Intangible property

Intangible property, also known as incorporeal property, describes something which a person or corporation can have ownership of and can transfer ownership to another person or corporation, but has no physical substance, for example brand identity or knowledge/intellectual property. It generally refers to statutory creations such as copyright, trademarks, or patents. It excludes tangible property like real property (land, buildings, and fixtures) and personal property (ships, automobiles, tools, etc.). In some jurisdictions intangible property are referred to as choses in action. Intangible property is used in distinction to tangible property. It is useful to note that there are two forms of intangible property: legal intangible property (which is discussed here) and competitive intangible property (which is the source from which legal intangible property is created but cannot be owned, extinguished, or transferred). Competitive intangible property disobeys the intellectual property test of voluntary extinguishment and therefore results in the sources that create intellectual property (knowledge in its source form, collaboration, process-engagement, etc.) escaping quantification.

Generally, ownership of intangible property gives the owner a set of legally enforceable rights over reproduction of personal property containing certain content.[1] For example, a copyright owner can control the reproduction of the work forming the copyright. However, the intangible property forms a set of rights separate from the tangible property that carries the rights. For example, the owner of a copyright can control the printing of books containing the content, but the book itself is personal property which can be bought and sold without concern over the rights of the copyright holder.

In English law and other Commonwealth legal systems, intangible property is traditionally divided in pure intangibles (such as debts, intellectual property rights and goodwill) and documentary intangibles, which obtain their character through the medium of a document (such as a bill of lading, promissory note or bill of exchange). The recent rise of electronic documents has blurred the distinction between pure intangibles and documentary intangibles.

Further reading

  • Black, Stephen (2012). "Capital Gains Jabberwocky: Capital Gains, Intangible Property, and Tax". Hofstra Law Review. 41 (359). SSRN 2266063.

See also

References

  1. ^ "What are intangibles? | RoyaltyRange". www.royaltyrange.com. Retrieved 2018-11-06.
Amortization

Amortisation (or amortization; see spelling differences) is paying off an amount owed over time by making planned, incremental payments of principal and interest. To amortise a loan means "to kill it off". In accounting, amortisation refers to charging or writing off an intangible asset's cost as an operational expense over its estimated useful life to reduce a company's taxable income.

Amortization (tax law)

In tax law, amortization refers to the cost recovery system for intangible property. Although the theory behind cost recovery deductions of amortization is to deduct from basis in a systematic manner over an asset's estimated useful economic life so as to reflect its consumption, expiration, obsolescence or other decline in value as a result of use or the passage of time, many times a perfect match of income and deductions does not occur for policy reasons.

Computer Fraud and Abuse Act

The Computer Fraud and Abuse Act (CFAA) is a United States cybersecurity bill that was enacted in 1984 as an amendment to existing computer fraud law (18 U.S.C. § 1030), which had been included in the Comprehensive Crime Control Act of 1984. The law prohibits accessing a computer without authorization, or in excess of authorization. Prior to computer-specific criminal laws, computer crimes were prosecuted as mail and wire fraud, but the applying law was often insufficient.

The original 1984 bill was enacted in response to concern that computer-related crimes might go unpunished. The House Committee Report to the original computer crime bill characterized the 1983 techno-thriller film WarGames—in which a young Matthew Broderick breaks into a U.S. military supercomputer programmed to predict possible outcomes of nuclear war and unwittingly almost starts World War III—as "a realistic representation of the automatic dialing and access capabilities of the personal computer."The CFAA was written to extend existing tort law to intangible property, while, in theory, limiting federal jurisdiction to cases "with a compelling federal interest-i.e., where computers of the federal government or certain financial institutions are involved or where the crime itself is interstate in nature.", but its broad definitions have spilled over into contract law. (see "Protected Computer", below). In addition to amending a number of the provisions in the original section 1030, the CFAA also criminalized additional computer-related acts. Provisions addressed the distribution of malicious code and denial of service attacks. Congress also included in the CFAA a provision criminalizing trafficking in passwords and similar items.Since then, the Act has been amended a number of times—in 1989, 1994, 1996, in 2001 by the USA PATRIOT Act, 2002, and in 2008 by the Identity Theft Enforcement and Restitution Act. With each amendment of the law, the types of conduct that fell within its reach were extended.

In January 2015 Barack Obama proposed expanding the CFAA and the RICO Act in his Modernizing Law Enforcement Authorities to Combat Cyber Crime proposal. DEF CON organizer and Cloudflare researcher Marc Rogers, Senator Ron Wyden, and Representative Zoe Lofgren have stated opposition to this on the grounds it will make many regular Internet activities illegal, and moves further away from what they were trying to accomplish with Aaron's Law.

Conversion (law)

Conversion is an intentional tort consisting of "taking with the intent of exercising over the chattel an ownership inconsistent with the real owner's right of possession". In the United Kingdom, it is a tort of strict liability. Its equivalents in criminal law include larceny or theft and criminal conversion. In those jurisdictions that recognise it, criminal conversion is a lesser crime than theft/larceny.

Examples of conversion include: 1) Alpha cuts down and hauls away trees on land s/he knows is owned by Beta, without permission or privilege to do so; and 2) Gamma takes furniture belonging to Delta and puts it into storage, without Delta's consent (and especially if Delta does not know where Gamma put it). A common act of conversion in medieval times involved bolts of cloth that were bailed for safekeeping, which the bailee or a third party took and made clothes for their own use or for sale.

Many questions concerning joint ownership in enterprises such as a partnership belong in equity, and do not rise to the level of a conversion. Traditionally, a conversion occurs when some chattel is lost, then found by another who appropriates it to his own use without legal authority to do so. It has also applied in cases where chattels were bailed for safekeeping, then misused or misappropriated by the bailee or a third party.

Conversion, as a purely civil wrong, is distinguishable from both theft and unjust enrichment. Theft is obviously an act inconsistent with another's rights, and theft will also be conversion. But not all conversions are thefts because conversion requires no element of dishonesty. Conversion is also different from unjust enrichment. If one claims an unjust enrichment, the person who has another's property may always raise a change of position defense, to say they have unwittingly used up the assets they were transferred. For conversion, there always must be an element of voluntarily dealing with another's property, inconsistently with their rights.

Economy of Utah

Utah has a largely mixed economy covering industries like tourism, mining, agriculture, manufacturing, information technology, finance, and petroleum production. The majority of Utah's gross state product is produced along the Wasatch Front, containing the state capital Salt Lake City.

According to the Bureau of Economic Analysis the gross stated product of Utah in 2010 was 82 billion, just over half a percent of the total United States GDP of $14.55 trillion for the same year. The per capita personal income was $36,457 in 2005. Major industries of Utah include: coal mining, cattle ranching, salt production, and government services.

According to the 2007 State New Economy Index, Utah is ranked the top state in the nation for Economic Dynamism, determined by,

"The degree to which state economies are knowledge-based, globalized, entrepreneurial, information technology-driven, and innovation-based."

In eastern Utah petroleum production is a major industry. Near Salt Lake City, petroleum refining is done by a number of oil companies. In central Utah, coal production accounts for much of the mining activity.

Utah collects personal income tax at a single rate of 5%, but provides tax credits to low and middle income taxpayers to provide a progressive tax system. The state sales tax has a base rate of 4.65 percent, with cities and counties levying additional local sales taxes that vary among the municipalities. Property taxes are assessed and collected locally. Utah does not charge intangible property taxes and does not impose an inheritance tax.

As of December 2015, Utah's unemployment rate sat at 3.5%, and ranked 7th out of the 50 states and the District of Columbia.

Gift tax in the United States

A gift tax is a tax imposed on the transfer of ownership of property. The United States Internal Revenue Service says, a gift is "Any transfer to an individual, either directly or indirectly, where full compensation (measured in money or money's worth) is not received in return."When a taxable gift in the form of cash, stocks, real estate, or other tangible or intangible property is made, the tax is usually imposed on the donor (the giver) unless there is a retention of an interest which delays completion of the gift. A transfer is "completely gratuitous" when the donor receives nothing of value in exchange for the given property. A transfer is "gratuitous in part" when the donor receives some value but the value of the property received by the donor is substantially less than the value of the property given by the donor. In this case, the amount of the gift is the difference.

In the United States, the gift tax is governed by Chapter 12, Subtitle B of the Internal Revenue Code. The tax is imposed by section 2501 of the Code. For the purposes of taxable income, courts have defined a "gift" as the proceeds from a "detached and disinterested generosity." Gifts are often given out of "affection, respect, admiration, charity or like impulses."Generally, if an interest in property is transferred during the giver's lifetime (often called an inter vivos gift) then the gift or transfer would not be subject to the estate tax. In 1976, Congress unified the gift and estate taxes limiting the giver's ability to circumvent the estate tax by giving during his or her lifetime. Notwithstanding, there remain differences between estate and gift taxes; such as the effective tax rate, the amount of the credit available against tax, and the basis of the received property.

There are also types of gifts which will be included in a person's estate; such as certain gifts made within the three-year window before death and gifts in which the donor retains an interest, such as gifts of remainder interests that are not either qualified remainder trusts or charitable remainder trusts. The remainder interest gift tax rules apply the gift tax on the entire value of the trust by assigning a zero value to the interest retained by the donor.

Hunter v Moss

Hunter v Moss [1994] 1 WLR 452 is an English trusts law case from the Court of Appeal concerning the certainty of subject matter necessary to form a trust. Moss promised Hunter 50 shares in his company as part of an employment contract, but failed to provide them. Hunter brought a claim against Moss for them, arguing that Moss's promise had created a trust over those 50 shares. The constitution of trusts normally requires that trust property be segregated from non-trust property for the trust to be valid, as in Re London Wine Co (Shippers) Ltd. On this occasion, however, both Colin Rimer in the High Court of Justice and Dillon, Mann and Hirst LJJ in the Court of Appeal felt that, because this case dealt with intangible rather than tangible property, this rule did not have to be applied. Because all the shares were identical, it did not matter that they were not segregated, and the trust was valid. The decision was applied in Re Harvard Securities, creating a rule that segregation is not always necessary when the trust concerns intangible, identical property.

The academic reaction to Hunter was mixed. While some called it "fair, sensible and workable", or noted that "Logically the decision in Hunter v Moss appears a sensible one", Alastair Hudson felt that "doctrinally, it is suggested that the decision in Hunter v Moss is wrong and should not be relied upon", because it contradicted existing property law and drew a distinction between tangible and intangible property he felt to be "spurious".

Katz v. United States

Katz v. United States, 389 U.S. 347 (1967), was a landmark United States Supreme Court case discussing the nature of the "right to privacy" and the legal definition of a "search" of intangible property, such as electronic-based communications like telephone calls. The Court's ruling refined previous interpretations of the unreasonable search and seizure clause of the Fourth Amendment to count immaterial intrusion with technology as a search, overruling Olmstead v. United States and Goldman v. United States. Katz also extended Fourth Amendment protection to all areas via the "Katz test" to determine when a person has a "reasonable expectation of privacy". The Katz test has been used in numerous cases, particularly with the advancement of technology that pose new questions on expectations of privacy.

Kimball Laundry Co. v. United States

Kimball Laundry Co. v. United States, 338 U.S. 1 (1949), affirmed the principle set forth in The West River Bridge Company v. Dix et al., 47 U.S. 507 (1848); that is, that intangible property rights are condemnable via the eminent domain power, and that just compensation must be given to the owners of such rights.

In this case, the United States filed a petition in the United States District Court for the District of Nebraska to condemn the plant of the Kimball Laundry Company in Omaha, Nebraska, for use by the Army. After the District Court granted the United States immediate possession of the facilities of the company for the requested period, the owner of the family business claimed that he had been denied just compensation, and contended that the award should have included some allowance for diminution in the value of the business due to the destruction of its customer base.

Oxford v Moss

Oxford v Moss (1979) 68 Cr App Rep 183 is an English criminal law case, dealing with theft, intangible property and information. The court ruled that information could not be deemed to be intangible property and therefore was incapable of being stolen within the Theft Act 1968.

Pippa Rogerson

Philippa Jane Rogerson is a British solicitor and academic. She is senior lecturer in law at the University of Cambridge, where her research covers the conflict of laws and company law. She is also a member of the university's council, and a fellow and director of studies at Gonville and Caius College.

Rogerson studied economics and law at Newnham College, Cambridge, receiving a BA in 1983, and went on to be admitted as a solicitor in 1986, working for Clifford Chance. She became a fellow of Caius in 1989 and was awarded her PhD in 1990 for a thesis entitled Intangible property in the conflict of laws.In May 2017 the college announced that Rogerson was elected the next master of Caius, succeeding Sir Alan Fersht when he retired at the end of September 2018. She is the college's first female master, and was installed as such on 1 October 2018 in a special evensong service in the college chapel.

Secured transactions in the United States

Secured transactions in the United States are an important part of the law and economy of the country. By enabling lenders to take a security interest in collateral (that is, the assets of debtors), the law of secured transactions provides lenders with assurance of legal relief in case of default by the borrower. The availability of such remedies encourages lenders to lend capital at lower interest rates, which in turn facilitates the free flow of credit and stimulates economic growth.

Article 9 of the Uniform Commercial Code (UCC), as adopted by all fifty states, generally governs secured transactions where security interests are taken in personal property. 1 It regulates creation and enforcement of security interests in movable property, intangible property, and fixtures. UCC Article 9 replaced a wildly diverse array of security devices that had evolved in the various states during the 19th and early 20th centuries, in response to the reluctance of U.S. courts to enforce general nonpossessory security interests as either against public policy or because they were perceived as fraudulent conveyances. The drafters of UCC Article 9, particularly Grant Gilmore, successfully argued that since historical experience showed that disfavoring such security interests would not prevent creditors from requesting them or debtors from trying to give them by any means necessary, and because they were clearly economically useful, the better path was to develop a unified, simplified law of security interests.

Transactions where security interests are taken in real property are regulated not by Article 9, but by real property laws that vary among jurisdictions. However, the assignment or conveyance of a contract secured by real property may be regulated by Article 3 to the extent that the contract is a negotiable instrument. Both must be distinguished from a secured interest in a promissory note that is secured by a mortgage or deed of trust on real property, which is regulated by Article 9. This latter distinction is important in the context of the sale and purchase of promissory notes secured by real property.

There are a variety of situations in which this distinction is important. For example, a non-depository mortgage lender may fund their operations with a warehouse line of credit, while a distressed loan workout specialist may obtain a line of credit. The first makes loans for the purchase of real property; the second will acquire nonperforming loans at a discount from their face value (and then will either renegotiate them or foreclose on the underlying collateral). In either situation, the mortgage lender or workout specialist's interest in underlying real property collateral will be secured under state real property law. But their lender's interest in the notes secured by the underlying collateral will be secured under Article 9.

Security interests are particularly valuable in bankruptcy, because creditors who have security interests in a bankrupt debtor's estate take priority over creditors who lack such interests (unsecured creditors) in the distribution of the debtor's assets.

Selig v. United States

Selig v. United States, 740 F.2d 572 (7th Cir. 1984), is a case decided by the United States Court of Appeals for the Seventh Circuit related to the amortization of intangible property.Conceptually, amortization is a mechanism that allows taxpayers to recover the cost of property over the life of an asset when they are precluded from taking an immediate and full deduction. Practically, this means that taxpayers may recover the cost in small amounts over time. There are two forms of such recovery: depreciation and amortization. Selig deals with amortization. The general rule for amortization is set forth in Section 197 of the Internal Revenue Code. The Selig case demonstrates some of the practical problems in cost allocation prior to the enactment of Section 197.

Situs (law)

In law, the situs (pronounced ) (Latin for position or site) of property is where the property is treated as being located for legal purposes. This may be important when determining which laws apply to the property, since the situs of an object determines the lex situs, that is, the law applicable in the jurisdiction where the object is located, which may differ from the lex fori, the law applicable in the jurisdiction where a legal action is brought. For example, real estate in England is subject to English law, real estate in Scotland is subject to Scottish law, and real estate in France is subject to French law.

It can be essential to determine the situs of an object, and the lex situs, because there are substantial differences between the laws in different jurisdictions governing, for example: whether property has been transferred effectively; what taxes apply (such as inheritance tax, estate tax, wealth tax, income tax and capital gains tax); and whether rules of intestacy or forced heirship apply.

The rules for determining situs vary between jurisdictions and can depend on the context. The English common law rules, which apply in most common law jurisdictions, are in outline as follows:

the situs of real estate (land) is where it is located.

the situs of a chattel (tangible moveable item) is where it is currently located.

the situs of a bearer instrument is where the document is located, but the situs of a registered instrument is where the register is held.

the situs of debts is where the debtor resides, since that is generally where legal action can be taken to enforce the debt.

the situs of intangible property, including intellectual property and goodwill, is where the property is registered, or, if not registered, where the rights to the property can be enforced.

the situs of a ship within territorial waters is where it is located, but the situs of a ship in international waters is its port of registry.

Tangible property

Tangible property in law is, literally, anything which can be touched, and includes both real property and personal property (or moveable property), and stands in distinction to intangible property.In English law and some Commonwealth legal systems, items of tangible property are referred to as choses in possession (or a chose in possession in the singular). However, some property, despite being physical in nature, is classified in many legal systems as intangible property rather than tangible property because the rights associated with the physical item are of far greater significance than the physical properties. Principally, these are documentary intangibles. For example, a promissory note is a piece of paper that can be touched, but the real significance is not the physical paper, but the legal rights which the paper confers, and hence the promissory note is defined by the legal debt rather than the physical attributes.A unique category of property is money, which in some legal systems is treated as tangible property and in others as intangible property. Whilst most countries legal tender is expressed in the form of intangible property ("The Treasury of Country X hereby promises to pay to the bearer on demand...."), in practice banknotes are now rarely ever redeemed in any country, which has led to banknotes and coins being classified as tangible property in most modern legal systems.

Theft

In common usage, theft is the taking of another person's property or services without that person's permission or consent with the intent to deprive the rightful owner of it. The word is also used as an informal shorthand term for some crimes against property, such as burglary, embezzlement, larceny, looting, robbery, shoplifting, library theft, and fraud (obtaining money under false pretenses). In some jurisdictions, theft is considered to be synonymous with larceny; in others, theft has replaced larceny. Someone who carries out an act of or makes a career of theft is known as a thief. The act of theft is also known by other terms such as stealing, thieving, and filching.Theft is the name of a statutory offence in California, Canada, England and Wales, Hong Kong, Northern Ireland, the Republic of Ireland, and the Australian states of South Australia, and Victoria.

Transfer pricing

In taxation and accounting, transfer pricing refers to the rules and methods for pricing transactions within and between enterprises under common ownership or control. Because of the potential for cross-border controlled transactions to distort taxable income, tax authorities in many countries can adjust intragroup transfer prices that differ from what would have been charged by unrelated enterprises dealing at arm’s length (the arm’s-length principle). The OECD and World Bank recommend intragroup pricing rules based on the arm’s-length principle, and 19 of the 20 members of the G20 have adopted similar measures through bilateral treaties and domestic legislation, regulations, or administrative practice. Countries with transfer pricing legislation generally follow the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations in most respects, although their rules can differ on some important details.Where adopted, transfer pricing rules allow tax authorities to adjust prices for most cross-border intragroup transactions, including transfers of tangible or intangible property, services, and loans. For example, a tax authority may increase a company’s taxable income by reducing the price of goods purchased from an affiliated foreign manufacturer or raising the royalty the company must charge its foreign subsidiaries for rights to use a proprietary technology or brand name. These adjustments are generally calculated using one or more of the transfer pricing methods specified in the OECD guidelines and are subject to judicial review or other dispute resolution mechanisms.Although transfer pricing is sometimes inaccurately presented by commentators as a tax avoidance practice or technique, the term refers to a set of substantive and administrative regulatory requirements imposed by governments on certain taxpayers. However, aggressive intragroup pricing – especially for debt and intangibles – has played a major role in corporate tax avoidance, and it was one of the issues identified when the OECD released its base erosion and profit shifting (BEPS) action plan in 2013. The OECD’s 2015 final BEPS reports called for country-by-country reporting and stricter rules for transfers of risk and intangibles but recommended continued adherence to the arm’s-length principle. These recommendations have been criticized by many taxpayers and professional service firms for departing from established principles and by some academics and advocacy groups for failing to make adequate changes.Transfer pricing should not be conflated with fraudulent trade mis-invoicing, which is a technique for concealing illicit transfers by reporting falsified prices on invoices submitted to customs officials. “Because they often both involve mispricing, many aggressive tax avoidance schemes by multinational corporations can easily be confused with trade misinvoicing. However, they should be regarded as separate policy problems with separate solutions,” according to Global Financial Integrity, a non-profit research and advocacy group focused on countering illicit financial flows.

Virtual tax

Virtual tax is a proposed tax on internet gamers for items bought or traded solely within the virtual world (Internet game worlds). The tax on a transaction would be considered as if it were a purchase or sale (if real currency is involved) or barter (if not). Virtual property, on the death of the owner, would be considered as if it were any other intangible property for the purpose of estate or inheritance tax. The Joint Economic Committee of the U.S. Congress has investigated taxing such transactions. This tax might include items bought with virtual currency, virtual items traded for other virtual items, real items traded for virtual items, and real currency traded for virtual items.

Web property

A web property is a point of presence (e.g. a website, social media account, blog, etc.) on the web that is an asset of an entity (e.g. an individual or corporation) used for the purpose of representing a brand, person or other identity. The property can be considered a communication channel for the entity whose identity is associated with it. Points of presence on the web which contain content about an entity may not be property that can be owned by that entity (e.g. restaurant review pages on sites such as Yelp).

Web property is considered intangible property and is analogous to real property in that it has ownership which can be recorded and transferred though ascertaining ownership is not always a simple or easy matter to resolve. The issue of ownership can be particularly challenging in relation to the employer-employee situation. Two current legal cases are likely to set precedent in this area, § PhoneDog v. Kravitz and § Eagle v. Morgan.

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