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

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.”

Aside from that, the percentage-based fee would make it harder for both institutions and individuals to manage the costs of holding the patent. This is especially true for smaller companies and individuals who cannot afford to pay millions of dollars to retain ownership of their innovations. Other experts even called this move double taxation, with the publication saying that patent holders already pay taxes based on the revenue they make from their intellectual property.

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.

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