USPTO Issues Final Rules of Discipline for Patent Practitioners

The United States Patent and Trademark Office (USPTO) announced today that it will publish final rules in the Federal Register on Tuesday, July 31, 2012, that relate to the statute of limitations provisions for disciplinary actions brought by the Office of Enrollment and Discipline (OED) at the USPTO.  For an advance copy see Implementation of Statute of Limitations Provisions for Office Disciplinary Proceedings.

“The final rule implements a key provision of the AIA by specifying the timing for the one-year period included in the statute of limitations for Office disciplinary actions,” said Under Secretary of Commerce for Intellectual Property and Director of the USPTO David Kappos. “The Office promulgated this final rule with the benefit of valuable public input and we thank our stakeholder community for that feedback.”  Reviewing the proposed rules in comparison with the final rules it does seem that the USPTO took legitimate, constructive criticism, which resulted in a final rules package that in my opinion more closely reflects the Congressional mandate in the AIA, while still balancing the desire not to prematurely file a disciplinary action and giving patent practitioners adequate time to respond to inquiries.

Patent Practitioner Statute of Limitations

Prior to the enactment of the America Invents Act on September 16, 2011,disciplinary actions for violations of the USPTO  Code of Professional Responsibility were generally understood to be subject to a five-year statute of limitations pursuant to 28 U.S.C. 2462. See, e.g., Sheinbein v. Dudas, 465 F.3d 493 (Fed. Cir. 2006), which applied the five year statute of limitations of 28 U.S.C. 2462, finding that the statute of limitation started to run with Sheinbein’s disbarment from the State of Maryland, not with the underlying conduct that lead to disbarment.

Thanks to the enactment of the AIA, Section 32 of Title 35, United States Code, has now been amended.  Now a requires disciplinary proceeding may be commenced not later than the earlier of either 10 years after the date on which the misconduct forming the basis for the proceeding occurred, or one year after the date on which the misconduct forming the basis for the proceeding is made known to an officer or employee of the Office, as prescribed in the regulations established under 35 U.S.C. 2(b)(2)(D).  Congress provided the USPTO with five additional years to bring an action, thus ensuring that the Office had additional flexibility to initiate “a [disciplinary] proceeding for the vast bulk of misconduct that is discovered, while also staying within the limits of what attorneys can reasonably be expected to remember,” Congressional Record S1372-1373 (daily ed. March 8, 2011) (statement of Sen. Kyl).

Disciplinary Proceedings

Generally speaking, there are four steps taken by the Office of Enrollment and Discipline (OED) prior to the filing of a disciplinary complaint against a practitioner: (1) Preliminary screening of the allegations made against the practitioner; (2) requesting of information from the practitioner about his or her alleged conduct; (3) conducting a thorough investigation after providing the practitioner an opportunity to respond to the allegations; and (4) submitting the investigated case to the Committee on Discipline for a determination of whether there is probable cause to bring charges against the practitioner.

The question that initially arose was when would the one year time limit start to run?  Under the proposed statute of limitation issued in January 2012, the one-year statute of limitations was set to start to run when the OED Director receives the practitioner’s complete, written response to a request. The Federal Register Notice explained that the Patent Office considered, but rejected, a regulation that would have the one-year limitation commence on the date on which the OED Director initially receives allegations about a practitioner.  This was proposed for three reasons:

  1. Mere allegations of ethical violations may alert the Office that a client is subjectively dissatisfied with a practitioner, they often do not provide sufficient objective evidence that misconduct has occurred.
  2. A regulation that proposes commencing the one-year limitation period on the date the OED Director initially receives allegations about a practitioner’s alleged misconduct would unnecessarily restrict the OED Director’s ability to grant reasonable extensions of time to respond to the OED Director’s initial request for information.
  3. Starting the one-year limitation period from the date the OED Director initially receives an allegation of misconduct might encourage dilatory responses and other delay tactics by practitioners, which would not be in the public interest.

While I understood the concerns of the USPTO, I wrote that it would be better to have “the statute of limitations… commence upon the USPTO learning of misconduct and a tolling… apply for any time the practitioner requests an extension to respond.”  See PTO Proposed Rules for OED Patent Practitioner Discipline. This is what the USPTO final rule elected to do.  In reading the USPTO response to comments contained within the Federal Register Notice it seems as if this point was raised by several people.

In explaining revised Rule 11.34, the USPTO explains:

Specifically, a complaint shall be filed within one year after the date on  which the OED Director receives a grievance forming the basis of the complaint, and no complaint shall be filed more than ten years after the date on which the misconduct forming the  basis for the proceeding occurred. The Office recognizes that this limited one-year period may require the filing of a complaint in circumstances where the matter might be resolved with additional time to conduct further investigation or for the Office and practitioner to discuss an appropriate resolution of the matter. In appropriate cases such as these, the practitioner should be permitted to voluntarily enter into a tolling agreement in order to avoid the quick filing of a complaint and subsequent litigation. Accordingly, subsection (e) is added to clarify that the one year period for filing a complaint may be tolled by a written agreement between the involved  practitioner and the OED Director. The Office agrees that tolling agreements may provide both the Office and the practitioner with additional time to resolve matters without a complaint.

The tolling issue aside, when does the one year period start to run?  Under the final rules it will run with the filing of a grievance, which by definition means a written submission from any source received by OED that presents possible grounds for disciplinary action against a specified practitioner. The USPTO specifically points out that OED makes staff attorneys available for inquiries by both the public and practitioners.  While OED staff attorneys do not provide advisory actions, they can identify rules that could come to bear given a particular situation described to them.  In order to avoid discouraging practitioners from reaching out to OED for guidance, a telephone inquiry or report to OED is not considered a grievance and will not start the one year statute of limitations running.

Furthermore, in order to satisfy the definition of grievance and start the one year statute of limitations running, the submission must identify the practitioner alleged to have engaged in misconduct and present information or evidence sufficient to enable the Office of Enrollment and Discipline to determine whether grounds for discipline possibly exist. Allegations in submissions unsupported by information or evidence may be insufficient to present possible grounds for discipline, which in turn would not start the one year statute of limitations period running.

Obligatory Remark About Congress

Before leaving this topic allow me to pause and take issue with Senator Kyl.  I like Senator Kyl, I think he is truly one of the leading statesmen in the U.S. Senate, and he will be sorely missed when he retires.  Having said that, what was he thinking?  Statute of limitations are there for a reason and not to be tinkered with on a whim.

Does anyone really remember what happened 10 years ago with enough detail to defend a charge of an ethical transgression?  So we are “expected to remember” what happened 10 years ago?  For crying out loud most in Congress seem to forget what they voted on within a matter of minutes!  It strikes me as purely fanciful to pretend that anyone will remember what happened 10 years ago, although I am honored that Congress thinks the mental capacity of patent practitioners is greater than their own mental capacities.

What I am referring to?  Exhibit 1: In Virginia the statute of limitations for criminal actions involving malfeasance in office is only 2 years.  Interesting!?!  Politicians can engage in acts of corruption and there is a 2 year statute of limitations, but attorneys have a 10 year statute of limitation.  Very interesting indeed!

Exhibit 2: Violation of campaign finance disclosure in Virginia has a statute of limitations of 1 year from discovery or a maximum of 3 years after the conduct.  I guess the collective memories of politicians must not be nearly as good as the memory of lawyers, particularly patent lawyers.

Frankly, a 10 year statute of limitations is ridiculous, but the Patent Office doesn’t have a choice.  That is what Congress wanted, and they won’t lose any votes for beating up on lawyers.  Perhaps next they will extend the statute of limitations for lemon laws so they can stick it to used car salesmen, or maybe consider extending statutes of limitations that can be used to capture nefarious activities by politicians.


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Join the Discussion

2 comments so far.

  • [Avatar for Gene Quinn]
    Gene Quinn
    July 31, 2012 02:28 pm

    The rule is § 10.24(a), which says: “A practitioner possessing unprivileged knowledge of a violation of a Disciplinary Rule shall report such knowledge to the Director.”

    I don’t see a time sensitive element, but delay could eventually turn into failure to comply I suspect.


  • [Avatar for Running for Congress]
    Running for Congress
    July 31, 2012 09:25 am

    Anyone know if practitioner A who needs to report a rules violation by practitioner B can himself get in hot water with the OED if there’s a delay in reporting the violation?