BPLA (Boston Patent Law Association) Presentation by Attorney Yale Robinson
Our Tax Associate, Yale Robinson, presented on two recent cases which highlight the intersection of tax law and patent law, namely, Diamond v. Hyundai and Spiridon Spireas v. Commissioner of Internal Revenue.
In Diamond, the Federal Circuit affirmed that Diamond lacked standing to pursue an infringement action without joining the original assignee of the patents-in-suit, Sanyo Electric Co. The lower court had found that the original agreement between Diamond and Sanyo did not convey “all substantial rights” in the patents-in-suit to Diamond. The Federal Circuit focused on two problems with the assignment agreement: (1) it did not grant Diamond a right to practice the patents-in-suit and instead vested that right in Sanyo; and (2) it allowed Sanyo to retain significant control over Diamond’s enforcement and litigation services because, among other things, Diamond’s actions were conditioned upon taking into consideration the “best interests” of both Diamond and Sanyo.
In Spiridon Spireas, the U.S. Tax Court also considered whether the petitioner had transferred “all substantial rights” to the relevant technology, such that the royalties received would be eligible for capital gain treatment. Finding that petitioner retained at least some rights in the technology, the Court reasoned that 26 U.S.C. 1235 did not apply and that the royalties constituted ordinary income.
At the event, Yale and the attendees considered the impact of these two cases, and how one might better structure a transfer of patent rights when capital gains treatment is a consideration.
For more information about the Boston Patent Law Association or the event itself, please follow this link.