NEWS
The Trump-Lutnick Patent Tax: Turning the USPTO into the IRS
Every so often, Washington cooks up an idea so outside the bounds of good patent policy that you have to check the calendar to make sure it’s not April 1st. The latest? A proposal from Commerce Secretary Howard Lutnick that would slap a property tax on patents—1% to 5% of their “value” every year. Yes, you read that right: instead of the flat maintenance fees we’ve had for decades, this would be an annual tithe to the federal coffers, calculated on what your patent is supposedly worth.
Now, if this were about making the patent system better—streamlining quality, funding examination, driving innovation—I’d at least hear them out. But no. This is about plugging a budget hole. That’s like selling the family car to pay for the electric bill—you’ll keep the lights on for a while, but you’ve just shot your transportation in the foot.
The targets are obvious: pharmaceutical patents in the FDA’s Orange Book, standards-essential patents, patents that have been litigated, licensed, marked, or otherwise proven to be commercially valuable. Translation: the more your patent is worth, the more they’ll charge you for the privilege of keeping it. And don’t expect this to replace current maintenance fees—it’s far more likely to be on top of them.
We’ve been here before—sort of. Escalating fees have long been used to weed out deadwood patents. Half of all U.S. patents are abandoned before their final maintenance fee. But that’s policy, not punishment. The purpose was to encourage owners to drop low-value patents, not to milk the productive ones for general-revenue cash.
And there’s history here too. For decades, the USPTO has fought for financial independence, only to watch Congress siphon off about a billion dollars of its collected fees for unrelated spending. Turning the USPTO into a patent tax collector puts us right back into that mess, undoing 40 years of work to keep the office self-funded.
The real kicker? If this goes through, high-value inventions might skip the patent system entirely. Why stake your crown jewels in a system that makes you pay for their success every year, when you could lock them away as trade secrets? That’s not innovation policy—that’s a slow-motion train wreck.
The USPTO’s “Settled Expectations” Doctrine — and Why It Matters to You
The USPTO has a new trick up its sleeve — and if you own older patents, you might just like it. It’s called the “settled expectations” doctrine, and Acting Director Coke Morgan Stewart rolled it out earlier this year to decide whether to even start an inter partes review (IPR) proceeding.
The short version? The older your patent, the more likely the USPTO will say, “No thanks” to a late-stage challenge.
What’s the Big Idea?
The doctrine says that over time — usually seven years or more — both you (the patent owner) and the public start to operate on the assumption that your patent is valid and enforceable. Disrupting that after years of business decisions, licensing deals, and R&D planning is seen as unfair and destabilizing.
That “temporal shield” means that if someone waits too long to challenge your patent, the USPTO can deny the IPR even if they have decent prior art. This is purely discretionary — not a hard deadline like the 1-year IPR filing limit after you get sued — but it’s a powerful new factor.
Real-World Examples
In June 2025, the USPTO applied the doctrine in several cases:
- iRhythm v. Welch Allyn – The petitioner had known about the patent for years and still waited. The Director said, “Too late.”
- Dabico v. AXA Power – Even without proof anyone knew about the patent, the age alone was enough to create “settled expectations.”
- Intel v. Proxense – No upcoming trial, no litigation pressure… but nine-year-old patent? Denied.
- Cambridge v. Applied Optoelectronics – Seven- and nine-year-old patents were protected, newer ones weren’t.
These decisions all reinforce one thing: age matters now.
Why This Is a Big Shift
Up until now, IPR timing was dictated by two hard rules:
- 9 months after grant — post-grant review (PGR) only.
- 1 year after you’re sued — the IPR deadline.
Now we have a third, softer filter: If your patent’s been around a while, the USPTO might just refuse to touch it.
This is like laches flipped on its head. Traditionally, laches punished patent owners for waiting too long to sue. Now, it’s petitioners who get punished for waiting too long to challenge.
It’s also similar to trademark incontestability, where after five years a trademark becomes harder to challenge. The idea is that the longer rights have been public, the more stability matters.
Do I buy the “public reliance” argument for patents? Not entirely. The public doesn’t cheer when a bad patent stays on the books — they cheer when they can use technology without a license fee. But from a portfolio strategy standpoint, this is a gift for owners of older patents.
If you’ve got assets in the 7–10+ year range, you now have another shield. If you’re a challenger, you’d better move fast — waiting for litigation to get serious could mean the IPR door is slammed shut.
Bottom line: The “settled expectations” doctrine shifts the game. For owners, it’s more staying power. For challengers, it’s one more reason to act early.
What Is Trademark Watching — And Why It Matters for Your Brand
Brand value is important, so protecting your trademarks isn’t just about legal compliance — it’s about defending your identity, your reputation, and your competitive edge. That’s where trademark watching comes in.
What Is Trademark Watching?
Trademark watching is a proactive service that monitors newly filed trademark applications and existing trademark activity to detect potential conflicts with your brand. Whether it’s a copycat logo, a similar-sounding name, or a strategic attempt to imitate your identity, trademark watching helps you spot the threat early — before it becomes a bigger problem.
Why It’s Essential
Trademark offices, like the USPTO or EUIPO, don’t notify you if someone files a similar mark. Without a watch service in place, you might only discover the conflict after the mark is registered or — worse — after it’s already in use, confusing your customers or diluting your brand.
Trademark watching ensures you’re not caught off guard. It gives you a chance to:
- Oppose applications before they register
- Stop bad actors before they gain legal traction
- Act quickly to defend your intellectual property
How It Works
Watching services scan national and international trademark databases regularly, looking for:
- Exact matches
- Similar or phonetically confusing names
- Visual similarities in logos
- Suspicious filings in key markets
Many modern services (like those powered by AI) can even filter results based on your industry, threat profile, and history — helping you focus only on the risks that matter.
Who Should Use It?
If you:
- Own a registered trademark,
- Are launching products in new markets,
- Are expanding your portfolio, or
- Simply want to stay ahead of infringement…
…then trademark watching should be part of your brand protection strategy.
Enforcing your trademark rights is important — but reacting to infringement after the fact is often too late. Trademark watching is about prevention. It helps you monitor the horizon, act early, and protect the integrity of your brand before threats materialize.
We can set up a trademark watch and we charge for this, but we’ll only charge if there is something interesting that gets passed along to you.
52k more fraudulently filed trademark applications and registrations cleared
The USPTO issued an update on Aug 6, 2025 that it has now terminated more than 52,000 fraudulently filed trademark applications and registrations connected to a foreign filing firm, and issued sanctions against it.
The PTO says the firm submitted documents without the proper authority or qualifications by seeking out U.S. licensed attorneys, then misusing their credentials and faking their electronic signatures; repeatedly signing documents using other people’s names; submitting fake specimens of use; and misusing USPTO.gov accounts. The name of the firm was not included in the announcement.
USPTO Slams the AAPA Window Shut — Shockwave’s Over Before It Started
If you thought Shockwave Medical was going to be your ticket to slip Applicant-Admitted Prior Art (AAPA) into an inter partes review (IPR) as a way to patch the holes in your prior art… sorry, party’s over.
As a quick refresher, Applicant-Admitted Prior Art (AAPA) is when an inventor, during the patent application process, openly admits that certain technology or features were already known before they filed. These admissions can be used as “prior art” — basically, evidence that an invention isn’t new.
Inter Partes Review (IPR) is a trial-like process at the USPTO where you can take a swing at knocking out a patent using earlier patents or printed publications — cheaper than full-blown litigation, but still a real fight.
So with those refreshers in mind, in the Shockwave case, the court seemed to say that AAPA could be used in IPRs to fill in missing pieces of a challenge — as long as petitioners didn’t explicitly call it the “basis” of their argument. This looked like it might open the door for more creative use of AAPA in IPR petitions.
What’s the new USPTO position?
On July 31, 2025 — just two weeks after the Shockwave decision — Acting USPTO Director Coke Morgan Stewart issued a memo saying the USPTO will strictly enforce a rule (37 C.F.R. § 42.104(b)(4)) requiring petitioners to point to where each claim element is found in actual prior patents or printed publications.
That means you can’t rely on AAPA, expert testimony, “common sense,” or other general knowledge to supply missing claim limitations in your petition — even if you try to finesse the wording.
Key points:
- Applies to any IPR petitions filed on or after September 1, 2025.
- Reverses more lenient 2020 and 2022 USPTO guidance that had allowed some AAPA use.
- The strict rule applies at the petition stage (before the IPR is instituted) but may not affect what happens after the review is underway.
In short: If you’re challenging a patent in an IPR after September 1, don’t count on applicant admissions or “common knowledge” to fill gaps — you’ll need hard, published prior art to back every single element of your challenge.
How One Supreme Court Decision Sparked an Era of “Efficient Infringement” — and What Might Be Changing
Nearly two decades ago, the Supreme Court’s decision in eBay v. MercExchange quietly reshaped the patent landscape — and not necessarily for the better. The ruling rejected the idea that winning a patent infringement case should automatically lead to an injunction against the infringer. Instead, it required courts to apply a traditional four-factor test to decide if an injunction is appropriate. On the surface, that sounds fair. In practice, though, it has opened the door to a troubling trend: “efficient infringement.”
What Is Efficient Infringement?
Under the eBay framework, infringers can often avoid an injunction, and simply pay damages instead. For patent holders, especially those who don’t manufacture products but license their inventions, removal of the threat of injunction is a loss of bargaining power. In the case of NPEs (Non-Practicing Entities) such as university patent holders, the loss is even worse because their lack of sales means that any assessed money damages might be very slim.
Congress Has Tried to Fix This — With Little Success
Lawmakers proposed the RESTORE Patent Rights Act in both 2024 and 2025 (as H.R. 1574 and S. 708), aiming to make it easier for patent holders to obtain injunctions. But progress has been slow, largely due to the influence of those benefiting from the status quo.
A Potential Shift: Radian v. Samsung
Enter a recent case: Radian Memory Systems v. Samsung. Radian, an NPE, is suing Samsung for patent infringement related to flash memory tech. Samsung argues Radian shouldn’t get an injunction because it doesn’t make or sell products—just licenses them. But here’s where things get interesting: The Department of Justice (DOJ) and the U.S. Patent and Trademark Office (USPTO) jointly filed a Statement of Interest in support of Radian’s request for a preliminary injunction.
What the DOJ and USPTO Are Saying
Their statement doesn’t advocate a specific outcome but urges the court to rethink how irreparable harm is assessed in these cases. They argue that:
- Patent damages are often difficult to calculate, especially for unique technologies.
- Loss of control over licensing terms is a form of irreparable harm.
- The current legal climate makes infringement seem like a better business move than negotiating a license — undermining the whole purpose of patents.
- Denying injunctions by default encourages longer litigation, fewer settlements, and more costs for inventors.
They back this up with case law and academic commentary, emphasizing that even non-practicing entities can suffer real, lasting harm without an injunction.
Why This Matters
This joint DOJ/USPTO statement is significant. It may signal a policy rethink at the federal level about how we treat patent holders—especially small ones—when they try to enforce their rights.
While the eBay decision was part of a broader Supreme Court effort to correct Federal Circuit doctrine (along with decisions like KSR, Bilski, and Myriad), it may have had unintended consequences. Namely, weakening the ability of innovators to protect their work and giving large companies a license to infringe.
The Bottom Line
The DOJ and USPTO aren’t rewriting the rules—yet. But their stance in the Radian case could be a first step toward rebalancing the patent system. Still, lasting change will likely have to come from Congress, no matter how slow or difficult that process may be.
New Comics! the AI series
The Patent Beast is back with a new set of comics inspired by the ubiquitous use of artificial intelligence these days. The first comic, above, finds our inventor starting to use Chat GPT for some feedback on the patentability of his invention. But the usage doesn’t stop there. Follow the rest of the comic series on patentbeast.com here to see what happens next!