USPTO was arbitrary and capricious over $10

The PTO granted Jorge Taylor U.S. Patent No. 5,178,701 relating a chemical sealant device for fixing flat tires. Mr. Taylor's 7 1/2 year maintenance fee was due between January 12, 2000 and January 12, 2001. If he paid between January 12, 2000 and July 12, 2000, the fee was $975. If he paid between July 13, 2000 and January 13, 2001, the fee was $975 plus a $65 surcharge, for a total of $1,040.

Mr. Taylor claims the PTO told him by telephone that the fee to pay was $1,030. So that's what he paid on January 13, 2001. The PTO kept the cash.

In 2004, Mr. Taylor called the PTO in advance of paying the 11 1/2 year maintenance fee (perhaps to find out how much?). The PTO then informed him that his patent was expired because he hadn't paid the 7 1/2 year maintenance fee.

Mr. Taylor then sent a number of letters asking for resinstatement (the PTO treated these each as petitions, but denied them without reviewing the merits as Mr. Taylor did not submit the $200 petition fee). Mr. Taylor explained that he could not afford the $200 petition fee, but that he "would not wave [sic] my money nor my patent without a fight." He explained:

1) You never billed me, but told me over the phone that my fee was $1030.00. I paid you that much.

2) You cashed my check, pocketed my $1030.00 and expired my patent for lack of payment. You then never informed me otherwise. I also have proof that I paid this amount of $1030.00. You kept me in the dark over a $10.00 discrepancy for over 3 years so that you could keep the $1030.00 and expire my patent, without my knowledge, for lack of payment. If I did not pay the fee why would you cash my check? How convenient, like a thieve [sic] in the night, never informed me of your malfeasant [sic]. If there were any discrepancies as to the fee owed and the fee paid, you should have made me aware so that the transaction could have been corrected.

2 year laters, Mr. Taylor sued the PTO for misappropriation of his $1,030, and sought damages of $1 billion (his estimated value of his patent). The district court dismissed under Fed. R. Civ. P. 12(b)(6). Mr. Taylor appealed to the Federal Circuit in forma pauperis.

Keeping Mr. Taylor's money while expiring his patent was not cool:

This court finds that the Office’s course of action in accepting Mr. Taylor’s deficient payment on the one hand, while on the other hand expiring his patent without notifying him under MPEP § 2531 that his payment was inadequate, was arbitrary and capricious.

The Court then remanded the case to the district court with instructions to exercise its equitable powers and reinstate Mr. Taylor's patent upon receipt of payment of all outstanding maintenance fees.

Taylor v. U.S. Patent and Trademark Office, Case No. 2009-1133 (Fed. Cir. Aug. 4, 2009)