That’s right. Stupid!
According to tax experts interviewed for this report on CBS news, the savings achievable by US companies moving some of their intellectual property rights to Ireland is so good that you would be stupid not to.
According to the report, the USA, with a headline rate of 35%, has the highest corporation tax rate in the developed world. In comparison Ireland’s rate of 12.5% may be reduced to as low as 2.5% for income derived primarily from intangible assets such as intellectual property.
Cisco CEO, John Chambers, drives home the point. Chambers emphasises that one of the key responsibilities of the US multinational CEO is the reduction of the effective corporation tax rate.
New Morning IP works with US companies to legitimately reduce their corporation taxes on intellectual property income. If you are a CEO or are responsible for your corporation’s tax rate then please email or call +353-1-254 2340 to find out how you could save money.
The Irish government’s decision to abolish a tax exemption on income from patent royalties does not close the door to foreign companies who want to monetize their patent assets in Ireland.
Richard O’Connor of patent attorneys Cruickshanks, speaking to Silicon Republic, has criticised the government’s decision to abolish the tax exemption on patent royalties. O’Connor wonders how the government can justify the termination of this incentive in light of its policy to promote the Smart Economy and increase R&D particularly given that the government will continue to pump almost half a billion per year into third level research. The patent royalty exemption was one of the key incentives for domestic SMEs and inventors.
On the other hand Ireland remains a very attractive place to hold, acquire and create intellectual property. A wide range of benefits remain available to international companies wishing to manage their intellectual property in a strategic overseas jurisdiction.
We offer international clients a cost effective managed licensing service to outsource all or part of their intellectual property operation quickly and cost effectively.
Why not contact us today to find out more.
According to a paper cited by the 271 Patent Blog, patents are a signal of the credibility of US start-ups.
Researchers carried out an analysis of three decades of patent data for VC-backed firms in the US to examine the effect of patents on their performance and the financing patterns of VCs. Their results show that US start-ups which file patents before receiving VC investment are more likely to file an IPO, less likely to fail or be sold privately and receive more funding from more prominent VCs.
According to the researchers the successful filing of patents before funding acts as a signal to the VCs relating to the quality of the opportunity where there is an asymmetry of information between the insiders in the start-up and VCs.
The researchers conclude:
[O]ur results show that start-up companies’ patenting prior to any VC investment is credible by leading to higher IPO success rates. Accordingly, entrepreneurs tend to wait for patent filing before asking for VC money and tend to file more patents when the degree of information asymmetry is higher. Consequently, patenting start-up firms not only attract larger and more experienced VCs in first VC financing round, but also receive significantly larger amounts in first rounds or all rounds of investment, and experience longer investment incubation periods. All these findings are consistent with the signaling role of patents in equilibrium. Patent filing also helps to enhance entrepreneurs’ control in start-ups: new ventures with prior patents are significantly less likely to be acquired in trade sale than those without patents.
The paper may be accessed here.
From the excellent IP Finance blog comes news that Japan is to reorganise the way in which it exploits some of the patents developed in universities. The Innovation Network Corporation of Japan (INCJ) is to set up a fund called LSIP which will bundle public sector IP, add value and license it. According to the announcement:
(1) Even though the companies seeking the patent licence from the university want a group of intellectual property that has been sorted and bundled to a certain extent, each university has tended to market its own patents without any coordination, making the patents much less attractive to the companies.
(2) University patents tend to be made simply on research results and so the data backing the patent is insufficient, which reduces their value as intellectual property because peripheral patents are not filed. Not only are public research institutions in Japan faced with similar problems, it is also likely that some companies have dormant patents that cannot be put to practical use.
This is an interesting way to overcome some of the issues relating to the exploitation of university IP. The same problems arise the world over namely lack of coordination, duplication of effort and lack of value add after a patent is filed.
This model could be applied in Ireland and indeed pushed further. For example the IP fund could offer R&D funding to the original inventors to carry out added value development or to pursue patents in related aspects of technologies. This would bring a more IP focussed coordination and add more value than the current ad-hoc system of funding research projects.
From the vaults, this link appeared in one of my regular Google alerts. It details the position in 1981 regarding the Community patent and trade mark within the EU. The tone of the paper implies that the Community Patent would come into force sooner rather than later. Unfortunately this has not been the case. Interestingly the paper called for ECJ supervision of the EPO appeals process an element that is strikingly missing from the current proposal for a unified patent litigation system. This was one of the objections of the Advocates General put forward in their opinion to the Court. They were off the view that since it was proposed that the EPO Enlarged Board of Appeal would not be subject to CJEU supervision in violation the TFEU.
While the trade mark directive was adopted at the end of the 1980′s, thirty years on it seems that we are no closer to the magical European Patent.
One of the very few patent-law areas where the EU has competency is in relation to biotechnology inventions. Article 9 of the Biotechnology Directive (98/44/EC) specifies that patent protection for materials which contain genetic information extends only so far as the genetic material performs its function. In case C-428/08 Monsanto Technology LLC v Cefetra BV and Others the ECJ held that material containing a residue of DNA material which conferred resistance to Monsanto’s Roundup pesticide was not protected by Monsanto’s patents since the DNA did not perform its function. The Court also held that Article 9 represented full harmonisation in this regard and it was not open to Member States to provide for absolute protection to a DNA sequence as such.
These days challenges to national gambling laws are almost as frequent as AdWords cases (here’s a recent one). In the most rececnt, the ECJ holds that Sweden is entitled to limit the provision of gambling services to operaters having socially beneficial objectives.
Nice article on some of the tensions between IP protection and innovation.
Are most lawyers low esteem workers? According to Seth Godin:
If you want to hire people to do a job, to be cogs in the system and to do what they’re told, you might want to focus on people who don’t think very highly of themselves.
People with low self esteem might be more happy to be bossed around, timed, abused, misused and micromanaged, no?
And the converse is true as well. If you want to raise your game and build an organization filled with people who will change everything, the first thing to look for is someone who hasn’t been brainwashed into believing that they’re not capable of great work.
This is a really important speech from Joaquín Almunia, European Commissioner for Competition. He outlines how Competition law will contribute to the Europe’s 2020 agenda. Key areas include creating an efficient internal market for content, facilitating new cloud and mobile platforms, securing the public benefit of standards, making sure some the next web platforms are developed in Europe and so on. For IP practitioner this speech sums up the next ten years in Europe.
The market for patents is beginning to take off in the US with diverse business models and funding arrangements emerging. But what about Europe? Interestingly, the Commission is concerned and is exploring the creation of a market for IPRs in Europe.
The European Commission today published results of a program which monitored patent settlements in the pharmaceutical sector between July 2008 and December 2009 and in particular the effect of those settlements on the entry of generic medicinces after the expiraton of patent protection for originator medicines.
The exercise took place as a follow up to the Commission’s sectoral inquiry into the pharmaceutical sector which concluded in 2009 that between 2000 and 2008 originator pharmaceutical companies were using the patent system to delay entry of generic replacement medicines by an average of 7 months after the expiration of patent protection. In particular there was evidence that originators were compensating generic manufactures in return for delays in market entry.
In today’s release the commission has noted that although the number of settlements has doubled on an annual basis, the value of these settlements has fallen dramatically and that only 10% of the latest settlements are problematic from a competition point of view.
The Commission has vowed to continue monitoring the sector and to repeat the investigation into patent settlements again in 2011.
The press release is here.
Full details of the sectoral inquiry are here.
The European Commission Directorate General for Trade has just published a report on the latest round of negotiations of the Anti-Counterfeiting Trade Agreement (ACTA) which recently took place in Switzerland.
Transparency has been a hot topic in relation to ACTA and a working draft of the agreement was released in April after considerable political pressure. Although the theme of transparency continues with the negotiators having met with civil society representatives in order to exchange views, an updated draft has not been released to date.
ACTA has also been accused of having several unpleasant side effects including mandating the seizure of generic drugs in transit and the searching of personal music players by customs agents looking for pirated music.
The Commission report provides a concise summary of ACTA, and obviously in light of the perceived negative affects focuses mostly on what ACTA is not:
While ACTA aims at establishing effective enforcement standards for existing intellectual property rights, it is not intended to include new intellectual property rights or to enlarge or diminish existing intellectual property rights.
ACTA will not interfere with a signatory’s ability to respect fundamental rights and liberties. ACTA will be consistent with the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement) and the Declaration on TRIPS and Public Health. Participants reiterated that ACTA will not hinder the cross-border transit of legitimate generic medicines, and reaffirmed that patents will not be covered in the Section on Border Measures. ACTA will not oblige border authorities to search travellers’ baggage or their personal electronic devices for infringing materials.
Conspicuous by its abscence, however is a lack of specific assurance that ACTA will not provide for graduated repsonse or “three strike” treatment of internet users accused of illegal downloading. The report merely states that ACTA will not interfere with a signatory’s ability to respect fundamental rights and liberties.
The UK budget introduces a “patent box” with a ring-fenced low tax rate for certain patent income. In addition changes are made with regard to R&D expenses for SMEs.
The former Community Patent is now the EU Patent but is it any closer to reality? After almost 40 years senior Commission official thinks it is “dead in the water“. Barnier and Belgium vow to press on with the project. Look out for legislation and opinion of the CJEU towards the end of the year. Is it a case of good-cop/bad-cop. More balanced view from IPEG.
IP meets competition after Microsoft: Good review of possible Commission plans to introduce legislation mandating software interoperability in certain circumstances. Timely in light of recent complaint against SAP.
Commission launches consultation on net neutrality. Context of Digital Agenda.
China has a plan.
On the first day of the Belgian presidency the EU Commission published proposals for rules relating to translation arrangements for future EU Patents.
According to the press release:
A proposal on translation arrangements for a future EU Patent, the final element needed for a single EU Patent to become a reality, has been presented today by the European Commission. Today, obtaining a patent in Europe costs ten times more than one in the US. This situation discourages research, development and innovation, and undermines Europe’s competitiveness. That is why Europe needs to act so that innovators can protect their inventions at an affordable cost with a single patent covering the entire EU territory with minimum translation costs and without needing to validate that patent at a national level as they currently have to do. The new proposal builds on the successful three language system at the European Patent Office (EPO) and, if adopted, would drastically reduce existing translation costs.
The proposed system allows for a patent to be granted in only one of the official languages of the EPO i.e. English, French or German and for the claims to be translated into the other two. It is proposed that translation into another language would only be required in the case of a legal dispute where for example a copy of the patent must be provided in the language of an alleged infringer or in the language of the court adjudicating a dispute.
In order to make the patent system more accessible it is proposed that high quality machine translations would be available, although these translations would not have binding legal effect. Furthermore it is proposed that inventors from countries that have a language other than one of the EPO languages would be entitled to file in their own language and also would be entitled to have the costs of translation into an official EPO language reimbursed.
The language issue has long been one of the major obstacles to the adoption of an EU-wide patent system with suspicion that a single Member State was holding up progress. Nevertheless, the latter part of this year may be make-or-break time for the EU Patent.
The proposal may be downloaded here.