DC Circuit - The FindLaw DC Circuit Court of Appeals Opinion Summaries Blog

TSA Was Arbitrary and Capricious in Dismissing X-Ray Bin Company

As you're waiting in line at the airport to get your full body scan, or have your stuff rifled through, you might peer over at the stack of bins, into which you're hastily stuffing your laptop and shoes, and notice that there are ads in them. Since 2007, the TSA has offset the cost of security checkpoints by selling ad space in the bottom of its X-ray bins.

And it's these bins and their ads that are the basis of a lawsuit decided by the D.C. Circuit Court on Tuesday, one that deals with First Amendment rights, patent infringement -- and murder! (Admittedly, I made that last one up to make the story sound more enticing.)

The Most Cutting-Edge, Patented Plastic Bin Technology

TSA contracts with a company called SecurityPoint at some airports to use these bins and their associated equipment. SecurityPoint even has a patent on this technology. (If you're super curious, Patent No. 6,888,460 is for "advertising trays for security screening." You could also say "putting ads in stackable bins." I'm not sure how this is a novel idea, but they don't pay me to be a patent analyst.)

In 2011, SecurityPoint sued the United States for using the bins and associated equipment at airports for which the TSA didn't have a license. The government responded that the patent was invalid as obvious. That case has yet to be decided.

In 2012, TSA modified the terms of its agreements with airports to require airports to indemnify TSA for intellectual property claims relating to those bins and also to allow TSA to keep using, and license, the bins if it stopped contracting with SecurityPoint.

Arbitrary and Capricious

SecurityPoint didn't much like these changes, and it said so to TSA in two different "cease and desist" letters, claiming that airports wouldn't sign an agreement forcing them to indemnify TSA. SecurityPoint also said that the changes were superfluous, as the SecurityPoint contract already gave TSA an "implicit license" to use the bins. TSA's chief counsel, in her own letter, denied the request to cease and desist.

The TSA letter, the D.C. Circuit said, was a reviewable "order" by an agency. It then found that the letter was inadequate as an exercise of agency authority, which has to explain itself somehow and not be conclusory. The letter didn't address any of SecurityPoint's concerns, which included the adverse effects the agreements would have on SecurityPoint as well as the adverse effects on TSA itself, as TSA benefits from licensing the security checkpoint equipment.

Finding the letter to be "arbitrary and capricious," the D.C. Circuit vacated it and sent the case back to the TSA for a more thorough pat-down.

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