MACHELEDT BALES LLP
Page 1 of 1
Sent: Monday, February 09, 2004 7:06 PM
To: ethicsrules comments
Subject: Comments to 12-Dec-03 rule Package Proposal
ATTN: Harry I. Moatz
United States Patent and Trademark Office
Please find attached an MS Word doc consisting of 4 pages of single spaced comments, as permitted.
If we need to email this in another form, please let me know.
Macheledt Bales LLP
BALES LLP _
Patents Trademarks Copyrights Licensing
4 pages) timely sent via E-mail 09-Feb-04 to ethicsrules.commentsna,uspto.gov
,,?,P <no> CONFIRMATION copy sent via Postal mail -facsimile--none>
The Honorable Jon Dudas
Acting Under Secretary of Commerce for Intellectual Property and
Acting Director of the United States Patent and Trademark Office
2121 Crystal Drive
Crystal Park Il, Suite 906
Arlington, VA 22202
SUBJECT: Notice of Proposed Rulemaking Changes to
Representation of Others Before the PTO
68 Federal Register 69442 (December 12, 2003); esp. Part 1 and Part 11, Subparts A-C
Dear Mr. Under Secretary,
We appreciate the opportunity to provide comments on these proposed rules and practice changes. We are a boutique law firm of practicing patent attorneys with active patent prosecution dockets. We have been practicing for many years, under several Presidential administrations. We urge the PTO to exercise caution and restraint before adopting proposals that have the potential to cause unnecessary harm to practitioners, the PTO, and the US patent system.
This extensive rule package places a huge additional administrative burden on the PTO to collect licensing fees, suspend those who do not pay, reinstate those who respond, track, record and update continuing educational materials, review and approve continuing educational programs, impartially review and consider "complaints" instituting a disciplinary proceeding, impartially-and without biaspreside, act on, or dismiss such proceedings, to name only a few of the voluminous additional tasks. It appears that this proposal is shifting Patent Office focus from its current role of rigorous and quality review and analysis of advancements in technology of inventors to determine patentability and issue patents, etc., to that of practicioner watchdog. In the commentary (68 Fed. Reg. 69442) the PTO points out that those who are licensed attorneys, in addition to having obtained separate admission to practice before the Patent Office, already have a host of ethical rules imposed on their practice and associated disciplinary procedures beyond those of non-lawyers, and that the vast majority of states have sophisticated systems for approving courses and ensuring licensed attorneys meet continuing legal education requirements. Furthermore, in its important role to impartially review and examine state-of the-art technology, the Patent Office uniquely permits individuals formally educated and trained in the technical arts to become registered without requiring a state license to practice law. We are aware of no requirement that Patent Office examiners, PTO Commissioner(s), their direct reports and staff study the law and become licensed attorneys. In these times of record federal government deficits, one would think it difficult for the Patent Office, as an arm of Commerce, to provide sufficient justification for yet another layer of regulating the behavior of practitioners along with requiring an annual tax to practice; all of which is to be administered by those who need not be licensed attorneys-requiring them to apply complex principles of legal ethics against behavior of all practitioners as if they were trained lawyers
,(which they need not be). The result will be to divert valuable resources from core Patent Office functions, increase federal government expenses, and require practitioners' time and attention-which will be taken from attending to their prosecution dockets to meet PTO deadlines.
While the commentary (68 Fed. Reg. 69442) includes some justification for this increased admin burden at the PTO, in light of current PTO backlogs associated with (a) applications awaiting examination, (b) the hardcopy scanning functions, (c) placing cases on PAIR, (d) updating and/or replacing the difficult PASAT and ePAVE software, (e) correspondence lost or misplaced by the PTO, (f) the length of Petition correspondence queues, and so on, thus further prolonging prosecution of cases, this package of proposed rulemaking will misdirect valuable PTO resources-the potential for great harm outweighs any realizable benefit to the patent system. While the package of proposed changes cause serious concern, a select few of the changes have been identified as particularly troublesome.
Proposed § 11.8(d) contains a requirement that each registered patent attorney or agent shall annually pay a fee to the PTO Director. The payment period for registered patent attorneys and agents would be based on the first initial of each individual's last name. The PTO states that the funds received from this annual tax on practitioners will cover the costs of the disciplinary system and maintaining the roster of registered practitioners up-to-date. It is hard to imagine how this will be accomplished. The PTO has underestimated the size of this project and requisite funds to initiate and operate the program(s) necessary to carry out the tasks set forth in this Notice (68 Fed. Reg. 69442). While there has been press concerning an end-in-sight to the current diversion of PTO funds to cover general federal budget expenses, legislation must first be put in place that reflect a true commitment to end PTO fee diversion, before more funds of a general nature are permitted to be collected by the PTO.
Proposed is a suspension of a registered practitioner who fails to pay the annual fee in a timely manner, see § 11.11(b). After the procedural requirements of proposed § 11.11 (b) have been satisfied, a suspended practitioner would no longer be authorized to practice before the PTO (proposed § 11.11(b)(2)), and an administratively suspended practitioner is subject to investigation and discipline for his or her conduct during or after the period he or she was administratively suspended. This is a serious penalty, imposed for the untimely receipt by an agency of the Executive branch of a tax to practice patent law. Given the record of the PTO in misplacing correspondence, placing responses in-queue, off-site and in the control of contractors who are not employees of the federal government, and effectively inaccessible to those on-campus, it is believed this proposal poses inherent dangers to the survival of the patent system. While it is possible that other federal agencies impose a tax to practice, it appears this amounts to a biased targeting of patent practitioners, who are technically trained specialized lawyers and agents.
Proposed § 11.10(a) indicates that only practitioners who are registered or are given limited recognition are permitted to prosecute patent applications of others before the Office. Although "prosecution" is unclear and not defined in the proposed regulations, proposed § 11.5(b) defines practice before the Office as including a variety of activities that include preparing and prosecuting any patent application, participating in drafting the specification or claims of a patent application and participation in drafting an amendment or reply to a communication from the PTO. While a nonpractitioner-assistant appears to be addressed in proposed § 11.503, it is unclear whether a nonpractitioner assistant would be violating proposed § 11.10(a) if he or she assisted, for example, in the preparation of a patent application, even under the direction and guidance of a registered practitioner. It is common practice for nonpractitioner assistants to work under the supervision of a registered practitioner in conducting many of the activities associated with practice before the Office, for example in the preparation of formal drawings, and that the proposed regulations should continue to authorize this activity.
Proposed § 11.12 sets forth a mandatory continuing education requirement that will be required from time?to?time by the PTO Director. According to the PTO proposal, the program can be given by a sponsor pre?approved by the OED Director or a program will be available on the Internet from the PTO. This proposed program imposes undue additional burden on the PTO and its practitioners; the potential adverse effects that will be caused by implementation of such a requirement will outweigh any possible recognizable benefit. In addition to serious concerns already raised above with regard to the requirement of a mandatory annual registration tax, it is difficult to imagine how the PTO will be able to find the resources to address the many pressing problems that need immediate attention when distracted with setting up and implementing continuing education program. The forcing of additional continuing legal education requirements on the practicing attorneys and agents (where attorneys represent ?80% of the registered practitioners, per the commentary, many of whom already have stringent continuing legal education requirements) will result in further distracting practitioners from attending to prosecution dockets. Justification for this continuing education program has not been sufficiently been provided: What is the likelihood that introducing additional burdens and costs to both the PTO and practitioners will produce any real benefit to the patent system?
In the unfortunate event a continuing education requirement is ultimately adopted by the PTO, added to the PTO admin duties will need to be a requirement to access each state's approved programs list (most are available, on?line) so that that those practicing as Reg. Patent Attorneys with licensing requirements in one or more state, may benefit from having obtained continuing legal education credit for respective state bar(s), and not simply be penalized for also being registered to practice before the Patent Office.
Proposed § 11.13(g)(4) would preclude law firms, professional corporations, and corporate law departments from being eligible to become approved sponsors of a continuing education program. This is unduly restrictive and arbitrary; the identified entities are often sponsors of continuing education programs that are approved by many state bars with very rigorous requirements. Justification needs to be provided before adopting this prohibition: It is hoped that this restriction is not a penalty against those that practice before the Patent Office (which are also those whose clients that already financially support PTO operations), and/or a mechanism of increasing PTO revenue (by forcing practitioners to pay the PTO for continuing education rather than another entity).
Proposed § 11.16 provides that a practitioner, in return for being registered, agrees that the OED Director may examine financial books and records maintained by or for the practitioner for the practice before the Office, and may also examine any trust account maintained by a practitioner whenever the OED Director reasonably believes that the trust account may not be in compliance with the Rules of Professional Conduct. This squarely conflicts with many state rules concerning client confidentiality, attorney?client privilege, due process and other important constitutional guarantees. There is _no justification for permitting the Director, or those who report to him/her, acting in the capacity as an officer of the US Department of Commerce, access to financial records of a patent attorney's clients. The same concerns are applicable to the provisions in proposed § 11.22(k).
Under proposed § 11.20(a)(2), the Director may impose an appropriate sanction by striking the filing of any document or dismissing the filing of an application with prejudice. Improperly expunging a paper may prejudice a party's rights. These provisions should be clarified and a clear statutory basis and standard be established for taking these actions.
Under proposed § 11.22(i), the time within which a respondent must respond to the OED Director concerning a complaint is no more than 60 days (an initial 30 days and then one extension of no more than 30 days). With the practice before the Patent Office full of shortened statutory time limits in connection with meeting deadlines so as not to prejudice an applicant's rights, this time frame is far too short and limiting, as these matters are often complex and requisite facts are often in the hands of a third party (e.g., court transcripts, etc.). It would appear, as mentioned above, that the core focus of the Patent Office to aid those who have engaged patent practitioners to help them is thwarted by such a process. Why create an environment where practitioners will forced to immediately direct attention away from impending prosecution deadlines, to the detriment of applicants' rights? The PTO is encouraged to provide flexibility to the OED Director to grant such additional extensions of time as a particular case may warrant.
Under proposed § 11.36(d), the failure to timely file an answer to a disciplinary proceeding complaint will constitute an admission of the allegations in the complaint, and may result in entry of default judgment. This is not of grave concern where a respondent received the disciplinary proceeding complaint and had an opportunity to respond, the provisions in § 11.36(d) do not appear to address the situation where the complaint was not received and respondent had no opportunity to address the allegations in the complaint. The last sentence in proposed § 11.36(d) is not intended to apply in a circumstance of non-receipt of the complaint: This should be clarified.
The requirements in proposed § 11.58(b)(1)(vi) that require every client account, trust account, and PTO deposit account be closed seems unduly restrictive and burdensome, especially as another practitioner who is not under suspension or exclusion may be able to administer the accounts for the benefit of the suspended practitioner's clients during the period of suspension, or take over administration permanently in the case of exclusion.
Once again, thank you for the opportunity to comment.
Jean M Macheledt, Registered Patent Attorney
Jennifer L Bales, Registered Patent Attorney