One of the innovative components of the current version of Patent Reform is eliminating the possibility of receiving patents on tax strategies. Under the ironic/populist title of (S. 139) The Equal Access to Tax Planning Act of 2011, a bill introduced by Mr. Baucus (D-Montana) and Mr. Grassley (R-Iowa) is under consideration in the Senate with th purpose of providing that certain tax planning strategies are not patentable are not patentable, among other goals. Specifically, the key provision introduces language referring to the process of evaluating patent applications under sections 102 and/or 103 of Title 35 USC (Patent Law), to the effect that:
“…any strategy for reducing, avoiding, or deferring tax liability, whether known or unknown at the time of the invention or application for patent, shall be deemed insufficient to differentiate a claimed invention from the prior art.”
If passed, this change should be enough to put an end to situations such as those reported by Bloomberg regarding the patent holder for “grantor-retained annuity trust with stock options strategy patent,” who sued a former Aetna executive forcing an undisclosed settlement in 2007, and the potential for government-supported Goldman Sachs patenting a method to lower taxes on executive pay!
This aspect of patent reform should find enough support to pass, unless Goldman strikes a kick-back licensing deal…