Accounting Academic Area Workshop Series: Devan Mescall
Devan Mescall
Professor at the Edwards Enhancement Chair in BusinessÂ
Ph.D. (University of Waterloo) Chartered Accountant (Canadian Institute of Chartered Accountants) MPAcc (University of Saskatchewan)
Intellectual Property Law Firm Networks and Tax Haven Strategies
Date: Friday, April 11, 2025
Time: 10:30 AM – 12:00 PM
Location: Bronfman building, Room 310
Abstract
We explore the network role of intellectual property (IP) law firms in proliferating tax haven strategies for their corporate clients. In examining patent assignment filings from the U.S. Patent and Trademark Office (USPTO), we reliably identify IP law firms, known for protecting client IP value, advising client companies on assigning patents to tax havens. Results from our network analysis imply that companies assigning patents to tax havens are abnormally clustered through law firm links relative to a random network. We provide strong, robust evidence that companies are more likely to assign patents to tax havens if they are linked through law firms to another company doing the same. Importantly, we find that IP law firms develop distinctive tax haven strategies evident in the variation in preferred tax havens across different law firms. However, other results imply that the network role that law firms play in disseminating tax haven strategies subsides after Exchange of Information agreements are reached between tax havens and companies’ home countries. Economically, we estimate that an average company can save approximately $366 million in cash taxes after assigning patents to tax havens. Our research has timely implications for tax authorities worldwide eager to combat IP-related income shifting and demonstrates the importance of global tax transparency initiatives to constraining companies from exploiting tax havens to lower their tax burdens.
