UPDATE: See Sadly, Invention Promotion Alive & Well
The United States Patent and Trademark Office has announced that it is adopting new rules relating to a variety of issues that impact who can engage in representation of clients before the PTO, both on the patent and the trademark side of the Office. These new rules, which will go into effect on September 15, 2008, will end the reign of terror brought to us by unscrupulous invention companies and other invention scams. Three cheers for the Patent Office!
The rule that strikes at the heart of the invention promotion companies is new Rule 11.5(b), which states:
Practice before the Office includes, but is not limited to, law-related service that comprehends any matter connected with the presentation to the Office or any of its officers or employees relating to a client’s rights, privileges, duties, or responsibilities under the laws or regulations administered by the Office for the grant of a patent or registration of a trademark, or for enrollment or disciplinary matters. Such presentations include preparing necessary documents in contemplation of filing the documents with the Office, corresponding and communicating with the Office, and representing a client through documents or at interviews, hearings, and meetings, as well as communicating with and advising a client concerning matters pending or contemplated to be presented before the Office. Nothing in this section proscribes a practitioner from employing or retaining non-practitioner assistants under the supervision of the practitioner to assist the practitioner in matters pending or contemplated to be presented before the Office.
If there is any doubt that this rule will prevent invention promotion companies from operating, the PTO closed all doubt with its published response to a comment on the proposed rules. Comment 9 essentially said that the new Rule 11.5 would make it impossible for invention promoters to help inventors obtain patents. The PTO response was, for all intents and purposes, a resounding GOOD! The text of Comment 9 and the PTO Response is below:
Comment 9: One comment urged that § 11.5 places unnecessary and improper restrictions on practitioners who may work with non-practitioner invention developers who communicate or consult with clients who may want to file documents with the Office. The comment said it is unreasonable and improper for the Office to interfere with the relationship between invention promoters and practitioners by restricting practitioners from working with non-practitioners, including invention promoters who may consult or communicate with clients regarding their inventions, so long as legal advice and the filing of patent applications, attending hearings, etc. remain the responsibility of the practitioner. The comment suggested changes to § 11.5 to eliminate the following ‘‘overly broad’’ language: law-related services ‘‘that comprehend any matter connected with the presentation to the Office,’’ the preparation of necessary documents ‘‘in contemplation of filing the documents’’ with the Office, and ‘‘communicating with * * * a client concerning matters pending or contemplated to be presented before the Office’’ in § 11.5(b); ‘‘consulting with * * * a client in contemplation of filing a patent application or other document with the office’’ in § 11.5(b)(1). The comment urged that a person who may have prospective business before the Office may want to utilize both lay and legal service providers in connection with his invention, including non-practitioners who merely assemble information to provide non-legal services at a much lower cost than practitioners would charge.
Response: The Office disagrees that § 11.5 places unnecessary and improper restrictions on practitioners who may work with non-practitioners who communicate or consult with clients. Nothing in the rule prevents a person having prospective business before the Office from utilizing both lay and legal service providers in connection with that person’s invention. Non-practitioners who assemble information to provide only non-legal services at a cost may continue to provide non-legal services. However, non-practitioners who, for example, provide law-related services ‘‘that comprehend any matter connected with the presentation to the Office’’ or prepare necessary documents, such as patent applications, ‘‘in contemplation of filing the documents’’ with the Office must be employed or retained by the practitioner and under the practitioner’s supervision. The suggestion to change the language of § 11.5 to enable non-practitioners to consult or communicate with clients regarding their inventions, and enable clients to obtain services at lower cost than practitioners can provide has not been adopted. Contrary to the comment, assembly of information is not always a non-legal service; for example, providing a list of patent references found in a search of the prior art is a non-legal service whereas transmitting information to the practitioner to use to describe the invention in a patent application is a legal service. The value of competent legal service and advice, including communications, consultations, and assembly of information for inventors can be significantly more valuable than its cost. Its value may be more significant for unsophisticated inventors who need expert evaluation of the merits or real prospects of legal protection for their invention. The Office ‘‘frequently finds itself challenged by so-called ‘invention promoters’ who exploit unsophisticated inventors, heap every invention with praise regardless of the merits or the real prospects of legal protection, and entice inventors into engagement agreements filled with hollow guarantees of patent protection and promises of royalty-bearing licenses that seldom yield anything of any significant value.’’ Bender v. Dudas, 490 F.3d 1361, 1363 (Fed Cir. 2007). A practitioner working with an unsupervised non-practitioner facilitates such practices. For example, in Bender, the Court found ‘‘[a]t no point did Gilden [a practitioner] consult with the inventors regarding the filing of a design patent application or the embellished drawings.’’ Id. at 1364. At a minimum, it is necessary that the practitioner representing the client not only consult with the client, but also that the consultation ‘‘otherwise advise that inventor on how best to proceed in his or her particular case.’’ Id. at 1365. Non-practitioners are not entitled to provide legal advice or otherwise practice law. To the extent practice of law includes a law-related service that comprehends any matter connected with the presentation to the Office, the preparation of necessary documents in contemplation of filing the documents with the Office, and communicating with * * * a client concerning matters pending or contemplated to be presented before the Office as in § 11.5(b), a practitioner authorized by relevant law must provide the legal services. For example, consultation with a client in contemplation of filing a patent application or other document with the Office as in § 11.5(b)(1) requires a registered practitioner to provide the services. A practitioner may not circumvent the Disciplinary Rules through the actions of another. See 37 CFR 10.23(b)(2). For example, a non-practitioner who is neither employed nor retained by the practitioner, or who is not under the supervision of the practitioner, may not assist the practitioner in matters pending or contemplated to be presented to the Office.
Unlike the claims and continuations rules, it seems completely clear that these rules will go into effect and are indeed well within the authority of the PTO to implement. In short, do not expect these rules to be challenged and do not expect any court to order the PTO to cease implementation. That just is not going to happen.
Many readers of IPWatchdog.com know that while I am one of the more vocal critics of invention promotion companies, I have had a long standing relationship with LegalZoom.com. LegalZoom.com was founded by Robert Shapiro (of OJ Simpson fame) and provides self help for inventors and for those who are seeking to obtain trademarks. Obviously, these new rules impact the way that LegalZoom.com does business. While LegalZoom.com is certainly not an invention promotion company or an invention scam, beginning September 15, 2008, the only way a non-practitioner, including LegalZoom.com, can provide any services relating to patent and trademark applications is through an attorney admitted to practice. While this was probably not the intent of those who drafted the rule, in an effort to once and for all end the $10 billion per year inventor scam perpetrated by invention scam companies, others will be caught up in this rule. I have spoken with LegalZoom.com and I am hopeful that a self-help option can be created that will stand scrutiny under new Rule 11.5(b). I do not believe the Patent Office intended to leave independent inventors in a lurch, so efforts are under way to sort things out in a way that makes sense and is in total and complete compliance with new Rule 11.5(b).