OED Discipline for False, Misleading Statements in Brief to CAFC

Each year the Practising Law Institute hosts its annual Patent Litigation Seminar. I will be speaking at the New York Patent Litigation 2014 program, which will take place from November 10-11, 2014. There will be an earlier presentation of the program in Chicago, IL, from October 6-7, 2014. I have this on the brain at the moment because my written materials for my presentation were due last week.

In New York I will be presenting on the topic of ethics, which will result in 1 credit of ethics, always useful for those who are required by their State bars to obtain continuing legal education credits annually.

In addition to discussion of the relatively newly adopted USPTO Rules of Professional Conduct, my presentation will also discuss a variety of other matters. Those who have seen my ethics presentations before know that one of the things I particularly like to do is dive into the OED Reading Room and find interim decisions and final orders. These decisions and final orders give us the best insight into what type of activity the Office of Enrollment and Discipline focuses on. Such an approach winds up being informative, allows us to discuss the substantive ethics rules and alleged violations, and frequently to feel better about ourselves knowing that our practices are set up so that the catastrophe that lead to OED inquiry could never happen to us.

Of course, every once in a while review of OED disciplinary activity may make even the most conscientious among us take a hard swallow. This is not to suggest that many practitioners will believe they are potentially in trouble, but legal ethics is not about morality or morals in any larger sense. Legal ethics is about rules, and the wisest approach to the matter is to know where the line is and stand well clear. Sometimes, however, some might be far closer to the line than they might have anticipated.

In one particular enforcement decision that I will discuss during my presentation in November — In the Matter of James Hicks — the Office of Enrollment and Discipline instituted an enforcement proceeding against James Hicks, who is an attorney admitted to practice in the State of California. Although Hicks is not a patent attorney duly admitted to practice before the United States Patent and Trademark Office, he had been permitted to practice before the Office in trademark and other non-patent matters, as can any attorney admitted to practice.


Hicks, a litigator, was alleged to have engaged in conduct prejudicial to the administration of justice. In Rates Technology, Inc. v. Mediatrix Telecom, Inc., No. 05-CV-2755, the United States District Court for the Eastern District of New York entered an order sanctioning him and his client for failing to comply with the court’s discover orders. Indeed, the abuses were such that the district court ultimately dismissed the case and imposed monetary sanctions against Mr. Hicks and Rate Technology in the amount of $86,965.81, to be split evenly between them.

Additionally, on appeal to the United States Court of Appeals for the Federal Circuit, the Federal Circuit found that Hicks made misleading and improper statements in the brief he submitted challenging the sanction levied against him by the district court. See Rates Technology, Inc. v. Mediatrix Telecom, Inc. The Federal Circuit, per Judge Bryson with Judges Dyk and Moore, explained:

On a separate matter, we note that Mr. Hick’s brief on appeal to this court contained several statements that were misleading or improper. One of the headings in Mr. Hicks’s brief reads, “Both the Magistrate and the District Court Found that RTI’s and its Litigation Counsel Hicks’ Pre-Filing Investigation Was Sufficient.” It is true that the magistrate judge recommended denying Rule 11 sanctions and instead recommended imposing sanctions under Rule 37. In her final report and recommendation, however, she concluded that the prefiling inquiry conducted by RTI and Mr. Hicks “was not reasonable nor was it made in good faith.” The district court adopted the magistrate judge’s report and recommendation in its entirety. It is thus clear that, contrary to Mr. Hicks’s representation in his brief, neither the magistrate judge nor the district court ultimately found that RTI’s or Mr. Hicks’s prefiling investigation was “sufficient.”

Mr. Hicks also stated in his brief that this court had previously held RTI’s prefiling investigation process to be adequate. In discussing RTI’s prefiling investigation, Mr. Hicks cited Rates Technology Inc. v. Tele-Flex Systems, Inc., No. 00-1184, 2000 WL 1807411 (Fed. Cir. Dec. 8, 2000), a case involving different defendants and different patents in which RTI’s and Mr. Hicks’s prefiling investigation was questioned. In referring to this court’s decision in that case, Mr. Hicks cited the case as follows: “See Rates Technology Inc. v. Tele-Flex Systems, 251 F.3d 170 (Fed. Cir. 2000).” He failed to note, however, that the disposition was a summary nonprecedential order issued under Rule 36 of the rules of this court. Citing that case and comparing the prefiling investigation done there to what was done here, Mr. Hicks stated, “[t]his Circuit held that was a fully adequate pre-litigation investigation,” and added that “RTI’s pre-filing investigation process [was] approved in the RTI v. Tele-Flex case.” After describing RTI’s prefiling investigation in this case, he concluded, in boldfaced and underlined font, referring to the pre-filing investigation in the present case, “[t]his is a fully adequate pre-litigation examination, under applicable Federal Circuit law.” Immediately following that statement, he cited the 2000 RTI v. Tele-Flex case again, but again without noting that it was a nonprecedential order issued under Rule 36.

Rule 36 allows us to “enter a judgment of affirmance without opinion” under certain circumstances. Since there is no opinion, a Rule 36 judgment simply confirms that the trial court entered the correct judgment. It does not endorse or reject any specific part of the trial court’s reasoning. In addition, a judgment entered under Rule 36 has no precedential value and cannot establish “applicable Federal Circuit law.” See, e.g., U.S. Surgical Corp. v. Ethicon, Inc., 103 F.3d 1554, 1556 (Fed. Cir. 1997). It is therefore not correct to say, as Mr. Hicks did here, that our previous Rule 36 judgment held that his actions in the RTI v. Tele-Flex case constituted “a fully adequate pre-litigation examination.” Moreover, while nonprecedential decisions of this court issued after January 1, 2007, may be cited in briefs to this court, see Fed. Cir. R. 32.1, the Rule 36 disposition in this case was from 2000. It is inappropriate to cite Rule 36 dispositions of this court as establishing circuit precedent except to the extent that the citation is in support of a claim of “claim preclusion, issue preclusion, judicial estoppel, law of the case, and the like,” Fed. Cir. R. 32.1(c), which was not the case here. While we disapprove of those aspects of Mr. Hicks’s brief, we have not taken those matters into account in deciding the merits of this case.

During the ethics proceeding Hicks continued to disagree with the Federal Circuit’s statements and findings of the district court relative to the discover sanctions, but the Office of Enrollment and discipline pointed out that he did not seek further appellate review. Those familiar with OED enforcement can attest to the fact that there is little tolerance for disagreeing with previously adjudicated matters and attempts to relitigate them in a disciplinary proceeding when appeal was available but not pursued.

The USPTO charged that Hicks violated 37 C.F.R. 10.20 et seq.[1]  Ultimately, Hicks acknowledged that he violated 37 C.F.R. 10.23(b)(5), which prohibited “conduct that is prejudicial to the administration of justice.” He was publicly reprimanded and ordered to serve a one year probationary period. Hicks was allowed to continue to practice trademark and other non-patent law before the USPTO during his probationary period unless his probation is revoked or he is suspended by order of the Director of the USPTO.

While at the end of the day Hicks was subjected only to a public reprimand, the fact that the Office of Enrollment and Discipline decided to go after a litigator should send a chilling shot across the bow. While Hicks was permitted to engage in trademark representation like any attorney, there was no mention of any open files at the USPTO or any matter involving questionable ethics in any representation before the USPTO. This matter seems to have arose simply because someone at the USPTO noticed that the Federal Circuit had noted that Hicks made disingenuous and misleading statements in an appeal brief filed at the Federal Circuit.

Patent litigation is at least as contentious as any other area of litigation, if not far more contentious than most. We have all seen statements in briefs and memos that stretch the truth to the point that they are clearly misleading, and we have likely all seen situations where what is mentioned in a brief or memo is outright false. It is noteworthy that the OED is taking the position that such actions amount to conduct prejudicial to the administration of justice, and should give everyone pause.

The fact that OED pursued discipline against Hicks is troubling for a number of reasons:

  1. Under new Rule 11.804(d), conduct that is prejudicial to the administration of justice continues to be ethical misconduct.
  2. Under new Rule 11.303(a)(1), a practitioner is prohibited from making a false statement of law or fact to any tribunal, which is defined under Rule 11.1 to mean “the Office, a court, an arbitrator in a binding arbitration proceeding or a legislative body, administrative agency or other body acting in an adjudicative capacity.”
  3. Under new Rule 11.803, a practitioner who knows that another has committed an ethical violation “that raises a substantial question as to that practitioner’s honesty, trustworthiness or fitness as a practitioner” is required to report the violation to OED.

Thus, Hicks likely stands for the proposition that a practitioner must inform OED if they know that another practitioner has made a false, misleading or improper statement to a tribunal, or as Hicks did, cites a non-precedential opinion to a tribunal.



[1]  Since the alleged misconduct occurred prior to May 3, 2013, the USPTO Code of Professional Responsibility was applicable to the case, not the newly modified USPTO Rules of Professional Conduct.



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