Imagine that Einstein, Fermi and
Oppenheimer set out to commercialise the intellectual property (IP) involved in
Einstein’s famous equation, Fermi’s ability to build a nuclear reactor, using
Oppenheimer’s labour with Australia’s tax law.

This is the thought experiment
provided yesterday evening by Professor Cameron Rider on the Intellectual
Property Research Institute of Australia (IPRIA). The seminar was jointly
sponsored by the Australian Institute for Commercialisation (AIC) and PricewaterhouseCoopers (PWC).

Australia’s tax laws are “very old-fashioned
when they come to treatment of intellectual property”. This is the theme of
Rider’s analysis, which he believes helps to explain the difficulties involved
in “the daunting challenge of R&D commercialisation” in Australia.
There are four major obstacles that, taken together, reduce resources put into
R&D commercialisation and/or drive it offshore. The problems are compounded
by the fact that use of a company structure is strongly encouraged by several
forces, not least corporations law.

Dr Ken Henry, please get a copy of
IPRIA’s Report number 01/06 – “Taxation Problems in the Commercialisation of
Intellectual Property” – and read it carefully. Treasurer Peter Costello, here
is an important part of the tax reform jigsaw.

Read Henry Thornton’s full summary