Ethics & OED: Practitioner Discipline at PTO – April 2013
|Written by Gene Quinn
Patent Attorney & Founder of IPWatchdog, Inc.
Principal Lecturer, PLI Patent Bar Review Course Posted: December 5, 2013 @ 8:00 am
My 2013 ethics series continues, today looking at several final orders in disciplinary proceedings resolved in April 2013.
These, together with the other orders from the Office of Enrollment and Discipline from our 2013 ethics series, will be at the core of my ethics presentation on February 4, 2014, at the 8th Annual Patent Law Institute in New York City. The event will be live and webcast, and then reprised on March 18, 2013, in San Francisco.
For more articles in this series please see Ethics & OED.
In the Matter of Leonard Tachner (April 12, 2013)
This case relates to Leonard Tachner of Irvine, California. Tachner was suspended from practice before the Office in patent, trademark, and non-patent matters for five years for severely neglecting his patent practice to the detriment of his clients, but with a provision that would allow him to apply for reinstatement after serving four years of the suspension. This action is the result of a settlement agreement between Tachner and the OED Director pursuant to the provisions of35 U.S.C. §§ 2(b)(2)(D) and 32 and 37 C.F.R. §§ 11.19, 11.26, and 11.59.
Mr. Tachner, a solo practitioner, was alleged to have engaged in a pattern and practice of neglecting the management of his law office, a problem that persisted for years. OED asserted that Tachner neglected patent matters by: (1) allowing patents to expire for not timely paying maintenance fees; (2) failing to inform clients of important Office correspondence; (3) giving misleading information to clients about the status of their patents; and (4) failing to engage in reasonable inquiry under the circumstances prior to signing and filing documents with the Office.
One of the things specifically alleged as demonstrating lack of control over his practice was his antiquated docketing system. Until 2005 Tachner used a “white board” system that was updated monthly and only included three months of data. It only had 3 columns, which were the client docket number, the type of action and the due date. If action were taken a handwritten line entry was placed after the due date. If action was not taken by the due date it would remain not the white board for a few months, but then ultimately removed without any action ever being taken. In 2005, this system was updated to a Word document that did not use tables, but instead included single line strings of data. There was no back-up docketing system, nor was any inventory of files ever done to ensure the integrity of the Word document docket. As you might imagine, this type of “docketing system” created problems.
There was no mention of any intentional malfeasance, just tremendous neglect. The Office said that Tachner neglect matters entrusted to him by, among other things, inadequately staffing his firm for the amount of patent work he had, he relied on unsound docketing practices, did not forward important Office correspondence to clients, and he did not adequately train and monitor his staff.
Patent practitioners have an obligation to train and supervise their employees and are ultimately the ones responsible for the acts and omissions of their employees. Thus, Tachner was properly on the hook for any neglectful conduct by his employees. Further, practitioners must maintain adequate docketing and calendaring systems and ensure compliance with Office deadlines. As a result of these actions Tachner stipulated that he violated the following ethics rules:
- 37 CFR § 10.77(c) (proscribing neglect of entrusted legal matters) by allowing patents to expire for not timely paying maintenance fees;
- 37 CFR § 10.77(c) by not adequately supervising his law firm employees to whom he had delegated certain duties and responsibilities concerning patent matters;
- 37 CFR §§ 10.23(a) and (b) via 37 CFR § 10.23(c)(8) (proscribing failing to inform a client of important Office correspondence) by not informing clients of important Office correspondence; and
- 37 CFR § 10.23(b)(6) (proscribing engaging in any other conduct that adversely· reflects on a practitioner’s fitness to practice before the Office).
It is worth nothing that Tachner was served with this hefty suspension even though he had no prior disciplinary history during his 40 year career as a registered patent practitioner. Generally a long career without any disciplinary record is a strong mitigating factor, but seemingly not when systemic neglect has lead to clients rights being compromised.
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In the Matter of S. Michael Bender (April 25, 2013)
S. Michael Bender was suspended from the practice of patent law by the United States Patent and Trademark Office via order dated September 30, 2003. See Moatz v. Bender Final Decision. Bender challenged the USPTO action, first in the United States District Court for the District of Columbia and then subsequently at the United States Court of Appeals for the Federal Circuit. The District Court granted a summary judgment upholding disciplinary action taken by the Director of the USPTO. On appeal to the Federal Circuit the Federal Circuit, with Judge Linn writing and Judges Rader and Plager joining, determined that the PTO findings were supported by substantial evidence and that the disciplinary action was not arbitrary, capricious or an abuse of discretion. The Federal Circuit affirmed, issuing its decision on June 21, 2007. See Bender v. Dudas.
Although immaterial to this latest action, Bender’s original transgressions of the rules related to his involvement with the American Inventors Corporation (AIC), an invention promoter. The Federal Circuit decision explained how AIC operated:
AIC would solicit inventors to present their ideas, tell each inventor that their idea was great, and then perform a patent search. After the search, AIC would conduct a sales presentation that provided the inventor with a positive evaluation of the invention and offered AIC’s services in procuring a patent and promoting the invention to manufacturers and other interested parties. The inventor then signed a standard form contract in which he or she paid a flat fee or a combination of a flat fee and a percent of royalty income in exchange for AIC’s promise to hire a patent attorney on the inventor’s behalf, pay all legal fees associated with prosecuting a patent application, and conduct various marketing activities to promote the invention. AIC also guaranteed that it would refund 100% of the inventor’s flat fee if a patent was not procured. The contract did not specify what type of patent would be obtained or in any way explain the differences in protection between a design patent and a utility patent. Indeed, according to past employees and clients, AIC’s general policy and practice was to conceal those differences from the inventors.
In 1993, AIC contracted with Bender for the prosecution of over 1,000 design patent applications, taking over for the previous attorney involved. The Federal Circuit explained that Bender did not provide any advice or make any inquiries related to the invention at issue, nor did he make any independent determination about what type of patent would be best for the invention in question. He merely filed design patents on all inventions. Many of the inventors either did not understand the difference between a design and utility patent or had wanted a utility patent at the time the application was filed.
So what has Mr. Bender back in the crosshairs of the USPTO after being excluded from practice? He continued to engage in representation even after he was excluded.
This dispute arises through a disagreement with respect to when Bender’s exclusion took affect. The Office took the position that the exclusion took effect on November 3, 2007. Bender took the position that his exclusion became effective on May 28, 2008. No explanation as to how or why each of these dates was calculated is offered in the April 25, 2013, OED Final Order, which memorialized the agreement between the parties to resolve the matter.
Upon inquiry by OED sent to Bender he responded that he did comply with the September 2003 order, which the Office found “to comprise a false or misleading statement…” As a result, Bender received an additional one-year suspension based upon violation of 37 C.F.R. §10.23(b)(5) (proscribing engaging in conduct prejudicial to the administration of justice).
At first glance this may seem odd because Bender was excluded from practice so why is it that he is receiving a one-year suspension? If you look at 37 CFR 11.60(b) you see that an excluded practitioner may request reinstatement, but not until five years has passed. The rule says: “An excluded practitioner shall be eligible to apply for reinstatement no earlier than at least five years from the effective date of the exclusion.”
Here Bender had not yet requested reinstatement, but this Final Order now means that Bender could not seek reinstatement prior to six years from his exclusion date. Thus, Bender cannot seek reinstatement until at least November 3, 2013, which has now just passed. So we may not have heard the last of Bender.- - - - - - - - - -
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Posted in: Gene Quinn, IP News, IPWatchdog.com Articles, Office of Enrollment and Discipline, Patents, USPTO
About the Author
Gene Quinn is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.