Nortel Beats $32M Software Tax On IP Grounds

Law360, New York (January 20, 2011, 5:22 PM EST) -- A California appeals court has ruled in favor of Nortel Networks Inc., agreeing that sales of the company's telephone software are not subject to a $32 million sales tax charge because the products incorporate copyrights and patents.

Nortel's software was exempt from sales tax under the Technology Transfer Agreements statutes because it was copyrighted, relied on patented processes and allowed licensees to make products — specifically telephone calls — using the protected technology, the Court of Appeal of the State of California ruled Wednesday.

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