Tax Law and Business Organization Strategy

House Judiciary Committee acts against patenting tax planning techniques

On July 18, the House Judiciary Committee approved a patent reform bill (H.R. 1908) that included a provision making tax planning techniques unpatentable. The provides that a patent couldn't be obtained for “a tax planning method”—a plan, strategy, technique, or scheme that's designed to reduce, minimize, or defer a taxpayer's tax liability, or that when implemented has that effect. However, an unpatentable tax planning method wouldn't include the use of tax preparation software or other tools used solely to perform or model mathematical calculations or prepare tax or information returns. The provision would cover tax planning with regard to any federal, state, county, city, municipality, or other governmental levy, assessment, or imposition (whether measured by income, value, or otherwise).

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Josh Droppo - September 5, 2007 3:30 PM

Would this bill be applied to patents that have already been issued? If so, any idea how far back would it be retro-active?

Jack Howell - September 10, 2007 2:16 PM

Josh: The language does not purport to void any patents already issued. But if a patent has not been issued by the effective date, even if applied for, no patent will issue. The statute also says that the fact that it does not void any patent previously issued does not automatically validate a patent that has been issued. Jack

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