Taxing a patent directly in the way you suggest is a terrible idea. Then smaller innovators who might benefit from patent protection are priced out by larger players directly! The value of the patent becomes proportional to the wealth of the patent holder, not the value of the innovation being protected.
Small innovators don't have the legal muscle to play hardball with large players anyway. More small companies died after getting distracted with a patent lawsuit than were saved by one.
He's not saying that small inventors couldn't profit. Just that their profits as a result of monopoly rights should be capped at a dollar amount. Patent rights are already capped in time: 20 years from the time of filing. After that, inventors no longer have the monopoly. The problem is that in high-tech fields, 20 years is too long. We don't want individual inventors to hold back progress for 20 years. Capping returns seems like a good solution. Inventors are still compensated, but within reason.
He isn't saying that, but it would be the result of his suggestion. It would be hugely lopsided in favor entities with lots of money, since the value of your invention to you (but not to potential infringers) is bounded by your cash on hand. The cost of getting a patent is already a hardship on non-corporate inventors. They won't be able to afford a lot on top of that — the ROI would just not be there. If Joe Inventor patents his technique for creating geese that lay golden eggs but can only afford to pay $5000 on top of the filing fees, then I can rip it off and end up having to pay him fractional pennies out of every dollar I make off my infringement.
"It would be hugely lopsided in favor entities with lots of money"
Much less so then the current system. Much of the uncertainty and potential liability for small businesses would disappear. Unless your small business is a patent troll but then that's a feature not a bug.
"the value of your invention to you (but not to potential infringers) is bounded by your cash on hand."
This is both false (you are bounded by the cash on hand and the value of things you can use as collateral for loans or equity) and no different then the current case where you are bounded in the number of lawyer hours you can afford.
If I find an enormous diamond that is worth $20 million dollars but it costs more to have it properly appraised and marketed then I have cash on hand, trust me I will raise that money and sell it near full market price. I may not get 100% of the proceeds but you'll have a hard time convincing me that the apprisal system is incredibly biased against people that find diamonds.
Smaller innovators could be protected in several ways.
First, you could defer any taxation for a couple years. That allows time for the inventor to find buyers or acquire (via loans, insurance, etc.) funding to handle the tax.
Second, you can break up the value and taxes into smaller periods. Like 3 or 5 year periods.
Third, the actual % taken of the value of the patent can scale progressively.
et cetera
I think you're missing the strengths of what I'm proposing:
(1) it kills the patent troll business model and massively decreases potential liability for small businesses.
(2) it fully staffs and funds the understaffed and underfunded USPTO.
(3) it legitimately protects and rewards innovation.
