Dealing with the Patent Office is a lot like standing in front of the airline ticket counter where the agent keeps typing in endless strings of random numbers and letters and politely explains that you can’t possibly make a change in your reservation because your ticket is a A389X-27-Purple ticket and not the B347L-Triple-Lindy ticket.

Although nonprecedential, the U.S. Court of Appeals for the Federal Circuit laid into the Patent Office this week for behaving in what it said was an ” arbitrary and capricious” manner after it cashed a payment that was $10 short and then promptly let the patent expire. See Taylor v. USPTO (CAFC 09-1133).

Jorge Taylor had a patent for a chemical sealant device for repairing flat tires (U.S. Pat. No. 5,178,701) and had to pay the seven-and-a-half-year maintenance fee of $1040. But, Mr. Taylor sent a check for $1030, rather than $1040, in the mail and used the wrong form for transmitting his payment, and sent it to the Applications Branch rather than the Maintenance Fee branch – sort of a hat trick of errors.

Mr. Taylor marked in capital letters at the top of his transmittal form:


The PTO employee who processed the form may not have recognized this filing as an attempt to pay a maintenance fee, and may have just processed it as a regular application filing fee. Whatever the thinking, the PTO deposited the check in its account.

Fast forward several years later when Mr. Taylor called the Office in preparation for paying the required eleven-and-a-half-year maintenance fee and the PTO says “Oops, your patent went abandoned for failure to pay the seven-and-a-half-year maintenance fee.”

Taylor asked the PTO for reinstatement of his patent saying that he was “not an attorney but a pauper disabled living on a fixed income (SSI) who cannot pay $200 to petition your office.”

The PTO dismissed the case (for not including $200) also helpfully pointed out that Mr. Taylor’s original payment had not included a certificate of mailing. Thus, because the Office received the payment on January 17, 2001, five days had passed beyond the window for accepting maintenance payments with a surcharge.

Taylor then sued in district court, alleging that the PTO had “misappropriated” his $1030, and sought $1 billion in damages, his estimation of the worth of his intellectual property “in the U.S. and world market.”

The district court dismissed the complaint saying that PTO regulations do not provide a waiver of petition filing fees for indigent applicants and that Taylor had not shown that the PTO’s actions were “arbitrary and capricious” for purposes of making out a claim under the Administrative Procedure Act.

Mr. Taylor appealed to Federal Circuit, which seemed perturbed that the case had to go all the way to the appellate level and was not happy that that the PTO cashed Mr. Taylor’s check and still proceeded to consider his patent expired.

The court said that the PTO’s actions were arbitrary and capricious in accepting Mr. Taylor’s deficient payment on the one hand, while on the other hand expiring his patent without notifying him under MPEP § 2531 (Notice of Non-Acceptance of Patent Maintenance Fee) that his payment was inadequate.

The PTO tried to weasel out of the suit saying it would refund the $1030 and said that Taylor could still file a petition — along with $200, of course — to have his patent reinstated for unavoidable delay. But, the USPTO then mused that even if the failure to properly pay the 7.5-year maintenance fee could be overlooked, Mr. Taylor has now also failed to pay the 11.5 year maintenance fee, and has also missed the deadline for reinstatement based on “unintentional delay” of that payment.  Nice.

In the end, the Federal Circuit said that it wasn’t fair for the PTO to take Mr. Taylor’s payment without notifying him of the $10 shortfall and demanded an equitable remedy:

In this case, equity would counsel that the PTO should reinstate Mr. Taylor’s patent upon receipt of his payment for all outstanding maintenance fees. This relief will remedy, to this court’s best estimation, the PTO’s arbitrary and capricious actions.

While I feel bad for Mr. Taylor, the real issue here is why doesn’t the Patent Office put more procedures in place that make the application process more of a mutual partnership? Yes, Mr. Taylor paid the wrong amount. Yes, he used the wrong form. But, even very experienced attorneys make these kinds of mistakes.

The present case illustrated that the Patent Office needs to adopt more equitable rules and procedures for helping inventors correct mistakes in the first place so that valid patents issue. Shouldn’t the Patent Office be on the inventor’s side?

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  1. I’m thinking that the triple error must have happened an awful long time ago and that, if it were to happen again today, the susequent chain of events would be very different, because the PTO has learned from its mistake. I had thought that, in any organisation, a good measure of “quality” is how much analysis of mistakes takes place, and how much implementation of measures that not only minimise the chances of the same mistake happening again but also make maximum use of all lessons learned.

    Has the pauper Mr Taylor therefore provided valuable public service? Could the same story play out a second time, in today’s USPTO? Surely not.

  2. I’m not sure if I get the airline analogy.

    If I were to go to an airline ticket counter with a ticket for the wrong flight, insufficient funds, and be there on the wrong day, I would not expect to be flying that day.

    Nor would I expect to win a billion dollar lawsuit against the airlines because of the three mistakes I made.


    Sometimes things are funnier in my head than written out on a web page. Having said that, what I had in mind is that the USPTO, like the airlines, has a lot of complicated rules. They both can claim that they are just following the rules. But, they both get to make a lot of the rules themselves, often arbitrarily.

    Where the analogy diverges is that the airlines are privates businesses and the patent office is a branch of the government. In the of/by/for the people sense, they are us. They should be in the customer/citizen service business.

    In defense of airlines, I have (more often than not) had a customer service agent bend over backwards to help me out. I may hate Delta’s prices (and seat legroom) but I’ve always experienced great service.