Administrative Patent Levers

50 Pages Posted: 19 Jan 2012 Last revised: 8 Jun 2014

See all articles by David Orozco

David Orozco

Florida State University - College of Business

Date Written: January 18, 2012


This article describes the processes involving the United States Patent and Trademark Office’s (PTO’s) 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, and are often motivated by institutional signals sent by actors within all three branches of government, as 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 methods. This behavior is explained under the “fire-alarm” theory of regulatory change and the principal-agent theory of administrative decision-making, 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 CAFC would review the PTO’s use of administrative patent levers as a general matter. Ultimately, the CAFC’s approach is deemed undesirable since 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 policy-oriented rules. Under the proposed line of analysis, it is proposed that the business method administrative patent levers would fail to meet this standard of review.

Keywords: patents, business methods, administrative law, intellectual property, PTO, USPTO, positive political theory, fire-alarm theory of regulation

JEL Classification: H00, H1, H77, K00, K2

Suggested Citation

Orozco, David, Administrative Patent Levers (January 18, 2012). 117 Penn State Law Review, Available at SSRN: or

David Orozco (Contact Author)

Florida State University - College of Business ( email )

423 Rovetta Business Building
Tallahassee, FL 32306-1110
United States

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