[Federal Register: December 12, 2003 (Volume 68, Number 239)]
[Proposed Rules]
[Page 69441-69562]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12de03-23]


[[Page 69441]]

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Part II





Department of Commerce





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Patent and Trademark Office



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37 CFR Parts 1, 2, 10 and 11



Changes to Representation of Others Before the United States Patent and
Trademark Office; Proposed Rule


[[Page 69442]]


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DEPARTMENT OF COMMERCE

Patent and Trademark Office

37 CFR Parts 1, 2, 10 and 11

[Docket No.: 2002-C-005]
RIN 0651-AB55


Changes to Representation of Others Before the United States
Patent and Trademark Office

AGENCY: United States Patent and Trademark Office, Commerce.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The United States Patent and Trademark Office (Office or
USPTO) proposes to update the procedures regarding enrollment and
discipline. The Office also proposes to replace the current USPTO Code
of Professional Responsibility, which is based on the Model Code of
Professional Responsibility of the American Bar Association, with new
USPTO Rules of Professional Conduct, largely based on the Model Rules
of Professional Conduct of the American Bar Association.

DATES: To be ensured of consideration, written comments must be
received on or before February 10, 2004.

ADDRESSES: Comments should be sent by electronic mail over the Internet addressed to: ethicsrules.comments@uspto.gov. Comments may also be
submitted by mail addressed to: Mail Stop OED-Ethics Rules, United
States Patent and Trademark Office, P.O. Box 1450, Alexandria, Virginia
22313-1450 or by facsimile to (703) 306-4134, marked to the attention
of Harry I. Moatz. Although comments may be submitted by mail or
facsimile, the Office prefers to receive comments via the Internet. If
comments are submitted by mail, the Office would prefer that the
comments be submitted on a DOS formatted 3\1/2\-inch disk accompanied
by a paper copy. The comments will be available for public inspection
at the Office of Enrollment and Discipline, located in Room 1103,
Crystal Plaza 6, 2221 South Clark Street, Arlington, Virginia, and will
be available through anonymous file transfer protocol (ftp) via the
Internet (address: http://www.uspto.gov). Since comments will be made
available for public inspection, information that is not desired to be
made public, such as an address or telephone number, should not be
included in the comments.

FOR FURTHER INFORMATION CONTACT: Harry I. Moatz ((703) 305-9145),
Director of Enrollment and Discipline (OED Director), directly by
phone, or by facsimile to (703) 305-4136, marked to the attention of
Mr. Moatz, or by mail addressed to: Mail Stop OED-Ethics Rules, U.S.
Patent and Trademark Office, P.O. Box 1450, Alexandria, Virginia 22313-
1450.

SUPPLEMENTARY INFORMATION: At this time, nearly 28,000 individuals are
registered as patent attorneys and agents, of whom about 80% have
indicated that they are attorneys. The registered patent attorneys have
offices located in all fifty States and the District of Columbia. More
than 2,500 individuals applied for admission to the registration
examination given on October 18, 2000. At the same time, the
Martindale-Hubbell reports that there are more than 900,000 lawyers and
law firms listed in its legal directory. More than 17,000 attorneys are
members of the Intellectual Property Law Committee of the American Bar
Association. Any attorney who is a member in good standing of the bar
of the highest court of a State or the District of Columbia is eligible
to practice before the Office in trademark and other non-patent
matters. 5 U.S.C. 500(a). Forty-two of the bars have adopted the Model
Rules of Professional Conduct of the American Bar Association or a
modification thereof, and two have disciplinary rules which are a
combination of the Model Code and the Model Rules of Professional
Conduct of the American Bar Association. Adopting ethics rules that are
largely based on the Model Rules of Professional Conduct of the
American Bar Association would provide attorneys, as well as registered
patent agents, with consistent ethical standards, and large bodies of
both case law and ethics opinions.
    This notice of proposed rule making sets out rules in three areas:
    (1) Rules of general applicability, and rules governing the
recognition of individuals to practice as attorneys and agents before
the Office in patent, trademark, and other non-patent matters
(Sec. Sec.  11.1-11.18);
    (2) Rules governing investigation and disciplinary proceedings for
possible violations of the Office Rules of Professional Conduct
(Sec. Sec.  11.19-11.62). Disciplinary proceedings can result in
reprimand, suspension or exclusion (disbarment) of individuals from
practicing before the Office who, after notice and opportunity for a
hearing, are found to have violated an imperative USPTO Rule of
Professional Conduct; and
    (3) Rules setting out the proposed Office Rules of Professional
Conduct (Sec. Sec.  11.100-11.806).
    These changes are intended to improve the Office's processes for
handling applications for registration, petitions, investigations, and
disciplinary proceedings. The changes also are intended to bring
standards of ethical practice before the Office into closer conformity
with the Rules of Professional Conduct adopted by the majority of
States, while addressing circumstances particular to practice before
the Office. As these environments change (e.g., by adoption of
amendments to the Model Rules of Professional Conduct of the American
Bar Association) the Office will consider whether to make further
changes to the rules.
    This proposed rule making is being conducted under the auspices of
the General Counsel of the United States Patent and Trademark Office,
James Toupin (703) 308-2000, and the supervision of the OED Director,
Harry I. Moatz (703) 305-9145). They would appreciate feedback on the
overall rule making process in addition to any comments on the merits
of the proposed rules.
    Table 1 shows the principal sources of the proposed rules relating
to (1) admission to practice of attorneys and agents in patent matters,
and (2) practice in trademark and non-patent matters.
    Table 2 shows the principal sources of the rules proposed for
disciplinary proceedings.
    Table 3 shows the principal sources of the rules proposed for the
Office Rules of Professional Conduct.
    Discussion of Specific Rules:
    Section 1.1 would be amended to add paragraph (4) to provide an
address for correspondence for the Office of Enrollment and Discipline
in enrollment, registration and investigation matters.
    Section 1.4 would be amended to revise the references from
Sec. Sec.  10.18(b)(2), 10.18(c), and 10.23(c)(15) to Sec. Sec.
11.18(b)(2), 11.18(c), and 11.804(c)(i)(15), respectively.
    Section 1.21 would be amended to revise one paragraph into two
distinct fees, add ten paragraphs to provide for ten new fees, as well
as to reserve paragraph (3), redesignate another paragraph and change a
section citation therein. These fees are intended to fund the costs of
the registration examination process, disciplinary system, and maintain
the roster of registered practitioners up-to-date. Bar disciplinary
activities are generally regarded as being in the interest of
maintaining the Bar's reputation for integrity and supporting the
willingness of potential clients to engage the services of
practitioners. The continual

[[Page 69443]]

updating of the USPTO roster is also in the interest of assuring that
registered practitioners are identified to the public they seek to
serve. The cost is currently met by funds from application, issue, or
maintenance fees. By adopting these fees to be paid by registered
practitioners, the costs of these activities are not passed on to
applicants. Thus, USPTO will recover the costs associated with these
activities from the practitioners instead of the public in general. The
funds would be directed to these activities and would not be diverted
to support other proposals. The fees are based on the status of the
registered practitioner.
    The USPTO is revising the way in which its registration examination
is administered. Currently, the examination is administered twice a
year, using a unique set of questions each time. The USPTO is moving to
a frequently administered computer-based examination using a slate of
questions randomly selected from a large data bank of questions and
answers that will be publicly available. This change will make the
testing process more efficient and will benefit applicants by
permitting instant notification of test results, eliminating the
current approximately six weeks needed to report the results of a
paper-based examination. The computer-based examination will also
facilitate more frequent administration and permit the test to be given
simultaneously in many locations, thus reducing delays and travel
expenses for applicants. Paragraph 1.21(a)(1)(ii)(B) would increase the
examination fee to $450 for the test administered by the USPTO in order
to recover the full costs of the examination process. Paragraph
1.21(a)(1)(ii)(A) would introduce a reduced examination fee of $200 for
the test administered by a private sector entity. The $200 fee would
cover the costs of establishing and maintaining an up-to-date question
and answer data bank to be used in the computerized delivery of the
examination, but excludes the costs of actual test administration. This
$200 fee will apply where administrative testing arrangements are made
by a private sector entity. Applicants paying the $200 fee would
schedule the test with the private sector entity, and pay a service
fee, estimated to be $150, to the entity.
    A registered practitioner in active status is one who is able to
represent clients and conduct business before the USPTO in patent
cases. To maintain active status, the practitioner would pay the annual
fee required under Sec. Sec.  1.21(a)(7)(i) and 11.8(d) and comply with
the continuing legal education (CLE) requirements under Sec. Sec.
11.12(a) and (e). With respect to the CLE requirement, an inactive or
administratively suspended practitioner would have to contact the OED
Director to be advised which CLE's to take.
    A registered practitioner in inactive status would be prohibited
from representing clients and continuing to practice before the Office
in patent cases. Inactive status may be of an administrative nature
where the status is inconsistent with the role of a practitioner, as in
the cases of examiners working for the Office and judges. Inactive
status also may be voluntary, as in the case of practitioners who have
retired or are unable to continue their practice due to disability-
related matters but still desire to maintain a recognized professional
association with the USPTO. Practitioners with a disability may become
inactive.
    A registered practitioner under administrative inactive status is
not responsible for payment of the annual fee, or complying with the
CLE requirements while in this status, but will have to complete the
continuing education requirements for restoration to active status. A
registered practitioner under voluntary inactive status is responsible
for paying a reduced annual fee and completing the CLE requirements
during the period of inactivation. For the purposes of this section,
the fee for a registered practitioner in voluntary inactive status is
25% of the fee for a registered practitioner in active status. If a
condition occurs that automatically terminates a practitioner's
administrative inactive status, e.g., separation from the USPTO, it
would be permissible for that practitioner to seek a voluntary inactive
status where the practitioner does not intend to represent clients and
practice before the Office, but still desires to maintain a
professionally recognized association with the Office.
    A registered practitioner who is administratively suspended is one
who has failed to pay the annual fee required under Sec.  11.8(d) or to
comply with the continuing legal education requirements under
Sec. Sec.  11.12(a) and (e). Registered practitioners under active
status can be administratively suspended under failure to comply with
payment of the annual fee or failure to meet the CLE requirements.
Registered practitioners under voluntary inactive status can only be
administratively suspended for failure to comply with payment of the
reduced annual fee.
    Paragraph 1.21(a)(5)(i) would be added for a new fee for review of
a decision by the OED Director. Paragraphs 1.21(a)(7) (i) and (ii)
would be added for a new annual fee for registered patent attorneys and
agents based on their active or inactive status. Paragraphs 1.21(a)(7)
(iii) provides for a new fee due with a request from a practitioner
seeking restoration to active status from inactive status. Paragraph
1.21(a)(7) (iv) would be added for payment of the balance due on the
annual fee upon restoring active status to a registered practitioner in
inactive status. Paragraph 1.21(a)(8) would be added for a new annual
fee for individuals granted limited recognition. An individual granted
limited recognition would not be eligible for voluntary inactive
status. Paragraph 1.21(a)(9) would be added to set fees associated with
the administrative suspension of a registered practitioner. Paragraph
1.21(a)(9)(i) would be added for a new fee for delinquency in payment
of the annual fee or completing the required CLE requirements.
Paragraph 1.21(a)(9)(ii) would be added for a new fee for reinstatement
following administrative suspension. Paragraph 1.21(a)(5) has been
redesignated (a)(5)(ii), and section citation of 10.2(c) would be
changed to Sec.  11.2(d). Redesignated (a)(5)(ii), and section citation
of 10.2(c) would be changed to Sec.  11.2(d). Paragraph 1.21(a)(10)
would be added for a fee paid on application by a person for
recognition or registration after disbarment, suspension, or
resignation pending disciplinary proceedings in any other jurisdiction;
on petition for reinstatement by a person excluded, suspended, or
excluded on consent from practice before the Office; on application by
a person for recognition or registration who is asserting
rehabilitation from prior conduct that resulted in an adverse decision
in the Office regarding the person's moral character; and on
application by a person for recognition or registration after being
convicted of a felony or crime involving moral turpitude or breach of
fiduciary duty. Paragraph 1.21(a)(11) would be added for a paper
version of the continuing training program and furnished narrative.
Paragraph 1.21(a)(12) would be added for Application by Sponsor for
Pre-approval of a Continuing Education Program.
    Paragraph (a)(5) of Sec.  1.21 would be revised to add two
paragraphs. Paragraph (i) would introduce a fee for review by the OED
Director of a decision by a staff member of the Office of Enrollment
and Discipline. Section

[[Page 69444]]

1.21(a)(5) would be revised and redesignated (a)(5)(ii).
    Paragraph (a)(6) of Sec.  1.21 would be eventually revised by
deleting the fee for regrade and reserve the omitted paragraph.
    Paragraph (a)(7) of Sec.  1.21 is proposed to be added to provide
for a new annual fee paid by active and voluntary inactive registered
patent attorneys and agents.
    Paragraph (a)(8) of Sec.  1.21(a)(8) is proposed to be added to
provide for a new annual fee paid by individuals granted limited
recognition to practice before the Office.
    Paragraph (a)(9) of Sec.  1.21 is proposed to be added to provide
for new fees associated with delinquency resulting in administrative
suspension of a registered practitioner, and reinstatement of the
practitioner.
    Paragraph (a)(12) of Sec.  1.21 is proposed to be added to provide
for a fee to be paid by a sponsor upon submitting to the OED Director
all information called for by the ``Application by Sponsor for Pre-
approval of a Continuing Education Program.''
    Section 1.31 would be amended to revise the references from
Sec. Sec.  10.6 and 10.9 to Sec. Sec.  11.6 and 11.9, respectively.
    Section 1.33(c) would be amended to revise the references from
Sec. Sec.  10.5 and 10.11 to Sec. Sec.  11.5 and 11.11, respectively.
    Section 1.455 would be amended to revise the reference from Sec.
10.10 to Sec.  11.10.
    Section 2.11 would be amended to revise the reference from Sec.
10.14 to Sec.  11.14.
    Section 2.17(a) would be amended to revise the reference from
Sec. Sec.  10.1 and 10.14 to Sec. Sec.  11.1 and 11.14, respectively.
    Section 2.17(c) would be amended to revise the reference from Sec.
10.1 to Sec.  11.1.
    Section 2.24 would be amended to revise the reference from Sec.
10.14 to Sec.  11.14.
    Section 2.161(b)(3) would be amended to revise the reference from
Sec.  10.1 to Sec.  11.1.
    Section 11.1 would set out definitions of terms used in Part 11.
The defined terms include: affidavit, application, attorney, belief,
consent, consult, differing interests, employee of a tribunal, firm,
fraud, full disclosure, giving information, hearing officer, knowingly,
law clerk, legal counsel, legal profession, legal service, legal
system, matter, OED Director, Office, partner, person, practitioner,
proceeding before the Office, professional legal corporation,
reasonable, reasonably should know, registration, respondent, secret,
solicit, state, substantial, tribunal, and United States.
    In the proposed rules, the word ``individual'' is used to mean a
natural person, as opposed to a juristic entity. The definition of
``person'' is similar to the definition of ``person'' in 1 U.S.C. 1.
``Attorney'' is defined in the same manner as the term is used in 5
U.S.C. 500(b). The proposed definition includes an attorney who is a
member of one bar in good standing, and ``under an order of any court
or Federal agency suspending, enjoining, restraining, disbarring or
otherwise restricting'' the attorney from practice before the bar of
another state or Federal agency. The broad definition is believed
necessary inasmuch as 5 U.S.C. 500(b) provides that ``an individual who
is a member in good standing of the bar of the highest court of a State
may represent a person before an agency * * *.'' Though an attorney
suspended in one state and a member in good standing in another state
could represent a person before the Office, nevertheless the grounds
for suspension in one state may give rise to grounds for suspending the
attorney from practice before the Office, 5 U.S.C. 500(d)(2), after
notice and opportunity for a hearing. See Selling v. Radford, 243 U.S.
46 (1917).
    The phrase ``full disclosure'' is used to define the explanation a
practitioner must give a client regarding potential and actual
conflicts of interest. The explanation is based on discussions of full
disclosure found in Opinion No. 1997-148, Standing Committee on
Professional Responsibility and Conduct (California), and in In re
James, 452 A.2d 163 (D.C. App. 1982).
    Section 11.2, like current Sec.  10.2, would continue to provide
for the OED Director. The proposed rule sets out the duties of the OED
Director, including receiving and acting upon applications, conducting
investigations concerning the moral character and reputation of
individuals seeking registration, conducting investigations of possible
violations by practitioners of the Office Rules of Professional
Conduct, initiating disciplinary proceedings, dismissing complaints or
closing investigations, and filing with the Director of the United
States Patent and Trademark Office (``USPTO Director'') certificates of
convictions of practitioners. Except as otherwise noted, any final
decision of the OED Director refusing to register an individual, refund
a fee, recognize an individual, or reinstate a suspended or excluded
practitioner would be reviewable by the USPTO Director. A fee, set
forth in 37 CFR 1.21(a)(5), would be charged.
    Section 11.3 would provide for waiver of the rules and qualified
immunity.
    Paragraph (a) of Sec.  11.3, like current Sec.  10.170, would
provide for suspension, except as provided in section (b), in an
extraordinary situation, when justice requires, of any requirement of
the regulations of this part which is not a requirement of the
statutes.
    Paragraph (b) of Sec.  11.3 would prohibit waiver of any provision
of the Office Rules of Professional Conduct, Sec. Sec.  11.100 through
11.806; the disciplinary jurisdiction of the rules, Sec.  11.19; or the
procedures for interim suspension and disciplinary proceeding based on
reciprocal discipline or conviction of a serious crime, Sec.  11.24.
    Paragraph (c) of Sec.  11.3, like current Sec.  10.170(b), would
provide that a petition to waive a rule will not stay a disciplinary
proceeding unless ordered by the USPTO Director or a hearing officer.
    Paragraph (d) of Sec.  11.3 would provide a qualified privilege for
complaints submitted to the OED Director. This privilege should arise
from the necessity to reduce to the extent possible any probability
that an ethics complainant having honest cause to complain may be
intimidated by a practitioner into not filing a complaint. Some states
recognize that a complainant has absolute immunity for filing a
complaint regardless of the outcome of the proceeding. See Drummond v.
Stahl, 127 Ariz. 122, 618 P.2d 616 (Ct. App. Div 1 1980), cert. denied,
450 U.S. 967, 101 S.Ct. 1484, 67 L. Ed. 2d 616 (1981); Katz v. Rosen,
48 Cal. App. 3d 1032, 121 Cal. Rptr. 853 (1st. Dist. 1975); Field v.
Kearns, 43 Conn. App. 265, 682 A.2d 148 (1996), cert. denied, 239 Conn.
942, 684 A.2d 711 (1996); Jarvis v. Drake, 250 Kan. 645,830 P.2d 23
(1992); Kerpelman v. Bricker, 23 Md. App. 628, 329 A.2d 423 (1974);
Netterville v. Lear Siegler, Inc., 397 So.2d 1109 (Miss. 1981); Sinnett
v. Albert, 188 Neb. 176, 195 N.W.2d 506 (1972); Weiner v. Weintraub, 22
N.Y.2d 330, 292 N.Y.S.2d 667, 239 N.E.2d 540 (1968); Elsass v. Tabler,
131 Ohio App.3d 66, 721 N.E.2d 503 (1999); McAfee v. Feller, 452 S.W.2d
56 (Tex. Civ. App. Houston 14th Dist. 1970). Complaints filed with a
state bar committee are absolutely privileged as communications made in
a quasi-judicial proceeding. E.g., Goldstein v. Serio, 496 So.2d 412
(La. Ct. App. 4th Cir. 1986), writ denied, 501 So.2d 208, 209 (La.
1987).
    Under English common law, the ``absolute privilege'' from
defamation actions that attaches to all statements and testimony by
witnesses, judges, and parties in the course of any judicial proceeding
has been held to apply to

[[Page 69445]]

testimony and statements made in the course of solicitor disciplinary
proceedings. See Addis v. Crocker, 1 Q.B. 11, 2 All E.R. 629 CA. See
Halisbury's Laws of England, Libel and Slander 28:98-101. Several
states provide absolute privilege for complaints and testimony in
ethics proceedings through statutes, court rules, or rules of attorney
discipline. See Alaska Attorney Rules, Disciplinary Enforcement Rule 9
(Supp.1983); Ariz. Rules Regulating Conduct of Attorneys, Rule XII
(Michie Supp. 1983); Cal. Art. 5.5 Sec.  6094 (1984); Colo.R.C.P. Rule
259(C) (Michie Supp. 1983); Stone v. Rosen, 348 So. 2d 397
(Fla.Dist.Ct.App. 3 1977); Ga. Code App. to Title 9, Part IV, State Bar
Rule 4-221(g); Hawaii S. Ct. Rule 16.7 (1992); La. Rev. Stat. Ann.
Sec.  37 ch. 4 App., Art. of Incorp. Of La. State Bar Ass'n., Art. 15
Sec.  13 (West Supp. 1983); Minn. Rules of Law: Prof. Resp., Rule 21
(1977); Miss. Code Ann. Sec.  73-3-345 (1992); N.J.S.Ct.Rule 1:20-
11(b)(1984); Sullivan v. Crisona, 283 N.Y.S.2d 62 (Sup. Ct. 1967)
(interpreting N.Y. Judiciary Law Sec.  90); N.D. Cent. Code Sec.  27-
14-03 (1974); Okla. Ct. Rules Governing Disciplinary Proc., Chap. 1,
App. 1-A, Rule 5, Sec.5.4 (1981); S.C. Rules on Disciplinary Procedure
for Att'ys Sec. Sec.  11, 26 (Lawyers Coop. Supp. 1983) (complaints may
be subject to contempt sanctions and injunction against malicious
filing, but privilege prevents lawsuits predicated on filing or
testimony); S.D. Codified Laws Ann. Sec.  16-19-30 (1994); W. Va. State
Bar Bylaws Art. VI Sec.  43 (1982); Wyo. Ct. Rules, Disciplinary Code
for the Wyo. State Bar, Rule VI (1973).
    Other jurisdictions provide qualified immunity or privilege. See
Ind. S.Ct. Rules Part VI, Admission & Discipline Rule 23 Sec.  20
(1983) (immunity in absence of malice); Kan.S.Ct.Rule 223 (same
privilege as attaches in other judicial proceedings); Me. Bar Rule
7(f)(1) (1983) (immunity in absence of malice); Neb.S.Ct. Rule 106
(1983) (absolute privilege for good faith complainant); In re Proposed
Rules Relating to Grievance Pro., 341 A.2d 272 (N.H. 1975) (approving
proposed rules effective July 25, 1975, Rule 10 providing immunity for
statements made in good faith).
    Communications made to licensing agencies in connection with an
application for issuance, renewal, or revocation of a license have
frequently been held to be entitled to absolute privilege. Alagna v.
New York & Cuba Mail S.S. Co., 155 Misc. 796 279 NYS 319 (1935)
(complaint to Federal Communications Commission complaining of conduct
of licensed radio operators held absolutely privileged). Communications
to Federal agencies responsible for protecting the public are
privileged. See Holmes v. Eddy, 341 F.2d 477 (CA 4 1965) (holding
communication to the Securities and Exchange Commission did not amount
to defamation since Commission had statutory duty to protect public
from frauds through stock issues, and communication was treated as
confidential and not disclosed until beginning of court action);
Riccobene v. Scales, 19 F.Supp 2d 577 (N.D. W. Va. 1998) (statements by
attorney, representing Army officer's wife, to officer's superior made
in course of representing the wife, are absolutely privileged as they
were intended to obtain Army's help in ending domestic abuse, and Army
had clear interest in receiving reports of domestic violence committed
by soldiers).
    A person filing a complaint with the Office is proscribed from
providing materially false written statements. Under 18 U.S.C 1001(a)
criminal penalties are provided for whoever, in any matter within the
jurisdiction of the Office ``knowingly and willfully * * * (2) makes
any materially false, fictitious, or fraudulent statement or
representation; or (3) makes or uses any false writing or document
knowing the same to contain any materially false, fictitious, or
fraudulent statement or entry.''
    The Office is responsible for protecting the public from persons,
agents and attorneys demonstrated to be ``incompetent or disreputable,
or guilty of gross misconduct, or who does not comply with the
regulations established under section 2(b)(2)(D) of'' the Patent
Statute. 35 U.S.C. 2(b)(2)(D). The proposed rule provides potential
complainants with appropriate notice of the qualified immunity while
enabling the Office to fulfill its responsibility.

Recognition To Practice Before the USPTO

    Section 11.4, like current Sec.  10.3, would provide for a
Committee on Enrollment, which will advise the OED Director in
connection with the Director's duties under Sec.  11.2(b)(2).
    Section 11.5 would provide for keeping a register of attorneys and
agents recognized to practice before the Office in patent matters, and
a definition of practice before the Office.
    Paragraph (a) of Sec.  11.5, like current Sec.  10.5, would
continue to provide for maintaining a single register of attorneys and
agents registered to practice before the Office. The proposed rule
would conform to actual practice.
    Paragraph (b) of Sec.  11.5 would add a new concept for
disciplinary and non-disciplinary matters. The paragraph introduces
definitions for practice before the Office broadly, as well as practice
before the Office in patent matters, and practice before the Office in
trademark matters. The proposed broad definition of practice before the
Office is similar to the definition of ``practice'' adopted by the
Internal Revenue Service. 31 CFR 10.2(e). Practice before the Office
would not include the physical or electronic delivery of documents to
the Office.
    The definition of practice before the Office in patent matters is
derived from Sperry v. Florida, 373 U.S. 379, 137 USPQ 578 (1963). In
Sperry, the Supreme Court found that ``preparation and prosecution of
patent applications for others constitutes the practice of law.'' The
Court recognized that ``[s]uch conduct inevitably requires the
practitioner to consider and advise his clients as to the patentability
of their inventions under the statutory criteria, 35 U.S.C. 101-103,
161, 171, as well as to consider the advisability of relying upon
alternative forms of protection which may be available under state law.
It also involves his participation in the drafting of the specification
and claims of the patent application, 35 U.S.C. 112, which this Court
long ago noted `constitute[s] one of the most difficult legal
instruments to draw with accuracy,' Topliff [hairsp][hairsp]v. Topliff,
145 U.S. 156, 171. And upon rejection of the application, the
practitioner may also assist in the preparation of amendments, 37 CFR
1.117-1.126,\1\ which frequently requires written argument to establish
the patentability of the claimed invention under the applicable rules
of law and in light of the prior art. 37 CFR 1.119.'' Sperry, 373 U.S.
at 383, 137 USPQ at 579.
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    \1\ 37 CFR 1.117-1.119, and 1.122-1.124 no longer exist.
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    Consistent with the foregoing, courts in several jurisdictions have
held the preparation of patent applications by unregistered individuals
to be the unauthorized practice of law. See In re Amalgamated
Development Co., Inc., 375 A.2d 494, 195 USPQ 192 (D.D.C. 1977), cert.
denied, 434 U.S. 924 (1977); People v. O'Brien, 142 USPQ 239 (N.Y.
1964); Cowgill v. Albright, 307 N.E. 2d 191, 191 USPQ 103 (Ct. App.
Ohio 1973); and Virginia v. Blasius, 2 USPQ2d 1320 (Va. Cir. Ct. 1987).
    In Ohio, the preparation, filing and prosecution of patent
applications before the Office has been recognized as the practice of
law. Formal Opinion 91-25 (1991) of the Board of Commissioners on
Grievances and Discipline of the Ohio Supreme Court.

[[Page 69446]]

    The definition of practice before the Office in trademark matters
is derived in part from disciplinary cases concerning attorneys engaged
to prepare and prosecute trademark matters. See Attorney Grievance
Commission of Maryland v. Harper, 477 A.2d 756 (Md. 1984) (holding
attorney neglected legal matter by failing to prosecute filed trademark
application); State of Nebraska v. Gregory, 554 N.W.2d 422 (Neb. 1996)
(holding attorney did not competently act or zealously represent a
client by failing to file a trademark application); Office of
Disciplinary Counsel v. Frease, 660 N.E.2d 1156 (Ohio 1996) (holding
attorney neglected legal matter entrusted to him when he did not file
applications for trademark registration). The definition is also
derived from case law involving unauthorized practice of law wherein a
layperson offered trademark registration services. See Statewide
Grievance Committee v. Goldstein, 1996 Conn. Super. LEXIS 3430 (Conn.
Super. 1996) (enjoining layperson from advertising, offering to
complete, and completing blank legal documents for ``areas commonly
understood to be the practice of law including * * * trademark and/or
patent,'' soliciting information from customers and using the
information ``to select, prepare or complete legal documents,'' and
``providing written and/or oral instructions to customers advising them
what to do with their legal documents.'').
    The definition of practice before the Office also includes private
conduct relating to good character and integrity essential for a
practitioner in patent, trademark, or other non-patent law matters. The
definition is derived from case law disciplining attorneys for
misconduct not related to the practice of law. Any misbehavior, private
or professional, that reveals a lack of good character and integrity
essential for a person to practice as an attorney constitutes a basis
for discipline. Matter of Hasbrouck, 657 A.2d 878 (N.J. 1995); In re
LaDuca, 140, 299 A.2d 405 (N.J. 1973). That a person's activity does
not arise from a lawyer-client relationship, that the behavior is not
related to the practice of law or that the offense is not committed in
the attorney's professional capacity is immaterial. In re Suchanoff,
460 A.2d 642 (N.J. 1983); In re Franklin, 365 A.2d 1361 (N.J. 1976).
    Section 11.6, like current Sec.  10.6, would provide for
registration of individuals to practice before the Office in patent
matters.
    Paragraphs (a) and (b) of Sec.  11.6 would provide for registration
of attorneys and agents, respectively. Citizens of the United States
could be registered regardless of their residence. The OED Director
could register resident aliens, under appropriate circumstances.
Registration of permanent resident aliens would be consistent with In
re Griffiths, 413 U.S. 717 (1973) (permanent resident alien entitled to
be admitted to Connecticut Bar notwithstanding status as alien). See
also Raffaelli v. Committee of Bar Examiners, 496 P.2d 1264 (Cal. 1972)
and Application of Park, 484 P.2d 1264 (Alas. 1971). The Office
currently registers permanent resident aliens. See In re Bhogaraju, 178
USPQ 628 (Comm'r Pat. 1973); In re Bramham, 181 USPQ 723 (Comm'r Pat.
1974); and In re Keen, 187 USPQ 477 (Comm'r Pat. 1975).
    The proposed rules would restrict circumstances under which an
alien could be registered. Registration would be precluded if the
practice of patent law before the Office is inconsistent with the terms
of any visa under which the alien is admitted to and continues to
reside in the United States. Registration would be precluded, for
example, when the visa petition does not describe that the alien as
being authorized to be employed in the capacity of representing patent
applicants before the Office. See In re Richardson, 203 USPQ 959
(Comm'r Pat. 1979) (alien admitted to U.S. with H-3 visa for training
could not practice patent law under terms of the visa), and In re
Mikhail, 202 USPQ 71 (Comm'r Pat. 1976) (alien admitted to U.S. on B-1/
B-2 visa and visiting the U.S. temporarily for business or pleasure
could not practice under the terms of the visa). It is nevertheless
appropriate for some aliens to be granted limited recognition under
Sec.  11.9. See In re Messulam, 185 USPQ 438 (Comm'r Pat. 1975)
(granting limited recognition to alien admitted to U.S. on L-1 visa for
purpose of rendering service to a single company for whom the alien had
previously worked abroad and who would remain in the U.S. temporarily).
See also In re Gresset, 189 USPQ 350 (Comm'r Pat. 1976).
    Paragraph (c) of Sec.  11.6, like current Sec.  10.6(c), would
continue to provide for registration of foreign patent agents on the
basis of substantial reciprocity. Paragraph (c) would add procedures
for removing a patent agent's name from the register if the patent
agent is no longer registered in good standing before the patent office
of the country in which he or she resides, or no longer resides in the
foreign country. The procedures would avoid any necessity of going
through an administrative proceeding.
    Section 11.7, like current Sec.  10.7, would set forth the
requirements for registration.
    Paragraphs (a)(1) and (a)(2) of Sec.  11.7, like current Sec.
10.7(a), would continue to require an individual to apply for
registration, and establish possession of good moral character, as well
as legal, scientific and technical qualifications, and competence to
advise and assist patent applicants.
    Paragraph (a)(3) of Sec.  11.7 would explicitly place the burden of
proof of good moral character and reputation on the applicant, and
provide ``clear and convincing'' as the standard of proof.
    Paragraph (b)(1) of Sec.  11.7, like current Sec.  10.7(b), would
continue to require an individual to take and pass a registration
examination in order to practice in patent matters before the Office.
    Paragraph (b)(2) of Sec.  11.7 would identify components of a
complete registration application, give an individual submitting an
incomplete application 60 days from the notice to file a complete
application, and require individuals to update their applications
wherever there is an addition to or change to information previously
furnished with the application.
    Paragraph (c) of Sec.  11.7 would allow for a petition to the OED
Director from any action refusing to register anindividual, refusing to
admit an individual to the registration examination, refusing to
reinstate an individual, or refusing to refund or defer any fee. The
petition would be accompanied by the fee set forth in Sec.  1.21(a)(5).
    Paragraph (d) of Sec.  11.7, like current Sec.  10.7(b), would
continue to provide for waiver of the examination for former patent
examiners. Unlike Sec.  10.7(b), waiver no longer would be available
(except for a grandfathering provision) merely upon successfully
serving in the patent examining corps for four years. Paragraph (d)
would introduce new conditions for waiver of the registration
examination for former patent examiners and expand the occasions for
waiving the examination for other Office employees.
    Currently, the requirement to take the examination may be waived in
the case of any individual who has actively served for at least four
years in the patent examining corps of the Office. The Office provides
newly hired examiners with initial training. Thereafter, training
provided by the Office is received on the job, or in more advanced
formal training courses. Primary patent examiners are examiners who the
Office has certified as having legal competence to act with a minimum
of oversight. The Office also gives primary examiners a certificate
granting authority to negotiate with

[[Page 69447]]

practitioners. Before an examiner is promoted to primary patent
examiner, a group of patent applications that he or she has examined is
reviewed for competence and compliance with rules and procedures.
However, no test is administered to ascertain the examiner's knowledge
of patent law, practice and procedure. After an examiner achieves
primary status, there is no periodic testing/training to ensure that
the individual maintains an expected level of competency in law,
regulations and practice and procedures. Currently, subsequent training
takes place in the form of lectures or memoranda following changes to
the patent law and/or regulatory changes.
    To ensure competence the Office is instituting a formal
certification and recertification program for patent examiners, in
keeping with its 21st Century Strategic Plan. The program will require
examiners being promoted to grade GS-13 to pass a competency
examination based on the examination taken by persons seeking to be
registered as a patent practitioner.
    Also, patent examiners, like licensed practitioners, would be
required to receive training and pass recertification tests to update
and maintain competence and proficiency in patent law, practices and
procedures.
    The proposed rule would provide for waiver of the registration
examination for two groups of former patent examiners who were serving
in the patent examining corps at the time of their separation.
    Paragraph (d)(1) of Sec.  11.7 would address former patent
examiners who, by a date to be determined, had not actively served four
years in the patent examining corps, and who were serving in the corps
at the time of their separation. The registration examination would be
waived for a former examiner if he or she met four conditions. The
former examiner must have (i) actively served in the patent examining
corps of the Office, (ii) received a certificate of legal competency
and negotiation authority; (iii) been rated, after receiving the
certificate of legal competency and negotiation authority, at least
fully successful in each quality performance element of his or her
performance plan for the last two complete fiscal years as a patent
examiner, and (iv) not have been under an oral or written warning
regarding the quality performance elements at the time of separation
from the patent examining corps.
    Paragraph (d)(2) of Sec.  11.7 would address former patent
examiners who, by a date to be determined, have actively served four
years in the patent examining corps, and who were serving in the corps
at the time of their separation. The examination would be waived for
the former examiner if he or she meets three conditions. The former
examiner must (i) have actively served for at least four years in the
patent examining corps of the Office by the date to be determined, have
been rated at least fully successful in each quality performance
element of his or her performance plan for the last two complete fiscal
years as a patent examiner in the Office; and (iii) not have been under
an oral or written warning regarding the quality performance elements
at the time of separation from the patent examining corps.
    Requiring that an examiner be rated at least fully successful in
the quality performance elements of his or her performance plan is in
accord with prior practice. Former examiners, who upon separation from
the Office, were rated unacceptable for quality performance elements
have been required to take the registration examination. Accord,
Commissioner's Decision, leg.01.pdf, posted on the Office Web site as
http://www.uspto.gov/web/offices/com/sol/ foia/oed/legal/leg01.pdf.
    Paragraph (d)(3) of Sec.  11.7 would address certain former Office
employees who were not serving in the patent examining corps upon their
separation from the Office. The examination would be waived for a
former Office employee meeting four requirements. The former employee
must demonstrate by petition that he or she possesses the necessary
legal qualifications to render to patent applicants and others valuable
service and assistance in the preparation and prosecution of their
applications or other business before the Office by showing that (A) he
or she has exhibited comprehensive knowledge of patent law equivalent
to that shown by passing the registration examination as a result of
having been in a position of responsibility in the Office in which he
or she: (i) Provided substantial guidance on patent examination policy,
including the development of rule or procedure changes, patent
examination guidelines, changes to the Manual of Patent Examining
Procedure, or development of training or testing materials for the
patent examining corps; or (ii) represented the Office in patent cases
before Federal courts; and (B) was rated at least fully successful in
each quality performance element of his or her performance plan for the
position for the last two complete rating periods in the Office, and
was not under an oral warning regarding the quality performance
elements at the time of separation from the Office.
    Paragraph (d)(4) of Sec.  11.7 would provide additional conditions
for waiver of the examination for each individual covered in paragraphs
(d)(1) through (d)(3). To be eligible for consideration for waiver, the
individual must file a complete application within two years of
separation from the Office, together with the fee required by Sec.
1.21(a)(1)(i). All other individuals and former examiners filing an
application or paying a fee more than two years after separation from
the Office would be required to take and pass the examination in order
to demonstrate competence to represent applicants before the Office. If
the examination is not waived, the individual or former examiner also
would have to pay the examination fee required by Sec.  1.21(a)(1)(ii)
within 30 days of notice.
    Paragraph (e) of Sec.  11.7 would eliminate the provision for
regrade of an examination. The current rule requires the Office to
treat each regrade request individually. Candidates requesting regrade
seek, in effect, individualized regrading. Individualized regrading can
promote the occurrence of arbitrary and capricious decisions.
    The standard for review of the grading of the registration
examination is ``whether the officials of the Patent Office acted
fairly and without discrimination in the grading of the plaintiff's
examination, pursuant to a uniform standard.'' See Cupples v. Marzall,
101 F.Supp. 579, 583 (D.D.C. 1952). The Office uses a set of model
answers in grading examination answers. The use of Office Model Answers
to grade the examination satisfies the Cupples standard ``because it
provides a set of uniform standards by which all examinations can be
fairly judged and is therefore not arbitrary and capricious.'' Worley
v. USPTO, 2000 U.S. Dist. LEXIS 16992, 16997 (D.D.C. 2000). In
contrast, ``permitting individualized and subjective regrading upon
request would promote, not reduce, the likelihood that the Office would
make arbitrary and capricious decisions regarding who passes and fails
the Patent Bar examination.'' Worley, at 16998. See also Kyriazis v.
Dickinson, No. 99-2299, slip op. at 7 (D.D.C. Dec. 8, 2000) (``this
Court rejects Plaintiff's argument that a regrade of question 16 of the
examination should consist of an individual determination as to whether
Mr. Kyriazis's explanation for his answer constitutes the correct
interpretation of patent law, rather than a determination whether the
grading conformed with the PTO's Model Answers'').
    To treat each regrade request individually requires dedication of

[[Page 69448]]

considerable resources. Further, such regrades require release of both
the questions and Model Answers. In turn, release of the questions and
answers necessitates preparation of new examinations twice each year.
Producing new examinations twice each year requires dedication of
considerable resources. The Office is already pressed for staff and
time to provide these services. The Office intends to change the
delivery of the registration examination. The examination would no
longer be administered twice a year in a paper and pencil format.
Instead, a private sector party would deliver the examination at
computer terminals at that party's test sites. It is anticipated that
the examination would be administered each business day. The
examination would not be delivered to applicants on the Internet. The
registration examination is and will continue to be a multiple choice
examination. The Office intends to develop a databank of multiple
choice questions in following years that can be reused in subsequent
examinations. The source of the questions and answers would be the
patent laws, rules and procedures as related in the Manual of Patent
Examining Procedure (MPEP) and policy statements issued by the Office.
The examination would be ``open-book'' in the sense that the MPEP and
policies would be accessible at the same computer terminals where the
examination is taken. Paper forms of the MPEP or policies could not be
brought into the private sector party's test site. New questions would
be introduced as MPEP revisions or policy statements introduce new
policies, rules, procedures, or statutory law changes. The USPTO would
announce when questions are added to the data base addressing revisions
of the MPEP or new policy statements. Questions would be retired as
necessary and consistent with the changes. Reuse of questions could
reduce the time and resources needed to develop the examination each
time it is given. To reuse questions and reduce pressure on the staff,
it would be necessary to cease publication of the questions and the
corresponding answers. This would preserve the fairness of the test for
later applicants.
    The Multistate Bar Examination (MBE), like the registration
examination, is a multiple choice examination. Questions on the MBE are
reused in later years. An individual may review on his own MBE
examination papers under the guidelines established by the National
Conference of Bar Examiners, i.e., under supervision and without taking
notes. See Fields v. Kelly, 986 F.2d 225, 227 (8th Cir 1993). Under
proposed paragraph (g), an unsuccessful applicant would schedule an
opportunity to review, i.e., inspect the examination questions and
answers he or she incorrectly answered under supervision without taking
notes. The questions could not be copied. This would be the same as the
guidelines established by the National Conference of Bar Examiners for
inspection of the MBE.
    Under proposed paragraph (e), an unsuccessful applicant satisfying
the admission requirements would have a right to sit for future
examinations. The due process clause of the Fourteenth Amendment does
not require that unsuccessful applicants be given the opportunity for a
regrade. The applicant is afforded due process by permitting him or her
to sit for the examination again. See Lucero v. Ogden, 718 F.2d 355
(10th Cir. 1983), cert. denied, 465 U.S. 1035, 79 L. Ed. 2d 706, 104
S.Ct. 1308 (1984) (``Courts have consistently refrained from entering
the arena of regrading bar examinations when an unqualified right of
reexamination exists.''); Tyler v. Vickery, 517 F.2d 1089, 1103 (5th
Cir. 1975), cert. denied, 426 U.S. 940, 49 L. Ed. 2d 393, 96 S.Ct. 2660
(1976); Poats v. Givan, 651 F.2d 495, 497 (7th Cir. 1981); Davidson v.
State of Georgia, 622 F.2d 895, 897 (5th Cir. 1980); Sutton v. Lionel,
585 F.2d 400, 403 (9th Cir. 1978); Whitfield v. Illinois Board of Bar
Examiners, 504 F.2d 474, 478 (7th Cir. 1974) (Constitution does not
require an unsuccessful applicant be permitted to see his examination
papers and to compare them with model answers or answers of successful
applicants); Bailey v. Board of Law Examiners, 508 F.Supp. 106, 110
(W.D. Tex. 1980); and Singleton v. Louisiana State Bar Ass'n., 413
F.Supp. 1092, 1099-1100 (E.D. La. 1976).
    Limiting access to the questions would not deny the unsuccessful
applicant equal protection of the laws. Inasmuch as some of the
questions appear in following years, the questions must be kept secret
in order to preserve the fairness of the test for later applicants. See
Fields v. Kelly, 986 F.2d at 227. An unsuccessful applicant also is not
deprived of a property right without due process by limiting access to
the questions. Providing an opportunity to review the examination under
supervision without taking notes affords the applicant a hearing at the
administrative level. Id. at 228.
    The Administrative Procedures Act provides procedural protections
in matters involving an ``adjudication,'' which includes licensing. 5
U.S.C. 554. However, the Act also provides that these protections are
not required where there is involved ``proceedings in which decisions
rest solely on inspections, tests, or elections * * *. ``5 U.S.C.
554(a)(3). This subsection implicitly recognizes that ``where
examinations are available, further procedural protections are
unnecessary. See also 1 K. Davis, Administrative Law Treatise Sec.
7.09 (1958).'' Whitfield v. Illinois Board of Bar Examiners, 504 F.2d
474, 478 (7th Cir. 1974).
    Paragraph (f) of Sec.  11.7 would continue the current practice in
which applicants seeking reciprocal recognition under Sec.  11.6(c)
must file an application and pay the fee set forth in Sec.  1.21(a)(6).
It would introduce the practice of paying the application fee required
by Sec.  1.21(a)(1)(i).
    Paragraph (g) of Sec.  11.7 would continue the practice of
soliciting information bearing on the moral character and reputation of
individuals seeking recognition. If information from any source is
received that tends to reflect adversely on the moral character or
reputation of an individual seeking recognition, the OED Director would
conduct an investigation into the individual's moral character and
reputation.
    The proposed regulation specifies that the information sought
bearing on the moral character and reputation of individuals includes
events regardless of whether the records have been expunged or sealed
by a state court. In accordance with the supremacy clause of the United
States Constitution, ``a federal agency acting within the scope of its
congressionally delegated authority may pre-empt state regulation.''
Louisiana Public Service Comm'n. v. FCC, 476 U.S. 355, 369, 90 L. Ed.
2d 369, 106 S.Ct. 1890 (1986). The pre-emptive force of a Federal
agency's regulation does not depend on express Congressional
authorization. Instead, the correct focus is on ``the proper bounds of
[the Federal agency's] lawful authority to undertake such action.''
City of New York v. FCC, 486 U.S. 57, 64, 100 L. Ed. 2d 48, 108 S.Ct.
1637 (1988).
    Congress has authorized the USPTO Director to adopt regulations
requiring individuals to demonstrate that they are of good moral
character and reputation before being recognized. 35 U.S.C. 2(b)(2)(D).
The statute does not mention expungement as a means for removing
statutory disqualifications. Congress does not appear to have
contemplated these expungements would limit the USPTO Director's
authority under statute. Requiring disclosure of expunged offenses is a
rational and

[[Page 69449]]

reasonable method to promote licensing individuals presently possessing
good moral character and reputation. In Dickerson v. New Banner
Institute, Inc., 460 U.S. 103, 103 S.Ct. 986, 74 L. Ed. 2d 845 (1983),
the Supreme Court held that an Iowa expungement of a judgment did not
remove disabilities imposed by the Federal Gun Control Act of 1968 on
the basis of the state conviction, and that the expungement did not
nullify the conviction. Information regarding expunged offenses is
clearly relevant to, though not necessarily determinative of, an
applicant's moral character. See Wilson v. Wilson, 416 F.Supp. 984 (D.
Oregon 1976). Expungement, for example, does not signify that the
person was innocent of the crime. Rather, expungement alleviates
certain continuing effects of a conviction under various laws. State
bar examiners consider the commission of any crime, including expunged
offenses, in weighing an applicant's overall character and fitness to
practice law. See In re Leff, 619 P.2d 232 (Ariz. 1980); State Bar v.
Langert, 276 P.2d 596 (Calif. 1954); Florida Board of Bar Examiners Re:
Certified Question--Felony Convictions--Federal Youth Corrections Act,
361 So.2d 424 (Fla. 1978); In re Majorek, 508 N.W.2d 275 (Neb. 1993);
In re McLaughlin, 675 A.2d 1101 (N.J. 1995); and In re Davis, 403
N.E.2d 189 (Ohio 1980). Requiring disclosure of arrests, even if a
state court has ordered expungement, does not violate a constitutional
right to privacy. See AFL-CIO v. HUD, 118 F.3d 786 (D.D.C. 1997). The
proposed rule would provide applicants with notice of the requirement
for disclosure of expunged records.
    The USPTO is seeking comments on the two alternatives proposed
below for accepting a state bar's determination on the moral character
of persons seeking to become registered practitioners who at the time
of filing of their USPTO application, have been admitted as an attorney
in a State Bar and continue to be in good standing.
    One option is to require applicants who are attorneys to submit a
certified copy of their State Bar application and moral character
determination. The Office may accept the moral character determination
as meeting the requirements set forth in Sec.  11.7(g).
    The second option is to require these applicants to submit a
certified copy of their State Bar application and moral character
determination and for the Office to accept the State Bar's character
determination as meeting the requirements set forth in Sec.  11.7(g)
if, after review, the Office finds no substantial discrepancy between
the information provided with their USPTO application and the State Bar
application and moral character determination. In such a case, OED will
accept the moral character determination of the State Bar as meeting
the requirements set forth in Sec.  11.7(g), so long as this acceptance
is not inconsistent with other rules and the requirements of 35 U.S.C.
2(b)(2)(D). If the USPTO finds that there is substantial discrepancy or
if OED obtains or receives other or new information, or if the
determination of moral character conflicts with other rules or Sec.
2(b)(2)(D), the USPTO reserves the right to make an independent
decision.
    The first option, accepting the state bar's determination on moral
character without further review, is administratively convenient.
However, it raises the issue of equal treatment between patent
attorneys and patent agents as to standards applied. The nature of the
patent application proceedings before the USPTO allows for registered
practitioners to represent clients before the Office who may or may not
be attorneys. In addition, ``Congress placed the responsibility on
Director to protect the public.'' 35 U.S.C. Sec.  2(b)(2)(D).\2\ Under
35 U.S.C. Sec.  32, the USPTO is under an obligation to consider the
moral character of all applicants seeking to become registered
practitioners. The states and USPTO have concurrent authority to
protect the public. Kroll v. Finnerty, 242 F.3d 1359 (Fed. Cir. 2001).
Thus, the USPTO may not have authority to resolve all moral character
questions of attorneys by deferral to the state determinations.
Complete deference to a determination on moral character made by state
bars is inconsistent with the USPTO's responsibility of protecting the
public. Further, it is possible that state bars may be unaware of
violations brought to the attention of the Office. The Office cannot
circumvent its responsibility to protect the public. In tandem, it is
not the Office's intent to place an unnecessary burden on state bars to
make determinations on issues that can be equally addressed by both
entities. Thus, while it is appropriate to consider the determination
on moral character made by state bars as part of the application
process at the USPTO, it is inconsistent with the statute to accept the
state bar determination as dispositive of the issue for USPTO purposes.
    Under the first option, the USPTO would give deference to the state
bars if the Office allows patent attorneys to submit a copy of their
state bar applications and moral character determinations. Under the
second option, the USPTO would still give deference, but reserves the
authority to look further into the issue of moral character if there is
substantial discrepancy between the information provided in the USPTO
application form and the state bar application or if new information is
provided related to this matter. This is a satisfactory compromise that
enables both the states and the USPTO to exercise their respective
authorities to protect the public.
    Paragraph (h) of Sec.  11.7 would define moral character. The
definition is derived from Konigsberg v. State Bar of Cal., 353 U.S.
252, 77 S.Ct. 722, 1 L.Ed.2d 810 (1957); and In re Matthews, 462 A.2d
165 (NJ 1983). This paragraph also would provide a nonexclusive list of
moral character factors considered by the OED Director. The list would
be substantially the same as that considered by the Committee of Bar
Examiners of the State Bar of California in ``Statement on Moral
Character Requirement For Admission to Practice Law in California,''
which is available at http://www.calbar.org/shared/2admndx.htm.
    Paragraph (h)(1) of Sec.  11.7 would provide not only that an
applicant convicted of a felony or crime involving moral turpitude or
breach of fiduciary duty is presumed not to be of good moral character,
but also that the individual would be ineligible to apply for
registration until two years after completion of any sentence and
probation or parole. See In re Dortch, 687 A.2d 245 (Md. 1997); Seide
v. Committee of Bar Examiners (Calif.), 782 P.2d 602 (Cal. 1989). The
individual would have to pay the fee required by Sec.  1.21(a)(10) with
the application for registration.
    Paragraph (h)(4) of Sec.  11.7 would provide that an attorney
disbarred or suspended from the practice of law, or an attorney who
resigns in lieu of discipline would not be eligible to apply for
registration for a period of two years following completion of the
discipline. The OED Director would have discretion to waive the two-
year period only if the individual demonstrates that he or she has been
reinstated to practice law in the State where he or she had been
disbarred or suspended, or had resigned. The attorney would have to

[[Page 69450]]

pay the fee required by Sec.  1.21(a)(10) with the application for
registration.
    Paragraph (i) of Sec.  11.7 would identify factors that may be
taken into consideration when evaluating rehabilitation of an applicant
seeking a moral character determination for registration.
---------------------------------------------------------------------------

    \2\ ``[T]he primary responsibility for protection of the public
from unqualified practitioners before the Patent [and Trademark]
Office rests with the Commissioner of Patents [and Trademarks].''
Gager v. Ladd, 212 F.Supp. 671, 673, 136 USPQ 627, 628 (D.D.C.
1963), (quoting with approval Cupples v. Marzall, 101 F.Supp. 579,
583, 92 USPQ 169, 172 (D.D.C. 1952), aff'd, 204 F.2d 58, 97 USPQ 1
(D.C. Cir. 1953)).
---------------------------------------------------------------------------

    Paragraph (j) of Sec.  11.7 would provide procedures for the OED
Director and Committee on Enrollment to hear cases arising if the OED
Director believes that any evidence suggests that an individual lacks
good moral character and reputation. The procedures are in accord with
those recognized in Willner v. Committee on Character and Fitness, 373
U.S. 96, 83 S.Ct. 1175 (1963) as providing due process. When the
evidence is information supplied or confirmed by the individual, or is
of an undisputed documentary character, the hearing will be on the
written record. When a person or source whose reliability or veracity
is questioned supplies the evidence, the individual may choose to have
a hearing on the written record, or have an oral hearing to confront
and cross-examine the person or source providing the evidence. The
expense of an oral hearing could be a serious burden on an individual
who is both distant from the Office and without an established
practice. The rule provides such an individual with an alternative to
an oral hearing, i.e., being heard on a written record with briefing.
The procedures for an oral hearing are similar to those adopted by the
District of Columbia Court of Appeals. Rule 46(f) and (g). An oral
hearing will provide the Committee and OED Director with an opportunity
to observe the individual's demeanor.
    Paragraph (k) of Sec.  11.7 would allow an individual whose
application for registration has been rejected because of lack of good
moral character and reputation to reapply for registration. The
individual would be permitted to reapply five years after the ruling,
unless otherwise provided. The individual would also be required to
take and pass the registration examination. This provision follows the
same time provisions of Rule 201.12 of the Rules Governing Admission to
the Bar of the State of Colorado. The individual would have to pay the
fee required by Sec.  1.21(a)(10) with the application for
registration.
    Section 11.8 would continue the practice under current 37 CFR 10.8
of requiring an oath and payment of a fee prior to registration, and
conform to the practice of filing a completed Data Sheet.
    Paragraph (a) of Sec.  11.8 would provide a two-year period within
which an applicant who passes the registration examination may complete
registration. In effect, a passing score would be good for two years.
The Office would deem this period reasonable for individuals who have
not been registered, and not completed their registration within two
years. Their continued familiarity with the Patent Statute, Office
practices and procedures, and changes thereto in the interim is not
established, and they could not lawfully practice before the Office in
patent matters in that period. The two-year period is similar to the
time afforded District of Columbia Bar applicants, who may request
acceptance of a prior Multistate Bar Examination or essay exam result
provided, inter alia, the prior administration of the examination was
within 25 months of the examination about to be administered. See Rules
46(b)(8)(A)(3) and 46(b)(8)(B)(3) of the Rules of the District of
Columbia Court of Appeals.
    Under paragraph (a) of Sec.  11.8, limited recognition would no
longer be granted to individuals while awaiting registration. The
period candidates await registration is expected to be reduced by the
Office's soliciting information tending to affect the eligibility of
candidates based on their character on both the Office Web site as well
as the Official Gazette. The names of the candidates receiving a
passing score will be published. The public will be given 60 days from
publication on the Web to provide the information.
    Paragraph (b) of Sec.  11.8 would add procedures for applicants
seeking registration as a patent attorney or agent. An individual
seeking registration as a patent attorney would have to demonstrate
that he or she is a member in good standing with the bar of the highest
court of a state.
    Paragraph (c) of Sec.  11.8 would codify a practice of requiring
individuals to update the information and answers they provide on their
applications based on events occurring between the date an individual
signs an application, and the date he or she is registered or
recognized to practice before the Office in patent matters. This would
include not only changes of address, but also events that may reflect
adversely on the individual's moral character. The latter would serve
the integrity of the registration process to require the applicant to
update information and answers, and show that the individual continues
to satisfy the requirements of Sec.  11.7(a)(2)(i).
    Paragraph (d) of Sec.  11.8 would introduce an annual fee to be
paid by registered practitioners. The amount of the fee would be set
forth in Sec.  1.21(a)(7). The annual fee would be due in three-month
intervals depending on the first initial of a practitioner's last name.
The roster would be divided into four units. The payment period for
last names beginning with A-E shall be every January 1 through March
31; the payment period for last names beginning with F-K shall be every
April 1 through June 30; the payment period for last names beginning
with L through R shall be every July 1 through September 30; and the
payment period for last names beginning with S through Z shall be every
October 1 through December 31.
    In the past, the fees paid by applicants and patentees have
supported the costs of the activities that maintain the patent
practitioner's community reputation for integrity. The proposed annual
fee is introduced pursuant to 35 U.S.C. 41(d). The annual fee is
intended to fund the costs of the disciplinary system, and maintaining
the roster of registered practitioners up-to-date by (i) annually
surveying the practitioners for current address/telephone/e-mail
information, and (ii) daily updating the roster with new changes of
address. With an annual fee, the Office would be funding the
disciplinary system as State Bars do, by dues from the bar members. Bar
disciplinary activities are generally regarded as being in the interest
of maintaining the Bar's reputation for integrity and supporting the
willingness of potential clients to engage the services of
practitioners. The continual updating of the USPTO roster is also in
the interest of assuring that registered practitioners are identified
to the public they seek to serve. The current cost of USPTO
disciplinary and roster maintenance programs is a little in excess of
$100 per year per registered practitioner. That cost is currently met
by funds from application, issue, or maintenance fees. It is
problematic to charge applicants for this activity, since many of the
complaints concern applications that were not filed or were filed or
prosecuted improperly or should not have been filed in the first place,
or patentees, who have received the benefit of competent counsel. The
anomaly is magnified by the need for disciplinary action concerning
practitioners who have been convicted of felonies, or disciplined by
state bars for matters other than practice before the Office. By
adopting an annual fee to be paid by registered practitioners, the
costs of these activities is not passed on to applicants. Thus, USPTO
will recover the costs associated with these activities from the
practitioners instead of the public in general. The funds received from
the annual fee would be directed

[[Page 69451]]

to these activities and would not be diverted to support other
proposals. The annual fee would not be imposed on persons during the
calendar year in which they are first registered to practice before the
Office. Failure to comply with this rule would subject a registered
practitioner to penalties set forth in Sec.  11.11(b).
    Section 11.9 would continue the same practice under current Sec.
10.9 of providing limited recognition of individuals under the
appropriate circumstances.
    Paragraph (a) of Sec.  11.9 would continue to provide for limited
recognition of individuals to practice before the Office in a
particular patent application or applications. The practice would be
limited to individuals who are not attorneys representing the
individual's close relative, such as a child, elderly parent.
    Paragraph (b) of Sec.  11.9 would provide for aliens, residing in
the United States, to obtain limited recognition to practice before the
Office in a particular patent application or applications if the
Immigration and Naturalization Service or the Department of State has
authorized the alien to be employed in the capacity of representing a
patent applicant by preparing and prosecuting the applicant's U.S.
patent application. Recognition may be granted if the applicant
satisfies the provisions of Sec.  11.7(a), (b), and (c) or (d).
Consistent with current practice, limited recognition would be granted
in maximum increments of one year, but would not be granted or extended
to an alien residing abroad. Limited recognition also would not be
granted to aliens admitted to the United States to be trained.
Recognition to practice before the Office, like admission to practice
law in any other jurisdiction, is not a training opportunity.
    Paragraph (c) of Sec.  11.9 would continue to provide for limited
recognition of an individual not registered under Sec.  11.6 to
prosecute an international application only before the U.S.
International Searching Authority and the U.S. International
Preliminary Examining Authority.
    Paragraph (d) of Sec.  11.9 would provide for a limited recognition
fee paid by an individual granted limited recognition under paragraphs
(b) or (c) of Sec.  11.9. The same individuals would also be required
to pay an annual fee upon renewal or extension of the limited
recognition previously granted. Failure to comply with the rule would
subject the individual to loss of recognition.
    Section 11.10 would set forth provisions regarding post-employment
restrictions on practice before the Office. Paragraph (a) would permit
only practitioners who are registered under Sec.  11.6 or individuals
given limited recognition under Sec.  11.9 to prosecute patent
applications of others before the Office.
    Paragraph (b) of Sec.  11.10 would parallel the provisions of 18
U.S.C. 207(a) and (b). The proposal would parallel the basic
restrictions of Sec.  207(a) on any registered former Office employee
acting as representative, or intending to bring influence, in a
particular matter in which he or she personally and substantially
participated as an employee of the Office. The proposal also would
parallel the basic two-year restriction of Sec.  207(b) on any
registered former Office employee acting as representative or with
intent to influence as to a particular matter for which the employee
had official responsibility. In addition, the proposal would proscribe
the same conduct occurring behind the scenes by prohibiting conduct
that ``aids in any manner'' the representation or communication with
intent to influence. It is appropriate that the conduct proscribed by
Sec. Sec.  207(a) and (b) be extended to conduct occurring behind the
scene. The conduct is proscribed by current Sec.  10.10(b). A patent
can be held unenforceable where a former patent examiner engaged in
behind the scene efforts to obtain a reissue patent on a patent in
which he or she personally and substantially participated as an
examiner. See Kearny & Trecker Corp. v. Giddings & Lewis, Inc., 452
F.2d 579 (7th Cir. 1971), cert. denied, 92 S.Ct. 1500 (1972).
    Paragraph (c) of Sec.  11.10 would introduce citation of the
statutory and regulation provisions governing the post employment
conduct of unregistered former employees. The provisions cover any
unregistered former employees, who represent another person in an
appearance or, by other communication, attempts to influence the
Government, including the Office, concerning a particular matter in
which he or she was involved. For example, a former patent examiner,
whether or not he or she becomes a registered practitioner, may not
appear as an expert witness against the Government in connection with a
patent granted on an application he or she examined as a patent
examiner.
    Paragraph (d) of 11.10, like current Sec.  10.10(c), would continue
to proscribe an employee of the Office from prosecuting or aiding in
any manner in the prosecution of a patent application for another.
    Paragraph (e) of Sec.  11.10 would continue the prohibition against
conflicts of interest contained in current Sec.  10.10(d). A number of
statutory and regulatory provisions affect U.S. Government employees
who are registered to practice before the Office. These provisions
include 18 U.S.C. 203 and 205.
    Section 205 is a criminal statute which ``precludes an officer or
employee of the Government from acting as an agent or attorney for
anyone else before a department, agency or court in connection with any
particular matter in which the United States is a party or has a direct
and substantial interest.'' Memorandum of Attorney General Robert F.
Kennedy Regarding Conflict of Interest Provisions of Public Law 87-848,
Feb 1, 1963, 28 F.R. 985. In interpreting a predecessor statute to
Sec.  205, Acting Attorney General Peyton Ford determined that ``the
United States is a party or directly or indirectly interested'' in
proceedings involving the filing and prosecution before the Patent
Office of an application for patent, and that the predecessor statute
therefore ``proscribe[d] the participation in such proceedings of
Government employees for compensation on behalf of private parties.''
Opinion of the Attorney General of the United States, Vol. 41, Op. No.
4, 82 USPQ 165 (Atty. Gen. 1949). Under the current statute,
``[s]ection 203 bars services rendered for compensation solicited or
received, but not those rendered without such compensation; section 205
bars both kinds of services.'' Memorandum of Attorney General Robert F.
Kennedy Regarding Conflict of Interest Provisions of Public Law 87-848,
Feb 1, 1963, 28 F.R. 985. Accord, OGE Informal Advisory Letter 91 X 11,
1991 WL 521202 (O.G.E.). Sections 203 and 205 apply to full-time and
part-time employees.
    OGE Informal Advisory Letter 91 X 11, 1991 WL 521202 (O.G.E.)
recognizes one exception. The prohibition does not apply if an
executive branch employee is ``a special employee'' as defined in 18
U.S.C. 202(a). The OGE Informal Advisory Letter also recognizes that
the exception does not apply to a special Government employee for those
particular matters involving specific parties in which the employee
participated as a Government employee and, if the employee served in
the department more than sixty days, to those matters pending before
the department where he or she is employed. A special Government
employee is one who is ``employed to perform * * * for a period not to
exceed one hundred and thirty days during any period of three hundred
and sixty five consecutive days, temporary duties either on a full-time
or

[[Page 69452]]

intermittent basis * * * Status as a special Government employee is
determined at the time of appointment.'' Section 202(a). The OGE
Informal Advisory Letter also recognizes that individuals serving in
the U.S. Military reserves as officers, are considered under the
provisions of section 202(a) to be special Government employees unless
they are called to active duty and serve for more than a specified
threshold period. The OGE Informal Advisory Letter indicates that
reservists in the enlisted ranks are not deemed subject to sections 203
or 205 when called to active duty.
    In view of such provisions, the opinion of the Attorney General,
and the OGE Informal Advisory Letter, the position of the Office would
be that full-time and part-time U.S. Government employees other than
special Government employees, may not solicit or accept private
clients, or represent clients other than their agency before the
Office. Accordingly, the Office of Enrollment and Discipline requires
registered practitioners who are employed by the U.S. Government full-
time or part-time to list their Government addresses as their official
addresses of record.
    Section 11.11 would continue the requirement under current Sec.
10.11 that a registered practitioner notify OED of a change of address
separately from any notice given in any patent applications.
    Paragraph (a) of Sec.  11.11, similarly to current Sec.  10.11(a),
would provide for requiring practitioners to notify the OED Director of
their postal address and telephone number for his or her business, as
well as every change thereto. Additionally, it would require
practitioners to notify the OED Director of the e-mail address for
their business and every change to the e-mail address. Notice of the
change of address or telephone number would have to be given within
thirty days of the date of the change. Practitioners will be encouraged
to provide their business e-mail address to facilitate the Office's
ability to communicate with the practitioners. A practitioner who is an
attorney in good standing with the bar of the highest court of one or
more states would also be required to provide the OED Director with the
state bar identification number associated with each membership. This
will enable the OED Director to distinguish between individual
attorneys having the same or similar names. Further, the section
identifies the information that the OED Director will routinely publish
on the roster about each registered practitioner recognized to practice
before the Office in patent cases.
    Paragraph (b)(1) of Sec.  11.11 would provide for administrative
suspension for failure to comply with the payment of the annual fee
required by Sec.  11.8(d) or Sec. Sec.  11.12(a) and (e). The OED
Director would mail a notice to the practitioner advising of
noncompliance, demanding compliance within sixty days, and payment of a
delinquency fee for each rule violated.
    Paragraph (b)(2) of Sec.  11.11 would provide that upon failure to
comply with the directive within the allowed time, the practitioner
would be notified in writing that the practitioner has been
administratively suspended and may no longer practice before the Office
in patent matters, or hold himself or herself out as being registered
or recognized to practice before the Office in patent matters. The OED
Director would publish notice of the administrative suspension in the
Official Gazette. The administrative suspension would not relieve the
delinquent attorney or agent of his or her annual responsibility to pay
his or her dues to the USPTO Director.
    Paragraph (b)(4) of Sec.  11.11 would provide that an
administratively suspended attorney or agent would be responsible both
for paying his or her annual fee required by Sec.  11.8(d) and for
completing the required continuing training programs.
    Paragraph (b)(6) of Sec.  11.11 would provide that administratively
suspended practitioners cannot practice before the Office in patent
cases while under administrative suspension.
    Paragraph (c) of Sec.  11.11 would provide for inactivation of a
registered practitioner who becomes employed by the Office.
    Paragraph (c)(1) of Sec.  11.11 would provide that a registered
practitioner, upon separating from the Office and seeking reactivation,
must complete the required continuing training programs if the
practitioner did not pass recertification tests required during the
practitioner's employment at the Office and appropriate to
practitioner's grade and position in the Office.
    Paragraph (d) of Sec.  11.11 would provide for voluntary
inactivation of a registered practitioner. This section accommodates
registered practitioners who are not active in representing clients
before the USPTO, but still desire to maintain a recognized
professional association with the USPTO. The USPTO will not inquire
into reasons for seeking voluntary inactivation except that voluntary
inactivation will be denied if the practitioner is delinquent on paying
annual dues. Voluntary inactivation will not preclude the USPTO from
inquiring or continuing to inquire into possible ethical violations by
the practitioner. Reasons for seeking voluntary inactivation may
include retirement, health condition of the practitioner (long-term
illnesses), or a practitioner's decision to practice in another
substantive area.
    Paragraph (d)(1) of Sec.  11.11 would provide that a registered
practitioner may seek voluntary inactivation by filing a written
request to be endorsed as inactive.
    Paragraph (d)(2) of Sec.  11.11 would provide that a registered
practitioner whose status has been changed to a voluntary inactive
status would be responsible both for paying his or her annual fee
required by Sec.  11.8(d) for such status and for completing the
required continuing legal education programs while in such status. For
purposes of this section, the annual fee for practitioners in inactive
status is 25% of the fee for practitioners in active status.
    Paragraph (d)(3) of Sec.  11.11 would provide that a registered
practitioner in inactive status is still subject to investigation or
discipline for ethical violations during the period of inactivation.
    Paragraph (d)(4) of Sec.  11.11 would provide that a registered
practitioner in arrears in dues or under administrative suspension for
fee delinquency is ineligible to seek or enter into voluntary inactive
status.
    Paragraph (d)(5) of Sec.  11.11 would provide that practitioners
may not practice before the Office in patent cases while under inactive
status.
    Paragraph (d)(6) of Sec.  11.11 would provide for restoration to
active status of a registered practitioner who is in voluntary inactive
status in accordance with Sec.  11.11(d). The Office provides options
for practitioners who are no longer attorneys in good standing at their
state bars but seek active status before the USPTO. Since practitioners
before the USPTO need not be attorneys, a practitioner who has ceased
to be a member in good standing of the highest court of a state for
reasons other than ethical grounds may still seek to represent clients
before the USPTO as a patent agent. Generally, attorneys are held to
the standard of ethics in effect at their respective state bars. It
becomes necessary to ensure that attorneys who are no longer members in
good standing in a state bar explain the basis of such status when
seeking restoration to active status before the USPTO. This section
seeks to avoid the possibility that an attorney under a disciplinary
proceeding or investigation at his or her state bar does not circumvent
the obligation of informing the USPTO of

[[Page 69453]]

any matter that detrimentally impacts the determination of the
practitioner's moral character.
    Any registered practitioner who is voluntarily inactivated pursuant
to paragraph (d) of this section and who is an attorney may comply with
the submission of information and material pertaining to the
practitioner's moral character on proof of being a member in good
standing with the highest court of a state. If the registered
practitioner is no longer a member in good standing at the state bar,
the practitioner must submit a signed declaration or affidavit
explaining the circumstances surrounding their status at the state bar
to the satisfaction of the OED Director that the reason for not being a
member in good standing is not predicated on moral character. If the
statement submitted is not to the satisfaction of the OED Director, the
OED Director may decline restoration to active status on grounds of
present lack of good moral character as set forth in Sec.  11.7. Any
adverse decision by the OED Director is reviewable under Sec.  11.2.
This does not preclude the practitioner from submitting additional
evidence to establish the requisite moral character.
    Paragraph (e) of Sec.  11.11 would allow for resignation from
practice before the Office of a registered practitioner who is neither
under investigation under Sec.  11.22 for a possible violation of the
Rules of Professional Conduct, nor subject to an adverse probable cause
determination by a panel of the Committee on Discipline under Sec.
11.23(b).
    Paragraph (f) of Sec.  11.11 would establish a procedure for
reinstatement of a registered practitioner who has been
administratively suspended pursuant to Sec.  11.11(b) or Sec.
11.12(e), or who has resigned pursuant to Sec.  11.11(d).
    Section 11.12 would introduce mandatory continuing education for
practitioners licensed to practice in patent cases before the Office.
Such continuing education would apply to all licensed practitioners,
whether they are registered patent attorneys, patent agents, or persons
granted limited recognition. With two exceptions, all licensed
practitioners are currently required to pass the registration
examination. The registration examination may be waived for former
patent examiners who actively served for at least four years in the
patent examining corps and separate from the Office without an legal
competence issue. Also, by long-standing custom, foreign patent agents
who are registered under 37 CFR 10.7(c) on the basis of reciprocity
with their foreign patent office have not been required to take and
pass the registration examination. A licensed practitioner has been
qualified through passing the registration examination. However, there
is no requirement for periodic education to ensure that individuals
maintain an expected level of competency in law, regulations, practices
and procedures.
    It is in the interest of the practitioner community, applicants and
the efficiency of the USPTO that practitioners keep their legal
knowledge current. In recent years there have been numerous changes to
the Patent Act, and in the regulations governing the filing and
prosecution of patent applications. After significant court decisions
and other events, the Office has issued memoranda describing new
procedures and policy to be followed by Office employees as well as
registered practitioners and those granted limited recognition. Though
licensed practitioners are ethically prohibited from handling a legal
matter without preparation adequate in the circumstances, this has not
prevented members of the public from criticizing the competence of
practitioners. Such lapses can reflect adversely on the integrity of
the intellectual property system, as well as on the reliability of
practitioners as a whole. The ethics rules have not compelled
practitioners to promptly become and remain familiar with changes to
patent application practices and procedures.
    A licensed practitioner's lack of currency with practice
requirements impedes the efficiency and quality of the application
process under current conditions. Within the USPTO, there is an office
devoted to handling petitions, often by practitioners, seeking relief
from some ``unintentional'' events, as well as ``unavoidable'' events,
such as occur when new procedures and policies are not followed. Some
petitions seeking relief from mistakes reflect an unawareness of the
requirements of new rules, practices and procedures, as well as some
well-established practices and procedures. This continual need for
rework is an obstacle to improving pendency. Other mistakes may not be
similarly curable.
    The trend toward continuing legal education requirements by state
bars is not sufficient to maintain the currency of knowledge among
licensed practitioners regarding patent practice before the Office.
First, while some attorneys may be required to take continuing legal
education as a matter of state bar requirements, such requirements do
not apply to patent agents and are not specific to obtaining additional
patent education. The Office's licensing of patent agents who are not
attorneys effectively preempts the states' restrictions on practicing
law without a license. Thus it is incumbent on the Office to assure
that agents are required to be kept up-to-date on legal matters in ways
equivalent to the requirements now imposed by forty state bars on
lawyers. The foreign patent agents also are not subject to the
restrictions and continuing legal education requirements imposed by
states. Similarly, although one state is now considering special
certification for patent lawyers, its proposal defers to the Office's
authority over licensing patent practitioners and thus imposes no
certification requirements based on Office practice. None of the states
mandating continuing legal education (CLE) require registered patent
attorneys to receive updated education in new Office practices and
procedures.
    To assure the public that licensed practitioners maintain their
competence and proficiency, the Office proposes to deliver required
education materials via the Internet and otherwise to practitioners and
to certify their scrutiny of those materials through an interactive
computer-delivered examination. Alternatively, the Office would accept
mandatory continuing education given by a pre-approved sponsor. Section
11.12 would apply only to licensed practitioners, not to inventors
applying pro se. The availability of the education, however, will make
the patent process more accessible to inventors, while helping the
quality and efficiency of prosecution.
    Delivery of mandatory continuing education by the USPTO meets the
need for equal availability of the program worldwide. The Office can
provide this service at a minimal cost because we are building on a
program we conduct for examiners. The Office is going to seek CLE
credits for the program from state bars requiring attorneys to meet
certain continuing legal education requirements. However, the Office is
not sure all state bars with the requirements will recognize the
mandatory education program offered by the Office. Therefore, the
Office believes that regular continuing education sponsors should be
able to offer the program content in alternative formats that are
acceptable to state bars.
    It is anticipated that the Office would publish on the Internet
written material followed by self-administered questions and answers
that would be linked to Office publications on Office's Web site that
would provide the answers. The publications would include new rules,
policy announcements, rule packages, question and answer memoranda, the

[[Page 69454]]

Manual of Patent Examining Procedure, narrative guidelines, and other
narratives containing new information the Office wants to deliver. The
function of the program would be to assure that licensed practitioners,
like patent examiners, have read and absorbed key content of these
publications. The USPTO is planning to institute similar education of
patent examiners.
    Unlike traditional continuing legal education courses that must be
taken at particular times and places, because the self-assessment
update program would be available on the Internet, it could be taken
when and where the practitioner selects. Paper copies of the questions
and narratives would be made available to practitioners lacking access
to the Internet. A licensed practitioner could take the program and
complete it, or take part and store it until he or she has more time to
complete it. The practitioner also would have the option to take it
repeatedly and as often as desired until all questions are correctly
answered. It would not be necessary for practitioners to take courses,
such as continuing legal education courses offered by other parties, in
order to complete the program.
    A practitioner would have the option of obtaining the education
from a USPTO pre-approved sponsor. The practitioner would be
responsible for paying any fees charged by the sponsor for the program.
The sponsor or the practitioner taking the program from the sponsor
would be responsible for obtaining continuing legal education credit
from a state bar. The Office would not seek such credit for the sponsor
or the practitioner taking a course given by a sponsor.
    The self-assessment program offered by the Office would include
multiple choice and/or true/false questions. Narrative material, such
as a guideline or policy announcement, would either precede the
question, or links to the narrative material would be embedded in the
questions. To complete a required education program, all questions must
be correctly answered. A licensed practitioner would have to complete
the program within the dates set by the USPTO Director. Taking a USPTO
pre-approved course that is offered by a USPTO pre-approved sponsor
providing comparable education also could complete the required
education program. Licensed practitioners failing to complete the
program would be administratively suspended from practice before the
Office. The results from the USPTO Web-based program would be instantly
available, and electronically recorded in the Office.
    The education program requirement would not be onerous, since the
self-assessment program would be self-administered and available on the
Internet, and it would either contain or be linked to USPTO
publications on its Web site that would provide the answers. Currently,
forty states provide for or require continuing legal education for
attorneys licensed in their respective jurisdictions. The Office will
be communicating with the appropriate authorities in each of the states
in an effort to have them accept the USPTO's education program as
meeting their respective continuing legal education requirements.
    Paragraph (c) of Sec.  11.12 would provide four exemptions from
completing the education. One exemption would be for newly registered
practitioners during the fiscal year he or she is first registered.
Another exemption would be for a practitioner who becomes inactive as a
result of being employed by the Office if, while so employed, the
practitioner passes all recertification programs required for patent
examiners during the practitioner's employment at the Office and
appropriate to practitioner's grade and position in the Office.
    The same paragraph permits completion of the education to be
delayed for a specified time for ``good cause shown.'' The cause may be
shown in conjunction with illness, hospitalization, or such other
matters as determined by the OED Director. Good cause would not be
shown by representations that a medical condition makes attendance only
difficult or uncomfortable, that a practitioner is outside the United
States, that a practitioner finds it most difficult to complete the
program, that the practitioner obtains education by observing other
practitioners, or that a practitioner is in advanced years.
    Paragraph (d)(1) of Sec.  11.12 would provide that persons seeking
reinstatement after they resigned pursuant to Sec.  11.11(d), after
their names were transferred to disability inactive status, or upon
seeking reinstatement after being suspended or excluded must furnish
the OED Director with proof that he or she has completed all education
programs required by the USPTO Director during the fiscal year(s) the
practitioner was inactive, suspended or excluded, or during the
practitioner's resignation. Thereafter, the person would have the same
education program requirement as other licensed practitioners.
    Section 11.13 would provide procedures for sponsors to be approved
as offering a pre-approved mandatory continuing education program, as
well as for practitioners receiving credit for completing the pre-
approved program offered by either the USPTO or by a USPTO pre-approved
sponsor. Practitioners will not receive credit for completion of the
required education by attending a program that is not pre-approved by
the OED Director as providing the legal, procedural and policy subject
matter identified by the USPTO Director as being required to satisfy
the mandatory continuing education program.
    Section 11.14, like current Sec.  10.14, continues to set forth who
may practice before the Office in trademark and other non-patent
matters. The present procedure under Sec.  10.14 would continue, except
that the definition of attorney is changed. See the discussion above
under Sec.  11.1. The change in the definition of attorney is believed
necessary in view of 5 U.S.C. 500(b), and the fact that an individual
may be an attorney in good standing in a state even though suspended or
disbarred in another state. In other non-patent matters, e.g.,
disciplinary proceedings or inter partes or ex partes patent or
trademark matters, a party could be represented only by an attorney.
    Paragraph (a) of Sec.  11.14(a) would contain a sentence making
clear that registration as a patent attorney does not entitle an
individual to practice before the Office in trademark matters. On
occasion in the past, an attorney suspended or disbarred by the highest
court of a state continued to practice before the Office in trademark
matters. The sentence would provide such individuals with notice that
they may not rely on registration as a patent attorney to practice in
trademark matters.
    Paragraph (f) of Sec.  11.14 would provide that an individual
seeking reciprocal recognition under paragraph (c) must apply in
writing for the recognition, and pay the fees required by Sec. Sec.
1.21(a)(1)(i) and (a)(6) of this subchapter.
    Section 11.15 would provide that practitioners (individuals who
practice before the Office in patent, trademark, or other non-patent
matters) could be suspended or excluded. The USPTO Director has
authority under 35 U.S.C. 32 to suspend or exclude practitioners
registered to practice before the Office in patent matters. See also 5
U.S.C. 500(e). The USPTO Director also has authority to suspend or
exclude practitioners who practice before the Office in trademark and
other non-patent matters. See 5 U.S.C. 500(d)(2); Herman v. Dulles, 205
F.2d 715 (D.C. Cir. 1953); and Attorney General's

[[Page 69455]]

Manual on the Administrative Procedure Act, pp.65-66 (1947). See also
Harary v. Blumenthal, 555 F.2d 1113 (2nd Cir. 1977) (certified public
accountant disbarred from practice before IRS), and Koden v. U.S.
Department of Justice, 564 F.2d 228 (7th Cir 1977) (suspending attorney
from practice before INS).
    Section 11.18, with one exception, would continue the provisions
under current Sec.  10.18 regarding who must sign documents filed in
the Office, and responsibility for the content of documents filed in
the Office. The exception is that the phrase ``claims and other'' found
in Sec.  10.18(b)(2)(ii) would not be carried forward into paragraph
(b)(2)(ii) of Sec.  11.18. The deletion is necessary inasmuch as Sec.
11.18 is derived from Rule 11 of the Federal Rules of Civil Procedure,
wherein a ``claim'' is not a patent claim. However, in the predecessor
rule, Sec.  10.18, it is possible to construe ``claim'' to be a patent
claim. Clearly, a patent claim is not the same claim under the Rule 11
of the Federal Rules of Civil Procedure. The practice under Sec.  11.18
is otherwise similar to that under Rule 11 of the Federal Rules of
Civil Procedure.

Investigations and Disciplinary Proceedings

    Section 11.19 would introduce a definition of the disciplinary
jurisdiction of the Office.
    Paragraph (a) of Sec.  11.19 would provide that practitioners
registered or recognized to practice before the Office, practitioners
administratively suspended under Sec.  11.11(b), practitioners
disciplined by suspension or exclusion, as well as pro se patent
applicants and any individual appearing in trademark or other non-
patent case in his or her own behalf, are subject to the disciplinary
jurisdiction of the Office. The inclusion of administratively suspended
practitioners, and practitioners disciplined by suspension or exclusion
would permit the Office to take further action where appropriate or
necessary. Thus, for example, a suspended practitioner continuing to
practice before the Office despite suspension may be further
disciplined for unauthorized practice before the Office. Similarly, a
practitioner continuing to practice before the Office despite removal
of his or her name from the register should not be able to use
administrative suspension as a shield to avoid discipline for
misconduct occurring before or after removal of the practitioner's name
from the register.
    Paragraph (b) of Sec.  11.19 would recognize the authority of state
bars to discipline practitioners for misconduct involving or related to
practice before the Office in any matter.
    Paragraph (c)(1) of Sec.  11.19 would set out grounds for
disciplining a practitioner, or a suspended or excluded practitioner.
Grounds would include conviction of a crime; discipline imposed in
another jurisdiction; failure to comply with any order of a Court, the
USPTO Director, or OED Director; or failure to respond to a written
inquiry from a Court, the USPTO Director, or OED Director in the course
of a disciplinary investigation or proceeding without asserting, in
writing, the grounds for refusing to do so.
    Paragraph (c)(2) of Sec.  11.19 would set out grounds for
disciplining a pro se applicant. Grounds include violation of
Sec. Sec.  11.303(a)(1), 11.304, 11.305(a), and 11.804. Pro se
litigants in United States District Courts are subject to Rule 11 of
the Federal Rules of Civil Procedure, which imposes sanctions for
filing baseless or frivolous lawsuits wherein the pleadings are not
well grounded in fact or in law, or in a good faith argument for
extension, modification, or reversal of existing law, and had an
improper purpose. By extension, comparable conduct before the Office
would be subject to disciplinary action by the Office.
    Paragraph (d) of Sec.  11.19 would continue essentially the same
procedure as current Sec.  10.130(b) for handling petitions to
disqualify a practitioner in ex parte or inter partes matters in the
Office on a case-by-case basis. See SEC v. Chenery Corp., 332 U.S. 194,
203 (1974).
    Paragraph (e) of Sec.  11.19 would make clear that the Office can
refer unauthorized practice allegations and convictions to the
jurisdiction(s) where the act(s) occur. This can apply to unregistered
individuals, including unregistered attorneys practicing before the
Office in patent matters by ghostwriting applications and/or replies to
Office actions to be signed and filed by inventors.
    Section 11.20 would continue the present procedure in current Sec.
10.130(a) under which the USPTO Director imposes discipline. The
statutory framework for practice before the Office in patent,
trademark, and other non-patent law vests responsibility for discipline
in the USPTO Director. 35 U.S.C. 2(b)(2)(c). The discipline imposed on
practitioners includes reprimand, suspension or exclusion. Paragraph
(a)(1) is based on 35 U.S.C. 32 and 5 U.S.C. 500(d). The term
``exclude,'' rather than ``disbar,'' is used throughout the proposed
rules because ``exclude'' is used in 35 U.S.C. 32. Probation has been
employed by OED pursuant to 35 U.S.C. 32 and 5 U.S.C. 500(d). See
Weiffenbach v. Lett, 1101 Official Gazette 59 (April 25, 1989).
    Paragraph (a)(2) of Sec.  11.20 would permit sanctions to be
imposed on patent applicants representing themselves or other
applicants under Sec.  1.31, a person or party representing themselves
or others in a patent case pursuant to Sec.  1.33(b)(4), or by a
representative appearing in a trademark application pursuant to Sec.
11.14(e). A variety of sanctions can be imposed on pro se litigants
subject to Rule 11 of the Federal Rules of Civil Procedure. The
sanctions usually imposed serve two main purposes: deterrence and
compensation. Subsidiary goals include punishing prosecution/litigation
abuse, and facilitating case management. See Navarro-Ayala v. Nunez,
968 F.2d 1421 (C.A. Puerto Rico 1992). Sanctions that may be imposed on
pro se litigants may also be imposed on pro se applicants, including
prohibition from commencing additional or continuing other proceedings
before the Office without being represented by a licensed attorney or
by leave of the Commissioner for Patents or the Commissioner for
Trademarks to proceed pro se. Accord, Schramek v. Jones, 161 F.R.D. 119
(D.C. Fla. 1995); and Ketchum v. Cruz, 775 F. Supp. 1399 (D. Colo.
1991), aff'd, 961 F.2d 916 (1991).
    Paragraph (b) of Sec.  11.20 would provide for imposition of
conditions with discipline as a condition of probation, to protect the
public.
    Section 11.21 would provide for issuing warnings alerting the
practitioner that he or she could be subject to disciplinary action if
corrective action is not taken to bring his or her conduct into
conformity with the Office's Rules of Professional Conduct. 5 U.S.C.
558(c) authorizes warnings.
    Section 11.22 would continue the OED Director's authority under
current Sec.  10.131(a) to investigate possible violations of Rules of
Professional Conduct by practitioners. See Sec.  11.2(b)(2).
    Paragraph (b) of Sec.  11.22 would continue the provisions of
current Sec.  10.131(a), under which a nonpractitioner can report to
the OED Director a possible violation of Rules of Professional Conduct.
The OED Director would be enabled to require that the report be
presented in the form of an affidavit.
    Paragraph (c) of Sec.  11.22 would provide for initiating
investigations upon complaint or information received from any source.
The investigation would not be abated because of neglect by the
complainant to prosecute a

[[Page 69456]]

charge, or in view of settlement, compromise, or restitution.
    Paragraph (d) of Sec.  11.22 would require a complaint alleging
misconduct by a practitioner to be in writing and contain a brief
statement of the facts upon which the complaint is based.
    Paragraph (e) of Sec.  11.22 would provide for screening
complaints. Complaints would be docketed only if they are not unfounded
on their face, if they contain allegations of conduct, that, if true,
would constitute a violation of the practitioner's oath or the Rules of
Professional Conduct that would merit discipline, and are within the
jurisdiction of the Office.
    Paragraph (f) of Sec.  11.22 would provide for notifying the
complainant when a complaint is not docketed, and giving the reasons
therefor. This rule would provide that the OED Director's decision is
not subject to review.
    Paragraph (g) of Sec.  11.22 would permit complainants to be
advised of the docketing of the complaint.
    Paragraph (h) of Sec.  11.22 would provide for notifying a
practitioner in writing when a formal investigation in the
practitioner's conduct has been initiated.
    Paragraph (i) of Sec.  11.22 would provide for a practitioner to
have 30 days to respond to an inquiry, and to allow only one 30-day
extension of time. The response must set forth practitioner's position
with respect to allegations contained in the complaint.
    Paragraph (j) of Sec.  11.22 would provide that the OED Director
could request information from the complainant, practitioner, or any
other person who may reasonably be expected to have information needed
concerning the practitioner. A number of state bars were surveyed to
identify whether a common practice existed on handling the issue of
contacting a non-complaining client. Many states have no specific
procedural rules but can and do contact the non-complaining client
without the safeguards contained in proposed paragraph (j) of this
section. For example, one state bar has no rule but contacts the
attorney first, and then attempts to call the non-complaining client
before the attorney communicates with the client. Another has no rule
and does in fact contact the non-complaining client without first
informing the attorney.
    In the absence of a consistent practice among the various state
bars, the USPTO is placing formal safeguards through Section 11.22(j).
We recognize that such contact can create the possibility of conflicts
with the attorney. At the same time, there are cases in which
disciplinary action is most necessary and the non-complaining client is
unknowingly being victimized. The USPTO needs the discretion to
undertake the appropriate investigation without necessarily going
through the attorney. The USPTO wants to be careful to balance the
competing interests with the creation of a formal procedure that
provides appropriate safeguards to the attorney-client relationship.
    Paragraph (j) of Sec.  11.22 would provide that the OED Director
could request information from the complainant, practitioner, or any
other person who may reasonably be expected to have information needed
concerning the practitioner. The attorney will be contacted first
unless there is good cause to believe that such contact would interfere
with the gathering of relevant material from the client. If the OED
Director believes that there is good cause for such interference or the
attorney declines to consent, the OED Director will provide a showing
including reasons to the USPTO Director for review and clearance.
    Paragraph (k) of Sec.  11.22 would permit the OED Director to
examine financial books and records maintained by a practitioner
reflecting his or her practice before the Office.
    Paragraph (l) of Sec.  11.22 would provide that a practitioner's
failure to respond or evasive response to the OED Director's written
inquiries during an investigation would permit the Committee on
Discipline to enter an appropriate finding of probable cause.
    Paragraph (m) of Sec.  11.22 would allow the OED Director to
dispose of investigations by closure without issuance of a warning,
institution of formal charges, diversion, or exclusion on consent.
    Paragraph (n) of Sec.  11.22 would permit the OED Director to
terminate an investigation and decline to refer a matter to the
Committee on Discipline in a variety of circumstances, including where
the complaint is unfounded, the matter is not within the jurisdiction
of the Office, the questioned or alleged conduct does not constitute
misconduct, the available evidence shows that the practitioner did not
engage or willfully engage in the questioned or alleged misconduct,
that there is no credible evidence to support any allegation of
misconduct by the practitioner, or that the available evidence could
not reasonably be expected to support any allegation of misconduct
under a ``clear and convincing'' evidentiary standard.
    Section 11.23 would continue the practice of current Sec.  10.4 of
providing for a Committee on Discipline.
    Paragraph (a) of Sec.  11.23 would describe the organization of the
Committee on Discipline. The Committee would have two or more
subcommittees having three members each to facilitate processing of the
matters the OED Director refers to the Committee. The Committee would
designate a Contact Member to review and approve or suggest
modifications of recommendations by OED Director for dismissals, and
warnings.
    Paragraph (b) of Sec.  11.23 would set forth the powers and duties
of the Committee on Discipline. The Committee would designate a Contact
Member to review, and approve or suggest modifications of,
recommendations by OED Director of dismissals and warnings. The
Committee would prepare and forward its own probable cause
recommendations to the OED Director.
    Paragraph (c) of Sec.  11.23 would provide that no discovery could
be had of deliberations of the Committee on Discipline. See Morgan v.
United States, 313 U.S. 409, 422 (1941). Accordingly, under the
proposed rules, a disciplinary proceeding would resolve whether a
practitioner has or has not committed violations alleged in the
complaint that the Committee authorized to be filed under Sec.  11.26.
    Section 11.24 would provide for interim suspension and discipline
based on reciprocal discipline of a practitioner suspended or
disbarred, or who resigns in lieu of discipline. The USPTO Director,
upon being provided with a certified copy of a disciplinary court's
record disciplining a practitioner, would suspend the practitioner in
the interim. The practitioner would be provided with a forty-day period
to show cause why reciprocal discipline should not be imposed. A
certified copy of the record of suspension, disbarment, or resignation
shall be conclusive evidence of the commission of professional
misconduct. The practitioner may challenge imposition of reciprocal
discipline on four specific grounds, i.e., lack of notice or
opportunity to be heard, infirmity of proof of establishing misconduct,
grave injustice resulting from imposing the same discipline, or the
misconduct warrants imposition of a different discipline.
    Section 11.25 would provide for interim suspension and discipline
of a practitioner convicted of committing a serious crime or other
crime coupled with confinement or commitment to imprisonment. The USPTO
Director, upon being provided with a certified copy of a court's record
or docket entry, would suspend the practitioner from

[[Page 69457]]

practice before the Office in the interim until the conviction becomes
final. Practitioners would be disqualified from practicing before the
Office if confined or committed to prison. Upon the conviction becoming
final, the practitioner would be provided with a forty-day period to
show cause why discipline should not be imposed. A practitioner
convicted of a serious crime involving moral turpitude per se, or a
crime wherein the underlying conduct involved moral turpitude, would be
excluded. The practitioner may challenge imposition of discipline if
material facts are in dispute.
    Section 11.26 would provide a program for diversion from a
disciplinary proceeding.
    Paragraph (a) of Sec.  11.26 would permit the OED Director to offer
diversion to a practitioner under investigation, subject to
limitations.
    Paragraph (b) of Sec.  11.26 would make diversion available in
cases of alleged minor misconduct. However, diversion would not be
available when the alleged misconduct resulted in, or is likely to
result in, prejudice to a client or another person; discipline was
previously imposed, a warning previously issued, or diversion was
previously offered and accepted (unless exceptional circumstances
justify waiver of this limitation); the alleged misconduct involves
fraud, dishonesty, deceit, misappropriation or conversion of client
funds or other things of value, or misrepresentation; or the alleged
misconduct constitutes a criminal offense under applicable law.
    Paragraph (c) of Sec.  11.26 would set forth procedures for
diversion.
    Paragraph (d) of Sec.  11.26 would provide a diversion program that
is designed to remedy the alleged misconduct of the practitioner. It
may include participation in formal courses of education sponsored by a
voluntary bar organization, a law school, or another organization;
completion of an individualized program of instruction specified in the
agreement or supervised by another entity; or any other arrangement
agreed to by the parties which is designed to improve the ability of
the practitioner or other individual to practice in accordance with the
Rules of Professional Conduct.
    Paragraph (e) of Sec.  11.26 would close an investigation if the
practitioner completes the diversion program. If the practitioner does
not successfully complete the diversion program, the OED Director would
be able to take such other action as is authorized and prescribed under
section 11.32.
    Section 11.27 would provide for excluding a practitioner on
consent. This would be the sole manner for settling any disciplinary
matter.
    Paragraph (a) of Sec.  11.27 would provide that a practitioner
under investigation or the subject of a pending proceeding may consent
to exclusion, but only by delivering to the OED Director an affidavit
declaring the practitioner's consent to exclusion. The affidavit would
state, inter alia, that the consent is freely and voluntarily rendered,
that the practitioner is aware that there is currently pending an
investigation into, or a proceeding involving, allegations of
misconduct, the nature of which shall be specifically set forth in the
affidavit; that the practitioner acknowledges that the material facts
upon which the allegations of misconduct are predicated are true; and
that the practitioner submits the consent because the practitioner
knows that if disciplinary proceedings based on the alleged misconduct
were brought, the practitioner could not successfully defend against
them.
    Paragraph (b) of Sec.  11.27 would provide that the affidavit and
any related papers are submitted to the USPTO Director for review and
approval. The USPTO Director would enter an order excluding the
practitioner on consent.
    Paragraph (c) of Sec.  11.27 would provide for informing the
hearing officer of receipt of the required affidavit, and for transfer
of the disciplinary proceeding to the USPTO Director.
    Paragraph (d) of Sec.  11.27 would proscribe a practitioner
excluded by consent from petitioning for reinstatement for five years,
require compliance with the provisions of Sec.  11.58, and require
reinstatement be sought in accordance with Sec.  11.60.
    Section 11.28 would provide procedures for addressing four broad
groups of practitioners. The first are those judicially declared to be
``mentally incompetent'' or ``involuntarily committed to a mental
hospital.'' The second are disabled practitioners who are mentally or
physically infirm. The third are practitioners addicted to any chemical
or having a psychological dependency upon intoxicants or drugs. The
fourth are incapacitated practitioners who suffer from a disability or
addiction of such nature as to cause the practitioner to be unfit to be
entrusted with professional matters.
    Definitions of ``mentally incompetent,'' ``involuntarily committed
to a mental hospital,'' ``disability,'' ``addiction,''
``incapacitated,'' ``significant evidence of rehabilitation,'' and
``disability matter'' would be found in Sec.  11.1.
    Paragraph (a) of Sec.  11.28 would set forth the scope and purpose
of disability proceedings. Such proceedings would determine whether a
practitioner has been judicially declared to be mentally incompetent or
involuntarily committed to a mental hospital as an inpatient; whether
the hearing officer should apply to a court for an order requiring a
practitioner to submit to an examination by qualified medical experts
regarding an alleged disability or addiction; whether a practitioner is
incapacitated from continuing to practice before the Office by reason
of disability or addiction; whether the OED Director should hold in
abeyance a disciplinary investigation, or a hearing officer should hold
in abeyance a disciplinary proceeding, because of a practitioner's
alleged disability or addiction; whether a practitioner (having
previously been suspended solely on the basis of a judicial order
declaring the practitioner to be mentally incompetent) has subsequently
been judicially declared to be competent and is therefore entitled to
have the prior suspension terminated; whether a practitioner (having
previously been suspended solely on the basis of an involuntary
commitment to a mental hospital as an inpatient) has subsequently been
discharged from inpatient status and is therefore entitled to have the
prior order of suspension terminated; and whether a practitioner
(having previously acknowledged or having been found by the hearing
officer or USPTO Director to have suffered from a prior disability or
addiction sufficient to warrant suspension (whether or not any
suspension has yet occurred)), has recovered to the extent, and for the
period of time, sufficient to justify the conclusion that the
practitioner is fit to resume or continue the practice before the
Office and/or is fit to defend the alleged charges against the
practitioner in a disciplinary investigation or disciplinary proceeding
that has been held in abeyance pending such recovery.
    Paragraph (b) of Sec.  11.28 would provide that the hearing officer
may authorize the OED Director to apply to a court of competent
jurisdiction for an order appointing counsel to represent the
practitioner whose disability or addiction is under consideration if it
appears to the hearing officer's satisfaction, based on the
practitioner's motion or notice of the OED Director, that otherwise the
practitioner will appear pro se and may therefore be without adequate
representation.

[[Page 69458]]

    Paragraph (c) of Sec.  11.28 would provide that all proceedings
addressing disability matters before the hearing officer be initiated
by motion. The motion would contain a brief statement of all material
facts, a proposed petition and/or recommendation to be filed with the
USPTO Director if the movant's request is granted by the hearing
officer, and affidavits, medical reports, official records, or other
documents setting forth or establishing any of the material facts on
which the movant is relying. The non-moving party's reply would set
forth all objections, an admission, denial or lack of knowledge with
respect to each of the material facts in the movant's papers, and
affidavits, medical reports, official records, or other documents
setting forth facts on which the non-moving party intends to rely for
purposes of disputing or denying any material fact set forth in the
movant's papers.
    Paragraph (d) of Sec.  11.28 would provide a procedure addressing a
practitioner judicially declared to be mentally incompetent or
involuntarily committed to a mental hospital as an inpatient. The
procedure would include action by the OED Director (paragraph (1)).
    Paragraph (e) of Sec.  11.28 would provide a procedure to address
circumstances in which a practitioner is incapacitated from continuing
to practice before the Office because of disability or addiction, but
is nonetheless likely to offer or attempt to perform legal services
while so incapacitated. The procedure would include action by the OED
Director (paragraph (1)), and the required evidence (paragraph (2)).
    Paragraph (f) of Sec.  11.28 would locate in one paragraph the
provision for further proceedings for paragraphs (d) and (e). The
procedure would include action by the Committee on Discipline Panel
(paragraph (1)), action by OED Director (paragraph (2)), response by
Practitioner (paragraph (3)), initial decision by the hearing officer
(paragraph (4)), appeal to the USPTO Director (paragraph (5)), and
action by USPTO Director (paragraph (6)).
    Paragraph (g) of Sec.  11.28 would provide a procedure for the
circumstance in which a practitioner files a motion requesting the
hearing officer to enter an order holding a disciplinary proceeding in
abeyance based on the contention that the practitioner is suffering
from a disability or addiction that makes it impossible for the
practitioner to adequately defend the charges in the disciplinary
proceeding. The procedure would include the practitioner's motion
(paragraph (1)), and disposition of the practitioner's motion
(paragraph (2)).
    Paragraph (h) of Sec.  11.28 would provide a procedure for deciding
allegations that a practitioner has recovered from a prior disability.
This paragraph would apply to proceedings for reactivation as well as
for resumption of disciplinary matters held in abeyance. Paragraphs (2)
and (3) would pertain to reactivation, whereas paragraph (4) would
apply to resumption of disciplinary proceedings held in abeyance. The
regulation would limit an incapacitated practitioner suspended under
this section to applying for reinstatement once a year, unless the
USPTO Director orders shorter intervals. The practitioner may be
required to undergo examination by a qualified medical expert, selected
by the OED Director, at the practitioner's expense. The practitioner
also may be required to establish his or her competence and learning in
the law.
    Paragraph (i) of Sec.  11.28 would provide that a hearing officer
may order resumption of a disciplinary proceeding against a
practitioner upon determining that the practitioner is not
incapacitated from defending himself or herself, or not incapacitated
from practicing before the Office.
    Section 11.32, like current Sec.  10.132, would provide a procedure
for initiating a disciplinary proceeding and for referring the
proceeding to a hearing officer. Under paragraph (2) of Sec.  11.32,
when the OED Director is of the opinion that there is probable cause to
believe that an imperative rule of the USPTO Rules of Professional
Conduct has been violated, the OED Director would determine whether a
practitioner should be given notice under 5 U.S.C. 558(c). Section
558(c) provides, in part, ``Except in cases of willfulness or those in
which public health, interest, or safety requires otherwise, the
withdrawal, suspension, revocation, or annulment of a license is lawful
only if, before the institution of agency proceedings therefor, the
licensee has been given (1) notice by the agency in writing of the
facts or conduct which may warrant the action; and (2) opportunity to
demonstrate or achieve compliance with all lawful requirements.'' The
provisions of 5 U.S.C. 558(c) would apply to a registered patent
practitioner who is investigated for possible misconduct occurring in
connection with either a patent or a trademark matter. However, the
provisions of 5 U.S.C. 558(c) do not apply to disciplinary proceedings
in the Office involving practitioners who are not registered inasmuch
as the Office does not issue a license to such practitioners.
Nevertheless, OED customarily provides unregistered practitioners with
the opportunity to demonstrate or achieve compliance with all lawful
requirements. Where a practitioner willfully violates an imperative
rule of the USPTO Rules of Professional Conduct, notice and opportunity
to demonstrate compliance would not be required. In certain cases, the
public interest may require suspension of an incompetent practitioner
or a practitioner who has been found guilty of a crime and committed to
the custody of the Attorney General or has otherwise been incarcerated.
    After giving notice under 5 U.S.C. 558(c), or if no notice is
needed, the OED Director would call a meeting of a panel of the
Committee on Discipline. The Committee panel consisting of three USPTO
employees, would determine by a majority vote whether there is probable
cause to believe that a practitioner has violated an Office Rule of
Professional Conduct. If the Committee determines that a violation has
occurred, the OED Director would institute a disciplinary proceeding by
filing a ``complaint'' under Sec.  11.34. Upon the filing of a
complaint, an attorney under the Office of General Counsel designated
to represent the OED Director would prosecute the disciplinary
proceeding on behalf of the OED Director. Upon the filing of the
complaint, the disciplinary proceedings will be referred to a hearing
officer.
    A hearing officer would be used in disciplinary proceedings brought
under 35 U.S.C. 32. The hearing officer may be an employee of the
Office appointed by the USPTO Director, or an Administrative Law Judge
(ALJ). The use of a hearing officer is not required to suspend or
exclude a practitioner in trademark or other non-patent matters. See
Herman v. Dulles, 205 F.2d 715 (D.C. Cir. 1958). Nevertheless, a
hearing officer is qualified to handle disciplinary proceedings.
Accordingly, as a matter of policy the Office is and will continue to
use ALJ's, and take the opportunity to use Office employees as hearing
officers.
    Section 11.34, like current Sec.  10.134, would