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Carol Cavender

Moatz, Harry

From: ccavender@
Sent: Tuesday, February 10, 2004 6:58 PM
To: Ethicsrules.comments.@USPTO.gov
Subject: Request for comments on proposed changes in rules for representing others before the
USPTO

Expires: Thursday, February 10, 2005 1:00 AM


Attention Harry I Moatz:

These comments are my personal comments and should not be interpreted to be indicative of the position of my employer or any organization to which I belong.

There are many problems with this rule package. These comments are first directed to the package as a group of rules that should be consistent and should avoid as many conflicts as possible. Then individual rules are addressed such as 11.101(c) which seems to make any procedural mistake a cause for being disbarred. The writer is aware that the Office prefers to refer to disbarment as exclusion from practice before the USPTO but since the effect is the same, the writer will generally use "disbar" for this concept. Last these comments also address the CLE requirement.

The primary problem with the rule package is that the package is so different from those ordinarily accepted as ethics rules in other jurisdictions that confusion and unintentional violation is reasonably expected. Instead of adopting the Model Rules as was an apparent purpose of this proposal, this package proposes something far different from the Model Rules. The most unique rules of a large number of state bars and courts were selected. Then it looks like a number of rules previously based on earlier ethics rule systems were added to the Model Rules. The Model Rules were written to replace, not supplement earlier rule systems. The USPTO implementation needs to follow that design Most states have successfully changed to the Model Rules, not added the old and new rule packages together. Also, the USPTO has added special over-broad rules to deal with very specific situations. States have not found it necessary to address any particular type of business or other organization even though states deal with much more serious issues such as mobs, crime, and gangs. Ethics rules until now have transcended the type of organization because they deal with behavior which is wrong in any context rather than proscribing behavior which is acceptable in all other contexts but which is not acceptable in the context of a particular type of organization. If states can deal with attorney representation of mobsters without writing separate rules for dealing with each type of client, surely the USPTO can attack legitimately unethical behavior in an invention promotion context without separate rules. This proposal looks like the beginning of separate rules for attorneys in each type of organization with which they might be associated. Instead, it would be preferable for the USPTO to adopt the Model Rules in their entirety without the oddities of each court and state and to avoid adding back in prior rules for conduct. The Model Rules were written over a period of years and carefully examined by a large number of very capable people who apparently believed the Model Rules alone suffice to describe ethical behavior for attorneys. Special rules to address particular situations and organizations have not benefited from this scrutiny. Adopting the Model Rules virtually alone would be much more successful in avoiding conflicts among ethics rules to which an attorney may be subject than the proposed "solution." The USPTO admits that these proposed rules contain rules which conflict with state bar rules. Then the Office relies on the supremacy clause of the United States Constitution and Louisiana Public Service Comm'n to preempt state bar ethics rules. It is highly doubtful that any state bar would accept that its rules had been preempted by the USPTO. Certainly, it is not foreseeable that any state would accept the idea that because a first attorney is a patent attorney and a second is not, that the proposed USPTO rule 11.805(b) would prevail such that when there is a conflict of rules among state bars to which both attorneys are admitted, the first attorney would be treated differently from the second. Instead, attorneys will be subject to all sets of rules simultaneously, including those which conflict. Several times in the proposed rules, the Office requests comments on provisions that differ from state rules. The truth is that patent attorneys must act under all sets of rules to which they are subject. Patent attorneys could do no more than their states
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permit. Patent agents in the same state or attorneys in another state may be permitted to do what the USPTO would allow. There are even more problems when the requirements for client dealings differ so much that we would be required to have two sets of papers to satisfy both sets of rules. From a practical point of view, the USPTO can add requirements, complicate things, and create more "Catch 22's" but cannot clarify which set of rules we practice under unless the USPTO defers to the state bar rules. The tone of the rule proposal indicates that the idea of deferral is fantasy. It is not reassuring that the Office admits there are conflicts between its proposed rules and those of the states and yet punishes violations of either by disbarment. Thus, if an attorney obeys the USPTO rules and in doing so violates state ethics rules such that the attorney is disciplined by the state, the USPTO punishes the attorney by exclusion from practice before the Office under proposed rules 11.19(e)(ii) and 11.803(e) and (f).

The most straightforward way to avoid adding to the sets of conflicting rules an attorney faces would be to say that those who are required to keep the ethics rules of any state must do so to continue to practice before the USPTO, but that those who are not under the control of a state bar or for situations not covered by state rules, the USPTO provides ethics rules. A second, and probably preferable, way to avoid much of the conflict would be for the USPTO to adopt the Model Rules unadulterated. That would provide rules more like state rules based on the same Model. Each cherry picked unique court and state rule and exceptional situation rule has the potential for conflicting with a minimum of 49 other states' rules. Model Rules adopted without change will seldom conflict with state Model Rules.

Aside from the problems of the rule set in general, many of the proposed rules require more clarity. This tends to be particularly true when the rules are written to address specific situations without carefully limiting the rules to those situations. An example of an overly broad definition is that part of the definition of invention promoter that describes a person "who enters ... another agreement with a customer to assist the customer in marketing and patenting an invention." These persons are in addition to those who advertise or ender contracts with the customer. Customer is not defined. Therefore, is this definition intended to cover a friend of the inventor who agrees to help the inventor? Venture capitalists, who are often necessary to invention commercialization, would definitely be covered in the definition unless all inventing ceased and all patents were already obtained. While the evils of some invention promoters should be stopped, is it necessary that the inventor find it impossible to obtain help? Several of the rules that seem to be written to address the invention promoter situation also are written so broadly that they could be read to address activity by attorneys employed by corporations. The likelihood of this interpretation is admitted, for instance, on page 69476 of Fed. Reg. vol. 68, no. 239 of December 12, 2003 where these rules are proposed. Instead of simply clarifying the rule, the USPTO discusses technicalities of procedures to deal with the useless breadth of the rule. That page says that the "prudent attorney" would "before filing the application, ... secure from the inventor, the inventor's signature on a combined declaration and power of attorney, as well as on assignment of the patent rights to the corporation" and "The corporation may then revoke all previous powers of attorney, and give its own power of attorney in favor of the attorney." First, the prudent attorney is also aware of a competing issue, that of filing immediately lest a competit! or file first. Second, a corporate invention is seldom the work of one inventor. Instead, the inventors employed by a corporation are likely to be spread worldwide, a spread that requires weeks or months to obtain all the requisite signatures. Must the prudent attorney ignore the client corporation's interest in an early filing date in order to obtain all the forms in the sequence the USPTO would prefer lest the attorney be disciplined for misconduct? Third, if in every corporate patent application, the attorney acted "prudently" and the corporation revoked the previous powers of attorney and filed its own power of attorney in favor of the (same) attorney, the Office would receive tens of thousands, probably hundreds of thousands, more forms every year, and of course, more fees. It is respectfully suggested that a more reasonable solution would be to write the rules more clearly so that they do not literally encompass the necessary activity of attorneys employed by cor! porations. Rules that require circumvention for legitimate and necess ary activity can also be circumvented by those with less honorable purposes. The examples of conduct under 11.101(c) should definitely be clarified. For instance, does subsection (3) "A practitioner employs one or more procedures that the Office no longer authorizes practitioners to use to present or prosecute a patent application;" mean that the Office would disbar an attorney for incompetence if a paper mistakenly referred to a file wrapper continuation even though the forms were correct for requesting continuing examination? Would an attorney be disbarred if software lost the page break
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between amendments to the claims and amendments to the specification? The page break requirement is a procedure, but hardly merits loss of employment as a patent attorney for several years and being subjected to the reinstatement impossibilities of proving by clear and convincing evidence that every activity for the disbarred years complied with all the ethics rules. Would an attorney be disbarred for incompetence if a paper using an old procedure arrives one d! ay after the procedure is no longer authorized? A rule that makes procedural mistakes an ethics violation should never be enacted as a rule.

The Office should definitely continue to use the clear and convincing standard for proving disciplinary violations, especially since these new rules are so extremely long, complex and unclear. There is even the very real possibility of internal inconsistency. Only years of experience will reveal whether there is internal consistency. Certainly practicing attorneys faced with several sets of new rules including this 122 page document in December just before the holidays cannot be expected to recognize the problems in the short comment period. On the other hand, the clear and convincing standard for proving rehabilitation and even the "present good moral character" required of applicants for registration seems steep. One questions whether it is possible to prove these things to that standard in the way a court would interpret the clear and convincing standard. The requirement for reinstatement in 11.58 that a person "ii) Shows by clear and convincing evidence that the practitioner has complied with the provisions of this section and all imperative USPTO Rules of Professional Conduct;" seems particularly unclear. This would seem to require that a person prove by clear and convincing evidence that every action for perhaps 5 or 10 years complied with dozens of provisions. Reinstatement from legitimate ethics violations should be difficult but should not require so much detail that it cannot be reasonably be reviewed. The requirement for clear and convincing evidence ceases to have significance when it is so cumb! ersome that it becomes a meaningless formality. The value of these proposed rules over the present rules or the unadulterated Model rules does not seem to justify the problems inherent in them. Maybe the Office could prosecute a very few attorneys or agents when they cannot attack invention promoters directly; however, the promoters may just lie about obtaining patents and avoid the need for attorneys and agents. These rules should be successful in kicking many retired patent agents and attorneys off the rolls at a price of several million dollars for more bureaucracy. Either that, or the rules could be enforced literally to exclude from practice every attorney and agent guilty of the slightest procedural infraction under 11.101(c). The latter could cost billions and result in a bureaucracy 5 to 10 times the number of agents and attorneys that would be effectively disbarred.
The discussion of number of persons affected by reinstatement fees is severely underestimated on page 69511. The number 5 is based on current experience under current rules. The new rules multiply the reasons for disbarment, suspension, or resignations pending disciplinary proceedings. Even late payment of annual fees, late CLE, or CLE that is not properly pre-approved result in suspension. And such unclear rules as 11.101(c) (3), discussed earlier, could multiply the number of persons in violation of the new rules by hundreds. When rules are so unclear, so dissimilar from the Model Rules, that is from the rules familiar to attorneys, and so prone to conflict with other rules to which attorneys are subject, violations are inevitable.

The rules regarding continual recertification of patent attorneys and agents based on CLE preapproved by the USPTO seem to ignore the fact that for many, if not most, patent attorneys practice before the Office is only one (often small) aspect of legal practice. Yet the identity as patent attorneys is very important for many who practice patent litigation, who manage patent departments, who deal primarily with the transactional aspects of intellectual property law (licenses, mergers, etc.), who advise clients regarding avoiding infringement, and who are involved in a myriad of other areas of patent law. We need to have the freedom to select CLE pertinent to those areas in which we practice. In 2003, studying Sarbanes-Oxley may well have been more valuable than studying the series of changes in the format now required for amendments before the Office. In an ideal world, all attorneys could study all the things agencies want everyone to know every year. The real world sev! erely limits the time and money available for CLE. It would be a disservice to the profession and the Office to disqualify e.g. a managing partner in a law firm, the manager of a patent department of a major corporation or a skilled litigator from being a patent attorney because he or she deemed it more important to take the few precious CLE hours permitted by his/her schedule in some area other than format changes of amendments.
If patent CLE is required by the office, at a very minimum, the rules should state
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clearly the maximum amounts discussed on page 69510 of the Fed. Reg. notice. As the Office discusses there, it should be limited to 1 to 2 hours in any year when it is required. Rule 11.12 does not set a limit. Without a limit, times and other requirements always grow.
There are several other aspects of 11.12 that need clarification in the rule. The rule only says that the requirement will be made in a fiscal year and announced on the web. Patent practitioners need to know WHEN to look on the web, e.g. within 2 weeks of the beginning of the fiscal year. More importantly, the minimum time span from the announcement to the deadline for meeting the requirement needs to be stated in the rule. In all instances attorneys and agents should have the full fiscal year to complete any requirements posted within the first two weeks of the fiscal year. Should a requirement be first posted more than 2 weeks after the beginning of the fiscal year, attorneys and agents should have until the end of the following fiscal year, that is more than a calendar year. The rules as presently worded seem to permit the Office to post something e.g. December 23 and require that it be completed by e.g. January 1 with a penalty, reinstatement fee and much paperwor! k for reinstatement from administrative suspension for failing to complete the CLE. A reasonable rule must set specific times that the web must be checked for requirements and a reasonable amount of time for completion of the requirement.
All other descriptions of the CLE program that make it sound less onerous than it might be are also notably absent from the rules, leaving the Office to change the character of the requirement at will. The description alone tells us that the CLE will be available by internet, with repeated opportunities for success. If the rules are to be reasonable, these aspects must be stated in the rules. As the proposed rules stand, only the negative parts of the program, e.g. that it cannot be sponsored by a firm, are set as rules that require rulemaking procedures to change. Descriptive portions of the rule package can be ignored immediately or later. If every patent attorney and agent is required by the Office to take CLE, it is unwise to have the content of that CLE controlled by the USPTO. An attorney needs to understand developments from the perspective of attorney practice. Rules may help or hinder client interests in ways the Office has not perceived. The present method where attorneys can get CLE from a number of dissimilar sources based on the attorney's interests and experience with the providers is preferable. There is no reason to treat CLE providers as scam artists from which the USPTO must protect attorneys. CLE from law firms and corporate patent functions is often of the highest quality because these sources realize from first-hand experience how valuable the attorney's time is yet how important it is that the attorney understands new developments and makes them a part of practice. Organizations with experience in offering effective CLE mix procedure in small doses with more memorable concepts. There! is no reason to refuse to accredit the best CLE available, unless, of course, the accreditation requirement for CLE is not meant to be quality assurance. What legitimate reason can there be for preapproval aside from quality assurance? A rule forbidding CLE by firms and corporate patent functions is overkill. Why should a rulemaking process be required if the Office recognized in the future that some firms provide CLE more capably than other sponsors permitted under the proposed rules? Certainly the proposed set of ,rules where the Office can increase the amount of CLE requirement infinitely and charge any amount for it without rulemaking but cannot decide that even one firm is capable of delivering one adequate hour of CLE is misguided. CLE hours are precious and should be reserved for developments the attorney will remember and use. Instead, the Office proposes to design attorney CLE based on examiner training materials. Attorneys' needs differ from examiners' needs. Examiners cite and apply references. They need to know in great detail how to distinguish references that can be legally applied from those that cannot be. Attorneys only need this skill when dealing with validity questions. Even then, the case law requirement for clear and convincing proof of invalidity makes the attorney's application of references far different from that of an examiner. If attorneys and agents are required to take CLE, it should be designed for them. Furthermore, attorneys are responsible for complying with rules of all courts and agencies before which they practice. That compliance may be the result of teamwork within an organization. Attorneys have practiced before the USPTO according to the rules for decades, actually centuries, without special CLE on procedures and practices. Specific courts and other governmental agencies have their individual rules which must be followed - all without an attorney being disbarred for failure to take preapproved CLE every year. Attorneys are certainly not tested on these rules annually even if they don't appear before that court or agency during that particular year. Other ways of enforcing the rules have long been successful. This requirement is unnecessary and merely the start of something that could easily become unmanageable.
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The profession has benefited from the availability of recent graduates who have shown their interest in patent law and initiative by passing the patent bar exam while in school. The rules should be designed to avoid discouraging such action. These proposed rules would abolish the practice because the student who passed the exam would become responsible for the mandated CLE and annual fees (after the remainder of the year) in addition to the increased burdens of applying under this proposed set of rules. Student time and financial budgets are strained by the current registration requirements. The proposed rules increase the burden unnecessarily. Similarly, unemployed scientists who study and pass the patent bar exam become more employable and are often an asset to the profession. The proposed system of increased application requirements, CLE and fees would foreclose the patent bar to the unemployed scientist. The notice says the USPTO will be communicating with the state bar authorities to persuade them to accept the USPTO education program. Reciprocity is a key concept between state bars. The USPTO does not hint at any willingness to cooperate or reciprocate, rather wants to replace CLE that has proven to serve the state bars and attorneys well. The requirement 11.11 (d)(2) that those on voluntary inactive status continue to take the USPTO accredited CLE is inconsistent with the design of the status for those who are not practicing patent law, for instance those who are voluntarily not practicing for health reasons. If a person were on voluntary inactive status for more than a specified number of years, e.g. 3 or 5, it might make sense to require some CLE before reinstatement to practicing status. No applicant, no attorney, nor the Office benefits from forbidding an attorney whose illness, age or other circumstance may prevent attendance at CLE functions and whose medication may prevent meaningful internet testing to retain voluntary inactive status.

Respectfully submitted,
Carol Lavender
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United States Patent and Trademark Office
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