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Intellectual Property Law

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Thursday, January 25, 2018

The "Tax Cuts and Jobs Act of 2017" (the "TCJA") changed the tax treatment of self-created intellectual property ("IP").


Under the TCJA, patents, inventions, models or designs and secret formulas or processes no longer qualify as capital assets, nor do they qualify as property used in a trade or business. As a result, after recapture, all gain on these assets appear to be ordinary.

Fortunately, the limitation on capital gain treatment of self-created IP does not apply to self-created copyrights, literary, musical, or artistic compositions and similar property. The IRC Section 1221(b)(3) election remains unchanged by the new law.

In addition, Congress retained the narrow exception provided by Section 1235 which allows some inventors and investors the opportunity to obtain capital gain treatment when transferring "all substantial rights" to a patent.  Unfortunately, Section 1235 does not apply to self-created non-patent property; e.g., inventions, models or designs (unpatented), or secret formulas or processes - it only applies to patents.

In light of the foregoing, patent owners should consider transferring "all substantial rights" to patents.  In addition, self-created IP owners should consider selling the ownership of the company and not its assets.  Regardless, IP owners should continue to identify all elements of the business which may be capital assets, e.g., goodwill, workforce-in-place, trademarks, customer-based intangibles, supplier intangibles, etc.

The Law Offices of Mark E. Wiemelt, P.C. do not render tax advice.  Therefore, taxpayers should consult with their tax advisors or professionals.

8:09 am cst 

Wednesday, January 24, 2018

U.S. Copyright Office amends rules for deposit requirements

Effective February 16, 2018, the U.S. States Copyright Office rules that govern the deposit requirements for certain types of literary works and musical compositions are amended.  Under the previous regulations, two copies of the best edition were generally needed to register these types of works and to comply with the mandatory deposit requirement. Under the new rule, copyright owners will be able to satisfy both registration deposit and mandatory deposit requirements by submitting one copy of the best edition of the work.

6:53 am cst 

Tuesday, January 9, 2018

U.S. Copyright Office Issues Final Reminder to Re-Register DMCA Agents in Electronic System


On December 31, 2017, the U.S. Copyright Office issued a final reminder that any online service provider that designated an agent with the Office pursuant to the Digital Millennium Copyright Act (DMCA) under the Office’s old paper-based registration process, and that wishes to maintain an active designation with the Office, has until December 31, 2017, to re-register its designation using the Office’s new online registration system. After December 31, 2017, all paper designations will expire and become invalid.

7:16 am cst 

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