it compares proposals regarding tax strategy patents to the current prohibition on patents for atomic energy and nuclear energy and to the special immunity afforded physicians for infringement of medical procedure patents. It also considers whether granting tax strategy patents special treatment would raises questions under TRIPs. Finally, it discusses the trade-off that tax practitioners will face in seeking legislative or administrative action regarding tax strategy patents. To gain any kind of special treatment for tax strategy patents under the patent system, it concludes, tax professionals will have to show Congress how tax practice differs from other endeavors and why special treatment would not violate obligations under TRIPs.
Number of Pages in PDF File: 49
Date posted: April 15, 2007