The Trump administration is contemplating a significant revamp of the U.S. patent system, which could potentially generate tens of billions of dollars in revenue.
What Happened: The Commerce Department is considering a new fee structure that would require patent holders to pay 1% to 5% of their patent’s overall value. This change could result in a substantial increase in fees for patent holders. The proposal is part of Commerce Secretary Howard Lutnick’s strategy to raise revenue and reduce the government’s budget deficit, reported The Wall Street Journal.
The current system, which has been in place for 235 years, involves patent holders making flat-fee payments to the government, ranging from a few thousand dollars to approximately $10,000, over several years. The proposed fee would represent a substantial added expense for certain patent holders—comparable to a property tax.
Officials at the Patent and Trademark Office, a part of the Commerce Department, are currently discussing draft proposals and financial models. The total value of U.S. patents is estimated to be in the trillions of dollars, with companies like Samsung and Apple (NASDAQ:AAPL) acquiring thousands of patents annually.
"It's a total paradigm shift in how you think about protecting intellectual property rights," said Brad Watts, senior vice president at the U.S. Chamber of Commerce's Global Innovation Policy Center.
On the other hand, Marylee Jenkins, a partner at law firm ArentFox Schiff said, "I'm not seeing how charging a percentage of what the U.S. government thinks the valuation of your IP is encourages innovation.”
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Why It Matters: This proposal comes on the heels of other revenue-generating initiatives by the Trump administration. In June, Commerce Secretary Howard Lutnick announced that nearly 70,000 people had registered for the new $5 million ‘Trump Card’ visa program, potentially generating a windfall of $1 trillion from this premium immigration plan.
In July, it was reported that the U.S. Customs and Border Protection had collected a record $106 billion in customs revenue since Trump’s inauguration, largely due to the administration's tariffs.
The proposed patent system overhaul could face resistance from business groups who argue that they already pay taxes on the revenue made with their patents. It could also potentially fuel international backlash, as it would make the U.S. an outlier in global patent treaties.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
