8 ms·

Intelectual Property (especially patents and copyrights) should also be taxed at 1% of their assessed/declared value. And a single infringer should never be lia

by beagle3 10y ago

Intelectual Property (especially patents and copyrights) should also be taxed at 1% of their assessed/declared value. And a single infringer should never be liable for more than the assessed value. Not because patents are empty, but because this would create the incentive for patent owners to assess a real value to them, and not "bajillion dollars", which they do now.

reitanqild 10y ago
This really seems like a great idea! Anyone see any reason why it shouldn't be?
- simonbw 10y ago
  Patents and trademarks maybe, but copyright? You have copyright on basically anything you create. Should I pay taxes on everything I put on github? On essays I write? What if I'm a famous artist? If I make some artwork to go in my living room, should I really pay 1% of the assessed value of that every year? If I write a book, is it not enough to pay taxes on the income I get by selling my book? Should I really have to pay taxes on it to keep it out of the public domain?
  - reitanqild 10y ago
    Thanks! I feel a little less smart now which is a good sign. :-)
  - bostonvaulter2 10y ago
    Who said anything about copywright?
    - lordnacho 10y ago
      Copyright is a form of IP.
    - jahnu 10y ago
      > Intelectual Property (especially patents and copyrights)
  - Aaargh20318 10y ago
    > If I write a book, is it not enough to pay taxes on the income I get by selling my book? If I rent out a house, is it not enough to pay taxes on the income I get from rent ? > Should I really have to pay taxes on it to keep it out of the public domain? Yes. If you build a house with your own two hands, should you not pay property tax on it ?
    - astrodust 10y ago
      A house takes up physical space. Intellectual property doesn't. The reason we have property taxes is because maintaining the environment around the house costs money. There's no roads and sewers and schools for books.
      - beagle3 10y ago
        there are a lot of costs involved with enforcing property rights. It's not sewers but it is legal departments, customs offices and law enforcement officers. Also, a patent takes space by disallowing me to use the same kind of invention (even if I came up with it independently). And a copyright sometimes stops me from being able to use a "cultural common". They most definitely take space. And real estate property taxes are often supplemented by "road maintenance levies". They don't directly support the property's infrastructure when you really look into it.
        astrodust 10y ago
        Patents are a fairly large investment, plus they're a fixed life-span item. Although I'm largely against patents, fiddling with the fees associated with them won't help solve any problems. Now when it comes to copyright enforcement, 99.99% of the copyrighted material out there is never formally published. It's source code, it's email, it's creative works produced and shared but never curated or packaged. How can you possibly tax all of that?
        beagle3 10y ago
        If it's not published, its protection comes mostly from not being seen (in private setting) or from trade secrets and associated laws. If only want to use the tax as a way to make sure orphaned works can be shared, and patent trolls become unprofitable. I believe that an IP tax can help both. I think it is essential to force proper valuation of IP, and I think tying it to recovery (upside) and taxes (downside) is likely to give a proper evaluation. It is not my intention to try to tax your own painting on your living room. I assume, by default, anything not listed, is valued at $0 for that year. Do you understand that, regardless for copyrights or patents, your IP is not enforceable unless you can afford the court action?
  - randomdata 10y ago
    It was suggested elsewhere that you would assess the value yourself, so if the only utility of your work is to hang it in your living room, you could claim it has $0 copyright value, and thus pay no tax. The implication is that if someone decides to copy it, your claim for damages in court is based on that $0. But if your intent is to keep a private copy in your living room without the willingness to share with the public who gave you the privilege of copyright in the first place, perhaps that still remains fair.
- DKnoll 10y ago
  Because it would make the misappropriation of the work of poor creators cheap.
  - darawk 10y ago
    But if they had something worth keeping, they could ideally get financing from someone who'd want to own it. At least, that's what should happen in an efficient market.
    - totony 10y ago
      A poor person will have to sell his idea or else he wont be able to patent it. What was proposed may solve some problems, but if it deepens that inequality hole I dont think its worth it. If you own a unused property, in comparison, shows you have significant funds
      - beagle3 10y ago
        A poor person already has to sell it. Patents cost a minimum of $5,000, usually not less than $20,000 and often not less than $50,000 all things accounted for. That's just filing - it can take upwards of 5 years to get approved or rejected. And then, it is STILL worth nothing because you have to sue to enforce infringement, at costs north of $100,000 more often than not. I propose that the value of IP for tax purposes is owner assigned. If you have no money to pay the tax, just declare $1. The catch is, that would make you ineligible to recover much more than that in the case of infringement. As far as poor people, it changes little to none. But it grounds patent valuation, which are now arbitrary.
        will_brown 10y ago
        There are a few fundamental flaws with your proposal, but namely the inventor of a patent or holder of IP generally does not just randomly assign a value to their IP and win that amount in the instance of infringement. It's sort of the whole point of proving damages, because it would be impossible to calculate future damages for a violation of IP at the time the IP was created. For example I invent and patent the widget and assign a $1B valuation to the invention. Apple violated my patent, manufactures the widget and sells $100M. Should I sue, my potential damages have nothing to do with the $1B valuation I made up but with the damages I suffered as a result of Apple violating my patent. Alternatively I write a book and slap $1 valuation, because I assume there is no market for my writing or to avoid the big tax until I make it big. JK Rowling Violated my copyright and slaps her name on my book and sells millions of copies, again my damages have zero relation to the valuation I created for the IP.
- hengheng 10y ago
  Valuation of IP is not easy. Even if you invest a lot of effort, there will be some big error bars.
  - beagle3 10y ago
    Of course. But they will still be about a hundred times smaller than they are today. Today, someone thinks of an idea, patents it and estimates its worth at $100M. Someone else develops the same idea and assigns a value of $20K. That's the error bar TODAY. Inventor has no incentive for realistic estimate - they will always overestimate (no penalty for that). An infringer has no incentive for a realistic estimate (no additional penalty for that if he loses in court). An ip tax will decrease the error bars by forcing the patent owner to pay for overestimates.
  - Aaargh20318 10y ago
    That is the whole point. Either you agree that IP is real property and as such it should be taxed, or you don't and and you pay no taxes. If your property has value, then you should pay property tax. If it has no value, you cannot claim damages if someone 'steals' said property since it wasn't worth anything. You can't have your cake and eat it. If you start taxing imaginary property, this will force IP owners to consider wether their IP has actual value or not and act accordingly.
- will_brown 10y ago
  Because creating an acurate valuation for IP at the time IP is created that would be accurate for the life of the IP is impossible. Moreover, it would make no sense for that made up valuation for tax purposes to determine future potential damages in IP infringement cases. Edit: to bring the concept to perspective, imagine having to assign a valuation to new borns so in the instance they die as a result of negligence the damages are capped at the assigned valuation of the deceased at their birth.
  - ianai 10y ago
    Values are placed on people's lives all the time for insurance. I'm thinking for IP a flat tax may make most sense. It would incentivize letting go of at least some things. If it's $5 fewer things will go public than if it's $1000, for instance. It should probably be more to actually affect companies.
  - beagle3 10y ago
    I didn't explicitly state this here (I did numerous times before when discussing this) but property tax is annual, and I propose value assignment be annual as well. Therefore, if at the end of the year neither yourself nor anyone else had made any money from your IP, just assign zero. At the moment, patents are cheap compared to the value they have as an offensive weapon, and this is what I hope to address with my proposal. As for copyrights - the same framework would make infinite extension unaffordable even for Disney, so I hope we would all benefit.
    - pakitan 10y ago
      You can only determine the exact IP revenue when someone is paying explicitly for the use of that IP. If, however, I'm selling, say, a very complex machine, where I hold a patent over a small component of that machine, how would you determine the value of my patent? > Therefore, if at the end of the year neither yourself nor anyone else had made any money from your IP, just assign zero How would that solve the issue of patents being used as a offensive weapon? Under your proposal if a patent troll has thousands of patents and has made zero revenue on them, they would pay zero tax. On the other hand if they made money, they will happily pay the tax.
- mseebach 10y ago
  So, capping damages at the listed value of the patent basically means that you have a standing offer to sell a perpetual non-exclusive license to any one for any reason. This means that for anything truly valuable (say, medicine), the value would probably have to be assessed in the several billions. Medicine can take tens of years to commercialise, so we've just raised the cost of developing new medicine substantially. So, rather, it would probably discourage patenting these things (in favour of keeping them deeply confidential) until their value has actually been proven, which goes against the purpose of the patent system in the first place, to encourage the disclosure of inventions in exchange for a monopoly on exploiting it.
  - beagle3 10y ago
    > So, capping damages at the listed value of the patent basically means that you have a standing offer to sell a perpetual non-exclusive license to any one for any reason. Yes. At full value PER ONE YEAR. (Property taxes are per year, and the liability limit I propose is "per infringer per year" (or "per infringement per year" if infringement is defined in a macroscopic enough sense).
- rlpb 10y ago
  It would favour large institutional "inventors" and lock out individuals. An invention and subsequent patent is only the beginning of a pretty risky endeavour. There are significant risks in bringing a new product to market, such as in funding, timing, marketing, industrial production, and so on. Overall they will average out. Some patents will be more successful than expected, and some will bomb. Large companies will be able to make a guess, pay the tax, and overall they'll make a profit. The risk on a higher value and paying the tax isn't such a big deal for them. Small time inventors will be unable to take the risk and be forced to undervalue their own invention lest it bomb. They'll be exploited by large companies that will just pay the limited damages and then exploit their invention. All this would do is cap the return of small inventors, without affecting the carpet-bombing large companies. I hate patent trolls as much as the next HNer, but I don't think this idea will work, sorry. I'm a small time inventor with one patent filed, but I didn't pay the maintenance fees (I had to publish but didn't want to spend thousands more making it final) because it didn't make enough money so it's now in the public domain. A large company could take my work. If they make a success of it where I failed, good on them. But I'll be owed nothing (rather than a proportion), which I think would be unfair since they'd be using my work. I'm already a victim of having been unable to spread the risk in a way that large companies can do.
  - beagle3 10y ago
    There is no point in getting a patent if you cannot enforce it. The current situation already favors large patent owners, and my proposal will not make that worse, I believe. > All this would do is cap the return of small inventors, without affecting the carpet-bombing large companies. On the contrary. IBM and MS have tens to hundreds of thousands of patents. Keeping them all "Ready to sue" would cost them billions. And .. a small inventor who can't afford $100K in court fees does not have patent protection even if they have a patent. > If they make a success of it where I failed, good on them. But I'll be owed nothing (rather than a proportion), which I think would be unfair since they'd be using my work. I'm already a victim of having been unable to spread the risk in a way that large companies can do. So ... if you had paid $0, then a company made money of it, increase the value that year to $1M (pay the $10K tax) and have them license or sue them. You're better off under my proposed system.
deleted 10y ago
[deleted]
graeham 10y ago
Arguably, they already do tax IP(for patents) by maintence fees. https://en.wikipedia.org/wiki/Maintenance_fee_(patent) https://en.wikipedia.org/wiki/Maintenance_fee_(patent) https://www.uspto.gov/learning-and-resources/fees-and-payment/uspto-fee-schedule https://www.uspto.gov/learning-and-resources/fees-and-paymen... The problem with liability being < assessed values is then what's the incentive to work for a licensing deal? Why pay for a license when, worst case, you'll be taken to court to pay the same amount?
- patates 10y ago
  > Why pay for a license when, worst case, you'll be taken to court to pay the same amount? First of all: I'm not a lawyer and this is not legal advice. You don't pay the full price of the intellectual property when licencing it, do you? The value of the intellectual property should be based on it's market value which would, in a perfect world be based on the expected benefit from that property. Also, paying for the damages for unlicensed usage does not mean you can keep using it unlicensed further on.
- stymaar 10y ago
  > The problem with liability being < assessed values is then what's the incentive to work for a licensing deal? Wut ? “assessed value” ≠ “licence fee” ! The value of Windows for Microsoft is not the same thing that the value of one licence of Windows for your company ... The proposed mecanism would just prevent Intellectual Vulture & co to gather a lot of worthless patents and then claim millions un court for patent infrigment.
- beagle3 10y ago
  First, maintenance fees are very low compared to legal action, and independent of whether the patent is worth $10 or $10B (or you believe it does). So is is entirely unlike a property tax. > The problem with liability being < assessed values is then what's the incentive to work for a licensing deal? If you upload a song you like, and tax has been paid for it as worth $100,000 that year, (which would be $1000/year), and you can license it for $1, then - yes, you have an incentive to license it for $1, because you are otherwise liable for as much as $100,000 (but not more[0]). Think this is stupid? Because under the current law, you are liable for $150,000. That's what the law says, anyway. [0] Except for e.g. willful infringement laws, which would make you pay 3x as much potentially - another answer to your "what's the incentive".
edblarney 10y ago
" And a single infringer should never be liable for more than the assessed value." This is the case already. And no - there is no reason to tax IP at 1% of it's valuation. Remember that patents eventually run out, in which case they are 'taxed at 100%'. :)
- beagle3 10y ago
  Why is there a reason to tax real estate property at 1% of its valuation per year? Same arguments apply, in addition to the one I gave (grounding valuations) which you dismiss without explanation. > Remember that patents eventually run out, in which case they are 'taxed at 100%'. :) First of all, so what if they run out? Other kinds of property also depreciate and we still tax them. Second, copyright has effectively ceased to run out around 1970. So there is every reason to tax IP.
  - edblarney 10y ago
    "Why is there a reason to tax real estate property at 1% of its valuation per year? " Because there is an acute supply problem in Vancouver real estate. Making them pay 1% for empty homes incents people to rent them out. The same arguments do not apply at all to IP. "First of all, so what if they run out? Other kinds of property also depreciate and we still tax them." 'Depreciation' and 'expiration of patents' are not the same thing at all. A 'patent' is the exclusive right to own a piece of IP for a period of time, after which it's public domain. It's basically pointless to add on a 'wealth tax' to a patent - there is already a tax on royalties and that makes sense. When you buy your property, it does not become 'public domain' after 10 years - it's a completely different economic vehicle. "Second, copyright has effectively ceased to run out around 1970. So there is every reason to tax IP." Copyright and patents are totally different things. Someone who created a unique song, has the right to protect it for quite some time. Moreover - it was 'made famous' by them, i.e. it's a brand that is invested in. Disney should be able to 'own' Mickey Mouse forever - they created it, and they back it. They spend billions supporting 'Mickey' and there's no reason someone else should be able to rip them off by selling clones. In much the same way fashion brands are protected. Drugs, algorithms, other kinds of solutions, there is definitely a 'public good' in those things being public after some time, so it's fair that IP protections run out.
omouse 10y ago
Intellectual property shouldn't exist because it grants a monopoly on ideas which is a violation of property rights. It's an unnatural monopoly.
- adrianN 10y ago
  Whether IP should exist or not is an age old debate, at least on the Internet. I don't think anything new can be contributed at this point.
pmontra 10y ago
Out of print copyrighted books which are not published as ebooks should be a very good analogue to empty homes. Tax them at 1% of the average money they make they sell books' IPs to another publisher.
dnautics 10y ago
How do you assess the value?
jobu 10y ago
Even just a small, yearly flat tax on copyrights, patents, and trademarks would be enough to discourage many people and companies from holding on to useless IP. A lot of old books or music still under copyright will never generate another penny of income, but putting them in the public domain could let them be mixed or used as a foundation for new creative works.
- astrodust 10y ago
  Great, let's put old authors into bankruptcy just because their publisher decided their work needed to be archived. This idea is absurd. Classic copyright term limits, and patents being reserved for only specific implementations of an idea would fix these problems without taxing the hell out of everyone. You do realize everything you write is copyrighted? This means you're going to have to file with the IRS for all your Hacker News comments on an annual basis.
  - wool_gather 10y ago
    > You do realize everything you write is copyrighted? Which...is something else that can and probably should change. What purpose does this serve?
    - astrodust 10y ago
      If you have to ask you have no idea how important copyright law is. Do you really want to live in a world where someone, anyone, can take something you've done and give it away to other people without your permission, or commercialize it and leave you with zero recourse? Most people think copyright protection is for important, significant creative works like a book or a song, but it's equally important for less visible things. For example: A single method in your code that someone else appropriates. If you had to register copyright for every line of code you wrote, you'd never get anything done.
      - wool_gather 10y ago
        I'm not talking about getting rid of copyright. Of course I want copyright protection for my work, and of course I want other people to enjoy that protection as well. I don't see any reason, however, that I need that protection for every single thing that I create. What purpose does _automatic_ copyright serve? I stick a copyright notice in every software project already, but when I don't want the copyright I also have to explicitly disavow it. Why shouldn't the model be flipped to claiming copyright with a simple attached notice, instead of disavowing it?

by beagle3 10y ago

reitanqild 10y ago

This really seems like a great idea! Anyone see any reason why it shouldn't be?

simonbw 10y ago
Patents and trademarks maybe, but copyright? You have copyright on basically anything you create. Should I pay taxes on everything I put on github? On essays I write? What if I'm a famous artist? If I make some artwork to go in my living room, should I really pay 1% of the assessed value of that every year? If I write a book, is it not enough to pay taxes on the income I get by selling my book? Should I really have to pay taxes on it to keep it out of the public domain?
- reitanqild 10y ago
  Thanks! I feel a little less smart now which is a good sign. :-)
- bostonvaulter2 10y ago
  Who said anything about copywright?
  - lordnacho 10y ago
    Copyright is a form of IP.
  - jahnu 10y ago
    > Intelectual Property (especially patents and copyrights)
- Aaargh20318 10y ago
  > If I write a book, is it not enough to pay taxes on the income I get by selling my book? If I rent out a house, is it not enough to pay taxes on the income I get from rent ? > Should I really have to pay taxes on it to keep it out of the public domain? Yes. If you build a house with your own two hands, should you not pay property tax on it ?
  - astrodust 10y ago
    A house takes up physical space. Intellectual property doesn't. The reason we have property taxes is because maintaining the environment around the house costs money. There's no roads and sewers and schools for books.
    - beagle3 10y ago
      there are a lot of costs involved with enforcing property rights. It's not sewers but it is legal departments, customs offices and law enforcement officers. Also, a patent takes space by disallowing me to use the same kind of invention (even if I came up with it independently). And a copyright sometimes stops me from being able to use a "cultural common". They most definitely take space. And real estate property taxes are often supplemented by "road maintenance levies". They don't directly support the property's infrastructure when you really look into it.
      - astrodust 10y ago
        Patents are a fairly large investment, plus they're a fixed life-span item. Although I'm largely against patents, fiddling with the fees associated with them won't help solve any problems. Now when it comes to copyright enforcement, 99.99% of the copyrighted material out there is never formally published. It's source code, it's email, it's creative works produced and shared but never curated or packaged. How can you possibly tax all of that?
        beagle3 10y ago
        If it's not published, its protection comes mostly from not being seen (in private setting) or from trade secrets and associated laws. If only want to use the tax as a way to make sure orphaned works can be shared, and patent trolls become unprofitable. I believe that an IP tax can help both. I think it is essential to force proper valuation of IP, and I think tying it to recovery (upside) and taxes (downside) is likely to give a proper evaluation. It is not my intention to try to tax your own painting on your living room. I assume, by default, anything not listed, is valued at $0 for that year. Do you understand that, regardless for copyrights or patents, your IP is not enforceable unless you can afford the court action?
- randomdata 10y ago
  It was suggested elsewhere that you would assess the value yourself, so if the only utility of your work is to hang it in your living room, you could claim it has $0 copyright value, and thus pay no tax. The implication is that if someone decides to copy it, your claim for damages in court is based on that $0. But if your intent is to keep a private copy in your living room without the willingness to share with the public who gave you the privilege of copyright in the first place, perhaps that still remains fair.
DKnoll 10y ago
Because it would make the misappropriation of the work of poor creators cheap.
- darawk 10y ago
  But if they had something worth keeping, they could ideally get financing from someone who'd want to own it. At least, that's what should happen in an efficient market.
  - totony 10y ago
    A poor person will have to sell his idea or else he wont be able to patent it. What was proposed may solve some problems, but if it deepens that inequality hole I dont think its worth it. If you own a unused property, in comparison, shows you have significant funds
    - beagle3 10y ago
      A poor person already has to sell it. Patents cost a minimum of $5,000, usually not less than $20,000 and often not less than $50,000 all things accounted for. That's just filing - it can take upwards of 5 years to get approved or rejected. And then, it is STILL worth nothing because you have to sue to enforce infringement, at costs north of $100,000 more often than not. I propose that the value of IP for tax purposes is owner assigned. If you have no money to pay the tax, just declare $1. The catch is, that would make you ineligible to recover much more than that in the case of infringement. As far as poor people, it changes little to none. But it grounds patent valuation, which are now arbitrary.
      - will_brown 10y ago
        There are a few fundamental flaws with your proposal, but namely the inventor of a patent or holder of IP generally does not just randomly assign a value to their IP and win that amount in the instance of infringement. It's sort of the whole point of proving damages, because it would be impossible to calculate future damages for a violation of IP at the time the IP was created. For example I invent and patent the widget and assign a $1B valuation to the invention. Apple violated my patent, manufactures the widget and sells $100M. Should I sue, my potential damages have nothing to do with the $1B valuation I made up but with the damages I suffered as a result of Apple violating my patent. Alternatively I write a book and slap $1 valuation, because I assume there is no market for my writing or to avoid the big tax until I make it big. JK Rowling Violated my copyright and slaps her name on my book and sells millions of copies, again my damages have zero relation to the valuation I created for the IP.
hengheng 10y ago
Valuation of IP is not easy. Even if you invest a lot of effort, there will be some big error bars.
- beagle3 10y ago
  Of course. But they will still be about a hundred times smaller than they are today. Today, someone thinks of an idea, patents it and estimates its worth at $100M. Someone else develops the same idea and assigns a value of $20K. That's the error bar TODAY. Inventor has no incentive for realistic estimate - they will always overestimate (no penalty for that). An infringer has no incentive for a realistic estimate (no additional penalty for that if he loses in court). An ip tax will decrease the error bars by forcing the patent owner to pay for overestimates.
- Aaargh20318 10y ago
  That is the whole point. Either you agree that IP is real property and as such it should be taxed, or you don't and and you pay no taxes. If your property has value, then you should pay property tax. If it has no value, you cannot claim damages if someone 'steals' said property since it wasn't worth anything. You can't have your cake and eat it. If you start taxing imaginary property, this will force IP owners to consider wether their IP has actual value or not and act accordingly.
will_brown 10y ago
Because creating an acurate valuation for IP at the time IP is created that would be accurate for the life of the IP is impossible. Moreover, it would make no sense for that made up valuation for tax purposes to determine future potential damages in IP infringement cases. Edit: to bring the concept to perspective, imagine having to assign a valuation to new borns so in the instance they die as a result of negligence the damages are capped at the assigned valuation of the deceased at their birth.
- ianai 10y ago
  Values are placed on people's lives all the time for insurance. I'm thinking for IP a flat tax may make most sense. It would incentivize letting go of at least some things. If it's $5 fewer things will go public than if it's $1000, for instance. It should probably be more to actually affect companies.
- beagle3 10y ago
  I didn't explicitly state this here (I did numerous times before when discussing this) but property tax is annual, and I propose value assignment be annual as well. Therefore, if at the end of the year neither yourself nor anyone else had made any money from your IP, just assign zero. At the moment, patents are cheap compared to the value they have as an offensive weapon, and this is what I hope to address with my proposal. As for copyrights - the same framework would make infinite extension unaffordable even for Disney, so I hope we would all benefit.
  - pakitan 10y ago
    You can only determine the exact IP revenue when someone is paying explicitly for the use of that IP. If, however, I'm selling, say, a very complex machine, where I hold a patent over a small component of that machine, how would you determine the value of my patent? > Therefore, if at the end of the year neither yourself nor anyone else had made any money from your IP, just assign zero How would that solve the issue of patents being used as a offensive weapon? Under your proposal if a patent troll has thousands of patents and has made zero revenue on them, they would pay zero tax. On the other hand if they made money, they will happily pay the tax.
mseebach 10y ago
So, capping damages at the listed value of the patent basically means that you have a standing offer to sell a perpetual non-exclusive license to any one for any reason. This means that for anything truly valuable (say, medicine), the value would probably have to be assessed in the several billions. Medicine can take tens of years to commercialise, so we've just raised the cost of developing new medicine substantially. So, rather, it would probably discourage patenting these things (in favour of keeping them deeply confidential) until their value has actually been proven, which goes against the purpose of the patent system in the first place, to encourage the disclosure of inventions in exchange for a monopoly on exploiting it.
- beagle3 10y ago
  > So, capping damages at the listed value of the patent basically means that you have a standing offer to sell a perpetual non-exclusive license to any one for any reason. Yes. At full value PER ONE YEAR. (Property taxes are per year, and the liability limit I propose is "per infringer per year" (or "per infringement per year" if infringement is defined in a macroscopic enough sense).
rlpb 10y ago
It would favour large institutional "inventors" and lock out individuals. An invention and subsequent patent is only the beginning of a pretty risky endeavour. There are significant risks in bringing a new product to market, such as in funding, timing, marketing, industrial production, and so on. Overall they will average out. Some patents will be more successful than expected, and some will bomb. Large companies will be able to make a guess, pay the tax, and overall they'll make a profit. The risk on a higher value and paying the tax isn't such a big deal for them. Small time inventors will be unable to take the risk and be forced to undervalue their own invention lest it bomb. They'll be exploited by large companies that will just pay the limited damages and then exploit their invention. All this would do is cap the return of small inventors, without affecting the carpet-bombing large companies. I hate patent trolls as much as the next HNer, but I don't think this idea will work, sorry. I'm a small time inventor with one patent filed, but I didn't pay the maintenance fees (I had to publish but didn't want to spend thousands more making it final) because it didn't make enough money so it's now in the public domain. A large company could take my work. If they make a success of it where I failed, good on them. But I'll be owed nothing (rather than a proportion), which I think would be unfair since they'd be using my work. I'm already a victim of having been unable to spread the risk in a way that large companies can do.
- beagle3 10y ago
  There is no point in getting a patent if you cannot enforce it. The current situation already favors large patent owners, and my proposal will not make that worse, I believe. > All this would do is cap the return of small inventors, without affecting the carpet-bombing large companies. On the contrary. IBM and MS have tens to hundreds of thousands of patents. Keeping them all "Ready to sue" would cost them billions. And .. a small inventor who can't afford $100K in court fees does not have patent protection even if they have a patent. > If they make a success of it where I failed, good on them. But I'll be owed nothing (rather than a proportion), which I think would be unfair since they'd be using my work. I'm already a victim of having been unable to spread the risk in a way that large companies can do. So ... if you had paid $0, then a company made money of it, increase the value that year to $1M (pay the $10K tax) and have them license or sue them. You're better off under my proposed system.

deleted 10y ago

[deleted]

graeham 10y ago

Arguably, they already do tax IP(for patents) by maintence fees. https://en.wikipedia.org/wiki/Maintenance_fee_(patent) https://en.wikipedia.org/wiki/Maintenance_fee_(patent) https://www.uspto.gov/learning-and-resources/fees-and-payment/uspto-fee-schedule https://www.uspto.gov/learning-and-resources/fees-and-paymen... The problem with liability being < assessed values is then what's the incentive to work for a licensing deal? Why pay for a license when, worst case, you'll be taken to court to pay the same amount?

patates 10y ago
> Why pay for a license when, worst case, you'll be taken to court to pay the same amount? First of all: I'm not a lawyer and this is not legal advice. You don't pay the full price of the intellectual property when licencing it, do you? The value of the intellectual property should be based on it's market value which would, in a perfect world be based on the expected benefit from that property. Also, paying for the damages for unlicensed usage does not mean you can keep using it unlicensed further on.
stymaar 10y ago
> The problem with liability being < assessed values is then what's the incentive to work for a licensing deal? Wut ? “assessed value” ≠ “licence fee” ! The value of Windows for Microsoft is not the same thing that the value of one licence of Windows for your company ... The proposed mecanism would just prevent Intellectual Vulture & co to gather a lot of worthless patents and then claim millions un court for patent infrigment.
beagle3 10y ago
First, maintenance fees are very low compared to legal action, and independent of whether the patent is worth $10 or $10B (or you believe it does). So is is entirely unlike a property tax. > The problem with liability being < assessed values is then what's the incentive to work for a licensing deal? If you upload a song you like, and tax has been paid for it as worth $100,000 that year, (which would be $1000/year), and you can license it for $1, then - yes, you have an incentive to license it for $1, because you are otherwise liable for as much as $100,000 (but not more[0]). Think this is stupid? Because under the current law, you are liable for $150,000. That's what the law says, anyway. [0] Except for e.g. willful infringement laws, which would make you pay 3x as much potentially - another answer to your "what's the incentive".

edblarney 10y ago

" And a single infringer should never be liable for more than the assessed value." This is the case already. And no - there is no reason to tax IP at 1% of it's valuation. Remember that patents eventually run out, in which case they are 'taxed at 100%'. :)

beagle3 10y ago
Why is there a reason to tax real estate property at 1% of its valuation per year? Same arguments apply, in addition to the one I gave (grounding valuations) which you dismiss without explanation. > Remember that patents eventually run out, in which case they are 'taxed at 100%'. :) First of all, so what if they run out? Other kinds of property also depreciate and we still tax them. Second, copyright has effectively ceased to run out around 1970. So there is every reason to tax IP.
- edblarney 10y ago
  "Why is there a reason to tax real estate property at 1% of its valuation per year? " Because there is an acute supply problem in Vancouver real estate. Making them pay 1% for empty homes incents people to rent them out. The same arguments do not apply at all to IP. "First of all, so what if they run out? Other kinds of property also depreciate and we still tax them." 'Depreciation' and 'expiration of patents' are not the same thing at all. A 'patent' is the exclusive right to own a piece of IP for a period of time, after which it's public domain. It's basically pointless to add on a 'wealth tax' to a patent - there is already a tax on royalties and that makes sense. When you buy your property, it does not become 'public domain' after 10 years - it's a completely different economic vehicle. "Second, copyright has effectively ceased to run out around 1970. So there is every reason to tax IP." Copyright and patents are totally different things. Someone who created a unique song, has the right to protect it for quite some time. Moreover - it was 'made famous' by them, i.e. it's a brand that is invested in. Disney should be able to 'own' Mickey Mouse forever - they created it, and they back it. They spend billions supporting 'Mickey' and there's no reason someone else should be able to rip them off by selling clones. In much the same way fashion brands are protected. Drugs, algorithms, other kinds of solutions, there is definitely a 'public good' in those things being public after some time, so it's fair that IP protections run out.

omouse 10y ago

Intellectual property shouldn't exist because it grants a monopoly on ideas which is a violation of property rights. It's an unnatural monopoly.

adrianN 10y ago
Whether IP should exist or not is an age old debate, at least on the Internet. I don't think anything new can be contributed at this point.

pmontra 10y ago

Out of print copyrighted books which are not published as ebooks should be a very good analogue to empty homes. Tax them at 1% of the average money they make they sell books' IPs to another publisher.

dnautics 10y ago

How do you assess the value?

jobu 10y ago

Even just a small, yearly flat tax on copyrights, patents, and trademarks would be enough to discourage many people and companies from holding on to useless IP. A lot of old books or music still under copyright will never generate another penny of income, but putting them in the public domain could let them be mixed or used as a foundation for new creative works.

astrodust 10y ago
Great, let's put old authors into bankruptcy just because their publisher decided their work needed to be archived. This idea is absurd. Classic copyright term limits, and patents being reserved for only specific implementations of an idea would fix these problems without taxing the hell out of everyone. You do realize everything you write is copyrighted? This means you're going to have to file with the IRS for all your Hacker News comments on an annual basis.
- wool_gather 10y ago
  > You do realize everything you write is copyrighted? Which...is something else that can and probably should change. What purpose does this serve?
  - astrodust 10y ago
    If you have to ask you have no idea how important copyright law is. Do you really want to live in a world where someone, anyone, can take something you've done and give it away to other people without your permission, or commercialize it and leave you with zero recourse? Most people think copyright protection is for important, significant creative works like a book or a song, but it's equally important for less visible things. For example: A single method in your code that someone else appropriates. If you had to register copyright for every line of code you wrote, you'd never get anything done.
    - wool_gather 10y ago
      I'm not talking about getting rid of copyright. Of course I want copyright protection for my work, and of course I want other people to enjoy that protection as well. I don't see any reason, however, that I need that protection for every single thing that I create. What purpose does _automatic_ copyright serve? I stick a copyright notice in every software project already, but when I don't want the copyright I also have to explicitly disavow it. Why shouldn't the model be flipped to claiming copyright with a simple attached notice, instead of disavowing it?