A Patent System Idea So Bad You Check the Calendar
Every so often, Washington cooks up an idea so far outside good patent policy that you have to check the calendar. Is it April 1st? The latest example is a proposal from Commerce Secretary Howard Lutnick. It 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. The amount would be based on what your patent is supposedly worth.
This Isn’t Patent Policy—It’s a Budget Patch
If this were about improving the patent system, I’d at least listen. Streamlining quality. Funding examination. Encouraging innovation. But that’s not what this is. This is about plugging a budget hole. That’s like selling the family car to pay the electric bill. You keep the lights on for a while. You also lose your transportation.
Who Pays? Anyone Whose Patent Actually Matters
The targets are obvious. Pharmaceutical patents in the FDA’s Orange Book. Standards-essential patents. Patents that have been litigated, licensed, marked, or otherwise shown commercial value. In plain English, the more valuable your patent is, the more you’ll pay to keep it. And don’t expect this to replace existing maintenance fees. It’s far more likely to sit on top of them.
Fee Pressure Is One Thing—Punishing Success Is Another
We’ve been here before—at least in spirit. Escalating fees have long been used to clear out deadwood patents. About half of all U.S. patents are abandoned before the final maintenance fee comes due. But that’s policy, not punishment. The goal was to encourage owners to drop low-value patents. It was never meant to milk productive ones for general-revenue cash.
Turning the USPTO Back into Congress’s Piggy Bank
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 Endgame: Trade Secrets Over Patents
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.