Plus if these patents are so valuable, then it would be nice if their sale from one shell company to another had tax implications. Once a licensing campaign has been initiated for one shell company, that should put some idea of a value on the patent(s).
If you can be assessed taxes for options in a company that isn't public that you have no way to exercise, selling assets from one shell company to another should have tax implications as well.
Maybe that would limit the creation of mazes of ownership of these patent portfolios.
I really like the idea of relating the value of a patent to the registration cost. If the patent is giving you $10 million a year in income, you should have to pay more for that right than if it brings you $10,000 a year in income. At least then we would have a list of patent holders and how much they are making from licensing.
Absolutely agree. Patents grant you exclusive rights on public knowledge, much the same way a deed gives you exclusive rights to a piece of property. People are forced to pay property tax equivalent to its value for that exclusive right, patent holders should have to do the same.
Furthermore, valuing patents and taxing them accordingly help create a feedback loop that can help in determining reasonable licensing costs or damages for infringement.
But how would that work if you are some poor Joe Schmoe who discovers the next billion dollar idea? How does he manage to pay for the patent before going to market?
Perhaps a better option would be a hybrid of the current system and what you're proposing. Say, a flat fee for the first 2-5 years, and then an option to renew the patent through the current length of a patent (20 years, i think) for x% of the gross profit of the previous year due services/products covered by the patent.
He doesn't have to pay any tax before going to market - in the first year there is no revenue so the licensing is cheap. At subsequent intervals - say every 2 years - you report the revenue and pay your "intellectual property tax" based on the revenue over that period.
If you're a landlord, you pay taxes on income and property. There's no reason to think that being subjected to taxation in one form exempts you from all others.
The registration costs would need to be non-trivial to discourage abuse, which would harm legitimate small-scale innovators. Also, who decides (or validates) the "worth" of a patent? We would be replacing one regulatory nightmare with another.
I think it would be awesome but it will never happen.
You claim a value for your patent. It is treated as property and subject to tax if transferred from one entity to the next. The catch is that you can only sue for a certain percent of the claimed value. You can change the claimed value of your patent, but then you must pay a tax as if that was earned income. You would have to be allowed to set your initial claimed value of the patent at whatever you wish. Kinda the same way that when you start a corporation you can decide how many shares you have (like 1.000 or 10,000 or 1,000,000). But once that is set you can't just change them around without registering the change with the state.
In theory it would punish people who transfer patents a lot, but have almost no affect on people who register or hold onto patents. Since trolls thrive on shell companies, it would be very expensive to constantly transfer high-value patents.
The value of the patent is your income stream from licensing that patent.
If 50 states can figure out how to track every single car in existence I think the federal government can keep track of patents. Especially because you already budget tens of thousands of dollars and hiring a lawyer to get a patent registration as is.
If you can be assessed taxes for options in a company that isn't public that you have no way to exercise, selling assets from one shell company to another should have tax implications as well.
Maybe that would limit the creation of mazes of ownership of these patent portfolios.