USPTO Commioner Orders Reexamination of Wealth Transfer Group Patent

David Kappos, director of the USPTO, has ordered a reexamination of  a 2003 patent granted to Wealth Transfer Group LLC for a system that minimizes gift tax liability through the use of a stock option grantor retained annuity trust (SOGRAT). The patent is the focus of concerns among tax practitioners that individuals might be able to patent legal concepts construing or applying the tax code. In 2006, Wealth Transfer Group settled a suit against John W. Rowe, CEO of Aetna Inc. for unlicensed use of the SOGRAT method. According to Prof. Linda M. Beale of Wayne State University Law School, "It is incredibly important that the SOGRAT patent is being reviewed, because it garnered so much attention as representative of the threat tax patents pose to the tax system." Congress has recently debated whether to ban tax strategy patents. See, USPTO REEXAMINING CONTROVERSIAL TAX STRATEGY PATENT, 2011 TNT 96-3.