Fed Gov’t Updates

  1. Tax plan: No patent box this year. Instead, all corporations get a tax break regardless of whether they are engaged in innovative or beneficial activities.
  2. Tax plan: For 2018, law firm associations may want to push hard for ownership to take advantage of the new pass-through tax cuts.
  3. Government Funding: On the brink, Congress has passed a short-term spending bill till Jan 19. This means no USPTO or Court shutdown.
  4. USPTO Director: The Senate took no action on Andrei Iancu’s nomination before their long Christmas break.

32 thoughts on “Fed Gov’t Updates

  1. 5

    I am placing this here as this is a hodge podge already.

    Greg A’s email today has a blip that strikes (or should strike) at ALL attorneys (at least outside of the Commonwealth of Massachusetts, whose attorney oath does not appear to the Constitution above the Supreme Court):

    The Supreme Court justices need fact-checkers The 18 October edition of the New York Times had an op-ed piece, “The Supreme Court Justices Need Fact-Checkers”, by John Pfaff, a professor at Fordham Law School. He wrote it in response to a study by ProPublica, which sampled 24 Supreme Court cases from 2011 to 2015, and “found that the court cited faulty research or introduced its own errors in a third of the cases”. Some of the errors were errors of statistical analysis, which is no surprise to Pfaff, observing that none of the Supreme Court justices has any training in statistics [or for that matter, anything to do with science and engineering and mathematics], and few if any of their law clerks know much about statistics beyond Excel formulas. One suggestion of his? If the U.S. Congress has a Congressional Research Service, does the U.S. Judiciary need a Judicial Research Service? At least for patent law cases, the answer is definitely YES YES YES. Too many SC and CAFC decisions are riddled with scientific and semantic nonsense, especially anything involving software AND ESPECIALLY ESPECIALLY ANYTHING INVOLVING 101. With regards to software, pretty much all of the caselaw and law review articles about “mean-plus-function” concerns is nonsense because neither the judges nor the professors understand the current state of software engineering. Times article at: link to nytimes.com .

    1. 5.1

      But if bureaucracies are inherently expansive, the only way for the PTO to expand is serve their clients well that they file more patents to generate more fees. ScrimpIng on searches and the time experienced examiners can spend only helps in the overall mission of expanding the bureaucracy.

      Obviously, in order to fix the problem, the budgets in the pay of those in the bureaucracy have to somehow be linked to quality. Thus the bonus pool both for executives and for examiners has to be linked in my view to the validity rate.


          That has become Ned’s modus operandi. He just has a set of talking points and doesn’t care what the content of your post is. A true propagandist.

      1. 5.1.2

        Actually anon, this is part of a post regarding Greg’s email. I left off the beginning which referenced a study of why the Office was issuing so many invalid patents. Greg’s summary of that study:

        • USPTO is addicted to application, issuance and maintenance fees
        • File enough RCEs and it is just easier to issue a piece of crap
        • Senior patent examiners with more experience are given less time


          Ned, Greg’s emails often have many topics – your reply to the topic I presented is not on point.

          ALWAYS feel free to start a new subthread (that’s what that option is for). But please observe that if you are responding to another’s post, you should at least aim to be on point.

  2. 4

    When we’re already running a structural deficit (that is, a deficit that persists averaged over the business cycle), there’s no such thing as a tax cut. There’s only a tax shift, to our kids. With interest.

    For a history of the success of tax cuts in spurring growth, see the discussion of the 1981 tax cut at third paragraph of link to en.wikipedia.org and the 1982 tax increase at link to en.wikipedia.org After the demise of Bretton Woods system of fixed exchange rates, tax cuts don’t work as stimulus (except in times of recession).

    Analyzed in a Congressional Research Service report, which is linked to from Forbes magazine. link to forbes.com

    This tax cut is dumb, even for very Republican reasons.

    1. 4.1

      The tax cut is really just a prelude to cutting entitlements. They specifically increase the deficit so that now they “have” to cut entitlements.

  3. 3

    An article on the G blog today says that: “Given that the Committee Bill directly contradicts itself with respect to the tax treatment of the sale of patents by taxpayers whose personal efforts created such property, it is unclear how this Bill will be implemented. It is unclear how gains or losses on a sale of self-created assets by a taxpayer who created a patent will be treated.”

    1. 3.1

      P.S. I’m sure there will be a “technical corrections bill” required, as so often occurs with major legislation – there was even one after the next to last patent bill. If it gets on the uncontested Consent Calendar it should not take too long.

    2. 3.2

      Kind of like the AIA you say? There is a similar flaw where a patent can both have priority to a priority application and have that same priority application (as a published application or patent) be prior art under the statute. How will the courts handle that?

      1. 3.2.1

        Like they have always been handling CIP claims?

        Ned, as far as I am aware, the AIA, unlike the prior major patent bill for application publication and new patent terms, and the inter partes reexamination statute, never had a “technical corrections bill.”

  4. 2

    patent sales taxed as long term capital gains rate was repealed. why no mention here on in news?

  5. 1

    The high percentage of IP lawyers that live in CA, NY and NJ with high property taxes and high income taxes will take a large hit next year from the new combined $10K deductability cap.

    1. 1.1


      How does your point sync with 2) from the article?

      In a larger context, I, like Senator Warren, find it preposterous that this new law even could have been read through carefully, much less crafted well to achieve meaningful changes.

    2. 1.2

      One analysis I read is that the deductibility cap will probably be awash for high income earners because they previously lost the state tax deductions under the AMT anyway.

    3. 1.3

      Like K mentioned, many of the purported comparison tools ignore both the low AMT exemption amounts and the low threshold where even those low exemption amounts began being clawed back (under the old law).

      The new plan increases both. The best way for a person usually subject to AMT to compare is to run the numbers from this April’s return against the new scheme.

      Especially if they have kids 16 and younger and were accustomed to seeing zero child tax credits because of those phaseouts, they may be pleasantly surprised, despite losing a lot of their former SALT deductions.


          Paying property taxes early is of no benefit if you are subject to AMT for 2017–which includes a surprisingly high % of filers, especially married couples with kids with both spouses working. And even if you are not currently subject to AMT, paying property taxes early may push you into AMT. I heard an accountant on the radio yesterday and she said that a very, very small percentage of her clients would benefit from prepaying property taxes.

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