SOME U.S. companies are registering their intellectual property abroad because it makes tax bills cheaper, the Wall Street Journal reported, citing companies, lawyers and academics.

Companies including Columbia Laboratories Inc. register patents and establish subsidiaries in countries such as Bermuda because they can book royalties from overseas sales to those units tax free, the Journal reported.

Columbia, most of whose sales are now expected to come from the U.S., is reconsidering its Bermuda strategy, the paper said, citing chief financial officer David Weinberg.

The Internal Revenue Service, which is cracking down on alleged abuses of offshore corporate moves to avoid taxes, estimates the practice of transferring intellectual property could eventually involve claims worth tens of billions of dollars, the Journal reported.

Legislation covering more traditional corporate manoeuvres to avoid taxes wouldnât have any effect on companies simply exporting their best ideas and brands, the paper said.

ãItâs pretty popular,ââ said Brian Wainwright, a California-based lawyer, who has been approached in the past by accounting firms about such intellectual property manoeuvres, according to the Journal. ãIt looked like they all woke up and said, ÎWeâre going to start pushing IP (intellectual property) holding companiesâ.ââ