The patent law boom

Labarbapostiza

It has come to my attention recently, that corporations are hiring hoards of lawyers to do patent filing, and other ostensibly intellectual property protection.

Are they doing genuine intellectual property protection, or are the patents part of a tax minimisation scheme. Example: a manufacturer is producing and selling a widget. The widget is patent protected, and the patent is held by an off shore subsidiary. The manufacturer has to pay a hefty licensing fee, which gobbles up most of the profit. Tax is minimised.

What are they up to?

Labarbapostiza

If I'm correct in my first assumption. Does it make it very difficult to impossible for a tax collection agency to prove that patent and licencing is spurious - and is in fact a tax evasion scheme?


The other thing. I've been looking at the patents Microsoft, Google, Apple, Samsung and the other mobile manufacturers have been battling over. They look spurious for a number of reasons. They're not novel and complex technologies. It's things like having a calendar on phone, or touch screen scrolling. A calendar is not something anyone can patent. And putting one on a mobile device is not something that seems defensible.

The patents seem spurious and the litigation vexatious. There is genuine licensed technology that goes into the design of these phones, but that technology is produced by third parties, and the same technology is used in the different phones from different manufacturers to the point, under the skin they're virtually identical.

Victor

Labarbapostiza wrote: »

part of a tax minimisation scheme.

This is a lot of it, but htere is also an effort to stymie competitors through litigation - much of it improper.

I think it was apple tried to patent the shape of their phones - a flattened cuboid with curved corners.

Greenmachine

Victor wrote: »

This is a lot of it, but htere is also an effort to stymie competitors through litigation - much of it improper.

I think it was apple tried to patent the shape of their phones - a flat cuboid with curved corners.

Lol, how innovative.

Mr. Incognito

If you cannot show novelty of design its not patented.

You can trademark a host of things if you can show that you have commercially exploited it. Cadbury has a registered trade mark over a particular pantone purple colour for example.

The tax planning of intellectual property is much newer than the design and patents system but you cannot register things that don't meet the criteria jut because it may be advantageous for tax purposes.

Sorry to pop the conspiracy theory.

Try https://oami.europa.eu/ohimportal/en/

Labarbapostiza

Victor wrote: »

This is a lot of it, but htere is also an effort to stymie competitors through litigation - much of it improper.

There seems to be an acceleration in impropriety. And new forms of patent trolling. One in the electronics industry is filing patents on open standards, and then trolling small manufacturers who do not have a patent lawyer on their staff for licencing fees.

I think it was apple tried to patent the shape of their phones - a flattened cuboid with curved corners.

Well, these are the absurd battles the big players are having with each other. Anyone with the money can lodge these patents, but their validity would or least should, not stand up to scrutiny. The people who manufacture the components that go into the phones, are companies no one has ever heard of. When they make a component, like a chip or screen, they make a whole design of a phone, and this is what their marketing people market to people like Apple, and Samsung, etc. These people make their money through manufacture and genuine intellectual property. The look of the phone, even the applications, come about through a gradual evolution no one has complete ownership of. So, before smart phones even came on the market, the component manufactures already had them on their websites - with calendars, all kinds of things. At that point they still didn't exist - but when the retailers like Samsung, Nokia, Apple, etc, retailed these phones, they looked an performed like the manufacturers artistic representation.

The Apple Iphone...Apple designed the Apple logo. They put a chip in to distinguish it from other manufacturers using the same architecture, to stop someone from taking a Samsung and turning it into an iphone. They designed the operating system - essentially implementing the existing work of others.

The true value in the Apple brand, is not anything patentable. They just apply a very high standard of quality in the production of their products.

Some of the genuine patent violations in electronics, the patent lawyers, the judge, etc, would nearly need PhDs in electronic engineering to understand. But cases like Apple vs Samsung have been absolutely absurd. The judge essentially, award Apple a billion for nothing.

Labarbapostiza

Mr. Incognito wrote: »

If you cannot show novelty of design its not patented.

No. You can lodge a patent for any old crap. The validity of the patent is something that's tested in court. I've looked at some of the patents where there have been disputes between mobile manufacturers, and the only novelty in some cases is the term "for use on a mobile device". Which is utterly meaningless.

You can trademark a host of things if you can show that you have commercially
exploited it. Cadbury has a registered trade mark over a particular pantone
purple colour for example.

No, you're confusing trade marking with patenting. They're two very different things.

The tax planning of intellectual property is much newer than the design and patents system but you cannot register things that don't meet the criteria jut because it may be advantageous for tax purposes.

It's been used for decades but it's reached a point of absurdity. Some of the tech giants have promoted themselves as innovative by how many patents they file in a day or year. But the patents are only innovative in the sense they create an impossibly tall mountain of documentation for any tax authority to wade their way through.

The patent is valid until it is found invalid in court. If a corporation is diverting earnings to a subsidiary using thousands of licencing claims, then you have to prove each patent invalid in court before you could say it's a tax avoidance scam. Even in that case, the corporation could concede on that one patent. And just replace the licencing flow with another spurious patent.



The whole off-shoring world was created by the cosa nostra. First for laundering the mob's money, and then for avoiding tax on the washed dough.

FreudianSlippers

Mr. Incognito wrote: »

Cadbury has a registered trade mark over a particular pantone purple colour for example.

They actually lost that case: http://www.bbc.com/news/business-24401249

Labarbapostiza

I just had a conversation with a patent lawyer.

And yes, they confirmed my suspicions.

1. It is just about tax evasion.

2. The civil disputes over patents are spurious, but it's such a big money making racket the lawyers, judges, etc, are not going to stop it.

Mr. Incognito

Labarbapostiza wrote: »

I just had a conversation with a patent lawyer.

And yes, they confirmed my suspicions.

1. It is just about tax evasion.

2. The civil disputes over patents are spurious, but it's such a big money making racket the lawyers, judges, etc, are not going to stop it.

So you are saying that a patent lawyer confirmed that the whole industry that they earn a living from is basically about tax evasion.

Riiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiigggggggggggght.

I don't believe you but sure, look it, whatever you want to believe yourself.

Labarbapostiza

Mr. Incognito wrote: »

So you are saying that a patent lawyer confirmed that the whole industry that they earn a living from is basically about tax evasion.

Riiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiigggggggggggght.

Well, it's what the horse said.

They were telling me about their new job. The salary is a multiple of what they're currently earning - there is a boom in this particular business.

I caught them on the hop asked them if it was all just about tax evasion...they paused....their eyes widened.....then they smiled.....and said "yes". Call it criminal vanity, if you will.

It's not like I have a written confession. I'm satisfied, since there isn't really any other plausible explanation.

I don't believe you but sure, look it, whatever you want to believe
yourself.

Something about you strikes me. I bet, you're the kind, who if 25 years ago I told you that the local parish priest was sexually abusing children, you'd have rolled your eyes in your head, smirked that smart paddy smirk, and nodded to one of your pals that I was crackers in the head.

Mr. Incognito

Labarbapostiza wrote: »

Something about you strikes me. I bet, you're the kind, who if 25 years ago I told you that the local parish priest was sexually abusing children, you'd have rolled your eyes in your head, smirked that smart paddy smirk, and nodded to one of your pals that I was crackers in the head.

WOW.

just. Wow

So people who don't believe whatever nonsense you make up based on an anonymous horse are apologists for paedo priests?

You win at Internet. Your certificate will be along in the post.

FreudianSlippers

Labarbapostiza wrote: »

Well, it's what the horse said.

They were telling me about their new job. The salary is a multiple of what they're currently earning - there is a boom in this particular business.

I caught them on the hop asked them if it was all just about tax evasion...they paused....their eyes widened.....then they smiled.....and said "yes". Call it criminal vanity, if you will.

It's not like I have a written confession. I'm satisfied, since there isn't really any other plausible explanation.




Something about you strikes me. I bet, you're the kind, who if 25 years ago I told you that the local parish priest was sexually abusing children, you'd have rolled your eyes in your head, smirked that smart paddy smirk, and nodded to one of your pals that I was crackers in the head.

I'm an IP lawyer (albeit I don't do much with patents) and I'd like to make a multiple of my current salary. I can has job tax evading ppl?

Uno my Uno.

Lawyers never do very much work with Patents, Patent Attorneys (who are a separate profession) do all the work related to Patents as it is highly specialised and highly technical. Contrary to what has been suggested in this thread it is exceptionally difficult to gain a patent and many more patent applications are refused than are granted. Patent offices only grant them when specific and exacting criteria are met. If it were any other way a Patent would be worthless and the system pointless. Legal actions involving Patents (such as Apple and Samsung) generally revolve around whether a Patent was infringed rather than whether a Patent was validly granted.

I think it is unlikely that this so called boom in Patent work is related to Tax evasion because there is much better ways to avoid/evade/plan tax liability. A Patent's primary use is to protect inventions before their value can be truly known. Its not possible to Patent your best selling product years after you have started selling it, only while it is "novel". For that reason when a company is developing products the best approach is to obtain as many patents for as many products as possible so that if one of them turns out to be the next iPhone, you've got it covered.

Labarbapostiza

FreudianSlippers wrote: »

I'm an IP lawyer (albeit I don't do much with patents) and I'd like to make a multiple of my current salary. I can has job tax evading ppl?

Aw...the dark side beckons you.......with cash.

If you're any kind of IP lawyer the penny should have dropped for you a long time ago. Are you kind of green? And in fact could you be green enough to have participated in the scam unbeknownst to yourself.


How to find the ppl. The thing about any criminal enterprise is that like the Swiss banking system, confidentiality and discretion are essential for its' success. Just as hoodlums don't put ads in the Evening Herald; experienced robber sought for bank job; company car, VHI, and pension, etc, the tax evaders don't place ads saying; IP lawyer with tax evading nous, sought for major tax scam.

You're not even meant to whisper it's a scam, otherwise the jig would be up quick enough.

The trick began decades ago. I imagine others had been slow to get in on the game, because they believed the patents and IP had to be legitimate. They don't. A subsidiary is hardly going to dispute the legitimacy of licencing claim from another subsidiary, are they now?

Now, there is a bit of a gold rush.


I think theoretically anyone can get in on the scam. Say if you have a hotdog stand; but with a unique twist; your name is Micky, and your sausages are Willies. You set up an offshore entity, in some warm and shady location, name unimportant. That entity holds the IP; all the trademarks for Micky's Willies. Then you have your hotdog stand in Ireland, but the offshore entity charges you a licencing fee for the use of it's IP; the trademarks, and maybe even you lease the hotdog stand from the offshore entity. This way, you divert the profits from your Willy stand to a location where the tax arrangements are more favourable.

Uno my Uno.

Labarbapostiza wrote: »

Aw...the dark side beckons you.......with cash.

If you're any kind of IP lawyer the penny should have dropped for you a long time ago. Are you kind of green? And in fact could you be green enough to have participated in the scam unbeknownst to yourself.


How to find the ppl. The thing about any criminal enterprise is that like the Swiss banking system, confidentiality and discretion are essential for its' success. Just as hoodlums don't put ads in the Evening Herald; experienced robber sought for bank job; company car, VHI, and pension, etc, the tax evaders don't place ads saying; IP lawyer with tax evading nous, sought for major tax scam.

You're not even meant to whisper it's a scam, otherwise the jig would be up quick enough.

The trick began decades ago. I imagine others had been slow to get in on the game, because they believed the patents and IP had to be legitimate. They don't. A subsidiary is hardly going to dispute the legitimacy of licencing claim from another subsidiary, are they now?

Now, there is a bit of a gold rush.


I think theoretically anyone can get in on the scam. Say if you have a hotdog stand; but with a unique twist; your name is Micky, and your sausages are Willies. You set up an offshore entity, in some warm and shady location, name unimportant. That entity holds the IP; all the trademarks for Micky's Willies. Then you have your hotdog stand in Ireland, but the offshore entity charges you a licencing fee for the use of it's IP; the trademarks, and maybe even you lease the hotdog stand from the offshore entity. This way, you divert the profits from your Willy stand to a location where the tax arrangements are more favourable.

Step 1. Steal underpants
Step 2. ????????????????
Step 3. Profit!!!!!

FreudianSlippers

Labarbapostiza wrote: »

Aw...the dark side beckons you.......with cash.

If you're any kind of IP lawyer the penny should have dropped for you a long time ago. Are you kind of green? And in fact could you be green enough to have participated in the scam unbeknownst to yourself.

Whooooosh.


(the sound of my sarcasm going right over your head)

Labarbapostiza

FreudianSlippers wrote: »

Whooooosh.


(the sound of my sarcasm going right over your head)

It's okay Slippers. On the internet no one can see you blush.

Happdog

There are plenty of ways for companies to be tax efficient without relying on the plan you have set out here. As far as I am aware the tax exception on an Irish patent is only five million. If you are referring to section 234 of the Taxes Consolidation Act 1997, what makes you think that all these companies just spotted this now and hence the “upsurge”. You can rest assured that these companies were not caught on the hop.

This “upsurge” ( if it exsits out side this thread) in patents could simply be due to the fact that companies like people follow trends, the Apple and Samsung conflict got a lot of media attention. One billion awards tend to do that. There is no big conspiracy or scam, companies will be tax efficient and this is a small tool in the arsenal.

In regards spurious claims, there is a growing industry of patent abuse in the states. The best I have heard of was MPHJ Technology Investments who have attempted to patent the action of scanning a document to email, and sent out tens of thousands of letters to business across America demanding money if they had ever performed this task. Federal goverment is attempting to bring them to task as I type.

jawn

Can we distinguish between tax evasion (which is illegally not paying tax which is owed) and tax avoidance (which is arranging your affairs in such a way as to reduce your tax liability)?! Sweet!

Labarbapostiza

jawn wrote: »

Can we distinguish between tax evasion (which is illegally not paying tax which is owed) and tax avoidance (which is arranging your affairs in such a way as to reduce your tax liability)?! Sweet!

Evade, avoid, tomatoe, temayto

You could say tax minimisation. Using intellectual property solely with the intention of minimising tax, is tax evasion. People get confused, with the difference between "they can't nail us for it" with something being actually legal.

hullaballoo

Labarbapostiza wrote: »

Evade, avoid, tomatoe, temayto

You could say tax minimisation. Using intellectual property solely with the intention of minimising tax, is tax evasion. People get confused, with the difference between "they can't nail us for it" with something being actually legal.

This is incorrect; tax avoidance is totally legitimate. In fact, if it wasn't for government-led tax avoidance measures, we never would have had any sort of economy worthy of recovering. The world is not as Marxist as you might like.

Somehow I don't think you're going to accept any explanation of the difference.

I don't know what sort of additional life-span this thread has. It's very much starting to look like you're looking to grind an axe with only very finely marginal relevance to this forum.

Labarbapostiza

hullaballoo wrote: »

This is incorrect; tax avoidance is totally legitimate. In fact, if it wasn't for government-led tax avoidance measures, we never would have had any sort of economy worthy of recovering. The world is not as Marxist as you might like.

Please do not force me to sound condescending. It can be very upsetting

You're not meant to evade your tax, you're not meant to avoid you're tax, you're meant to pay your tax. Not because you have a moral obligation, not that the world is Marxist (whatever that means), it's because it is the law.

Imagine, you are a company director. And you're being interviewed by the IRS, the revenue, or even Her Majesty's. They point at the books and ask, "What are these transactions to off shore entities about here?". And you answer, chest swelling with professional pride, "Oh, these are my tax avoidance structures". You prattle on, explaining how the different entities function to minimise your tax bill. When you finish you're beaming like an idiot. The tax men will look down at their notepads, scribble some calculations, when they finish they will tell you that your off-shore entities are now on-shore, that you owe a lot more tax, plus a fine for taking the piss, and even the possibility of prison time.

(I know prison time isn't that likely in Ireland, if you turn up in your rugby blazer and don't forget the school tie.....the judge will assume because of your standard of education that yes, you may have understood what you were doing was wrong, but that you didn't realise your were in fact breaking the law. And let's face it, he's right. It's only in the public education system they teach law, as that class are more likely to embark on careers of habitual criminality, crime being in their DNA. And you can't expect a rugby 'legend' to be cognisant of much, given the damage from blunt force trauma to their brains, and whatever else the peculiar bonding rituals they do at those schools did to their mind. God love them, may be they'd enjoy prison, you never know.)

You're not meant to explain the entities exist for tax avoidance.

Somehow I don't think you're going to accept any explanation of the
difference.

Well, I'm not going to accept your explanation, because your explanation is incorrect.

I don't know what sort of additional life-span this thread has. It's very much
starting to look like you're looking to grind an axe with only very finely
marginal relevance to this forum.

Oh spare me the "you've got some chip on your shoulder" clap trap.

hullaballoo

Yeah whatevs.

Thread closed.