Federal Taxation of Intellectual Property Transfers.

ALM Media, LLC, January 2011, Pages: 612

Federal Taxation of Intellectual Property Transfers bridges the gap between intellectual property law and tax law by explaining how to: achieve capital gains tax treatment for licensing agreements; deal with the "sale" requirements for capital gains taxation; qualify for safe harbors; avoid the pitfalls inherent in copyright transfers; and determine when patents, trade secrets, trademarks, copyrights and other intellectual properties qualify as capital assets. This tax-planner's tool also discusses judicial and legislative developments as they relate to capital assets sold or exchanged and provides a full analysis of amortization deduction rules and recovery of acquisition costs.

CHAPTER 1
Introduction
- 1.01 In General
- 1.02 Inventor's Needs
- 1.03 Congressional Policy

CHAPTER 2
The Statutory Scheme
- 2.01 Regular Capital Gains Provisions
- 2.02 Safe-Harbor Capital Gains Provisions
- 2.03 Treatment of Losses
- 2.04 Drafting Suggestions

CHAPTER 3
Basic Patent Law Concepts
- 3.01 Authority to Issue Letters Patent
- 3.02 Statutory Bars
- 3.03 Non-Obviousness
- 3.04 Negative Rules of Patentability
- 3.05 The Patent Application
- 3.06 Patent Infringement
- 3.07 Patent Rights and Transfer Rules
- 3.08 Title
[1] Nature
[2] Transfers: Assignment v. License
- 3.09 Assignments
[1] Nature and Requirements
[2] Form and Recording
- 3.10 Licenses
[1] Nature and Requirements
[2] Shop Rights
- 3.11 Royalties

CHAPTER 4
Regular Capital Gains Sections
- 4.01 In General
- 4.02 Capital Asset Status
- 4.03 Qualification as “Property”: Patents
- 4.04 Compensation for Services
- 4.05 Ancillary Services and Intangibles
- 4.06 Inventory-Type Property
- 4.07 “Trade or Business Property”
- 4.08 Holding Period
- 4.09 Improvements

CHAPTER 5
The “Sale” Requirement: Major Factors
- 5.01 Introduction
- 5.02 Assignment v. License
- 5.03 The “Substantial Rights” Standard
- 5.04 Duration
- 5.05 Mode of Payment
- 5.06 Fragmentation of Patent Rights
- 5.07 Geographic Limitations
- 5.08 Field-of-Use Limitations
- 5.09 Less Than All Claims Transferred
- 5.10 Prior Transfers
- 5.11 Undivided Interests
- 5.12 Charitable Contributions

CHAPTER 6
The “Sale” Requirement: Other Factors
- 6.01 Construction of Agreement
- 6.02 Terminology and Form
- 6.03 Legal Title or Security Interest
- 6.04 Payment Terms
- 6.05 Termination by Transferor
[1] At Will
[2] On Default
- 6.06 Best Efforts Requirement
- 6.07 Restrictions on Assignment
- 6.08 Restrictions on Sublicensing
- 6.09 Participation in Infringement Litigation
[1] Bringing Actions
[2] Defending Actions
- 6.10 Termination by Transferee
- 6.11 Licenses-Back
- 6.12 Miscellaneous Rights

CHAPTER 7
The “Sale“ Requirement: The Rogue Doctrines
- 7.01 Introduction
- 7.02 Controlling Interest in Transfer Negates Sale
- 7.03 “Pig Theory” Negates Sale
[1] Introduction
[2] Aggregate of Retained Rights
[3] Total Factual Complex
- 7.04 Operational Control of Transferee's Business

CHAPTER 8
Trade Secret and Know-How Transfers
- 8.01 Introduction
- 8.02 Definitions: Trade Secret and Know-How
[1] Trade Secret
[2] Know-How
- 8.03 Capital Asset Status: Not Services
- 8.04 Capital Asset Status: “Property”
- 8.05 Capital Asset Status: Secrecy
- 8.06 Capital Asset Status: Novelty
- 8.07 Know-How: Non-Secret Information Incidental to Transfers of Other Property
- 8.08 Know-How: Non-Secret, Non-Incidental Information
- 8.09 The “Sale” Requirement

CHAPTER 8A
Trademark, Service Mark, Trade Name, and Franchise Transfers
- 8A.01 Introduction
- 8A.02 Definitions: Trademark, Service Mark, Trade Name, Franchise
- 8A.03 Section 1253: In General
- 8A.04 Section 1253: Contingent Payments Received by Transferor
- 8A.05 Section 1253: Significant Power, Right, or Continuing Interest
- 8A.06 Deductibility of Contingent and Fixed-Sum Payments Made by the Transferee
[1] General
[2] Contingent Payments and Contingent Serial Payments
[3] Other Payments for Section 1253 Transfers
[4] Pre-1993 Law: Fixed-Sum Payments for Section 1253(a) Licenses
[5] Pre-1993 Law: Contingent Nonserial Payments and Fixed-Sum Sale or Exchange Payments
- 8A.07 Trademark Rights: Transfers Outside the Scope of Section 1253 and Subject to the Regular Capital Gains Provisions

CHAPTER 8B
Copyrights and Similar Property
- 8B.01 Introduction
- 8B.02 Copyright Concepts and Definitions
- 8B.03 Copyrights, Literary, Musical, Artistic Compositions, and Similar Property
- 8B.04 Letters, Memoranda and Similar Property
- 8B.05 “Creator” Status
- 8B.06 Carryover Basis Property

CHAPTER 9
Safe Harbor Capital Gains Section
- 9.01 Introduction
- 9.02 Patentability
- 9.03 Holder: Inventor
- 9.04 Holder: Financial Backer
- 9.05 Holder: Entities, Employers and Related Persons
- 9.06 Method of Transfer
- 9.07 The “All Substantial Rights to a Patent” Standard
- 9.08 Patent Fragmentation Prohibited
[1] Introduction
[2] Field-of-Use
[3] Geographical Area
[4] Claims
[5] Prior Transfers
- 9.09 Allowable Retained Rights
- 9.10 Undivided Interests
- 9.11 Disqualified Transferees
- 9.12 Employers as Transferees
- 9.13 Exclusiveness for Holders
- 9.14 Relation to Other Tax Provisions

CHAPTER 10
Ancillary Matters
- 10.01 Incidence of Taxation: Introduction
- 10.02 Incidence of Taxation on Transferee: Transfers of the Royalty Contract
- 10.03 Incidence of Taxation on Transferee: Transfer of the Income from the Royalty Contract
- 10.04 Incidence of Taxation on Transferee: Transferor's Retention of Control over the Obligor
- 10.05 Character of Income to Transferee
- 10.06 Exceptions to Capital Gains Treatment: Imputed Interest
- 10.07 Exceptions to Capital Gains Treatment: Transfer to Certain Related Taxpayers
- 10.08 Amortization by the Transferee of License Payments

Appendices
Table of Cases
Index

Joseph E. Olson

Professor Olson teaches at the Hamline University School of Law in St. Paul, Minnesota.

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