Inventors’ Rights Act of 1999 to protect inventors from invention promotion scams. The Act authorized the Patent and Trademark Office (PTO) to publicize complaints it receives against promoters who tell inventors to bring their inventions to be marketed on behalf of the inventor—for a fee, of course.
The PTO began public ads to alert the public to “invention promotion scams.” One stated, “Make sure your ideas—and your money— don’t wash away. To learn more, call the U.S. Patent and Trade- mark Office toll free.” One had a testimonial from a person named Lewis who spent $13,000 with an in- vention promoter who produced nothing.
Newspapers interviewed Lewis, who told of his fruitless involvement with Invention Submission Corpo- ration (ISC). It had been sued before passage of the Act by the FTC for “patent-marketing schemes” and had paid a $1.2 million settlement. ISC responded to Le- wis’s claims by saying it “did nothing wrong” and had not “misled Lewis or any other inventor.” It settled with Lewis, and he withdrew his complaint with the PTO.
ISC then sued the PTO, contending that its adver- tising campaign violated the Administrative Procedure Act (APA) and that the ad campaign improperly sin- gled out the company. The district court granted the PTO’s motion to dismiss the suit. ISC appealed.
Case Decision Niemeyer, Circuit Judge
United States Court of Appeals, Fourth Circuit 357 F.3d 452 (2004)
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The Administrative Procedure Act does not provide judicial review for everything done by an administra- tive agency, and the PTO’s advertising campaign, in- cluding its conduct in giving a journalist Lewis’s telephone number, is not the type of conduct that constitutes agency action that is reviewable in court under the APA. Other than the administrative decision to conduct an advertising campaign at all—a decision that Invention Submission has not challenged—the content of the campaign was not the consummation of any decision-making process that determined rights or obligations or from which legal conse- quences flowed. Moreover, by looking at the cam- paign material, the public would see only that a consumer complained about an invention promoter and that invention promotion scams are causing the
public $200 million in losses every year. Surely Inven- tion Submission would not suggest that the attribu- tion in the advertisements of $200 million in losses to patent scams was in any respect focusing the pub- lic’s eye on it. The text of the advertising material can only be construed to be an effort by the PTO to inform inventors of the perils and potential scams that they might encounter during the patent process. Such ad- vertising did not create “legal consequences” for In- vention Submission or any other member of the public cognizable as final agency action, and the cam- paign itself did not determine any right or obligation of any party….
In short, the PTO’s advertising campaign warning the public about invention promotion scams was con- sistent with the PTO’s commission granted by the Inventors’ Rights Act of 1999, and in the circum- stances of this case, the decision to pursue such a campaign, as well as its content, did not create a final agency action that is reviewable in court. As we said in [an earlier case], this type of a campaign is “prop- erly challenged through the political process and not the courts.”
Because the conduct of the PTO that is the sub- ject of this action did not constitute “final agency ac- tion” as used under the APA, the district court did not have subject matter jurisdiction to evaluate the com- plaint…. We therefore vacate its order…as well as the supporting opinion, and remand with instructions to dismiss this case….
Questions for Analysis
1. The appeals court held that the courts do not have jurisdiction to review matters such as adver- tising campaigns by agencies that highlight legal issues. Why did it instruct the district court to vacate its order?
2. Why does the court say this belongs in the politi- cal arena and not the courts?
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