ILNews

IBA: Indiana Patent Owners Not Interested in Saving Money?

Back to TopCommentsE-mailPrintBookmark and Share

By Cedric A. D’Hue, D’Hue Law, LLC

Indiana Code § 6-3-2-21.7 aims to encourage innovation by giving Indiana entrepreneurs and small businesses a break on Indiana state income tax. Several articles and blog posts initially notified the public about this unique Indiana tax benefit. A recent posting argued that all indications suggest this law is underutilized, essentially saying that Indiana patent owners are leaving money on the table. While I agree with some of the initial indications, I am encouraged by increased use of the law.

In my devotion to this law, I researched Indiana-based patents which may qualify for the Indiana patent income tax exemption. My search criteria involved identifying U.S. utility patents issued in the year 2008 to at least one Indiana individual or Indiana based business. My search criteria sought to exclude patents owned by large Indiana businesses or non-Indiana based businesses.

From this labor of love, my informal research identified two hundred and thirty seven (237) relevant Indiana based patents. It is reasonable to hypothesize that the law is underutilized when there are 237 potentially relevant patents and only ten Indiana taxpayers taking advantage of the law.

There are several reasons why so many patents might qualify for the exemption but only ten Indiana taxpayers took advantage of the law. First, it is unknown how many Indiana patent owners are aware of the tax law advantage. Second, I don’t know if each of the ten Indiana taxpayers utilized one or more patents when claiming their exemption.

Several factors might cause Indiana patent owners to not take advantage of this tax law. Not all U.S. patents immediately generate income. Another reason could be the cost associated with compliance of this law. For example, determination of fair market value of the licensing fees or other income generated from the sale of a product covered by the patent could easily exceed the tax savings provided by the first years of patent income. Intangible asset valuation firms may choose to charge $7,500 to $8,000 for an uncertified patent valuation and $20,000 to $25,000 for a certified patent valuation. A third reason is there can be a several year lag between filing a patent application and issuance of a U.S. patent. After notification about this unique tax benefit, Indiana entrepreneurs or small business owners may have filed for patent protection but have yet to receive an issued U.S. utility patent.

As illustrated in the Table, the sum of claimed exemptions almost doubled from 2008 to 2009 during one of the most challenging eIBA-chart-2col.jpgconomic environments since The Great Depression. The increase has been encouraging. In my opinion the almost doubling indicates increased utilization in this unique Indiana tax benefit. I am interested to see if a pattern emerges and the increase continues upward for 2010.

In conclusion, the initial number of Indiana taxpayers utilizing this unique tax benefit seems to be small. Immediate and optimal use of this law would provide maximum benefit. Realistically, we may not see the full impact of this unique Indiana law for several years. Let us make the most of this opportunity by: (1) ensuring that all Indiana entrepreneurs and small business owners are aware of this exemption, (2) increasing our reporting on this law and continuing to evaluate its benefit to Indiana, and (3) assisting Indiana patent owners to take advantage of this unique tax benefit.•

Cedric D’Hue is a patent attorney and sole member of D’Hue Law LLC (www.dhuelaw.com). The opinions expressed in this article are those of the author.
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. All the lawyers involved in this don't add up to a hill of beans; mostly yes-men punching their tickets for future advancement. REMF types. Window dressing. Who in this mess was a real hero? the whistleblower that let the public know about the torture, whom the US sent to Jail. John Kyriakou. http://www.nytimes.com/2013/01/26/us/ex-officer-for-cia-is-sentenced-in-leak-case.html?_r=0 Now, considering that Torture is Illegal, considering that during Vietnam a soldier was court-martialed and imprisoned for waterboarding, why has the whistleblower gone to jail but none of the torturers have been held to account? It's amazing that Uncle Sam's sunk lower than Vietnam. But that's where we're at. An even more unjust and pointless war conducted in an even more bogus manner. this from npr: "On Jan. 21, 1968, The Washington Post ran a front-page photo of a U.S. soldier supervising the waterboarding of a captured North Vietnamese soldier. The caption said the technique induced "a flooding sense of suffocation and drowning, meant to make him talk." The picture led to an Army investigation and, two months later, the court martial of the soldier." Today, the US itself has become lawless.

  2. "Brain Damage" alright.... The lunatic is on the grass/ The lunatic is on the grass/ Remembering games and daisy chains and laughs/ Got to keep the loonies on the path.... The lunatic is in the hall/ The lunatics are in my hall/ The paper holds their folded faces to the floor/ And every day the paper boy brings more/ And if the dam breaks open many years too soon/ And if there is no room upon the hill/ And if your head explodes with dark forbodings too/ I'll see you on the dark side of the moon!!!

  3. It is amazing how selectively courts can read cases and how two very similar factpatterns can result in quite different renderings. I cited this very same argument in Brown v. Bowman, lost. I guess it is panel, panel, panel when one is on appeal. Sad thing is, I had Sykes. Same argument, she went the opposite. Her Rooker-Feldman jurisprudence is now decidedly unintelligible.

  4. November, 2014, I was charged with OWI/Endangering a person. I was not given a Breathalyzer test and the arresting officer did not believe that alcohol was in any way involved. I was self-overmedicated with prescription medications. I was taken to local hospital for blood draw to be sent to State Tox Lab. My attorney gave me a cookie-cutter plea which amounts to an ALCOHOL-related charge. Totally unacceptable!! HOW can I get my TOX report from the state lab???

  5. My mother got temporary guardianship of my children in 2012. my husband and I got divorced 2015 the judge ordered me to have full custody of all my children. Does this mean the temporary guardianship is over? I'm confused because my divorce papers say I have custody and he gets visits and i get to claim the kids every year on my taxes. So just wondered since I have in black and white that I have custody if I can go get my kids from my moms and not go to jail?

ADVERTISEMENT