They’re central controversies AND comparative discussion is critical to legal education.

Tax and intellectual property have different goals, causing an inherent tension between these two groups of lawyers. Although these tensions cannot be eliminated, they can be minimized, and the starting point is to make each group aware of the differences.

For example, tax lawyers seek to minimize taxes by migrating assets to a low tax jurisdiction in a manner acceptable to taxing authorities. They also prefer to minimize the value of those intellectual property assets to minimize taxes on the actual transfer. Intellectual property lawyers, on the other hand, seek to make intellectual property asset maintenance and enforcement as easy as possible and to maximize the value of the asset. A low valuation may be benefi cial for tax reasons, but may be less than helpful when trying to establish a high reasonable royalty rate in an infringement litigation. As such, it may be important to be able to distinguish the tax valuation from any arrangements with outside parties based on the timing, rights, geography or the terms of arrangement.

One of the most important differences between the two groups is a linguistic one—each has a very different concept of “ownership.” When intellectual property lawyers discuss ownership, they mean who owns the “legal title” and is “recorded” as the legal title owner in the relevant office. In contrast, tax lawyers usually mean “beneficial ownership” as indicated by a royalty stream and who is taking the financial “risk” if the business does not proceed as planned. Being aware of the differences in the way the two groups conceptualize ownership and taking care to articulate which meaning is intended will make communications easier.