We track a lot of issues over at Rethink(IP). One of my favorites is the management and cultivation of innovation. On that point, we’re currently asking managers – What are you listening for?

Figueroa v. United States – the fee diversion case – revealed Judge Newman’s sympathetic ear for the current patent application backlog, its potential effects on innovation, and the need for increased funding levels. She focused on these issues during oral argument as she pressed the government to show the extreme nature of its position that the preamble of the Patent Clause does not limit congressional authority to establish patent fees:

Judge Newman: “Is the government’s position that…Congress could appropriate the entire income [of the Patent and Trademark Office]…and allow the backlog to continue to increase in the…Office if, in fact, [that's] what Congress decided to do?”

Government counsel: “Yes, your Honor. It’s our position that Congress’ legislation is not limited by the preamble’s promotion language on which the Appellant relies.”

The appropriators scored a major victory last week when the Court of Appeals for the Federal Circuit ruled that the practive of diverting patent fees to non-patent purposes (e.g., homeland security and other programs) survives constitutional scrutiny.

In Figueroa v. United States [.pdf], a patent applicant challenged the constitutionality of excessive fees (fees that exceed the cost of Patent and Trademark Office operations) and their diversion. Importantly, the Court ruled that the patent applicant did, in fact, have standing to challenge the fees.

On the issue at hand, the government argued that the Patent Clause preamble does not limit congressional authority to charge patent fees at all. That is, the government argued that the patent fees do not need to be related to the promotion of progress in science and the useful arts in any way. The Court assumed that a ‘limit’ exists, but declined to decide this issue.

Following the direction of the Supreme Court in Eldred v. Ashcroft (537 U.S. 186 (2003)), the Court analyzed the statutory fee structure for a “rational relationship between the present level of patent fees and Congress’s legitimate objectives under the Patent Clause.” The Court rejects the notion that the actual reason for enacting the legislation is at issue, indicating that “[t]he question, rather, is whether there is a rational basis on which Congress could conclude that the level of fees served legitimate congressional objectives.”

Oddly, the Court then offers three separate and sufficient reasons for the legislation: funding the overall patent system, keeping pace with future costs of administering the PTO and the system, and deterring “the filing and prosecution of certain types of patent applications.”

Regarding this last point, the Court stated:

“Congress could rationally seek to discourage applications for patents that would later likely be found invalid….applications for inventions where the patent is sought only for the sake of personal recognition…and applications from inventors who seek the patent only as a means of inhibiting innovation by competitors.

Did the Court include these comments in the opinion to underscore the breadth of the deference it will give Congress on patent fees? It’s almost as if the Court is saying “the rational relationship test is so weak that Congress could base patent fee legislation on an anti-patent objective.”

So fee diversion is legal…and the appropriators now have a Federal Circuit decision in their back pocket. The practice is likely here to stay unless Congress feels enough political pressure to end it.

Crouch: CAFC OK’s Fee-based Regulation at PTO.

We’ve got great associates at DCR. Smart, hard-working, and passionate. Turns out, they’re funny, too. Read their Top Ten Milestones of a Young Patent Attorney, and I think you’ll agree with me.

Last week, we officially launched legalmojo – the internet job board for legal professionals.  The site has received an incredibly positive reception since that time.  We’ve already exceeded our initial projections for traffic, and, as you can see, we’ve already collected an impressive set of legal job openings.

For job-seekers, the site is designed for quick and easy review of job postings.  Browse all openings, or narrow your focus to a particular geographic area or practice area (as an example, check out the current listing of intellectual property jobs).  Contact information is provided for each listing so you can immediately send your resume for consideration.

For employers, posting a listing is as easy as filling out the job ad form, providing contact information, and submitting payment.  You’ll get 30 days of exposure to significant web traffic from an audience of legal professionals…and the ability to engage potential employees directly.

And, in true RTIP fashion, we’ve already collected some amazing ideas for version 2.0.  So keep watching….

In Dystar Textilfarben v. C.H. Patrick, the Court of Appeals for the Federal Circuit recently issued a sternly worded defense of its motivation/suggestion to combine test for determining when references can properly be combined to render a claimed invention obvious. The Court, clearly speaking to the Supremes as they prepare to consider the propriety of the motivation/suggestion test in KSR v. Teleflex, highlighted the flexibility of the test and explained the relationship between the test and the Graham factors.

In defending the test, the Court clearly expressed its frustration with the prevailing belief that the prior art must include an express motivation to combine in order for obviousness to be found. The Court specifically referenced the Federal Trade Commission and National Academies of Sciences reports as examples of inaccurate interpretations of the Court’s decisions that have created “much confusion about the law.” These reports, you’ll remember, are considered to be two of the primary catalysts underlying the patent reform movement.

The Court repeatedly stressed the flexibility of the test, noting that an express suggestion to combine is not required and that the motivation/suggestion to combine can come from several sources, including the prior art references, general knowledge, and the nature of the problem to be solved.

While the Court didn’t change the test in any way, its restatement of sorts might just change obviousness law for evermore.

View the PatentFizz display of United States Patent No. 5,586,992.

For more detail on the decision, read Crouch’s review of the case.

What if you could see what an issued United States patent looks like after the Court of Appeals for the Federal Circuit reviews it?  Guess what…..now you can.