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Sunday, February 20, 2011

Tax Patents

This story was pretty funny. Congress is pursuing one area of patent reform. They're banning "tax patents"!

A "tax patent" occurs when someone patents a tax evasion trick. If someone else attempts the same patented tax evasion trick, they can be sued for patent infringement!

You might wonder "WTF? You can patent tax evasion tricks?" As the law is currently written, "tax patents" are allowed.

Patents are a huge drain on the productive sector of the economy. Most technology is patented, making it illegal to start a business that competes with a patent holder.

With software patents, really vague and general and obvious patents have been allowed. I suspect that other areas are just as bad.

A patent represents that someone is gaming the legal system. A patent doesn't usually indicate something truly original. You get a patent by spending $25k+ in legal fees and you jumped through the bureaucratic hoops. Someone else is banned from doing something similar, just because you got a piece of paper from the State.

In many patent lawsuits, the victim doesn't even know about the patent until he's sued. Patent lawsuits are a huge tax on the productive sector of the economy.

All a patent gives you is the right to sue someone, if they "infringe" your patent. Ideas are not property. Patents and "intellectual property" are not property. There is a massive State brainwashing campaign, to convince people that patents should be treated like real property.

One example of patent evil is "patent trolls". A patent troll buys patents, and then goes around suing people. The patent troll has no business of his own, other than suing people. It's legal extortion.

The patent lawsuit is filed through a shell corporation with no assets except for the patent. Even if you countersue and win legal expenses, there's nothing to win, because you're just countersuing an empty shell corporation.

Suppose I start a business. You own a patent, but I never heard about it. If I succeed, you can sue me for patent infringement. If I fail, you don't bother suing me, because I'm broke. The patent system is a tax on successful businesses, because they risk being sued for patent infringement.

Even if the patent is trivial and obvious, it still may be enforceable. Judges and juries know nothing about technology. They may make the wrong conclusion. In fact, according to "voir dire" rules, any juror who knows anything about the technical area of the patent is automatically disqualified. For example, I'd be automatically disqualified from a software patent lawsuit, even though I'm probably more qualified to judge than almost anyone.

Most patent lawsuits are filed in Texas. The judges in Texas have a strong history of favoring patent holders at the expense of the victims.

Another defect in patent law is the way statutory damages are calculated. It's "% of revenue". It makes no difference how significant the patent is. For Microsoft's XML patent loss, damages were a % of *ALL* Office sales. It should have been sales times the value of that feature. The XML feature was only a tiny part of Office, but statutory damages are based on *ALL* Office sales. The statutory damages formula for patents further encourages frivolous lawsuits.

"Intellectual property" is not property. There's a massive State brainwashing campaign, to convince people that patents, copyrights, and trademarks should be treated like property. "Intellectual property" is an excellent evil fnord phrase. That phrase sets the debate in the wrong frame. It should be call "intellectual un-property".

Congress is reforming an area of patent law. It doesn't have to do with the productive sector of the economy. "Tax patents" involve patented tax evasion tricks.

This is a horrible tragedy! Lawyers and accountants might not be able to use a tax evasion trick, due to tax patents. Insiders are the primary beneficiary of fancy tax evasion tricks, because it costs $50k-$100k+ just to set it up. (This refers to State-approved legal tax evasion tricks. The usual "tax protester" tax evasion tricks won't work in State court. If you're an insider, your tax evasion tricks usually do work, but you have to spend a lot on lawyers and accountants.)

Congress isn't reforming patents in the productive sector of the economy. Instead, they're eliminating "tax patents". There should be no obstacles, when insiders want to use their favorite tax evasion trick.

This is very offensive. Congress is eliminating patents in the parasite sector of the economy. In the productive sector of the economy, patents are a serious obstacle. Any company with a profitable business, will very likely be the victim of a patent lawsuits.

Patents are not property. All patent lawsuits are legal extortion. It is offensive that Congress views "tax patents" as a serious problem, but not patents in the productive sector of the economy.

"Tax patents" prevent lawyers from selling tax evasion tricks to insiders. This is a serious problem that must be fixed!


Anonymous said...

Another excellent post.

Anonymous said...

I remember reading somewhere that in the United Kingdom clients have to sign a contract saying they won't reveal the tax evasion tricks their lawyer has implemented for them!

Anonymous said...

I am going to trademark the word "patent".

According to one lawyer who came top of his class at law school, a trademark is a word patent (clue: it is not). So everytime a lawyer, congress or government uses the word "patent", I will collect a big punitive fee from them.

I'm off to my private island. Catch you later suckers.

This may seem stupid, buy lawyers do threaten people that use words under trademark law, even when the words are not used to label goods or services. You can only sue under trademark law if the name is used on good or services, otherwise not.

But lawyers are all about threats. They ignore the actual written law.

Even if FSK trademarks "FSK", I can still use FSK in text on the Internet so long as I'm not passing off goods and services.

Anonymous said...

Tax avoidance is merely a dissent, tax evasion is an all out fight for one's freedom from oppression.

Anonymous said...

The answer to the question: "Why am I made to pay taxes if I did not vote for these programs?" is this: "If people were made to directly pay for the idiotic programs they vote for, they would never even create the government, as it is only a tool that enslaves others. No one needs a government to enslave oneself."

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