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New Money Maker: Patent Your Practice Area!

This New York Times article, You Can't Use That Tax Idea.  It's Patented (10/20/06), reports that in the wake of a federal appellate ruling of 1998 [State Street Bank v. Signature Financial Group, 149 F.3d 1368 (Fed. Cir. 1998), discussed here] that provides for patents for "business methods," 49 tax-strategy patents have been issued, with numerous more applications filed. And apparently, lawyers are among those filing for and invoking the patent. For example, the article reports that after an ABA conference where tax strategies were discussed, "participants got a letter warning that using one idea mentioned would be in violation of a patent."

Some lawyers, however, have have stepped up to argue against issuance (or enforcement) of tax strategy patents as a policy matter. From the article:

In an article in Legal Times this week, Paul Devinsky, John R. Fuisz and Thomas D. Sykes, three lawyers from McDermott, Will & Emery, suggested that a company might figure out a tax strategy that would save it a lot of money, and then patent it. Then the company could refuse to license the patent to its competitors, thus raising its rivals’ cost of doing business.  Tax patents, the lawyers wrote, amount to “government-issued barbed wire” to keep some taxpayers from getting equal treatment under the tax code...After all, as Mr. Devinsky and his colleagues wrote, “The successful patenting of tax strategies now limits Congress’ ability to shape economic policy through legislation, and places that power in the hands of individual patent holders.”

What's next -- patented techniques for drafting legal briefs or setting up estate plans? Will law schools have to pay licensing fees to patent holders when they teach students strategies under patents? Where's the end to all of this?

Posted by Carolyn Elefant on October 20, 2006 at 04:16 PM | Permalink | Comments (0)


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