TAPP Signs onto Coalition Letter Opposing Patent Tax

The Trade Alliance to Promote Prosperity recently joined a coalition of three dozen organizations in signing a letter to U.S. Secretary of Commerce Howard Lutnick, urging the Trump administration to abandon the idea of imposing a patent tax.

In part, the coalition wrote, “We are troubled over reports of an unprecedented change being considered for the U.S. patent system: charging a 1%-5% tax on the value of the most successful U.S. patents. This would be counterproductive in the extreme… This is in contrast to the user-fee-based patent system in existence today, which funds its operations from a dedicated revenue stream.”

The letter lists five specific reasons for the coalition’s opposition to the tax.

The coalition letter notes, “Under the patent system the Founders crafted, the government does not imbue value to new inventions and has no claim on the product of private ingenuity. Rather, innovators’ ingenuity and subsequent commercialization (including both product development and market development) are the source of an invention’s eventual value… We strongly urge the Department of Commerce to drop any further consideration of a patent tax… We stand ready to work with the administration on ensuring tax policies and deregulation that incentivize initiative, ingenuity, and U.S. innovative advancement.”

Read the full letter here.