If you read the context of that quote then you're telling me you think that the USPTO is arguing that an effectively infinite amount of money should be paid for every new piece of IP since you'd also need to pay something for all the IP that it was built upon.
The USPTO is certainly NOT arguing that when you pay for IP you also must pay something for everything that the IP is built upon.
Perhaps not. But let's say that I patent some technology that uses as it's basis another idea that is patented. Then I develop some technology based on this. I then license that technology. Then someone else creates a patent based on my patent and then licenses it from me.
So here is where I perhaps get a little confused. Is this allowed? If you can't refine an idea, then this restricts innovation. If I can refine the idea and then patent it, does this mean that any license costs must go only to me? Or do I have to pay a portion of these license costs to the original patent I have derived my ideas from?
Option 1: Can't refine a patent. Result: restriction of innovation and trade.
Option 2: You can refine a patent, but don't have have to license this to the original patent author. Result: you can bypass patents. The whole system becomes pointless.
Option 3: You can refine a patent, but you must pay part of the license you charge to the original patentee. Result: Costs increase for each patent license.
Oh, I don't know. The USPTO?