Toupin put up a lukewarm defense of tax-strategy patents by talking out of both sides of his mouth, a tactic commonly referred to as diplomacy. "While the USPTO may grant a patent on a tax strategy, that patented strategy should not be practiced or marketed unless it complies with applicable law, rules and regulations administered by the Internal Revenue Service." Nicely put.

Toupin, not referring to tax patents specifically, reminded the subcommittee that Congress may legislate at its whim certain invention types unpatentable for any variety of reasons, including deceptiveness. So much for "anything under the sun made by man..." Toupin then flicked a booger with: "Until such time as Congress does so, however, we find no basis to hold that inventions can be ruled unpatentable for lack of utility simply because they have the capacity to fool some members of the public."

IRS Commissioner Mark Everson agreed with Toupin that a patent may appear to legitimize an abusive tax patent. "The public may be largely unaware about both the rights that a patent owner enjoys and the fact that a patent does not guarantee that the transaction has the desired tax consequences." Or, as Albert Einstein put it, "The hardest thing in the world to understand is the income tax."

Toupin pointed the finger elsewhere with "the requirement of 'utility' in patent law is not a directive to the USPTO or the courts to serve as arbiters of deceptive trade practices," and referred to the FTC (Federal Trace Commission) and FDA (Food and Drug Administration) as being tasked with protecting consumers from fraud and deception. Toupin referred to the 1975 Watson Pharmaceuticals v. SmithKline CAFC decision, which ruled, with regard to the USPTO and drug safety, "not their problem." The FDA is responsible for the safety of drugs and food. A spokesperson wasn't there from the FDA to remind that people don't eat patents. But Toupin's point was that taxes are like drugs, at least as far as the patent office is concerned. More generally denying the PTO as the cop on the beat, Toupin referred to an 1880 Supreme Court ruling that "Congress never intended that the patent laws should displace the police powers of the states."

The patent office has a long tradition of issuing patents for devices and processes illegal, immoral and offensive. Sort of like the defense used by Delta House in its probationary hearing in Animal House: "We have long tradition of existence to the community." In 1930, during Prohibition, the agency granted a patent for unlawfully producing alcohol. Other unsavory patents include gambling devices, automobile radar detectors, and a device for illegal cock-fights, not to mention a 1962 biological warfare patent for ricin. With a puff of legalistic pride, like Al Gore defending himself about a questionable presidential campaign contribution from a Buddhist temple with, "there was no legal controlling authority," Toupin chimed, "In issuing these patents, the USPTO has endeavored to carry out its mission to grant patents as allowed by law, and to refrain from making policy decisions not within its legal authority."

Paraphrasing Einstein, Everson of the IRS pointed out that not all tax patents are odious; there are those that could facilitate taxpayer's ability to comply with the otherwise inscrutable tax code.

In the finale, Everson piped "tempest in a teapot": "We thus far have not seen the use of the patents in developing or marketing aggressive or abusive tax strategies."

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In the hearings, Toupin noted 41 issued tax patents, with 61 applications pending related to tax strategy.