USPTO response to FOIA confirms there are no Rules of Judicial Conduct for PTAB Judges

By Gene Quinn
May 31, 2017

On Thursday, May 11, 2017, I submitted a Freedom of Information Act (FOIA) request to the United States Patent and Trademark Office (USPTO). My FOIA request sought a copy of any and all rules of judicial conduct, ethical policies and/or codes of professional or judicial conduct that apply to Administrative Patent Judges (APJs) of the Patent Trial and Appeal Board (PTAB).

Earlier today I received a response from the USPTO informing me that the information I requested is indexed and publicly available at the USPTO website link:

https://www.uspto.gov/patents-application-process/patent-trial-and-appeal-board/ethics-guidance

The website link provided by the USPTO contains no rules of judicial conduct or codes of judicial conduct, which means that the USPTO has indirectly confirmed that there are no rules or codes of judicial conduct that apply to Administrative Patent Judges (APJs) of the Patent Trial and Appeal Board (PTAB). All that appears at the webpage provided, which the USPTO characterized as containing the information responsive to my FOIA inquiry, are general ethics rules that apply to all employees of the USPTO. None of the documents specifically mention the Board, the PTAB, judges, Administrative Patent Judges, or APJs.

To call this revelation by the USPTO shocking is an understatement. 37 CFR 11.803 clearly contemplates the existence of rules of judicial conduct applicable to APJs, which obviously do not exist. According to §11.803, a practitioner commits an breach of the rules of ethics applicable to the practitioner if the practitioner becomes aware that an APJ has violated the “applicable rules of judicial conduct” and does not report such violation to the appropriate authority. How a practitioner could inform the USPTO of a breach of applicable rules of judicial conduct violated by an APJ when no such rules exist is a mystery.

The lack of any judicial rules of conduct or ethical rules specifically tailored for judges on the PTAB is highly informative, and explains why it was possible for at least two PTAB judges to decide post grant challenges filed by former patent defense clients.

Over the last month we have written several times (here, here, here and here) about a Patent Trial and Appeal Board (PTAB) situation that, in my opinion, symbolizes everything that is wrong with a tribunal that is out of touch with reality. Prior to being hired in March 2013 by the U.S. Department of Commerce to become an Administrative Patent Judge (APJ) on the PTAB, Matthew R. Clements represented Apple as patent infringement defense counsel while working for Ropes & Gray. Since September 2014, APJ Clements has been assigned to numerous petitions, mostly CBMs but some IPRs, filed by Apple, his former client. Clements’ record in deciding cases, perhaps predictably, is tilted overwhelmingly in Apple’s favor. Similarly, APJ Stacy Beth Margolies has served as an APJ on at least two IPRs petitioned by Apple, both of which challenge patents owned by Voip-Pal.com, a developer of Internet telecommunications technologies. According to information from PACER, Margolies represented Apple as counsel in Fast Memory Erase LLC v. Spansion Inc. et. al. (ND Tex 3:08-cv-00977)(see screenshot).

It is practically unbelievable that the USPTO allows for a PTAB judge to decide petitions filed by their former patent infringement defense clients after a 1-year recusal period. See Disqualification and Recusal.  These rules absolutely must be changed. They are wholly and completely inconsistent with any sensible notion of what it means to have a conflict of interest.

PTAB vs. Practitioner Ethics

The rule adopted by the USPTO to deal with ethical obligations to former clients is found at 37 C.F.R. 11.109, which reads in part:

“(a) A practitioner who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing.”

The comments to ABA Model Rule 1.9 are instructive, because in 2013 the USPTO adopted the ABA Model Rules to govern patent practitioners. The comments to Rule 1.9 read:

“Matters are ‘substantially related’ for purposes of this Rule if they involve the same transaction or legal dispute or if there otherwise is a substantial risk that confidential factual information as would normally have been obtained in the prior representation would materially advance the client’s position in the subsequent matter.”

It also says: “knowledge of specific facts gained in a prior representation that are relevant to the matter in question ordinarily will preclude such a representation.”

Clearly, in defending Apple for patent infringement the attorneys would learn all kinds of confidential and sensitive information about Apple, their business and legal philosophies, how they treat patent owners, litigation strategies, whether they intend to settle or take licenses ever, whether they will engage in a war of attrition, etc. etc. There is no way that any attorney could represent a party adverse to Apple in a patent infringement matter after having represented Apple. First, Apple would never allow it. Second, there is no way you could competently represent the new client without using knowledge of confidential and sensitive information learned, period.

Had either Clements or Margolies not been a member of the PTAB and one of the patent owners in the cases they were deciding had come to seek representation in a PTAB proceeding against Apple, the conflict of interest question would have been a much easier question. Having represented Apple previously as defense counsel the duty to a former client under 37 CFR 11.109 would prevent them from representing the patent owner adverse to Apple and now charging Apple with patent infringement, which is a prerequisite to the filing of a CBM petition. Had representation been accepted on behalf of a patent owner in proceedings brought by Apple there would be a direct and irreconcilable violation of the ethics rules applicable to patent attorneys and patent agents.

Importantly, there is no time limit on a duty to a former client, at least if you are a patent practitioner. So the 1-year recusal period is wholly without precedent and inappropriate for PTAB judges.

Thus, it seems clear that the ethical bar the USPTO sets for its own Administrative Patent Judges is lower than the ethical bar set for patent practitioners, which is pathetically sad. In what universe does it make any sense to have a lower ethical bar for judges deciding cases than for patent practitioners?

PTAB vs. Ethics for Federal Judges

Canon 2A of the Code of Conduct for Article III Judges, under the title “Respect for Law,” says: “A judge should respect and comply with the law and should act at all times in a manner that promotes confidence in the integrity and impartiality of the judiciary.” The commentary that goes along with Canon 2A begins by tackling the issue of an appearance of impropriety. The comment, in relevant part, reads:

An appearance of impropriety occurs when reasonable minds, with knowledge of all the relevant circumstances disclosed by a reasonable inquiry, would conclude that the judge’s honesty, integrity, impartiality, temperament, or fitness to serve as a judge is impaired. Public confidence in the judiciary is eroded by irresponsible or improper conduct by judges. A judge must avoid all impropriety and appearance of impropriety. This prohibition applies to both professional and personal conduct. A judge must expect to be the subject of constant public scrutiny and accept freely and willingly restrictions that might be viewed as burdensome by the ordinary citizen.

Canon 3C of the Code of Conduct for Article III Judges, under the title “Disqualification,” reads in relevant part: “A judge shall disqualify himself or herself in a proceeding in which the judge’s impartiality might reasonably be questioned…”

In the situation where there is not a per se disqualification under Canon 3C, such as for personal bias, the judge served as a lawyer in the same controversy, or the judge or a family member has a financial interest, the judge may disclose the reason disqualification would seem appropriate under Canon 3C and leave it up to the parties to decide. In this situation, however, the rules are very specific.

The judge may participate in the proceeding if, after that disclosure, the parties and their lawyers have an opportunity to confer outside the presence of the judge, all agree in writing or on the record that the judge should not be disqualified, and the judge is then willing to participate. The agreement should be incorporated in the record of the proceeding.

Of course, a federal judge could (and perhaps should) conclude that adjudicating a matter involving a former client creates a personal bias, which creates a per se disqualification. If that is not the case, then the parties would have to be notified and given the opportunity to discuss outside the presence of the judge. If and only if all parties agree in writing can the judge continue on the case.

Thus, the rules of conduct applicable to a Article III Federal Judge are dramatically more strict than the measly 1-year recusal period the USPTO places upon PTAB judges.

Conclusion

PTAB judge are appointed by the Secretary of Commerce, which makes them far more than mere employees of the USPTO. They should be held to a higher standard than a generic all employees ethics policy. It is also unacceptable and completely nonsensical for APJs to have less stringent conflict standards than for the attorneys appearing before them.

President Trump campaigned on draining the swamp that is Washington, DC. Many on the left and the right have tried to do so in the past, so many are understandably very skeptical. If President Trump is at all serious about draining the swamp and preventing insiders from accessing influence, how can the Department of Commerce justify allowing hand-picked PTAB judges to hear and decide cases dealing with the interests of a former defense client?

The post grant challenges ushered in by the America Invents Act (AIA) were intended to be an alternative to district court litigation. As we have learned over the last 4+ years, many of the procedural protections Americans are used to in federal district court do not apply at the PTAB, which can for example simply decide not to consider evidence timely submitted. But a lack of a code of judicial ethics applicable to PTAB judges is a bridge too far and simply cannot be the type of district court alternative that Congress meant to create, is it?

 

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and founder of IPWatchdog.com. Gene is also a principal lecturer in the PLI Patent Bar Review Course and an attorney with Widerman Malek. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 11 Comments comments.

  1. Name withheld to protect the innocent May 31, 2017 6:18 pm

    To call this revelation by the USPTO shocking is an understatement
    To one unfamiliar with the USPTO, this should be shocking.

    However, for those of us that have dealt with the government behemoth named the United States Patent & Trademark Office (USPTO) and, the Board of Patent Trials and Appeal (PTAB or “Board”) in particular, this is not surprising. Playing fast and loose with the rules/law appears to be part of the culture at the USPTO. The Board has been characterized as a group of attorneys that finds way to invalidate (hold unpatentable) patent claims. Many of them have a cavalier approach to the law and wanton misrepresentation of case law is the norm.

    The Board’s approach to their “precedential” decisions is very illustrative. The USPTO (and hence the Board) is not permitted to make substantive law. However, the Board has promulgated many precedential decisions that involve more than Board procedure (i.e., what should be the proper scope of the Board’s precedential decision). Recent decisions such as this include Ex parte Schulhauser (claim construction) and Ex parte Mewherter (statutory subject matter). These decisions are substantive law making, which is out-of-bounds for the USPTO.

    The antipathy that the Board has towards Patent Owners is well-documented. For example, the Board’s implementation of the AIA’s inter-parte reexaminations is heavily slanted against the Patent Owners. Almost all of this happened during the reign of Michelle Lee, who worked for Google for nearly 10 years and was head of the Patents and Patent Strategy. As is extremely well known in the patent circles, Google would like nothing more than to eviscerate the patent system, and Michelle Lee’s actions at the USPTO reflect that strategy.

  2. Bluejay May 31, 2017 6:26 pm

    I hope this fact makes it into the merits brief when Oil States is heard by SCOTUS. This is another reason why SCOTUS needs to put PTAB out of business.

  3. EG June 1, 2017 7:43 am

    “Thus, it seems clear that the ethical bar the USPTO sets for its own Administrative Patent Judges is lower than the ethical bar set for judges of the PTAB, which is pathetically sad.”

    Hey Gene,

    It is not only sad that APJs that sit on PTAB have no corresponding ethical canons as do Article III judges, but how, pray tell, does that comply with “due process” or the APA?

  4. Bemused June 1, 2017 8:38 am

    You’d like to think that APJs like Clements and Margolies – as attorneys with at least some understanding of ethical canons and as purported officers of the court – would have had the good graces and common sense (not to mention some sense of integrity) – to have recused themselves when the cases were assigned to them. WTF is wrong with these people?

    To paraphrase a long-ago French economist and philosopher: “When law and morality contradict each other, one has the alternative of either losing his moral sense or losing his respect for the law.”

    ‘Enuff said.

  5. Anon June 1, 2017 10:03 am

    A question that comes to mind as I read the (purposefully) all-inclusive nature of the ethics guidelines presented is whether or not any other executive branch administrative agency with “judicial” powers ALSO be constrained to only this set of ethical rules, or if any of these other other executive federal employees have additional ethical rules more in line with Article III judges.

    The problem may not be a “patent” problem…

  6. Todd June 1, 2017 10:13 am

    Can you post the judicial code ethics and how does this compare with the USPTO’s all employee standard. Let’s see a side by side table and particularly relating to conflicts of interest code. It appears the USPTO has a pretty stringent code for all employees relating to conflicts of interest.

  7. Gene Quinn June 1, 2017 10:59 am

    Todd-

    The Code of Conduct for Article III Judges is discussed here and in other articles. It is available at:

    http://www.uscourts.gov/judges-judgeships/code-conduct-united-states-judges

    There cannot be any side by side comparison as you suggest because no such code exists for PTAB judges.

    You are entitled to your opinion that the USPTO holds employees to a high standard, but the standard they hold all employees to pales in comparison to what is expected of practitioners and judges. That is simply not open to discussion.

    For the code of conduct applicable to practitioners see:

    https://www.gpo.gov/fdsys/pkg/FR-2013-04-03/pdf/2013-07382.pdf

  8. Mark June 1, 2017 2:49 pm

    As a shaereholder of Voip-Pal, I can not thank you enough for calling attention to these appauling circumstances. One can only hope that people in power, with integrity, will put an end to the blatent smothering of inventors rights!!!!

  9. Puzzled June 2, 2017 11:27 am

    “Thus, it seems clear that the ethical bar the USPTO sets for its own Administrative Patent Judges is lower than the ethical bar set for judges of the PTAB, which is pathetically sad.”

    Please explain. Are not the Administrative Patent Judges the judges of the PTAB?

  10. Gene Quinn June 2, 2017 2:04 pm

    Puzzled-

    That was supposed to say that the USPTO has a lower ethical bar for judges than they do for patent practitioners.

    -Gene

  11. Night Writer June 4, 2017 12:35 pm

    @1 very well stated. And one wonders as an attorney how Michelle Lee can represent the patent system which is her job after spending ten years working to burn it down in anyway that was legal. I think it is a clear conflict of interest for Lee to lead the USPTO after 10 years of working to weaken it.

    Additionally, a little bird told me that patent judges are discouraged from deciding cases where they hold stock in the companies of one of the parties. So, there must be something in writing about this. Can your FOI go to emails by the PTAB?

    I interviewed for a patent judge job. I got the distinct impression that I was not wanted because I was pro-patent. It felt like I was invited to talk about reining in the patent system, but instead I spoke of respecting the rule of law. I was booted out by CJ Smith.