Conservatives Appeal to Lutnick's Inventor Roots in Urging Him to Drop 'Patent Tax' Proposal

"The letter celebrated President Donald Trump's "One Big Beautiful Bill Act" (OBBBA) but said the patent tax would undermine the key benefits of it. According to the groups, although the proposal has been reported as a new approach to user fees, "available details suggest this levy would be designed to raise revenue for the general operations of the federal government," which is a departure from the Office's user-fee-based system, which funds operations from those fees."

"The letter outlined five ways the patent tax would be bad for the United States, first noting that it would undermine provisions of the OBBBA, such as the Foreign-Derived Intangible Income provision, which "encourages companies to develop and locate intellectual property (IP) in the United States." According to the letter, the tax on patents would dive venture capital away from U.S. R&D and make foreign companies more attractive."

Representatives of 36 conservative organizations urged Secretary of Commerce Howard Lutnick, an inventor, to withdraw a proposal to impose a 1%–5% tax on the value of granted U.S. patents. The proposed levy departs from the patent office's user-fee funding model and appears intended to raise general government revenue. The tax would undermine incentives created by provisions like Foreign-Derived Intangible Income, redirect venture capital away from U.S. research and development, and make foreign jurisdictions relatively more attractive for locating intellectual property. The proposal could penalize successful patents, burden innovators, and harm U.S. competitiveness in R&D.

Read at IPWatchdog.com | Patents & Intellectual Property Law