Effectively a Property Tax...
Companies Expected to Oppose
The Donald Trump administration in the United States is considering reforming the patent system to increase tax revenue. The plan involves imposing a fee of up to 5% of the value of a patent on patent holders, which could generate hundreds of billions of dollars in tax revenue. However, there are expectations that this plan will face strong opposition from businesses if implemented.
On the 28th (local time), the Wall Street Journal (WSJ) reported that Howard Lutnick, the U.S. Secretary of Commerce, is reviewing a plan to impose a fee ranging from 1% to 5% of the total value of a patent on patent holders in order to increase tax revenue and reduce the government budget deficit.
Currently, patent holders pay the government a fixed fee ranging from several thousand dollars up to about $10,000, paid periodically over several years. WSJ pointed out that if the new fee is introduced, the burden on some patent holders would increase sharply, effectively functioning as a kind of property tax.
It is unclear whether the new patent fee would replace the existing fixed fee or be added on top of it. Officials from the U.S. Patent and Trademark Office, which is under the Department of Commerce, are reportedly circulating draft proposals and financial models, according to sources.
President Trump has nominated John Squires, an intellectual property attorney formerly with Goldman Sachs, as the head of the Patent Office. Sources said that if confirmed by the Senate, Squires is expected to push forward with the fee reform and other related measures.
The market estimates that the total value of all patents currently registered in the United States amounts to several trillion dollars. Major companies such as Samsung and Apple acquire thousands of patents each year. If the new fee system is based on patent value, Korean companies operating in the United States would also be subject to it. WSJ pointed out that foreign companies like Samsung and LG, which conduct business in the United States, are among those holding the most patents, and that this could spark global backlash.
WSJ predicted that companies are highly likely to try to block such changes to the tax system. They argue that since profits from patents in key fields such as artificial intelligence (AI) and healthcare are already taxed, this could amount to a form of double taxation.
Brad Watts, Senior Vice President of the Global Innovation Policy Center at the U.S. Chamber of Commerce, said, "This is a complete paradigm shift in the way we think about intellectual property protection," adding that many companies will view this as a tax on innovation and will express significant concern.
Meanwhile, WSJ reported that Secretary Lutnick, who conceived the new patent fee plan, also holds patents himself.
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