Trump Admin Considering Charging Patent Owners a Percentage of Patent Value Called ‘Catastrophically Stupid’

Trump Admin Considering Charging Patent Owners a Percentage of Patent Value Called ‘Catastrophically Stupid’

If this idea becomes law, thousands (perhaps more) of patents will be dumped almost overnight. Many large companies will likely abandon defensive patenting entirely and shift to defensive publication.

The Wall Street Journal has reported that the Trump administration is considering charging patent holders 1% to 5% of a patent’s overall value. The United States Patent and Trademark Office (USPTO) is reportedly circulating draft proposals and financial models but no specific framework has been leaked. If the Trump administration is going to implement this plan, the most logical way to do this would be through dramatically increased maintenance fees. To keep a patent alive, maintenance fees are paid throughout the life of a utility patent. For design patents, which enjoy a fixed term, no maintenance fees are due. A utility patent covering an innovation will be abandoned and fall into the public domain if maintenance fees are not paid.

The general perception is that out-of-the-box thinking to address the $37 trillion national debt is understandable, but charging patent holders a percentage of the overall value of a patent is not only complex but also fraught with danger and unintended consequences. If this idea becomes law, thousands (perhaps more) of patents will be dumped almost overnight. Major patenting companies like Apple, Alphabet, Intel, Micron, Samsung, and Amazon obtain thousands of patents mostly for defensive purposes and would almost certainly stop acquiring patents if such fees were imposed. They could instead choose defensive publication, which blocks others from patenting the same innovation.

Patent valuation is more “black magic” than science — and the USPTO has never done it before. The question remains who exactly will carry out the valuation and what rights patent owners would have to challenge exaggerated valuations.

The plan would hit research and development companies especially hard — these businesses push science forward despite frequent failures and costly experiments. Will this plan give rebates for patents that are worthless or have negative value?

On top of this, patent eligibility decisions by the Supreme Court in Bilski, Myriad, Mayo, and Alice have already made many key innovations in software, biotech, medical devices, and AI unpatentable or easily invalidated.

So, let’s not sugar coat this — charging patent owners a percentage of the overall value of a patent is catastrophically stupid.