PHARMACEUTICAL AD FOR ER-DYSFUNCTION FALSELY CLAIMS A PATENT

The August 25th San Francisco Chronicle, page A5, had an ad (one in many other newspapers, I suspect), from the BostonMedicalGroup.com for their proprietary process for treating performance dysfunction for those men for which the new pills don't work. One sentence caught my eye: "The secret to Boston Medical Group's success lies in The BMG Method, a proprietary treatment process for Urecktyle Dysfunction that recently received a U.S. patent. The group is the only physician network known to have acquired such a patent, ..." But what is the patent number? The ad doesn't mention it, I couldn't find it on the BMG Web site, nor could I find any patent assigned to Boston Medical Group, or two of its doctors mentioned in the ad - Barry Buffman and Alan Sperber. I am always suspicious of small companies touting patents in medical ads, because the existence of the patent means little medically, and it is all the more suspicious when it is so hard to find the actual patent.

PROCTER AND GAMBLE SUES IRS TO RECLAIM ITS PATENT DONATION DEDUCTION

Speaking of which, Reuters reports that Procter & Gamble is suing the IRS, asking to have $435 million in patent donations reinstated. The news is from http://www.reuters.com/article/americasIpoNews/idUSN1952932320080919 In 2005, the IRS audited P&G's tax returns for 2001 through 2005, with the IRS in 2008 sending P&G a letter asking for extra taxes and interest, which P&G paid upfront without agreeing with the IRS assertions. Now P&G is suing to protest the extra taxes, which it wants back. From the article: "P&G said the IRS asked for more money after looking into tax credits the company claimed for technology donated to colleges and universities, as well as artwork donated to the Cincinnati Art Museum and the National Underground Railroad Freedom Center. The IRS also denied certain credits related to spending on patent work and research, among other items."

Tax reform kills used car donations

The 10 September Wall Street Journal, page D3, reports that far fewer people are donating their automobiles to charities after the tax laws were changed so that donors could only deduct the sales price of the automobile after the charity sold the car, not the book value. In 2004, under the old rules, 901,000 taxpayers claimed the deduction for a total amount of $2.4 billion, while in 2005 under the new rules, 297,000 people claimed the deduction for a total amount of $470 million, a two billion dollar difference. This tax law change came about in part because large U.S. companies were donating patents to universities, and similarly claiming large values for the patent (see the relevant post), even if the recipient did nothing economically with the patent. Under the new tax law, companies donating patents can only deduct whatever the recipient earns from the patent, much like with the automobile deductions. And I suspect much like the automobile deductions, there has been significant drops in the number of companies claiming large deductions for their donated patents. In both cases, the taxpayers were being scammed.