A couple of weeks ago, the U.S. Department of Commerce floated a trial balloon that, frankly, didn’t fly very far. The idea? Scrap the current flat maintenance fee system for patents and replace it with an annual, value-based tax.
If adopted, the United States would stand alone among major patent jurisdictions—and not in a good way. The ripple effects for patent holders and the broader innovation ecosystem could be enormous.
How Things Work Now
Today, patent owners pay maintenance fees at years 4, 8, and 12 after their patent is granted. The fees increase at each interval, though small companies (generally those with fewer than 500 employees) pay only 40% of what large entities do.
Now, let’s be clear: paying these fees doesn’t actually mean the Patent Office is doing more work for your patent. The money goes toward funding the USPTO, which is a self-funded government agency. I’ve always thought of these payments as less about “maintenance” and more like a tax on companies who want to keep their patents alive.
Why This Proposal Fell Flat
So why change things now? Honestly, I’m not sure. And judging by how quickly this proposal disappeared from the news cycle, I’m not alone. Maybe it got drowned out by bigger headlines. Or maybe it was just a trial balloon that burst the moment people realized how impractical it was.
The truth is, I’ve spent more than 35 years helping small businesses secure and protect their patents. A tax like this wouldn’t strengthen the system—it would weaken it. Instead of encouraging innovation, it would discourage companies from filing patents at all. Many would simply rely on trade secrets rather than making their ideas public, which undermines the whole point of the patent system: disclosure in exchange for protection.
The Bigger Picture
The U.S. patent system was designed to promote the progress of science and the useful arts. This proposal? It would have done the opposite. A value-based annual tax would hit small businesses hardest, effectively punishing the very innovators we should be supporting.
Hopefully, This Is the End of It
The silver lining is that this idea seems to have sunk before it got off the ground. My hope is that Congress keeps it that way—park it out to pasture and focus on policies that actually encourage innovation rather than stifling it.
Because at the end of the day, patents aren’t just paperwork. They’re the lifeblood of invention, especially for small businesses. And the last thing those businesses need is another tax standing in the way of progress.
When the Government Comes Knocking on Your Patents