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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

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.
  - themacks 10y ago
    I think what he is getting at is if the patent owner ascribes no value to the patents for tax purposes, then the same lack of value applies if they attempt to collect damages for IP infringement. This would force the patent troll to set the value to something balances so that they can afford the taxes while still recouping enough infringement damages.
  - beagle3 10y ago
    > where I hold a patent over a small component of that machine, how would you determine the value of my patent? I want YOU to value that patent (and the tax just make sure it is not arbitrarily high). When you sue for damages, you must have that estimate. I just want to force that to happen in a way that discourages over estimation. > 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. Court cases take years to start (and resolve). The patent troll's leverage is "if you don't license, I'll sue". If they have to pay $10,000 for every $1M patent, they will not be able to afford their current business model - they will not be able to sue for more than they paid taxes for. (The lawsuit is likely - and perhaps should legally be required - to be filed only after tax is paid).
- will_brown 10y ago
  >Therefore, if at the end of the year neither yourself nor anyone else had made any money from your IP, just assign zero. If you can declare $0 and not pay taxes on the IP you are basically coming full circle to existing taxation based on the income generated by the IP. However, the more important issue with your proposal is an IP holder might not want to declare $0, despite no current revenue, because your proposal would then tie that $0 valuation to potential damages in the instance of an infringement case. >As for copyrights - the same framework would make infinite extension unaffordable even for Disney, so I hope we would all benefit. As both a small business owner and consumer I have always been on the other side of the Disney argument. Why do you think we would all benefit from Disney losing IP protections? Most of the time its a innovation argument, but is their really any innovation being stifled by the Mouse? As a business owner, if my company creates some form of IP, say a cartoon mouse whom I copyright/trademark to various degrees (name, logo, color(s), etc...),the company invests capital to create a movie starring the mouse and the market votes with their wallets, which the company pays taxes on, and like Steve Jobs I am fanatical about Quality Control and just keep reinvesting in the IP, creating products with the Mouse that the market love and keep paying taxes. Why, at some arbitrary point in time, should my company lose IP protections to the cartoon Mouse and all completed works with the Mouse? As a consumer, I currently know Disney for its high quality productions and there is a lot of goodwill with the brand that has been established over a lifetime, now with the floodgates opened and everyone able to profit off Disney IP there will be confusion in the marketplace leading toward loss of goodwill with the brand.
  - randomdata 10y ago
    > Why do you think we would all benefit from Disney losing IP protections? Copyright is willingly extended by the public to private interests for the purpose of fostering innovation and creativity. The question isn't how do we benefit by Disney losing IP protections, the question is how do we benefit by maintaining what we have graciously given them? What return on investment, if you will, is the public getting for Mickey not being in the public domain?
  - beagle3 10y ago
    > However, the more important issue with your proposal is an IP holder might not want to declare $0, despite no current revenue, because your proposal would then tie that $0 valuation to potential damages in the instance of an infringement case. For that year (alone), and I proposed you set it when you pay your taxes - that is, at the end of the year, in retrospect. In this case, there is never a reason for you to file anything other than $0 unless someone else is making money of it (if you are, then you're already being taxed on it). > Why do you think we would all benefit from Disney losing IP protections? Most of the time its a innovation argument, but is their really any innovation being stifled by the Mouse? It's supposed to be the other way around. We have granted Disney limited monopoly in return for wide availability. "Steamboat Willy" was released with the understanding that it will become public domain within 50 years. The question is, why on earth did we retroactively give another 100 years of that monopoly for free? And even if it wasn't retroactive - the current 100+ years doesn't seem reasonable to me at all. > Why, at some arbitrary point in time, should my company lose IP protections to the cartoon Mouse and all completed works with the Mouse? The only reason they currently have these protections is that they bought them from Congress. Why do you, as an employer, stop paying your employees a couple of months after you fire them / they quit? IP is not the same as work-for-hire, but it doesn't deserve the eternal protection it currently has. I am not aware of anyone who did NOT publish in 1930 because "I only get 50 years of copyright protection". And ... you are arguing a strawman. I did not argue that IP should be abolished. Just introduce an economic cost to the unlimited monopoly, which is currently free.

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.
- themacks 10y ago
  I think what he is getting at is if the patent owner ascribes no value to the patents for tax purposes, then the same lack of value applies if they attempt to collect damages for IP infringement. This would force the patent troll to set the value to something balances so that they can afford the taxes while still recouping enough infringement damages.
- beagle3 10y ago
  > where I hold a patent over a small component of that machine, how would you determine the value of my patent? I want YOU to value that patent (and the tax just make sure it is not arbitrarily high). When you sue for damages, you must have that estimate. I just want to force that to happen in a way that discourages over estimation. > 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. Court cases take years to start (and resolve). The patent troll's leverage is "if you don't license, I'll sue". If they have to pay $10,000 for every $1M patent, they will not be able to afford their current business model - they will not be able to sue for more than they paid taxes for. (The lawsuit is likely - and perhaps should legally be required - to be filed only after tax is paid).
will_brown 10y ago
>Therefore, if at the end of the year neither yourself nor anyone else had made any money from your IP, just assign zero. If you can declare $0 and not pay taxes on the IP you are basically coming full circle to existing taxation based on the income generated by the IP. However, the more important issue with your proposal is an IP holder might not want to declare $0, despite no current revenue, because your proposal would then tie that $0 valuation to potential damages in the instance of an infringement case. >As for copyrights - the same framework would make infinite extension unaffordable even for Disney, so I hope we would all benefit. As both a small business owner and consumer I have always been on the other side of the Disney argument. Why do you think we would all benefit from Disney losing IP protections? Most of the time its a innovation argument, but is their really any innovation being stifled by the Mouse? As a business owner, if my company creates some form of IP, say a cartoon mouse whom I copyright/trademark to various degrees (name, logo, color(s), etc...),the company invests capital to create a movie starring the mouse and the market votes with their wallets, which the company pays taxes on, and like Steve Jobs I am fanatical about Quality Control and just keep reinvesting in the IP, creating products with the Mouse that the market love and keep paying taxes. Why, at some arbitrary point in time, should my company lose IP protections to the cartoon Mouse and all completed works with the Mouse? As a consumer, I currently know Disney for its high quality productions and there is a lot of goodwill with the brand that has been established over a lifetime, now with the floodgates opened and everyone able to profit off Disney IP there will be confusion in the marketplace leading toward loss of goodwill with the brand.
- randomdata 10y ago
  > Why do you think we would all benefit from Disney losing IP protections? Copyright is willingly extended by the public to private interests for the purpose of fostering innovation and creativity. The question isn't how do we benefit by Disney losing IP protections, the question is how do we benefit by maintaining what we have graciously given them? What return on investment, if you will, is the public getting for Mickey not being in the public domain?
- beagle3 10y ago
  > However, the more important issue with your proposal is an IP holder might not want to declare $0, despite no current revenue, because your proposal would then tie that $0 valuation to potential damages in the instance of an infringement case. For that year (alone), and I proposed you set it when you pay your taxes - that is, at the end of the year, in retrospect. In this case, there is never a reason for you to file anything other than $0 unless someone else is making money of it (if you are, then you're already being taxed on it). > Why do you think we would all benefit from Disney losing IP protections? Most of the time its a innovation argument, but is their really any innovation being stifled by the Mouse? It's supposed to be the other way around. We have granted Disney limited monopoly in return for wide availability. "Steamboat Willy" was released with the understanding that it will become public domain within 50 years. The question is, why on earth did we retroactively give another 100 years of that monopoly for free? And even if it wasn't retroactive - the current 100+ years doesn't seem reasonable to me at all. > Why, at some arbitrary point in time, should my company lose IP protections to the cartoon Mouse and all completed works with the Mouse? The only reason they currently have these protections is that they bought them from Congress. Why do you, as an employer, stop paying your employees a couple of months after you fire them / they quit? IP is not the same as work-for-hire, but it doesn't deserve the eternal protection it currently has. I am not aware of anyone who did NOT publish in 1930 because "I only get 50 years of copyright protection". And ... you are arguing a strawman. I did not argue that IP should be abolished. Just introduce an economic cost to the unlimited monopoly, which is currently free.