The Senate Judiciary Committee did a markup of its patent reform legislation (S.23) today (Feb. 3, 2011) and --in a unanimous vote-- sent it to the floor of the Senate with the broad ban on the patenting of tax strategies intact.
The accounting group AICPA has been leading the tax practitioner charge against patentable tax strategies, as the ABA tax section is hampered by the overall ABA's decision to let the patent bar handle any comments on the matter. The patent bar tends to object to subject matter exclusions to patentability, claiming that broad patentability best serves innovation.
Significant patent reform has been on the table for several years, but has been the subject of intense negotations, since it is the first major amendment to patent law in 60 years. Some practitioners have urged Congress to pass a stand-along tax strategy patent ban, but that has been politically difficult, possibly because of the patent bar's interest in the matter and those in the technology industry who fear that bans on tax strategy patents will affect tax software (such as tax preparation software). While there are arguments that software, like tax strategy patents, simply shouldn't be patentable, those in Congress in support of tax strategy patent bans generally have indicated that tax preparation software is not intended to be covered. Sen. Grassley, for example, supports a ban on tax strategy patents but is cognizant of the technology industry's concerns. He stated that he believes the ban can be written so as to protect tax preparation software and similar applications.
The following is excerpted from his Feb. 3, 2011 statement for the record on the tax strategy patent issue (available in BNA Daily Tax Report, Feb. 4, 2011).