5 ms·

I think both patents and cooyright should be taxed so that the time progressivity is high. Say first year or two practically free, but if you want to keep your

I think both patents and cooyright should be taxed so that the time progressivity is high. Say first year or two practically free, but if you want to keep your ip at 20 years, it should cost you billions. You can stop paying tax any time you want and your ip moves automatically to public domain. Solves also orphan works. (Yes, I know, Berne convention needs likely to be amended for this to be possible)

chii 6y ago
or treat intellectual property the same as physical property - pay a property tax. The value of the IP is the amount of transfers and licensing it has - so you cannot hide profit by "selling" IP from a foreign offshore tax haven.
- mreome 6y ago
  I think the value of most IP is to abstract to apply a tax to it. Some patents are extremely valuable, most are worthless. Some are only useful to Patent Trolls, or for defensive purposes, etc. How would you tax a company that patents something it develops and sells itself? If the products/service they sell involves lots of non-patented features and/or multiple patented features, how do you determine the value of any individual patent? How do you determine the value of patents effectively licensed through an Agreement Not-to-Sue?
  - nielsole 6y ago
    You can charge a flat fee per patent. By this you avoid having to assess their value. For normal ip it would likely need to get registered in order to receive copyright protection. This way creators only pay taxes for their larger works. The biggest problem with this is that this tilts the playing field against smaller creators.
  - deleted 6y ago
    [deleted]
  - est31 6y ago
    You raise a good point. The way how real estate is valued is through a market where each item is looked at individually more or less, but patents are connected. A possible solution could involve letting the patent owner itself state how valuable owning the patent is to them. They could declare a monetary number X and then do annual payments of say 0.1% of that number. They could adjust the number monthly by statement to the patent office, but would have to pay the tax on the maximum number they told to the patent office within each year. Now comes the core of the idea: the number would be public, and any entity could "free" the patent by paying that amount X to the patent office which then redirects it to the patent's owners after deducting a tax. The patent would then enter the public domain. So company A invents something, patents it, and claims a billion dollars of value to the patent office. They have to pay a million in taxes annually. Company B thinks it could make a lot more than a billion dollars if the patent got lifted, and pays 1 billion to get rid of the patent. Company A is now 1 billion richer (minus patent freedom taxes), but now has to deal with competitors. So their next patent will have 10 billion as value number. I'm not sure the idea is good or not, it has some problems, e.g. it might lead to patents becoming even larger than they are today so that they get lots of valuable stuff into the patent's umbrella. Patent offices might become more willing to grant patents for things as they are now a major revenue source for the government, and many patents on promising stuff will need big investors so that they can afford the taxes until the patent matures. Also companies won't be able to plan as well as they are now. Making the tax progressive will help with some of these problems, but maybe not enough and maybe not with all of them.
    - mreome 6y ago
      This is an interesting idea. It reminds me of the idea of "I’ll break the cookie in two; you choose your piece." I’d have to work through the implications of how this would play out between large corporations, but the most immediate issue I would see with it is for the smallest inventors/companies. In many industries, a new/small company would never be able to price it’s patents out of the reach of its largest competitors, it would put them in the position of either spending huge amounts of their working capital in taxes to defend their patents, or let the patents be sold and compete with their large competitors on production, logistic, and support costs (which is a loosing position for a new small/new company). It would be even worse in the case of a solo inventor. Imagine you come up with an idea so good it’s clearly worth a billion dollars, but only in an industry with a single, or small number, of big players. If that one big player, or several big players collectively, refuse to buy or license your patent, you won’t be able to afford the taxes and end up with nothing once it expires (and they are free to use it). If you want to try to develop it yourself, you now need to find a huge amount of additional investment just to cover the taxes.
  - HeadsUpHigh 6y ago
    >How would you tax a company that patents something it develops and sells itself? That's easy. Have a flat fee per patent that increases based on years plus number of patents the company holds up to crazy amounts. What this does is three fold: 1) Tax patents the same way physical possessions are taxed. 2) Limit big corporations that have the budget to realize tons of patents quickly so patents are again used for the benefit of the small players. 3) Prevent patent trolls from holding big portfolios of bad patents as the costs would be extremely hard for them to maintain.
mreome 6y ago
This would seem to be very biased in the favor of large corporations. If the fees/taxes are high enough to be non-trivial for a mega-corp, then it's very likely those large and increasing rates would easily outpace the rate at which a small company could develop their product, get it to market, and start making a profit. It would also mean larger corporations would have little incentive to purchase patents from smaller entities, when they could just wait our their ability to pay for them.
- phreack 6y ago
  I think that would still be a boon for society. Take Slack as a random example. They took an incredibly simple idea (chat, but seriously) and took it to market with great success. Everyone including the largest corps had been doing chat, yet Slack did it once more and nailed it. I think if everyone could freely build upon ideas, corporations wouldn't suddenly be making all of these amazing products that thwart every little player out there. Or rather, any more than they already do. And then we'd all be reaping the benefits of collective knowledge.
  - mreome 6y ago
    I think you may be limiting your view to software here though. Software has an entirely different cost-of-entry then virtually any other industry, and most of the major products you see coming out of the industry right now are a combination, reimplementation, or reimagining of already existing ideas. Most patent issues in this space are issues with "business method" and "XYZ but on a computer" patents, the validity of which are both arguable, but a separate issue from the wider value of patents. There are many other industries where advancement is not made without huge amounts of investment, and the only thing that protects the little players are patents. An industry like Chemical Engineering and Manufacture for example – the development of a new useful chemical compound may cost 10s of millions of dollars in research, testing, process improvements, etc. Why would any company bear that cost if they could just wait for another company to do it and start producing it themselves, undercutting the cost of the original developers who must price their offering higher to recuperate their R&D cost? What would stop any large manufacture from taking a novel new compound developed by a smaller competitor, or recent entrant, and using their large already existing production and logistics capacity to undercut their small competitor? Also, regarding collective knowledge -- remember that the only alternative to patent protection is to keep something a trade secret. That encourages a company to never publicly disclose anything about their process that they can keep secret, which can theoretically be done forever, and can mean that when the company eventually ceases to exist, that knowledge can be lost. I’m not saying that the patent system doesn’t have its flaws, and really needs some revisions and updates in places, but it does provide a real value.

chii 6y ago

or treat intellectual property the same as physical property - pay a property tax. The value of the IP is the amount of transfers and licensing it has - so you cannot hide profit by "selling" IP from a foreign offshore tax haven.

mreome 6y ago
I think the value of most IP is to abstract to apply a tax to it. Some patents are extremely valuable, most are worthless. Some are only useful to Patent Trolls, or for defensive purposes, etc. How would you tax a company that patents something it develops and sells itself? If the products/service they sell involves lots of non-patented features and/or multiple patented features, how do you determine the value of any individual patent? How do you determine the value of patents effectively licensed through an Agreement Not-to-Sue?
- nielsole 6y ago
  You can charge a flat fee per patent. By this you avoid having to assess their value. For normal ip it would likely need to get registered in order to receive copyright protection. This way creators only pay taxes for their larger works. The biggest problem with this is that this tilts the playing field against smaller creators.
- deleted 6y ago
  [deleted]
- est31 6y ago
  You raise a good point. The way how real estate is valued is through a market where each item is looked at individually more or less, but patents are connected. A possible solution could involve letting the patent owner itself state how valuable owning the patent is to them. They could declare a monetary number X and then do annual payments of say 0.1% of that number. They could adjust the number monthly by statement to the patent office, but would have to pay the tax on the maximum number they told to the patent office within each year. Now comes the core of the idea: the number would be public, and any entity could "free" the patent by paying that amount X to the patent office which then redirects it to the patent's owners after deducting a tax. The patent would then enter the public domain. So company A invents something, patents it, and claims a billion dollars of value to the patent office. They have to pay a million in taxes annually. Company B thinks it could make a lot more than a billion dollars if the patent got lifted, and pays 1 billion to get rid of the patent. Company A is now 1 billion richer (minus patent freedom taxes), but now has to deal with competitors. So their next patent will have 10 billion as value number. I'm not sure the idea is good or not, it has some problems, e.g. it might lead to patents becoming even larger than they are today so that they get lots of valuable stuff into the patent's umbrella. Patent offices might become more willing to grant patents for things as they are now a major revenue source for the government, and many patents on promising stuff will need big investors so that they can afford the taxes until the patent matures. Also companies won't be able to plan as well as they are now. Making the tax progressive will help with some of these problems, but maybe not enough and maybe not with all of them.
  - mreome 6y ago
    This is an interesting idea. It reminds me of the idea of "I’ll break the cookie in two; you choose your piece." I’d have to work through the implications of how this would play out between large corporations, but the most immediate issue I would see with it is for the smallest inventors/companies. In many industries, a new/small company would never be able to price it’s patents out of the reach of its largest competitors, it would put them in the position of either spending huge amounts of their working capital in taxes to defend their patents, or let the patents be sold and compete with their large competitors on production, logistic, and support costs (which is a loosing position for a new small/new company). It would be even worse in the case of a solo inventor. Imagine you come up with an idea so good it’s clearly worth a billion dollars, but only in an industry with a single, or small number, of big players. If that one big player, or several big players collectively, refuse to buy or license your patent, you won’t be able to afford the taxes and end up with nothing once it expires (and they are free to use it). If you want to try to develop it yourself, you now need to find a huge amount of additional investment just to cover the taxes.
- HeadsUpHigh 6y ago
  >How would you tax a company that patents something it develops and sells itself? That's easy. Have a flat fee per patent that increases based on years plus number of patents the company holds up to crazy amounts. What this does is three fold: 1) Tax patents the same way physical possessions are taxed. 2) Limit big corporations that have the budget to realize tons of patents quickly so patents are again used for the benefit of the small players. 3) Prevent patent trolls from holding big portfolios of bad patents as the costs would be extremely hard for them to maintain.

mreome 6y ago

This would seem to be very biased in the favor of large corporations. If the fees/taxes are high enough to be non-trivial for a mega-corp, then it's very likely those large and increasing rates would easily outpace the rate at which a small company could develop their product, get it to market, and start making a profit. It would also mean larger corporations would have little incentive to purchase patents from smaller entities, when they could just wait our their ability to pay for them.

phreack 6y ago
I think that would still be a boon for society. Take Slack as a random example. They took an incredibly simple idea (chat, but seriously) and took it to market with great success. Everyone including the largest corps had been doing chat, yet Slack did it once more and nailed it. I think if everyone could freely build upon ideas, corporations wouldn't suddenly be making all of these amazing products that thwart every little player out there. Or rather, any more than they already do. And then we'd all be reaping the benefits of collective knowledge.
- mreome 6y ago
  I think you may be limiting your view to software here though. Software has an entirely different cost-of-entry then virtually any other industry, and most of the major products you see coming out of the industry right now are a combination, reimplementation, or reimagining of already existing ideas. Most patent issues in this space are issues with "business method" and "XYZ but on a computer" patents, the validity of which are both arguable, but a separate issue from the wider value of patents. There are many other industries where advancement is not made without huge amounts of investment, and the only thing that protects the little players are patents. An industry like Chemical Engineering and Manufacture for example – the development of a new useful chemical compound may cost 10s of millions of dollars in research, testing, process improvements, etc. Why would any company bear that cost if they could just wait for another company to do it and start producing it themselves, undercutting the cost of the original developers who must price their offering higher to recuperate their R&D cost? What would stop any large manufacture from taking a novel new compound developed by a smaller competitor, or recent entrant, and using their large already existing production and logistics capacity to undercut their small competitor? Also, regarding collective knowledge -- remember that the only alternative to patent protection is to keep something a trade secret. That encourages a company to never publicly disclose anything about their process that they can keep secret, which can theoretically be done forever, and can mean that when the company eventually ceases to exist, that knowledge can be lost. I’m not saying that the patent system doesn’t have its flaws, and really needs some revisions and updates in places, but it does provide a real value.