Article suggestion: The tax implications of Oil States

Now that we have been told that patents are “public franchises,” it might be useful for someone to discuss the tax implications of the Oil States holding. Does the holding of Oil States require any revision to the tax code? Can a “public franchise” be taxed?  Can an owner of a patent be taxed for both “public franchise” purposes and “personal property” purposes?  Do any companies with large patent portfolios now owe back taxes for failing to pay a “public franchise” tax? Are any owed a refund?  Are some states better for “public franchise” tax purposes than other states?  The Court notes:  “Finally, our decision should not be misconstrued as suggesting that patents are not property for purposes of the Due Process Clause or the Takings Clause.”  What about the taxing and spending clause?

Beyond the tax questions, are there any other complications caused by deeming a patent a “public franchise”?  Residency?  Nationality?  Restraints on alienation?


Totally unrelated issue — if you can’t patent an “abstract idea” because it is “part of the storehouse of knowledge of all men … free to all men and reserved exclusively to none,” should you be able to tax it?

If (a) the FCC grants a public franchise by granting a party sole use to a portion of the radio spectrum and (b) the radio spectrum is a natural phenomenon, is the FCC granting a public franchise to a natural phenomenon?  Why should the FCC be able to grant public franchises on natural phenomenon if the USPTO cannot?

Comments are closed.