File this one under "no good deed goes unpunished." Boston.com reports that Ford donated four piston assembly patents to The National Institute for Strategic Technology Acquisition and Commercialization (NISTAC), took a $27m tax deduction, licensed the technology back from NISTAC, terminated the agreement, and then continued using the patents paying nobody nothing. One potential issue: does NISTAC own the patents? It claims it's the "replacement" organization for Mid-American Commercial Corp, which received the original dontation. As you might imagine, all this philanthropy went down before Ford hocked its future to stay in business. Ford made the piston patent donation back in 2000– and 44 more besides, on seven separate occasions, to institutions including the University of Michigan and the National Center for Manufacturing Sciences.
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I would have thought that the legal office would be the last non-core business Ford would divest. Who made this flaming agreement to donate the patent and not have some kind of allowance for the donor to use the technology for free – perpetually? I mean, come on…would the tax break have been that much less?
Good deed? It sounds more like Ford pocketed $27M, from “giving it away” (read sold) and decided to not pay to keep using what was no longer theirs.
bytor, how does “a $27m tax deduction” equate to Ford pocketing $27M?
http://en.wikipedia.org/wiki/Tax_deduction
Ahhh… U.S. Patent Law.
A lovely morass of lawyers, beaurocrats, and soul-sucking technobabble.
I’m sure this will clear up in no time.
Can anyone now use those patents royalty free or only Ford?
Sherman,
My understanding, from reading the article, is that nobody – not even Ford – may use this patent royalty-free.
That’s what seems so strange. Ford came up with this idea, patented it, then gave the patent away (OK, Ford gets a tax deduction in exchange for the gift). Ford is no longer permitted to implement the idea unless it continually pays a fee to the current patent-holder.
I can’t understand why Ford didn’t give the patent away in exchange for royalty-free use. Ford could have given further gifts to the Institute (for more tax deductions) instead of royalties, and retained free use of the idea THAT THEY THEMSELVES invested in to develop and realize.
So, nobody’s gonna say it?
Indian Giver!!!*
*no offense intended towards Native Americans or actual Indians.
I’d love to be the fly on the wall as the IRS decides to look at the $27 million price tag Ford put on those patents.