Law Commons^™

Attacking Innovation, Xuan-Thao Nguyen, Jeffrey A. Maine

Articles

Economists generally agree that innovation is important to economic growth and that government support for innovation is necessary. Historically, the U.S. government has supported innovation in a variety of ways: (1) a strong legal system for patents; (2) direct support through research performed by government agencies, grants, loans, and loan guarantees; and (3) indirect support through various tax incentives for private firms. In recent years, however, we have seen a weakening of the U.S. patent system, a decline in direct funding of research, and a weakening of tax policy tools used to encourage new innovation. These disruptive changes threaten the …

Branding Taxation, Xuan-Thao Nguyen, Jeffrey A. Maine

Articles

Branding is important not only to businesses,but also to the economy. The intellectual property laws and tax laws should thus further the legitimate goals of encouraging and protecting brand investments while maintaining a sound tax base. Intellectual property protections for branding depend on advertisement and enforcement, both of which demand significant amounts of private investment by firms. Although one would expect similar tax treatments of both categories of investment, the categories are actually treated as vastly different for federal income tax purposes. Additionally, tax distinctions also exist within each category. The result is that some branding investments are expensed and …

Taxing Facebook Code: Debugging The Tax Code And Software, Xuan-Thao Nguyen, Jeffrey A. Maine

Articles

This article sets out to analyze both intellectual property laws and tax systems as applied to computer software. It analyzes software within intellectual property's established doctrinal framework, a difficult task due to the fact that software can encompass some combination of the traits of copyrights, trade dress, patents, and trade secrets. It then examines both the federal and state tax systems governing software. It shows that fitting software within current tax schemes presents unique challenges, as software contains both tangible and intangible elements, is subject to varying intellectual property protections, and can be delivered through various media. The article argues …

Equity And Efficiency In Intellectual Property Taxation, Xuan-Thao Nguyen, Jeffrey A. Maine

Articles

This article examines the federal income tax regime governing intellectual property using normative criteria in evaluating taxes: equity and efficiency. The article first evaluates the current intellectual property tax scheme in terms of horizontal equity, identifying differences in tax treatment of what appear to be similar intellectual property activities. It argues that disparate tax treatments between seemingly similar intellectual property owners signal that flaws may exist in the tax system. The article then assesses the efficiency of the intellectual property tax system, examining numerous tax subsidies for intellectual property and their effectiveness in promoting economic growth. It argues that many …

Acquiring Innovation, Xuan-Thao Nguyen, Jeffrey A. Maine

Articles

In recent years, the innovation market has witnessed a new business model involving companies that are mere patent holding shells and not operating entities. They have no customers or products to offer, but they do have an aggressive tactic of using patent portfolios to threaten other operating companies with potential infringement litigation. The strategy is executed with the end goal of extracting handsome settlements. Acquisitions of patents for offensive use have become a major concern to operating companies because such acquisitions pose the threats of patent injunction, interrupting the business and crippling further innovation.

While many operating companies today know …

Taxing The New Intellectual Property Right, Xuan-Thao Nguyen, Jeffrey A. Maine

Articles

Current, albeit arbitrary, rules exist governing the tax treatment of traditional forms of intellectual property, such as patents, trade secrets, copyrights, trademarks, and trade names. While tax principles exist for these traditional intellectual property and intangible rights, specific tax rules do not exist for new intellectual property rights, such as domain names, that are emerging with the arrival of global electronic commerce transactions on the Internet. This article explores the proper tax treatment of domain name registration and acquisition costs, addressing these parallel questions? Are domain names merely variations of traditional forms of intellectual property and other intangible rights to …