Commerce Department and U.S. Patent and Trademark Office Exploring a Patent Tax and Patent Fee Changes

By Holly Fechner, Matthew Shapanka & Samuel Klein on September 30, 2025

Posted in Intellectual Property Protection, Patent, Policy and Legislation, United States

The Trump Administration is considering multiple proposals to raise revenue from patent holders, including direct assessments on patent holders, changes to the existing patent fee schedule, and potentially a new mechanism for sharing profits from university-owned patents obtained through federal research funds.

Patent Tax

First, Commerce Secretary Howard Lutnick is reportedly considering assessing a charge on patent holders of “1% to 5% of their overall patent value”—a proposal some have called a “patent tax.”

Commerce Department officials have not released details of how the proposed value-based assessment on patents would operate in practice—including which patents or patent holders would be subject to the charge, the process for valuing patents, the mechanics and frequency of collecting assessed fees, or the legal basis for the government’s authority to collect patent fees based on such policy considerations. Regardless of the implementation details, however, the proposal as reported would mark a significant departure from existing practice.

Stakeholders and experts have reacted negatively to the idea of a patent tax. For example, the U.S. Chamber of Commerce and a coalition of signatories wrote to members of Congress that the tax “would undermine the foundations of America’s intellectual property (IP) system.” Additionally, stakeholders have questioned whether the government has the expertise or capacity to fairly and accurately value patented inventions. Experts have noted that patent valuation is often complex—particularly for emerging technologies—and that the market value of particular technologies is best determined in negotiations between private parties. And a group of conservative organizations wrote to Secretary Lutnick to oppose the proposal and argued that a value-based fee system is effectively a patent “tax” that undermines the economic incentives of the U.S. patent system by potentially steering inventors and investors to innovate outside the United States.

Patent Fee Setting

Second, USPTO Deputy Director Coke Morgan Stewart (then the Acting Director) signaled that the Commerce Department is moving forward with updates to the schedule of patent fees, stating at the annual meeting of the Intellectual Property Owners Association in September that there is a “disconnect” between patent fees and the value of certain patents—echoing similar statements from Lutnick.

According to Deputy Director Stewart, the Administration plans to undertake a regulatory action to propose restructuring USPTO fees. As a matter of law, Congress determines the fees that the USPTO can charge patent applicants and patent holders for transactions with the office. Section 11 of the Leahy-Smith America Invents Act (35 U.S.C. § 41) details a full schedule of patent fees, including, for example, filing fees, examination fees, appeal fees, maintenance fees, and other charges. Section 10 of the AIA also gives the Director discretion to “set or adjust by rule any fee established, authorized, or charged . . . for any services performed by or materials furnished by the Office,” AIA § 10(a)(1) (codified at 35 U.S.C. § 41 note), but goes on to specify that the Director may only exercise this authority to recover costs for processing, activities, services, and materials relating to patents (in the case of patent fees). Id. § 10(a)(2).

This fee-setting authority was initially scheduled to sunset in 2018, id. § 10(i)(2), but Congress extended fee-setting authority through 2026. See SUCCESS Act § 4, Pub. L. No. 115-273 (Oct. 31, 2018), 132 Stat. 4159 (codified at 35 U.S.C. 41 note).

Deputy Director Stewart recently suggested that changes to the fee structure will follow the fee-setting process established in the AIA, which requires the USPTO to consult with the Patent Public Advisory Committee (PPAC) and Congress, as well as to issue a notice of proposed rulemaking (NPRM) with a public comment period, before any change can take effect. See AIA §10(d) (35 U.S.C. § 41 note).

Each stage of the USPTO fee-setting process presents an opportunity for stakeholders to engage, including through direct engagement with Congress, the USPTO, and the Patent Public Advisory Committee (PPAC), as well as through public testimony at a PPAC hearing and written comments on an NPRM.

University Patents

Secretary Lutnick has also expressed interest in other changes to federal patent policy, suggesting that the government should share in the revenues derived from patents obtained through federally-funded university research. In an interview, Secretary Lutnick said, “we give hundreds of billions of dollars to universities. . . and they keep the patents. Don’t you think America should get a stake in the patents that we finance?” While the Secretary’s comments have focused primarily on universities that receive federal funding, he has also said that it is common in business contexts for investors to receive financial “benefit” in exchange for financing patented inventions, possibly portending an extension of this approach to the private sector. Secretary Lutnick has already requested from at least one university “a comprehensive list of all patents it has received stemming from federally-funded research grants” and information on the university’s compliance with the Bayh-Dole Act. He has also signaled plans to expand the request to additional research universities. The Commerce Department has not yet released additional details on its plans to share university patent revenues.