Court Opinion

ID: 9474265
Source: CourtListenerOpinion
Date Created: 2023-08-05 04:52:13.110102+00
Date Added: 2024-06-11T17:43:59.275361
License: Public Domain

PAULINE NEWMAN, Circuit Judge,
dissenting.
I respectfully dissent.
The majority view that the PTO can in this case accept an unsigned check on the chance that a friendly banker will honor it not only creates an unnecessary administrative burden, it is wrong as a matter of patent law and as a matter of commercial law.
I.
The majority inappropriately intrudes into the management of the PTO, overruling a discretionary act of the Commissioner which had been upheld by the district court in a mandamus suit. It is the decision of the district court that is before us, and appellant Dubost has not met his burden of showing, on appeal, that the district court erred in failing to find an abuse of administrative discretion.
The majority today decides that an unsigned check is the legal equivalent of “the fee required by law” in 35 U.S.C. § 111:
*1567The application must be signed by the applicant and accompanied by the fee required by law.
The PTO regulations, consistent with the statute, provide in 37 C.F.R. § 1.22:
Fees and charges payable to the Patent and Trademark Office are required to be paid in advance, that is, at the time of making application for any action by the Office for which a fee or charge is payable.
The method of payment is set out in 37 C.F.R. § 1.23, which describes the usual manner of fee payments, by cash and its equivalents:
All payments of money required for Patent and Trademark Office fees ... should be made in U.S. specie, Treasury notes, national bank notes, post office money orders, or by certified check. If sent in any other form, the Office may delay or cancel the credit until collection is made.
In its administrative discretion as authorized in § 1.23, the PTO routinely accorded a filing date to patent applications accompanied by checks that were not certified, subject to collection. If the funds were not collected the filing date (the “credit”) was “delay[ed] or cancelled]” until collectable payment was made. The PTO practice when confronted with an unsigned check, which on its face was not subject to collection, was to treat it the same way: to delay the filing date until a signed check or other form of payment was provided. See In re Application Papers Filed June 24, 1966, 152 USPQ 29 (Comm’r Pat.1966). Thus the PTO routinely and correctly handled Dubost’s check, in accordance with its rules and its discretionary authority.
The courts have consistently held that 35 U.S.C. § 111 requires that the filing fee be paid before an application can be accorded a filing date. Boyden v. Comm’r of Patents, 441 F.2d 1041, 168 USPQ 680 (D.C.Cir.), cert. denied, 404 U.S. 868, 92 S.Ct. 133, 30 L.Ed.2d 112, 171 USPQ 321 (1971); In re Application Papers Filed March 27, 1974, 186 USPQ 363 (Comm’r Pat.1975); In re Application Papers Filed June 24, 1966, 152 USPQ 29 (Comm’r Pat.1966).
The majority appears to instruct the Commissioner both to exercise his discretion (which he has already done) and to accept unsigned checks as payment as of the date received. This is contrary to 35 U.S.C. § 111, 37 C.F.R. § 1.22, and 37 C.F.R. § 1.23. Although I share my colleagues’ sympathy for the applicant, I see only mischief in this benevolence. The PTO receives hundreds of thousands of fee payments each year. I see no flaw in the Commissioner’s administration of the fee statute in accordance with standard commercial practice.
An unsigned check has no status as a commercial instrument. It is not money; it is not legal tender; it is not negotiable; it is not an enforceable promise to pay. U.C.C. § 3-104 makes clear that a negotiable instrument must “be signed by the maker or drawer”, and that “[n]o person is liable on an instrument unless his signature appears thereon.” Even for non-negotiable instruments, see U.C.C. §§ 3-104(3) and 3-805, the signature is required. An unsigned check is neither a negotiable nor a non-negotiable instrument.
Dubost argues that the phrase in 37 C.F.R. § 1.23 “[i]f sent in any other form” includes unsigned checks. But even if this phrase could include unsigned checks, the same sentence authorizes the PTO to “delay or cancel the credit until collection is made”. The plea of petitioner, to which the majority accedes, is to grant an unsigned check a preferred status over other forms of uncollectable payment.
The majority apparently places controlling weight on Dubost’s submission that his counsel’s banker, if he received the unsigned check for payment, would have contacted the maker and upon his authorization the banker would have honored the unsigned check pending actual signature by the maker. Most citizens do not enjoy such cooperative informal banking relation*1568ships.1 And no one has explained how the check would have reached Dubost’s counsel’s bank. If the PTO attempted to deposit the unsigned check routinely, the PTO’s depository bank would be expected to reject it.2
Common experience is that the check would bounce back to the PTO. The majority appears to accept that “the credit” could then be cancelled. The patent applicant will thus have lost even more time in perfecting the application than under the actual practice, when the check was promptly returned to Dubost by the PTO.
Courts should not readily intervene in the day-to-day operations of an administrative agency when the agency practice is in straightforward implementation of the statute. The majority has imposed a continuing burden3 on the PTO that is contrary to the statute and the regulations, and that common sense ought to reject.
The position adopted by the majority can not reflect a reasonable intent of Congress. I note the 1982 amendment to 35 U.S.C. § 111, to enable late payment of the filing fee without loss of the original filing date. This amendment, described as remedial, was not made retroactive.4 And it is still required that the fee be paid in the form set out in 37 C.F.R. § 1.23, and that if not so paid the credit may be “delay[ed] or cancelled] ... until collection is made”.
The district court found that the PTO’s practice of returning unsigned checks was a valid exercise of. administrative discretion consistent with the statute and the regulations. I agree, and would affirm the decision.
II.
I concur in the majority result on the close question of “arising under” jurisdiction in this case, although I think that their analysis oversimplifies the issue. I caution that there are aspects of Title 35 and its administration still unclear as to the applicability of 28 U.S.C. § 1338(a) for jurisdiction purposes.

. A maker’s bank is under no obligation to contact the maker before dishonoring a check, and would be liable to the maker if it charged the maker's account as a consequence of paying an unsigned check without specific authorization, U.C.C. § 4-401.

. The PTO’s bank is charged with knowledge that Dubost is not liable for the amount of an unsigned check, U.C.C. § 3-401(1), and that the instrument is so irregular on its face that it puts either bank on notice of a defense under U.C.C. § 3 — 304(l)(a). Under U.C.C. § 3-409(1), a drawee bank has no contractual obligation to the payee to accept an unsigned check. While a drawer is normally secondarily liable on an instrument pursuant to U.C.C. § 3-413(2), there is no liability on an unsigned check. Thus, it is extremely unlikely that the check would have reached Dubost’s bank.

. In order to achieve the result described by the majority the PTO must take the check directly to the maker’s bank to determine whether the bank has made a special arrangement to honor this maker’s unsigned checks; the PTO could not merely attempt to deposit the unsigned check routinely with its depository bank.

. Its effective date was six months after its enactment. See Pub.L. No. 97-247, § 17(c), 96 Stat. 319, 323 (1982).