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Patents on Tax Reduction Strategies a Problem
EsonLinji writes "The International Herald Tribune has an article about how some lawyers are realising that patents on tax reduction strategies (a business method) might be a problem. The article states that there are already 50 such patents with more on the way, and at least one lawsuit. Particularly worrying is the idea of needing a license to follow the law. Fortunately, some of the laws get that this is a problem. Tax patents, the lawyers wrote, amount to 'government-issued barbed wire' to keep some taxpayers from getting equal treatment under the tax code."
Finally, someone was dumb enough to rock the patent boat silly.
/read common man/ to take notice that something is just a bit wrong. Unfortunately, I don't forsee any great changes to come until wealthy men start losing out to those less fortunate. A good ol' fashioned robin hood approach to the matter could very well upset things just enough to make some real changes.
Granted, these will probably be killed due to certain issues... like aformentioned blurb mention.
However, it might just be enough to get more people
I will make it quite simple. Rich people don't care if poor get poorer. Rich people don't care if they lose wealth to other rich people. Rich people do care if they lose wealth to poor people. You just can go around upsetting the natural balance of things.
Yes, over the top a bit and a bit absurb, but I think I can get a few people behind my new campaign slogan.
Vote Cylix 2008!
"You should always go to other people's funerals; otherwise, they won't come to yours." -- Yogi Berra
Okay, so let me get this straight...
The gaming industry doesn't want me to make backups of my game to keep the disk from being scratched by overuse. It's infringement after all.
The recording industry won't let me put my tunes on a mix CD because that's a type of infringement too.
Now the government is going to ensure that I'm going to have to go to certain places to file my taxes this year because otherwise that's a different kind of infringement, patent infringement - and it doesn't matter if I read the law myself and saw that this is possible, because some tax firm in the middle of Texas came up with it as soon as the law was passed?
Enough is enough, already!
Accounting firms get paid tens of millions of dollars to come up with tax hedges. It isn't all that obvious what they are doing in many cases.
For instance, one older tax hedge -- not listed specifically in any laws -- involved forming a specific type of investment trust which purchased secured deed liens bonds of oil piplines, then reselling the interests in the trust. Using this method, the income from said trusts could be treated as operating (rather than investment) income by the holders in due course. This allowed them to prevent required liquidation (and subsequent taxation) of retained earnings in a C corp which had since converted to an S corp.
If 1 click puchasing counts as non-obvious, the above is not even questionable.
Oh, wow, so NOW someone patents something that pinches lawyers, and it's "ZOMG! WE GOTTA DO SOMETHING ABOUT THAT!!!" from the lawyers, and all this business method patenting bullshit that has been going on for decades gets nary a finger wave all this time?
I'm shocked. Truly.
Even beyond the fact that patenting something has to do with obeying the laws of the land, the whole notion of patenting business methods (and many forms of software patents as well) was and has always been absurd and self-destructive.
-SS "Teach the ignorant, care for the dumb, and punish the stupid."
So, if I patent a method af applying for and receiving a patent, will the patent system self destruct?
"Ain't democracy great?"
Right there is the prime reason why people are getting more and more cynical about this entire democracy thing: here, democracy has degenerated into a simple oligarchy, where the group in power is the group with money. Quite frankly, I wouldn't be surprised if in 50 years, the US would have the same political system that China has now: a central party that is in name democratic, but in practice completely static, and where ascension to posts comes strictly through internal power struggles.
I'm really not one for doomsday scenarios, but I have to say that this kind of crap is how people get disenfranchised and the idea that they have nothing to lose anymore. And what do people do who feel they have nothing to lose? They revolt. Feh.
Those who can, do. Those who can't, sue.
The previos poster wrote:
/Af Jerntagel
"One can only hope that tax and patent lawyers turn on each other and simply self destruct."
You work as an ecology consultant for Austraila or something?
What if they get viable offspring, you thought of that?!
Well, if I remember correctly, tax lawyers and patent lawyers are complimentary (same mass but opposite charge, i.e., a tax lawyer can be seen as a patent lawyer travelling the opposite direction in time), so if they ever do come into contact, they should annihilate each other in a burst of light.
It had better be hearsay, because coming from someone who has sworn to uphold and defend the constitution, it is nothing less than treason.
"How can you patent a business method on following the law?"
Easy. It's done all the time with the law of nature, so why not with the other laws? It's even more justified to patent following this law, since it's something that we have written by ourselves. Something that should not be justified, is to patent facts, like they do in science like physics and medicine.
c++;
Disclaimer - I am a tax lawyer
We've been discussing this internally for a few months now. Looking at the patent applications involving tax, we saw three categories of items:
(1) claims on how to implement data tracking systems in order to pay taxes (think programs for calculating sales taxes depending on where the product is shipped).
(2) claims on automating how to think through the tax consequences of a business deal (wow, if you do it with a database rather than pencil and paper, that should be patentable, right?) Side note: The hard part is not the algorithm, the hard part is getting the data and keeping it up to date.
(3) claims on a certain sequence of transactions that are claimed to be non-obvious and achieve lower taxes than a different sequences of transactions.
These have all the same problems that the software industry is dealing with: Some of this stuff has been done for decades, but is not "obvious" to a patent examiner.
A lot of these seem to be filed for patent troll purposes - if the patent office grants the application, then the patent holder will show up at the big accounting firms and demand a payoff.
There are a couple of interesting additional twists when this stuff starts getting applied to things like tax law. The first relates to type 1 claims (e.g. data tracking implementations). Here is where we argue that the patent system should not be allowed to put roadblocks on people's attempts to follow the law (and we are not even talking about gaming the system, just trying to be legal).
The second tax law specific twist relates to telling the government about your new tax planning idea. A competent government would look at the idea, decide if it should be allowed, and if it doesn't like the idea, change the tax law even before the patent is granted. [Yes, you can argue whether the US has competent government, but hey, we can talk hypothetically.]
I generally agree that the patent system is broken, we've just found additional ways to demonstrate that fact.
If you think deeply enough, you will have no single direction for your outrage.