Chipmaking industry pushes back on U.S. Patent Office considering imposing annual fee based on assessed value — “tax on innovation” draws strong opposition from Semiconductor Industry Association

News
By published

The federal government wants a bigger slice of the semiconductor pie through patents.

Ephos glass-based photonic chips
(Image credit: Ephos)

The Semiconductor Industry Association (SIA) just released an open letter addressed to John A. Squires, the Director of the U.S. Patent and Trademark Office (USPTO), urging him to reconsider the proposal of imposing periodic patent fees to maintain the validity of a patent based on a government-assigned value instead of the current fixed price. According to the document (PDF), patents in the semiconductor industry are interconnected, making it difficult, if not impossible, to determine the exact value of any single patent.

The U.S. Department of Commerce is looking to revamp the U.S. patent fee structure to raise more funds. It actually raised several of its fees and added new ones in January 2025, which are expected to raise around $440 million per year. However, these are all fixed-rate charges, so companies and individuals know precisely what they will pay regularly.

The proposal recommends replacing the current flat-fee model with one that charges an annual fee of 1% to 5% based on the government’s assessment of the patent’s value.

There is significant pushback on the proposal, though, across different industries, with the SIA arguing that such a move “could discourage patent filing in the U.S., thereby reducing collaboration and transparency that are essential for innovation and technology advancement.”

Although this is just a proposal, it’s already garnering vehement criticism from intellectual property experts, industry associations, and many tech corporations. If it passes, the plan could dampen innovation in the U.S. and encourage research and development in countries with friendlier patent policies.

Google Preferred Source

Follow Tom's Hardware on Google News, or add us as a preferred source, to get our latest news, analysis, & reviews in your feeds.

Jowi Morales
Jowi Morales
Contributing Writer

Jowi Morales is a tech enthusiast with years of experience working in the industry. He’s been writing with several tech publications since 2021, where he’s been interested in tech hardware and consumer electronics.

8 Comments Comment from the forums
  • Zaranthos
    No. The numerous ways we're taxed and the amount we're taxed is too much already. While this tax doesn't seem like it would directly affect me or most people it, like all taxes, will affect us all by increasing the cost of things we buy. It's also a barrier for new companies that might have value on paper but lack revenue to cover more stupid taxes or fees.
    Reply
  • thestryker
    This definitely seems like a hamfisted approach which would do more damage than good. There are plenty of better ways to raise revenue without exascerbating the existing issues with patents. Right now I'd say the two biggest problems with US patents is suppression of IP and patent trolls. A blanket fee based structure like this would greatly encourage the latter and would do little to nothing with regards to the former.

    I certainly think there's plenty of work that can be done to improve the patent office and even raise revenue, but this is not the way to do it.
    Reply
  • Sluggotg
    I seriously doubt it will ever happen. It is just someone's very bad idea. Overtaxing destroys businesses. Keep the market free and it will be best for the consumers.
    Reply
  • Dragonwatcher
    hey could always keep it a flat fee for the original patent holders or for the current holder when they original company is bought by them. But for these patent holding companies make it a percentage of value fee. Possibly even making it a sliding percentage fee for the holding companies (Patent Trolls) the more patents they hold the higher the fee for each patent. All because they are just buying them up and not actually utilizing them.
    Reply
  • Pename
    That's one way you can boost company balance sheets. Valuations done by the patents office.
    Reply
  • EduApps
    You should look to countries who did this. Brazil is highly dependent on other countries because of this kind of taxes.
    Reply
  • JC5000
    LoL, the most expensive patent office in the world (besides Japan), with the highest fees and LEAST protections wants more $.
    Reply
  • JC5000
    Patents dont protect you; they merely give you the right to pay litigation lawyers millions of dollars to protect you
    Reply