About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline

LOG IN
LOG IN


62 UCLA L. Rev. 2 (2015)

handle is hein.journals/uclalr62 and id is 1 raw text is: Intellectual Property Law Solutions to Tax Avoidance Andrew Blair-Stanek ABSTRACT Multinational corporations use intellectual property (IP) to avoid taxes on a massive scale, by transferring their IP to tax havens for artificially low prices. Economists estimate that this abuse costs the U.S. Treasury as much as $90 billion each year. Yet tax policymakers and scholars have been unable to devise feasible tax-law solutions to this problem. this Article introduces an entirely new solution: change IP law rather than tax law. Multinationals' tax-avoidance strategies rely on undervaluing their IP. This Article proposes extending existing IP law so that these low valuations make it harder for multinationals to subsequently litigate or to license their IP. For example, transferring a patent for a low price to a tax-haven subsidiary should make it harder for the multinational to demonstrate the patent's validity, a competitor's infringement, or entitlement to any injunctions. The low transfer price should also weigh toward lower patent damages and potentially even a finding of patent misuse. Extending IP law in such ways would thus deter multinationals from using IP to avoid taxes. Both case law and IP's policy justifications support this approach. AUTHOR Andrew Blair-Stanek is an Assistant Professor of Law at the University of Maryland Francis King Carey School of Law and the inventor of U.S. Patents 7,617,204 and 7,580,951. He holds a J.D. from Yale Law School and an A.B. in Mathematics, summa cum laude, from Princeton University. The author is very grateful for valuable feedback and comments from participants at the Florida Graduate Tax Policy Colloquium, the Critical Tax Conference, and workshops at Maryland and North Carolina, as well as Noel Brock, Greg Dolin, Rachael Doud, Daniel Epps, David Gamage, David Gray, Monica Gianni, Michael Gould, James Grimmelmann, Daniel Hemel, Elisa Jillson, Omri Marian, Mark Mathison, Robert Merges, Lisa Larrimore Ouellette, Gregg Polsky, Shruti Rana, Alexandra Roberts, Colin Starger, Kathleen DeLaney Thomas, and Lawrence Zelenak. All errors and views are the author's own. The author gratefully acknowledges the research assistance ofWilliam Young, Jr., Yuripzy Abarca, and Ben Cheatham, and the UCLA Law Review's top-notch editing work. 62 UCLA L. REV. 2 (2015)