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Archived updates for Tuesday, July 05, 2005

USPTO Fee Diversion Not Unconstitutional

In Figueroa v. United States (June 28, 2005), the Court of Federal Claims concluded that Congress’ practice of using money generated from patent application fees paid to the United States Patent and Trademark Office (“USPTO”) for purposes other than supporting USPTO operations did not violate the Intellectual Property Clause of the Constitution.

According to the opinion, inventor Miquel Figueroa's central point of argument is his claim that charging inventors fees that are not entirely used solely for the purpose of supporting the operations of the patent system is an irrational, unconstitutional burden on innovation that does not promote the progress of useful arts. However, the court was not persuaded:

In sum, during the past fourteen fiscal years, USPTO has taken in billions of dollars cumulatively in fees and has provided billions of dollars worth of services, most of which involved issuing more than 2 million patents. USPTO appropriations have increased by a factor of thirteen during that timespan. Congress is, thus, funding
USPTO operations, and funding them generously, with money assessed in the form of patent fees, although Congress has not dedicated all of the fees to that particular purpose, choosing instead to spend 4.4 percent of those fees on other priorities.
Congress’ determination of federal spending priorities and how the patent system
fits into national economic development goals is an eminently rational exercise of its

Congress is entitled to great deference under the Necessary and Proper Clause when it legislates under its Intellectual Property power. Any intellectual property law Congress passes need only survive the limited scrutiny of the rational basis test as to
whether it promotes the progress of science and the useful arts. Plaintiff may well be
correct that the current patent fee regime is misguided and creates the wrong incentives, but such policy determinations are for Congress, and not the courts, to make. Plaintiff has not carried his burden of showing that Congress has behaved irrationally.

The United States Patent and Trademark Fee Modernization Act of 2005 (HR
2791) which is now before the House Committee on the Judiciary would create a "Patent and Trademark Fee Reserve Fund" for reunding excess fee collections to persons who paid patent or trademark fees during that fiscal year.
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April 07, 2009 4:44 AM  

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