Skip navigation

Patented Tax Strategies

The December 2006 Trusts & Estates article -- Patenting Tax Strategies by Mary Lee Turk in the Chicago office of McDermott, Will and Emery -- fueled my interest in this hot topic. The piece discusses recent cases on the patenting of tax strategies, examines the issues pertaining to the patented stock option grantor annuity trust (SOGRAT) strategy raised by Wealth Transfer Group LLC v. Rowe, No. 3:06-cv-00024-AWT (D. Conn. Jan. 6, 2006) and advocates changes in the treatment of patented tax strategies.

Turk's analysis also made me want to review some primary sources: professional association comments; the legislative history on patented tax (including transfer tax) strategies; patents issued for tax strategies; and recent developments involving patented tax strategies and related business processes. Many of these materials can be found on the Internet.

For example, a simple search for "patented tax strategies" brings up a paper cited in Turk's piece, by Paul Devinsky, John Fuisz and Thomas Sykes, partners at McDermott Will & Emery LLP in Washington D.C. and Chicago. Whose Tax Law Is It?, a supplement to the Legal Times (Oct. 16, 2006) provides additional background on patented tax strategies before Rowe.

The Patent Office

Turk also mentions the U.S. Patent Office (USPTO) website, US Patent Grant and US PreGrant Publication documents classified in US Patent Classification 705/36T. This site lists patented tax strategies by description and patent assignee. The list displays a remarkable variety of planning techniques, insurance systems, pension systems and investment management systems. Another such listing is at USPTO Full-Text and Image Database, which includes a list of patented financial planning strategies.

The Testimony of James Toupin, General Counsel of the USPTO, cited in Turk, is available as part of the Ways and Means Committee Hearing on Issues Relating to the Patenting of Tax Advice. The hearing was held before the Subcommittee on Select Revenue on July 13, 2006.

The Committee Hearing

Other primary legislative material is available on the Ways and Means Committee site. For the hearings conducted during the 109th Congress, look at the Hearing on Issues Relating to the Patenting of Tax Advice. There, you can view the list of witnesses and their testimony, submissions for the record and the entire hearing transcript. Testimony before the committee includes:


Additional, relevant papers and reports from government agencies and professional organizations are available on the Internet:

Current Developments

The Internet also provides a convenient way to stay current on patented tax strategies and follow new developments.

The Rowe case involved a suit claiming infringement of the patented GRAT strategy trademarked as SOGRAT. An Internet search for "Wealth Transfer Group LLC v. Rowe" brings up a link to the Consent Final Judgment Regarding Settlement Agreement (March 9, 2007), reflecting the final disposition of the case in a confidential settlement agreement.

To determine the legislative aftermath of the Ways and Means Committee hearings, use the Thomas site to see new bills. The home page,, includes a search for newly proposed legislation. A search of the words "patent tax" brings up the Stop Tax Haven Abuse Act. On Feb. 17, 2007, Sens. Carl M. Levin (D-Mich.), Norman Coleman (R-Minn.) and Barack Obama (D-Ill.) introduced this act with provisions to restrict patents on "inventions designed to minimize, avoid, deter, or otherwise effect liability for federal, state, local or foreign tax." These provisions would become effective on the date of enactment and apply to any patents not granted before that date.

Bottom Line

The government websites, such as and, provide a wealth of primary source material on a broad range of topics. Such resources can complement the analysis and practical guidance that publications like Trusts & Estates offer.

Trusts & Estates magazine is pleased to present the monthly Technology Review by Donald H. Kelley -- a respected connoisseur of software and Internet resources wealth management advisors use to further their practices.

Kelley is a lawyer living in Highlands Ranch, Colo. and is of counsel to the law firm of Kelley, Scritsmier & Byrne, P.C. of North Platte, Neb. He is the co-author of Intuitive Estate Planner Software (Thomson - West 2006). He has served on the governing boards of the American Bar Association Real Property, Probate and Trust Section and the American College of Tax Counsel. He is a past regent and past chair of the Committee on Technology in the Practice of the American College of Trust and Estate Counsel.

Trusts & Estates has asked Kelley to provide his unvarnished opinions on the tech resources available in the practice today. His columns are edited for readability only. Send feedback and suggestions for articles directly to him at [email protected].

TAGS: Research
Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.