Jamille Cummins, Transworld Group - IP Strategies
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Jamille Cummins, Transworld Group Jamille is a former finalist in the Australian Young Business Person of the Year Award, and as the CEO of the Transworld Group, he brings a variety of skillsets, knowledge and experience to lead the group in realising its vision and meeting its core objectives. Prior to the Transworld Group, Jamille spent 10 years in sales & marketing and management in the Australian & UK retail sectors leading the business development of new and existing brands. As one of the founding members, Jamille was initially the director of business & project development of the group’s telecommunications service, whereby he led the commercialisation of the group’s retail VoIP and wholesale services. Since then he has been involved in each of the group’s projects. This has allowed him to continue to develop his skillsets and knowledge across various industry sectors, and thereby enabling him to engage at a senior executive level in delivering; corporate business administration & management, international trade & commerce, logistics, business systems development & integration, product research & development, corporate project & management, global industries market research & analysis, sales & marketing operations, capital raising, investor relations jamille cummins, jamille cummins transworld, jamille cummins transworld group, Transworld Group, jamille, Isle of Man, Steve Cummins, Steve Cummins transworld, steve cummins transworld group
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Jamille Cummins, Transworld Group - IP Strategies
- 1. Cross-Border IP Strategies Jamille Cummins Transworld Group www.transworldgroup.im 1
- 3. Global Business Context Increasing Technology Competition: Semiconductor Design, Fabrication Pharmaco-Genomics, Medical Devices Wireless Telecom, Broadband Content Strategic Intellectual Capital: Defensive & Offensive Portfolio-Building International I.P. Licensing and Litigation Jamille Cummins, Transworl d Group 3
- 5. Intellectual Property Rights Patents Trade Secrets Copyrights Maskworks Trademarks Jamille Cummins, Transworl d Group 5
- 6. Patents Protects “unobvious” apparatus, method Substantial application effort Arises under federal, international law Jamille Cummins, Transworl d Group 6
- 7. Trade Secrets Protects confidential business information No registration process Arises under state, federal, international law Jamille Cummins, Transworl d Group 7
- 8. Copyrights Protects original literal works Optional registration, marking Arises under federal, international law Jamille Cummins, Transworl d Group 8
- 9. Maskworks Protects semiconductor lay-out designs Simple registration, marking Arises under federal, international law Jamille Cummins, Transworl d Group 9
- 10. Trademarks Protects distinctive marks, symbols Optional registration, marking Arises under state, federal, international law Jamille Cummins, Transworl d Group 10
- 11. Protecting Software / Data Trade secret as default position Copyright for original media content Patent for algorithms, business method Maskwork for chip implementation Jamille Cummins, Transworl d Group 11
- 12. US Patent Practice First-to-invent rule 1-year bar-date rule 1-year foreign-filing rule Export controls Jamille Cummins, Transworl d Group 12
- 13. Other Intangible Assets Franchises Covenants not to compete Governmental permits Informational base Business goodwillJamille Cummins, Transworl d Group 13
- 14. US Tax Practice Business Development Expense §174 Capital Gains for R&D/Patent Sale §1235 Trademark development generally non-expensable, unless advertising §162 may be amortizable §197 Copyright generally non-expensable, non-capital asset §1221 Jamille Cummins, Transworl d Group 14
- 15. Offshore Motivation Globally-competitive development, manufacture, sales, or partnerships Overall tax savings or deferral Improve company balance sheet Cross-border shifting of income, risk, control, or privacy Jamille Cummins, Transworl d Group 15
- 16. Strategic Options Offshore technology/IPR development, co-inventorship, or improvement Transfer domestic technology/IPR to offshore structure in favorable tax jurisdiction Jamille Cummins, Transworl d Group 16
- 17. Offshore Development Impractical when technology rights already mature, commercialized Export control restriction on sensitive technology Favorable early fair market valuation Jamille Cummins, Transworl d Group 17
- 18. Offshore Transfer Complex structural choices for offshore entity/ies US tax regime substantial reach on cross-border transactions Territorial practical considerations Jamille Cummins, Transworl d Group 18
- 19. Key Planning Objectives Align IP ownership with development spend Locate IP with market, manufacture Consider incentives, depreciation, exit Jamille Cummins, Transworl d Group 19
- 20. Applicable Tax Regime US person subject to tax on all income, whether source is domestic / foreign §1 Tax law of jurisdiction applicable where IP is used, income source §§ 861-862 Development Manufacture Sales Jamille Cummins, Transworl d Group 20
- 21. Transfer Pricing IRS may reallocate income/deductions between taxpayers, when transactions conducted by controlled group §482 May require transfer pricing study/policy to validate arms-length economic relationships Jamille Cummins, Transworl d Group 21
- 22. Foreign Corporations Controlled Foreign Corporation (CFC) §§ 951-964 Foreign Personal Holding Company (FPHC) §§ 541-547, 551-558 Passive Foreign Investment Company (PFIC) §§ 1291-1297 Jamille Cummins, Transworl d Group 22
- 23. CFC Rules Total US shareholders owning at least 10% of company exceed 50% 10% shareholders taxed as if dividends paid, even if no cash distribution Taxed on share of foreign company Subpart-F income, even if no cash distribution Jamille Cummins, Transworl d Group 23
- 24. IP Contributions US person transferring IP to foreign corporation recognizes gain based on fair market value of receivable §367 Exceptions: Active trade / business by foreign corporation Domestic stock transfer, gain recognition agreement Foreign stock transfer, corporate reorganization Jamille Cummins, Transworl d Group 24
- 25. Valuation Methods Excess operating or premium profits Premium pricing Cost or royalty savings Market comparison Replacement cost Jamille Cummins, Transworl d Group 25
- 26. Inbound / Outbound Issues Withholding tax on royalties? Applicable tax treaty, rate? Trade / business or permanent establishment in foreign jurisdiction? Jamille Cummins, Transworl d Group 26
- 27. Sale vs. License Transfer “all substantial rights” ? Sale gives rise to capital gains / loss, usually no withholding tax License is ordinary income, royalties subject to withholding tax Jamille Cummins, Transworl d Group 27
- 28. Licensing Terms IP grant Improvements Currency Inflation rates Withholding tax Exchange controls Royalties Arbitration Language Political risk Travel expense Product liability Indemnification Applicable law Jamille Cummins, Transworl d Group 28
- 29. Country Selection Entity structure Funding type Formation time, documentation Shareholding meetings Taxation Foreign authority information exchange Jamille Cummins, Transworl d Group 29
- 30. Cayman Islands Entity structure: Company unit trust ltd, partnership Funding type: Open/closed-end class, hybrid scheme Formation time/docs: 1-week memorandum, articles of association or deed of trust, minimum $33k equity or fund listed on approved stock exchange Shareholding mtgs: None Taxation: No individual income, corporate, capital gains or transfer tax payable by funds or shareholders; no tax treaties Authority Info: Mutual legal assistance treaty with US to cooperate regarding narcotics, fraud Jamille Cummins, Transworl d Group 30
- 31. Bermuda Entity structure: Company unit trust ltd, partnership Funding type: Open/closed-end class Formation time/docs: 3-5 weeks prospectus, memorandum of association or deed of trust Shareholding mtgs: Annual meeting need not be in Bermuda Taxation: No individual income, corporate, profit, withholding capital gains, estate, duty, or inheritance tax payable by funds or shareholders; no tax treaties Authority Info: Mutual assistance act with US to cooperate regarding fraud Jamille Cummins, Transworl d Group 31
- 32. Ireland Entity structure: Company unit trust ltd, partnership Funding type: Closed-end, VC professional investor funds Formation time/docs: 2-3 months, memorandum, articles of association or deed of trust Shareholding mtgs: Annual meeting in Ireland Taxation: Special tax zone exempts funds and shareholders from income and capital gains tax; tax treaty Authority Info: Official secrets act maintain confidentiality except in limited circumstances Jamille Cummins, Transworl d Group 32
- 33. Luxembourg Entity structure: Fixed capital company, variable capital unit trust, partnership Funding type: Closed-end, VC funds Formation time/docs: 3-5 months, prospectus, articles of incorporation or deed of trust Shareholding mtgs: Annual meeting in Luxembourg Taxation: No income, capital gains, withholding, or dividends tax on funds of non-resident shareholder; tax treaty Authority Info: Banking secrecy statute Jamille Cummins, Transworl d Group 33
- 34. OECD List Andorra Anguilla Antigua & Barbuda Aruba Bahamas Bahrain Barbados Belize British Virgin Islands Cook Islands Dominica Gibraltar Grenada Guernsey Isle of Man Jersey Liberia Lichtenstein Maldives Marshall Islands Monaco Montserrat Nauru Netherlands Antilles Niue Panama Samoa Seychelles St. Lucia St. Kitts & Nevis St Vincent & Grenadines Tonga Turks & Caicos Islands US Virgin Islands Vanuatu Jamille Cummins, Transworl d Group 34
- 36. Offshore Company Set-up US Company Holding Company Foreign Subsidiary US Company sets-up Holding Company in low-tax/treaty(no- withholding) jurisdiction, limit US control/interest File IP appropriately for offshore protection, enforceability Jamille Cummins, Transworld Group 36
- 37. Offshore IP Transfer US Company Holding Company Foreign Subsidiary Holding Company pays US Company for fair- market-value stake in IP intangibles Cost-sharing agreement for IP co-development, financing by US and Holding companies, jointly-owned per relative contributions Jamille Cummins, Transworld Group 37
- 38. Offshore Subsidiary Licensing US Company Holding Company Foreign Subsidiary Holding Company licenses IP to Foreign Subsidiar(ies) to collect royalties from customers in other jurisdiction(s) US Company receives royalty portion in US and accumulate portion offshore, actively licenses IP from Foreign Subsidiary Jamille Cummins, Transworld Group 38
- 39. Offshore Tax Benefits US Company Holding Company Foreign Subsidiary US Company receives tangible asset as payments on balance sheet for sale of intangible IP US Company deducts license to use intangible asset, may defer income repatriation to tax- efficient time Jamille Cummins, Transworld Group 39