January 13, 2022

IP and Tax – Collaboration is Key to Mitigate Company Risks



Intellectual property is one of the key drivers of profitability for a multinational company.  Because IP is inherently mobile, tax planning for IP routinely involves intercompany licensing, cost sharing and other co-ownership structures.  Moving IP in connection with a tax planning strategy can generate significant bottom line value, but doing so, without the coordination of IP and Tax expertise creates significant risks.  These issues are also a critical part of any merger, acquisition, reorganization, or joint venture. 

Whenever a transaction includes either the acquisition or the migration of IP assets, it often results in inter–affiliate decisions that implicate both tax and IP issues. The failure to address both the tax and the IP issues can result in harm to the company. If not done properly, a company may not have standing to sue to recover lost profits or obtain an injunction. In addition to these IP risks, cross-border IP structures come with enhanced audit risk, as demonstrated by recent US Tax Court cases where the interplay between tax and IP is often integral to the outcome.  

Please join Mayer Brown Intellectual Property partner James R. Ferguson and Tax partners Jenny Austin and Michael Lebovitz as they discuss the crucial considerations and best practices for these transactions, answering questions such as: 

  • How can a company optimize its tax position through the placement of its IP assets?
  • What transfer pricing issues arise when a company migrates the ownership of its patents from one jurisdiction to another?
  • How does cost sharing affect the tax treatment of IP assets developed by joint ventures?
  • What tax disputes are currently being raised concerning ownership of IP assets?
  • What patent enforcement issues can arise when a company migrates the ownership of its IP assets from one jurisdiction to another?
  • How can a company best design its inter-affiliate licensing structure to protect the enforcement options for its patent portfolio?
  • How should patent-owning companies draft employee agreements to ensure corporate ownership of all future inventions?

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