Patent Office Disciplinary Actions and the Lack Thereof
|Written by Gene Quinn
Patent Attorney & Founder of IPWatchdog
Zies, Widerman & Malek
Follow Gene on Twitter @IPWatchdog
Posted: Sep 15, 2010 @ 4:07 pm
Two years ago today the United States Patent and Trademark Office made effective a rule change that should have once and for all put an end to those who engage in the unauthorized practice of law in the patent and trademark field. Unfortunately, to date the Office of Enrollment and Discipline done nothing whatsoever to enforce Rule 11.5, and in fact I have been repeatedly told by sources that the USPTO is of the belief that they cannot prevent someone who is not registered from practicing either on the patent or the trademark side of the building. This is practically unbelievable. Rule 11.5 (b) was specifically intended to force initial contact between an applicant and an attorney and prevent a middleman or entity from collecting the work, interfacing with an inventor and then handing off to a registered practitioner. It also prevents those who are not registered from preparing any documents in contemplation of filing, but that is exactly what is happening. All one has to do is a basic Internet search or turn on XM radio or cable TV to see the many advertisements from non-registered individuals and entities. Something needs to be done.
Why have a rule that defines unauthorized practice of law if that rule can only be enforced against those who are authorized to practice law? The fact that the Patent Office is not stepping up to do something is particularly sad given that some, including one of the biggest actors — LegalZoom — openly advertises that they will prepare legal documents, review them and then file them with the appropriate agencies for the customer. Sure sounds like the practice of law to me, and flaunting the Rule in a flagrant manner.
But surely LegalZoom can’t be saying those things, right? Here is the relevant text of a LegalZoom commercial on XM radio from August 19, 2010, with emphasis added:
With LegalZoom it is easy to file copyrights, trademarks and even provisional patent applications. You’ll save a bundle of money and hours of tedious work. Just go online and answer a simple questionnaire and LegalZoom will file the required legal documents.
A LegalZoom page that explains the provisional patent application process says: “We carefully review your answers for consistency.” Another LegalZoom page says: “We create your Provisional Application for Patent and file it electronically with the U.S. Patent Office.” With respect to trademark applications the LegalZoom website says: “We generate your trademark application. We electronically file your application with your approval.” So they will carefully review what information you give them, prepare a provisional patent application of trademark application and then file it on your behalf. How is that not the practice of law? Incidentally, the aforementioned links are screenshots because in the past when I have written about LegalZoom they change their website, at least for a time. All screenshots were taken today, September 15, 2010.
It is disheartening to watch the Office of Enrollment and Discipline sit by and seemingly do nothing to police the industry and eradicate what in my opinion seems to be the unauthorized practice of law. I think it is absurd to argue that they do not have the authority to act, but assuming for a moment that the USPTO is correct and they do not have the authority to act, isn’t it far past the time that such authority should be obtained, or at least sought? At the very least the USPTO could coordinate with the Federal Trade Commission or with the Congress to open up an investigation into what appears to be the unauthorized practice of law.
Notwithstanding, I thought it might be interesting to take a look at what the Office of Enrollment & Discipline has been up to since the start of 2010. To be perfectly honest, I was quite surprised by what I found. Not only is there not a single case involving Rule 11.5, but the overwhelming majority are related to reciprocal proceedings where discipline was already taken by a State and the USPTO is taking appropriate matching action with respect to the practitioner. In fact, out of the 37 disciplinary proceedings this year 24 have been reciprocal proceedings, where the USPTO seems to hand out justice largely or solely based on justice being handed out by some State Bar authority.
The take home lessons from reviewing OED proceedings so far this year are these:
- Don’t get in trouble with your State Bar;
- Definitely have a separate client trust account if you collect a retainer. Commingling funds is a sure way to get in trouble.
- Don’t bounce checks to the USPTO, but if you do quickly make good on the payment. It seems that bouncing checks is a red flag and leads OED to make inquiries, which lead in a few cases to the OED discovering commingling of funds.
- Keep your clients in the loop and follow their instructions. If you don’t it seems you are likely to get suspended, but have it stayed, which is curious.
- Don’t let cases go abandoned through your own actions, and if they do rectify the problem.
- Keep a clean record. If you make a mistake that would otherwise get you in trouble but have a clean record, believable explanation and take remedial measures on your own you might be able to get away with a public reprimand.
After reviewing these cases I must admit that I am left scratching my head with respect to several matters; wondering whether the punishments when compared to one another are appropriate. For example, how is it possible that someone who didn’t communicate with clients, is a repeat offender and filed applications outside the United States after nonpublication requests were filed and thereby resulted in US abandonments receives a 60 month suspension that is stayed (see Kroll, Michael I.),while at the same time someone who lied to her employer about her state bar status was suspended for 3 months. (see Ngo, Jasmyne B.) I am not condoning misrepresenting things to your employer, particularly when swearing into the Bar is concerned, but it would seem to me that the greater disciplinary violation is the former, not the later, but the penalty suggests otherwise. I also don’t understand how a patent examiner who was representing clients while a patent examiner escaped exclusion from practice (i.e., disbarment); he was also found to be engaged in unauthorized practice of law. (see Seto, Jeffrey K.). What could be worse than a patent examiner representing clients and also violating State UPL laws?
In any event, here is a summary of OED disciplinary proceedings so far in calendar year 2010.
- Smith, Stephen L. (January 8, 2010) – Reciprocal proceeding relating to State of Nebraska discipline. OUTCOME: Excluded from practice.
- Lever, Steven J. (January 22, 2010) – Reciprocal proceeding relating to State of New York discipline. OUTCOME: Suspended for 3 years.
- Soliz, Chad C. (January 22, 2010) – Reciprocal proceeding relating to State of Colorado discipline. OUTCOME: Suspended for 6 months.
- Sefrna, Ronald B. (January 22, 2010) – Reciprocal proceeding relating to State of Texas discipline. OUTCOME: Excluded from practice.
- Jung, Hume J. (February 4, 2010) – Reciprocal proceeding relating to State of California discipline. OUTCOME: Suspended for 1 year.
- Paulding, Theodore R. (February 4, 2010) – Bounced checks to USPTO. Did not maintain a client trust account, but also only billed after work was completed. OUTCOME: Public reprimand.
- Jensen, Erik B. (February 18, 2010) – Trademark practitioner assigned work to non-licensed attorney and did not supervise; allowed non-attorney to sign papers. OUTCOME: Public reprimand.
- Boegemann, Les A. (February 18, 2010) – Reciprocal proceeding relating to State of Arizona discipline. OUTCOME: Public reprimand.
- Prendergast, William F. (February 18, 2010) – Reciprocal proceeding relating to State of Illinois discipline. OUTCOME: Excluded from practice.
- Hedges, James K. (February 19, 2010) – Reciprocal proceeding relating to State of California discipline. OUTCOME: Suspended for 60 days.
- Silverman, Samuel B. (February 19, 2010) – Reciprocal proceeding relating to State of Texas discipline. OUTCOME: Public reprimand.
- Gibney, Lawrence J. (March 4, 2010) – Worked with an invention promotion firm and accepted referrals. Found to have accepted payment for legal services from invention promotion firm without first receiving consent of the client. Found to have taken action on behalf of client without client’s knowledge or being informed of such actions, and commingling client funds with law firm operating funds. OUTCOME: Suspended for 6 months (STAYED) and 24 months probation.
- Rowe, Jasper C. (March 8, 2010) – Reciprocal proceeding relating to State of Texas discipline. OUTCOME: Excluded from practice.
- Gonzales, John F. (March 31, 2010) – Reciprocal proceeding relating to State of Virginia discipline. OUTCOME: Suspended for 6 months.
- Ngo, Jasmyne B. (April 9, 2010) – Knowingly mislead employer into believing she would be sworn into State of Illinois Bar on a date certain when she knew that not to be the case. OUTCOME: Suspended for 3 months.
- Kroll, Michael I. (May 25, 2010) – Failed to communicate with clients and filed nonpublication requests and then subsequently filed in foreign jurisdictions without notifying the USPTO, thus the applications went abandoned in the US. OUTCOME: Suspended for 60 months (STAYED) and 60 months probation.
- Peacock, Gregg A. (May 25, 2010) – Prepared two applications but never filed them. Client requested additional applications be filed, which were never filed. OUTCOME: Suspended for 24 months.
- Martin, Timothy J. ( June 3, 2010) – Reciprocal proceeding relating to State of Colorado discipline. OUTCOME: Excluded from practice.
- Watson, Paul Granville IV (June 3, 2010) – Reciprocal proceeding relating to State of Virginia discipline. OUTCOME: Public reprimand.
- Lindon, James Lee (June 3, 2010) – Reciprocal proceeding relating to State of Michigan discipline. OUTCOME: Public reprimand.
- Santarlas, Brien P. (June 3, 2010) – Plead guilty to federal criminal complaint charging securities fraud and conspiracy to commit securities fraud. OUTCOME: Voluntarily resigned, excluded from practice.
- Mitrano, Peter Paul (June 10, 2010) – Reciprocal proceeding relating to District of Columbia discipline. OUTCOME: Excluded from practice.
- Manghera, Peter J. (June 10, 2010) – Engaged in conduct involving dishonesty, fraud, deceit or misrepresentation to clients by billing for work not performed and knowingly misleading clients by telling them applications had been filed when he knew that was untrue. OUTCOME: Suspended for 24 months.
- Wechsler, Lawrence Ira (June 10, 2010) – Reciprocal proceeding relating to State of New York discipline. OUTCOME: Public reprimand.
- Warren, William Z. (June 11, 2010) – Reciprocal proceeding relating to State of Pennsylvania discipline. OUTCOME: Suspended for 5 years.
- Siddiqui, Uzair M. (June 14, 2010) – Reciprocal proceeding relating to State of Virginia discipline. OUTCOME: Excluded from practice.
- Storwick, Robert M. (June 17, 2010) – Reciprocal proceeding relating to State of Washington. OUTCOME: Excluded from practice.
- Black, Edward P. (June 17, 2010) – Reciprocal proceeding relating to State of Texas discipline. OUTCOME: Suspended for 36 months.
- Robinson, James T. (July 1, 2010) – This is an initial decision. Robinson did not respond to the Complaint filed, which among other things charged him with bouncing a series of checks to the USPTO and never making good on the payments owed, resulting in patent applications going abandoned. OUTCOME: Excluded from practice.
- Weseman, James C. (July 6, 2010) – This is an initial decision. Weseman did not respond to the Complaint filed, which charged him with bouncing three checks to the USPTO and failing to make good on the fees owed after being informed by the USPTO of the returned checks. OUTCOME: Suspended for 120 days.
- Webb, Glenn L. (July 7, 2010) – Respondent did not maintain a separate client trust fund for holding unearned fees; bounced five checks, but upon being informed did make sufficient and appropriate payment to the USPTO. OUTCOME: Suspended for 24 months (STAYED) and probation for 24 months.
- Brown, Glenn C. (July 8, 2010) – Reciprocal proceeding relating to State of Oregon discipline. OUTCOME: Excluded from practice.
- Hamilton, Zachary ( July 21, 2010) – Respondent did not keep formal accounting records for his client trust account; paid PTO fees out of client trust account; checks bounced, but fees were paid. OUTCOME: Suspended 24 months (STAYED) and 24 months probation.
- Snyder, Jackson W. II (July 21, 2010) – Reciprocal proceeding relating to State of Florida and State of Virginia discipline. OUTCOME: Suspended for 36 months.
- Seto, Jeffrey K. (August 2, 2010) – Respondent was a patent examiner, left the Patent Office and was rehired back to the Patent Office. Patent examiners are not allowed to represent clients, but he continued to represent clients on the side, preparing for their signature required documents. He was also engaging in the unauthorized practice of law in Virginia because he was not an attorney. OUTCOME: Suspended for 60 months.
- Horowitz, Steven (August 2, 2010) – Respondent did not keep accurate records of disbursements from client trust account, and transferred some funds prior to being earned. He bounced several checks to the USPTO, but made sufficient payment. No harm to clients was found. Family medical problems were blamed for insufficient attention to bookkeeping; OED recognized he has been registered for 25 years without any history of disciplinary action and he has since hired a part-time bookkeeper. OUTCOME: Public reprimand.
- Galasso, Raymond M. (August 20, 2010) – Habitual and repeated disciplinary violations were charged, leading the Respondent to voluntarily resign. OUTCOME: Voluntary resignation; excluded from practice.
So it seems OED is keeping busy, and bouncing checks and commingling of funds are certainly not to be condoned. I personally feel that OED is missing the forest for the trees. If the point is to police the industry to protect clients then offenses where clients are injured should be treated more severely, including those cases where clients are injured as a result of the unauthorized practice of law. There are reasons States police the practice of law, and that is because people get hurt when they are represented by non-attorneys. The Patent and Trademark Office is in the best position to stop a lot of this unauthorized practice of law and I sure hope they start doing that.
About the Author
Gene Quinn is a US Patent Attorney, law professor and the founder of IPWatchdog.com. He is also a principal lecturer in the top patent bar review course in the nation, which helps aspiring patent attorneys and patent agents prepare themselves to pass the patent bar exam. Gene started the widely popular intellectual property website IPWatchdog.com in 1999, and since that time the site has had many millions of unique visitors. Gene has been quoted in the Wall Street Journal, the New York Times, the LA Times, USA Today, CNN Money, NPR and various other newspapers and magazines worldwide. He represents individuals, small businesses and start-up corporations. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.