Hatch-Waxman expenses tax-deductible immediately, Fed Circuit affirms
By Nick Robertson ( March 24, 2025, 20:28 GMT | Insight) -- Expenses from Hatch-Waxman litigation should be classified as ordinary business expenses for tax purposes and are therefore deductible immediately, the US Court of Appeals for the Federal Circuit affirmed Friday. Actavis Laboratories sued the Internal Revenue Service in 2022 after the agency classified the litigation expenses incurred in defending patent infringement suits as a capital investment, increasing its tax burden as the cost would be amortized over the course of years.Actavis Laboratories won an effort to deduct $12 million in patent litigation expenses from its taxes on Friday at the US Court of Appeals for the Federal Circuit, with the panel affirming in a precedential opinion that Hatch-Waxman litigation expenses should be classified as standard operating expenses for tax purposes....
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