Administrative Patent Levers

This article describes the processes involving the U.S. Patent and Trademark Office\u27s (PTO\u27s) implementation of administrative patent levers related to business methods. Administrative patent levers are conceptualized in this article as rules that represent a coordinated policy at the PTO to target a particular technology class, are often motivated by signals sent by actors within all three branches of government, and can be explained by positive political theory. This article presents an account where policymakers in all branches of government reacted strongly to the dangers posed by business method patents. The PTO\u27s behavior is explained under the fire-alarm theory of regulatory change, whereby an administrative agency responds to external institutional pressures and actors. This conceptual analysis of administrative patent levers is then informed by a detailed analysis of business method rules that fall under this category of administrative policymaking at the PTO. A descriptive account is then offered that predicts how the U.S. Court of Appeals for the Federal Circuit (CAFC) would review the PTO\u27s use of administrative patent levers. Ultimately, the CAFC\u27s likely approach is undesirable because it fails to recognize that the PTO engages in policymaking. A normative solution is offered whereby the reviewing courts would apply a hard look review under Section 706(2)(A) of the Administrative Procedure Act. This standard would require that the PTO offer objective evidence that any administrative patent levers are warranted. This standard would also require that the PTO address any valid arguments or evidence against the implementation of such technology-specific and policy-oriented rules. Under this line of analysis, it is proposed that current business method administrative patent levers would fail to meet this standard of review