PTO Fee Diversion is Constitutional

Figueroa v. United States (Ct. Fed. Clms. 2005).

 

In Figueroa, the plaintiff challenged Congress’ diversion of USPTO fee revenue to non IP government programs as an illegal exaction and unconstitutional.  Specifically, the plaintiff argued that because the diversion interfered with the USPTO’s performance and burdened inventors with costs unrelated to securing patent rights, it was “not rationally related to promoting the progress of the useful arts, as required by the Constitution.”

 

The Court disagreed, and held that the diversion was not unconstitutional.  It applied a rational basis test, which required the plaintiff to prove that the diversion of fees was not “rationally related to legitimate governmental objectives.” 

 

Relying on Eldred v. Ashcroft, the Court noted that IP policy judgments “are vested in Congress, and courts must be deferential to Congress’ exercise of its power in that sphere.”  It pointed out that under current USPTO appropriations legislation, the USPTO has continued to grow and its appropriations have increased.  Therefore, it concluded that “Congress’ determination of federal spending priorities and how the patent system fits into national economic development goals is an eminently rational exercise of that power.”

NOTE: This post was written by Paul Kafadar.  Paul is a law clerk at MBHB and a law student at Northwestern University in Chicago.

Links:

• Prior discussion of Figueroa.
• Information on the case from the prosecuting lawyer.
• Nipper’s discussion of the case.
• AIPLA amicus brief supporting Figueroa.