Posts Tagged: "ethics"

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.” *** 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that another practitioner has made a false, misleading or improper statement to a tribunal, or as Hicks did, cites a non-precedential opinion to a tribunal.

In part 1 of the interview we discussed why he choose McDermott, what it was like working for David Kappos and working with Federal Circuit Judge Ray Chen when he was Solicitor at the USPTO, and the appointment of Michelle Lee to be Deputy Director of the USPTO. In part 2 of the interview, which appears below, we discuss the new ethics rules adopted by the USPTO, the future of the USPTO, patent reform legislation, abusive patent litigation, and what the AIA was attempting to achieve relative to post grant patent challenges.

These three proceedings, like every other reciprocal disciplinary proceeding, demonstrate the overwhelming importance of obtaining the best resolution possible when the State ethics authorities come knocking. Because there is a presumption that reciprocal discipline is appropriate, to prevail at the USPTO you would need to demonstrate that there was a lack of due process, complete lack of evidence or that there is some manifest injustice that would occur if discipline were to be handed out by the USPTO. Whether we like it or not, you are going to be disciplined by the USPTO to the same extent you were disciplined by the State ethics panel, or a Federal Court. However, this sometimes seems to lead to unequal treatment of practitioners who are similarly situated but for the State in which they are admitted. Eventually someone will raise an equal protection argument, but you don’t want that to be you. It would have a significant uphill battle no doubt like all such arguments, but it would be very nice for OED to take a step back and consider whether it is fair to simply defer its own disciplinary authority to the States.

Time and time again in reciprocal discipline proceedings we see the USPTO handing down identical discipline to what was handed out at the State level. This is no doubt because State discipline creates a presumption that the imposition of reciprocal discipline is proper. See Selling v. Radford, 243 U.S. 46 (1917). Thus, seeking the identical penalty as already handed out at the State level is relatively easy and straight forward, and puts the responding practitioner at a significant disadvantage, requiring the Respondent to demonstrate lack of due process, severe lack of proof in the State proceeding or that a grave injustice would occur as the result of imposition of reciprocal discipline.

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.

Selling v. Radford, 243 U.S. 46 (1917), sets the standards for imposing reciprocal discipline on the basis of a State’s disciplinary adjudication. Under Selling, State disciplinary action creates a federal-level presumption that imposition of reciprocal discipline is proper unless an independent review of the record reveals: (1) lack of due process, (2) an infirmity of proof of the misconduct, or (3) that grave injustice would result from the imposition of reciprocal discipline. The standard the responding attorney must meet is one of clear of convincing evidence that the Selling factors preclude reciprocal discipline.

Jaeger did not file a response to the complaint, despite being granted two extensions of time to do so. He did, however, send two brief fax messages to OED, in one pointing out that he was an honorably discharged veteran who served during the Vietnam era, and in another pointing out that the underlying complaint that initiated disciplinary involvement stemmed from a disagreement with a client who did not want to pay his bill. Unfortunately for Jaeger, however, he never filed an answer, which meant that the allegations within the complaint were all deemed to be admitted. See 37 CFR 11.36(d).

It is not common to see a petition for reinstatement, much less an actual reinstatement. That is, however, what happened with respect to Mr. B., who was suspended nunc pro tunc from October 26, 2009, for a period of 60 months, but with the last 24 months stayed. B’s petition for reinstatement was successful, and he is once again a patent agent registered to practice at the USPTO. In the original disciplinary proceeding that lead to the suspension, the OED Director filed a disciplinary complaint against B on October 26, 2009, and then Director Kappos entered an interim suspension order because B was convicted of a felony. Authority for such an interim suspension comes from 37 CFC 11.25.

The Federal Register Notice explains that currently there are approximately 41,000 registered patent practitioners, with at least 75% of the roster of patent practitioners being attorneys who are admitted in one or more States. Given that the ABA Model Rules have been adopted by 49 states and the District of Columbia, nearly all of the attorneys registered to practice at the USPTO are already professionally governed by ethics rules modeled from the ABA Model Rules of Professional Conduct. Thus, this change should not be considered to be a substantive change to the rules that apply to patent attorneys.Indeed, the Federal Register Notice explains that this USPTO efforts “benefits and reduces costs for most practitioners by clarifying and streamlining their professional responsibility obligations.” Of course, for those who are patent agents, however, the rules will be different.

Individual inventors and corporate IP owners are used to dealing with accountants, lawyers and investment advisors – all professionals who are governed by state and/or federal professional regulations, and/or national association guidelines. Well, the question I pose is: What professional regulations govern the qualifications and conduct of all these IP middlemen? The short answer to the above question is “none!” After all, there is no IP brokerage or IP middlemen governing body.

What follows are the decisions from April and May 2012. In this time period in 2012 at the OED the Office found themselves dealing with a patent attorney that accepted referrals from an invention promotion company, a patent attorney that didn’t notify a client of an abandoned application, a trademark attorney that submitted false statements in three petitions to revive abandoned applications and a reciprocal discipline involving negligence associated with maintaining a Trust Account.

George Reardon was a registered patent agent (Registration No. 53,505). He was also the President and Executive Director of the National Association of Patent Practitioners (NAPP). He was alleged to have misappropriated at least $116,894.80 in NAPP funds and provided false annual financial reports to NAPP. Reardon did not admit to any wrongdoing or violation of the Disciplinary Rules of the USPTO, but he did choose to file an affidavit of resignation during the pendency of an investigation into the alleged misappropriation of funds. As a result, the United States Patent and Trademark Office (USPTO) accepted Reardon’s resignation and ordered his exclusion from practice before the Office.

The USPTO suspension was applied nunc pro tunc. Discipline imposed nunc pro tunc is appropriate only if the practitioner: (1) promptly notified the OED Director of his or her suspension or disciplinary disqualification in another jurisdiction; (2) establishes by clear and convincing evidence that the practitioner voluntarily ceased all activities related to practice before the Office; and (3) complied with all provisions of 37 CFR § 11.58. That was found to be the case effective October 17, 2011, thus the six (6) month suspension started effective that date.

What follows is discussion of the two disciplinary proceedings undertaken by the USPTO during the month of October 2012. First up is a situation where the USPTO went after an attorney in California who engaged in representation of trademark clients. Richard Gibson was not a patent practitioner, yet OED went after him for violation of various ethical rules, which is something recently new for the USPTO to do. The second case is a case where a patent practitioner was caught up in a sting operation. The sting was searching for adults soliciting sex from minors in Seattle, Washington.

David Gaudio was not a registered patent practitioner, but this was not a case where OED went after someone who was only engaged in trademark representation via a reciprocal discipline proceeding. The Law Office of David P. Gaudio, P.C. formed The Inventors Network, Inc. Gaudio was alleged to have engaged in the unauthorized practice of patent law. Gaudio knew that the representation of inventors without being a registered patent practitioner violated USPTO regulations. This case seems significant because it could well signal new USPTO interest in preventing those who are not registered practitioners from preying on unsuspecting inventors.