Patenting Estate Planning Techniques

Earlier on this blog, I discussed the controversy that exists over the patenting of estate planning techniques.  Approximately 48 patents for tax reduction strategies have already been patented and dozens of applications are pending.

Dennis I. Belcher (partner, Richmond office of McGuireWoods LLP) & Dana G. Fitzsimons Jr. (associate, Richmond office of McGuireWoods LLP) have recently published their article entitled Tax Planners–Beware of Patented Estate Planning Techniques!, Prob. & Prop., Nov./Dec. 2006, at 24, which explains that “[s]ince 1998, it has been possible to patent tax reduction techniques.”

Here is the conclusion of their article:

An estate planning advisor can encounter problems if the advisor recommends a patented tax reduction technique to a client without obtaining the approval of the patent holder.  If the patent holder discovers that the client has used a patented tax reduction technique, the client and possibly the advisor may be liable for patent infringement and subject to costly litigation.  Experienced patent lawyers claim that lawsuits involving the validity of commercial patents can cost in excess of $1 million to defend.  Because of this risk, the prudent estate planning advisor would be well advised to check the USPTO web site to make sure that an estate planning technique is not subject to a patent.