Thursday, 14 April 2016

A US Patent Box: reflections from "Abroad"

This might be news ...
This weblog has sometimes expressed its acute disappointment that the IP community has paid insufficient attention to taxation of IP-based revenue in the current global trading ecosystem. Having said that, it's only fair to add that not everything is doom and gloom -- even though it's still too early to celebrate the long-awaited acceptance of the proposition that taxation issues are an inseparable part of all IP-based business planning, issues that are too important to be left for after-the-event mopping up by accountants.

Respected US academic and IP Finance blogger Professor Mike Mireles reported yesterday on a conference, “Taxation of Intellectual Property in the Global Economy”, backed by Georgetown University. Mike's blogpost gives some idea of what this event, held on 11 March, was all about.  The title itself is really promising: the words "taxation", "intellectual property" and "global economy" suggested deep thinking about tax strategy across a world in which online trading, increasingly harmonised health and safety considerations and interoperability mean that what works in one country should work in many, if not all.

But titles, like appearances, can be deceptive.  A look at the final programme's agenda reveals that, while "intellectual property" is the theme, only one IP right -- the ubiquitous patent -- gets a name check [one of our readers recently complained with some justification that the terms 'IP' and 'patents' are not synonymous, as anyone who has worked in the entertainment industry can testify].  "Taxation" is of course the target topic, but only one narrow aspect of the topic is in focus, investment incentives through the medium of the patent box.  "Global economy" is the ideal backdrop, but the only country other than the United States to get a mention is somewhere rather vaguely called "Abroad". Oh, and the speakers are all affiliated to US institutions or businesses. Anyone looking for something to do with the OECD, BEPS, general issues regarding the taxation of royalty streams, the appropriate location of IP portfolios and a host of other labels that concern IP tax-payers might well be disappointed.

Georgetown University
But this is not the time for despondency.  In intellectual property circles outside the United States, that jurisdiction is often pilloried for its obsession with the belief that it is the only jurisdiction that counts.  In truth there is some basis for this belief in many markets, where the US and its commercial practices influence and indeed dominate the innovative markets which it effectively creates. However, here is proof positive that the US is looking at foreign tax/incentive models and making an honest effort to evaluate them objectively.  This trend should be encouraged. The US can learn from the IP taxation initiatives of other countries, just as those other countries can learn from this fresh assessment and appraisal of their current fiscal and innovation policies.

You can enjoy the proceedings of this conference here.

1 comment:

  1. No follow up? Has the idea died? Does anyone know? Come to think of it, does anyone care?