Bill Would Ban Tax-Strategy Patents
A ban on patents for tax-planning strategies is included in legislation to reform the patent code.
The ban is part of a patent reform package that passed the House earlier this month, but isn’t yet part of the Senate bill, the Wall Street Journal reports (sub. req).
Tax lawyers argue that such patents have changed the way they practice law, the ABA Journal reported in a May 2007 article, “Crisis Pending.” Now they need to check not only the latest Internal Revenue Service rulings but also the latest patents.
“If you recommend a plan that is patented, the risk is that you, your firm and/or your client might be sued for infringement,” said Christine Albright of Chicago, then-chair of the ABA Section of Real Property, Probate and Trust Law.
Critics also say a patent grant for a questionable tax shelter could spell trouble for the IRS when the patent holder argues the government has already approved it.
The U.S. Patent and Trademark Office has issued 60 tax-planning patents since the U.S. Court of Appeals for the Federal Circuit ruled in 1998 that business methods may be patented.
