By Maxine Shapiro, KERA 90.1 business commentator
Dallas, TX – Sometimes when you read things on the Internet, you wish had a truth-o-meter. It might sound legitimate, but here's a case when the both the New York Times and the IRS are listening and it's all about patents. I'm Maxine Shapiro with KERA Marketplace Midday.
Greg Aharonian is the publisher of Internet Patent News. And according to a New York Times article, he's known for his exaggerations and contrarian views. He's also an expert on software patents. This knowledge makes him a frequent speaker to patent lawyers worldwide. It's what's in a recent e-mail newsletter that making a few heads turn.
Mr. Aharonian exposes what he says, "is the alarming trend of companies donating bogus patents to universities and claiming big tax deductions on their federal taxes." That how it works. A company has a patent they deem worth hundreds of millions of dollars, and then with a generous heart they turn around and donate the patent to a university or nonprofit. How kind, but what's in it for the company? Sometimes - if they choose - a huge tax deduction. As Mr. Aharonian told me, a company can give away all the patents it wants, but the outrage comes when the companies receives large tax deductions for worthless patents.
One such patent was a donation from SBC Communications to the University of Texas in Austin. Without mincing any words, Mr. Aharonian said, "This patent stinks like a dead cow in the Houston shipping channel on a hot summer day." It's valued at more than $7 million. The company that assesses such patents admitted that its due diligence was rather weak. Anytime new anti-virus software is introduced, it's guaranteed to make money, right?
Even the IRS is joining the bandwagon. Several weeks ago, it issued a new set of guidelines for such tax deductions. And an IRS spokeswoman assured us, "We're not done with this issue."
So, according to Aharonian, SBC will receive about $2 million in tax savings. Another tax break for corporations. And quoting the New York Times, the balance sheet at UT "puts quite a different value on the patent: one dollar!" For KERA Marketplace Midday, I'm Maxine Shapiro.
Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 p.m.
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