Apr 082011

You’ve probably heard the news that the PTO will rely on its own funding to sustain itself for up to six days in the event of a government shutdown. I ran into an interesting post on Patently-O about this potentially going against the Constitution. “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.”[1] I guess the question would boil down to whether money is being drawn from the treasury. I did a quick search back to the last government shutdowns of the 1990s and I realized that blogs did not exist back then! So instead I found a couple Washington Post articles mentioning that the PTO (in 1995) was not going to shut down because of the fees it collects.[2] I don’t know if the constitutional question was not raised back then, but the question is certainly an interesting one: whether a completely self-sustaining agency can operate without Congress’ appropriations. But what makes it even more interesting is how the Framers likely viewed this clause in relation to their vision of the PTO at the time the Constitution was ratified. Back then, there weren’t agencies as we know them today. But a look to the humble beginnings of the patent agency shows that the Framers likely did not design the patent agency to use the Treasury’s monies.

Because of the patent office’s long history, it is difficult to say which statute definitively created a Patent agency rather than a patent system.  The Patent Act of 1790 allowed an inventor to file a “petition for patent” through the Secretary of State.  The Secretary of State, the Secretary of War, and the Attorney General would determine jointly if they, or any two of them, thought “the invention or discovery sufficiently useful and important” to merit a patent.[3] But assigning three cabinet officers the duties of determining what patents should be issued did not establish an office dedicated to granting patents.[4] Nor did it begin with the Act of 1793, under which various State Department clerks shared the work of engrossing patents between their diplomatic duties.  But on June 1, 1802, with the appointment of a clerk by the name of Dr. Thornton whose entire and full-time job was superintending the issuance of patents, it is arguable that the Patent agency began. It appears from the early history of the primitive patent agency that the funding system was self-sufficient as well. At this time, the amount of money coming in through “patent receipts” was $1400 per year so Secretary Madison offered Dr. Thornton that amount as salary, probably around May 12, 1802. The first record of him getting paid in the State Department was June 1, 1802 to December 31, 1802.[5] This shows that the Framers likely had in mind a system that relied on its own funding, rather than dipping into the Treasury.

Later in 1836, the establishment of a Patent Office became official: “Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That there shall be established and attached to the Department of State, an office to be denominated the Patent Office . . . .”[6] In addition to administering the Patent Act of 1952, the PTO is also charged with administering the Trademark Act of 1946.[7] In 1975, the Patent Office was renamed to the Patent and Trademark Office.  This organic statute is codified today in 35 U.S.C. § 1: “The United States Patent and Trademark Office is established as an agency of the United States, within the Department of Commerce.”[8] But the PTO has since maintained its core spirit of self-sufficiency.

[1] Article I, Section 9.

[2] See Stephen Barr The Washington Post, Government Shutdown Could Idle 800,000, Pg. A21 (November 09, 1995).

[3] Kenneth W. Dobyns, The Patent Office Pony—A History of the Early Patent Office 22 n.2 (1994), available at http://www.myoutbox.net/popnotes.htm#5-2 (last visited Nov. 27, 2010).

[4] Id.

[5] http://www.myoutbox.net/popnotes.htm#7-8.

[6] Patent Act of 1836, 5 Stat. 117 (1836).

[7] 15 U.S.C. §§ 1051–1127 (2009).

[8] Patent Act of 1952, 35 U.S.C. § 1 (2009).

 Posted by at 8:29 am