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Richard W. Goldstein

Moatz, Harry

From: goldstein@....
Sent: Tuesday, February 10, 2004 12:17 PM
To. ethicsrules comments
Subject: Comments 37 CFR 11 - A, B, C

Attached are my comments in .pdf format. Please reply to this email
and provide me with a return receipt. If you wish for me to send the
comments in another format, please let me know.
Thank you for the opportunity to provide comments on the proposed rules.
Richard Goldstein

Comments Regarding Proposed Part 11 of 37 CFR, Subparts A. B, and C
by Richard W. Goldstein

I. The Proposed Rules Seek To Enlarge the Jurisdiction and Authority of the Office of Enrollment and Discipline ("OED")

The proposed rules have an undeniable theme: they seek to enlarge the jurisdication of the OED during investigation and prosecution of patent practitioners. The proposed rules allow the OED to intrude further into the lives and practice of patent practitioners. Rather than dissecting the proposed changes rules by rule, the purpose of this commentary is to highlight that these proposed rules collectively raise a .single question: Whether it is prudent to enlarge the scope of the OED's authority? In this commentary, I share some of own experiences with the OED in the hope that it will help other practitioners consider the effect that these rules might have upon their everyday practice, and upon the legal profession.

II. Most Practitioners are Unfamiliar with the Practices and Procedures of the OED

For the vast majority of patent practitioners, their only brush with the OED is answering an occasional questionnaire to confirm that they are still practicing and at the same address. It is quite natural then, that these proposed rules might seem tobe of little consequence. As we carry out our professional practices, we never expect to be embroiled in an OED investigation or disciplinary procedure. So, on what level can we really appreciate the impact of any set of proposed rules regarding OED investigations and disciplinary powers and procedures`?

One of the problems with appreciating the impact of the rule proposal, is that because of the confidential workings of the OED, it is not possible for members of the patent bar to fully understand the potential significance of each proposed rule. The activities of the OED are maintained in secrecy. The details of such investigations might only be revealed in cases where a "conviction" is obtained. In cases where allegations of misconduct were unfounded, however, and even when the OED conduct was questionable or even improper, details of the proceedings are sealed, and the public never learns about any objectionable behavior by the OED. The only cases that are published are ones in which the OED is "right". The case law provides no guidance to help a practitioner. Winning arguments and defenses advanced by practitioners have no precedential value, and are forgotten.

Even beyond possible misconduct by the OED, the fact is that many of these proposed rules have resulted from decades of experience with the secret proceedings in the OED. Many of the rules are likely proposed in recognition of problems they encountered while prosecuting practitioners in the past, and problems of "proof' during disciplinary actions. Further, many of these proposed rules might be considered an attempt to legitimize procedures that the OED has been using for years, although without any specific

authority. In fact, many of these proposed rules directly correspond to allegations made in a lawsuit filed by me against members of the OED. This leaves the question of whether it is proper for the OED to propose rules that seek to legitimize tactics it has already been using, yet has been openly criticized for using.

It should be clear then that the public cannot fully realize the impact of these proposed rules, because we have not been privy to any debate that occurred over the years, regarding difficulties with the old rules. Without knowing, for example of the debate that occurred in the past when the PTO contacted clients of an attorney who have not themselves made any complaint about the attorney, without knowing of the arguments advanced by the practitioner in protest, we cannot make an informed decision of whether such a rule "is a good thing". The commentary published on December 10, 2003 along with the proposed rules cannot be considered to present the "whole story". In fact, for some of the most controversial rules, comment by the OED is conspicuously absent. It should be apparent, however, that the OED has an understanding of the implication of many of these rules far beyond what they have shared in the commentary.

III.. Overview of My Experience with the OED

Because ignorance of the workings of the OED is a barrier to any practitioner seeking to understand the impact of these proposed rules, I am willing to share some of my own experiences with the OED. Under ordinary circumstances, it is the right of a practitioner to maintain in secrecy that he or she has been investigated by the OED. People are so afraid of the potential impact on their lives, and professional reputation that they are afraid to come forward, even if they feel they have been victimized by the OED.

I am willing to share my experiences with the OED, however, for the benefit of the patent bar and the legal profession. Although I am certain that there are many other members of the bar who have valuable insight, I must assume that few others will come forward and provide an honest account of their run-ins with the OED. I therefore share my experience with the certainty both that my experiences will be helpful to others, and that I will be inevitably judged by other practitioners for having been investigated by the OED. In the face of potential damage to my professional reputation, I consider it more important that other practitioners see that the proposed rules are unwise, and that the OED requires oversight and accountability, rather than the jurisdictional expansion and immunity they have requested for themselves.

In my case, I was registered to practice in 1993. 1 started my own practice, and happily represented inventors for seven years before my first brush with the OED. I chose to dedicate my practice to working with independent inventors. I accepted clients from many sources, including from: lectures I gave, advertisements, referrals from former clients, referrals from other attorneys, and referrals from invention promotion companies. After representing more than a thousand clients, one dissatisfied client complained to the

OED. The OED started an investigation, using a "Requirement For Information" ("RFI", which I will explain below). I responded to the RFI, answering all questions.

Three Months later the OED sent me (2) investigations, both requiring a response within thirty days. Eight months later they sent me (3) additional investigations, each requiring a response within thirty days. What I learned from other patent practitioners, is that this suspicious pattern was not at all coincidental.

The OED has been using the RFls for years as a technique to fight a war of attrition: burying certain practitioners as a subtle way to "run them out of business". Why me? What I learned is that because I chose to accept client referrals from invention promoters, I was on the OED's "hit list". I further learned that the OED would "never leave me alone". To discourage, deter, or scare me from accepting client referrals from invention promotion companies, they would use any complaint, whether or not it contained a reasonable allegation of misconduct, as an excuse to send me another RFI. Each RFI contained endless questions and requests for documents that bore little relation to the purported basis of the investigation.

I soon bore witness to a decade old phenomenon: the use of the investigative procedures of the OED not for fact finding or investigation of misconduct, but for political purposes: for the sake of placing pressure on invention promoters by deterring patent practitioners from accepting referrals from them. As OED Director Mr. Moatz explained in his law review article', the PTO does not have jurisdiction over invention promoters, but it does have jurisdiction over patent attorneys that accept clients referred by them.

Deciding whether it is justifiable for the OED to "pay special attention to me" is unimportant to this discussion. What is clear, however, is that through their actions against me, the OED readily demonstrates that the prospect for it to abuse its investigatory powers for the sake of political goals is quite real. If they believe it is acceptable to use the powers of the OED to apply pressure on attorneys in fulfillment of a political agenda, it is clear that they can misuse their powers for any other purpose. The powerful truth that emerges is that the OED has a serious opportunity for abuse of power, and has insulated itself in an environment that is immune from challenge.

If there is any doubt that politics has a significant role in the OED, consider that recent USPTO Director James Rogan has been quite vocal about his goal of reducing the filing of patents. Now consider as one of his last official acts, the new proposed rules would make the filing of a "frivolous patent application" misconduct. (proposed 37 CFR § 11.101(4)) Was the need to suddenly chill the filing of "frivolous patent applications" necessitated by ethical concerns, or by the desire to fulfill Rogan's goals "for the patent system of the 21" century"? In my opinion, attorney ethical rules should never be tampered with for the sake of politics.

' "Avoiding Misconduct Complaints In Patent Prosecution", by Harry I Moatz, $0 PLI/N Y 29

IV. Investigative Authority of the OED

The Director of the OED has traditionally had the authority to investigate "possible allegations of misconduct" (37 CFR § 10.2(b)). This authority is not unlike the authority of State Bar organizations to investigate misconduct reported to them.

Like many state bar investigations, it is believed that over the past few decades, most practitioners who have been investigated received a letter informing them of the investigation and a "request for comments". Such requests informed the practitioner of the allegations, and gave the practitioner the opportunity to respond with comments. It is undeniable that there must be such mechanisms for investigating misconduct, as well as for allowing the practitioner to tell his or her story.

V. The Use of Requirements For Information by the OED to Conduct Investigations

In the past few years, however, some practitioners have been confronted by a more severe tactic, known as a "Requirement For Information". The OED sends the Requirement For Information ("RFI") to the practitioner by certified mail. The RFI informs the practitioner of the allegations, provides the practitioner with a set of written interrogatories, and requires that the interrogatories be answered and documents supplied within 30 days. In most known cases such a RFI is approximately 50 questions that inquire into virtually every area of the practitioners practice - even in areas well beyond any complained of misconduct. Further the practitioner is warned that "failure to respond, and answer the questions can be construed as a failure to cooperate and may be recommended to the Committee on Discipline for appropriate action". The practitioner is further instructed to "answer the questions in seriatum, first repeating the question and then providing the answer".

One serious problem with the RFIs, is that when the practitioner believes the RFI is unreasonably invasive or burdensome, that answering the questions would itself cause a breach of duty to the client, or that the RFI is otherwise improper, there is no one to "complain to", or from whom to request guidance. If the practitioner chooses not to answer, whether the entire RFI, or even a specific objectional question, the practitioner does so at the peril of committing misconduct by "failure to cooperate", and the possible loss of one's license to practice.

The prospect of calling the OED to discuss the RFIs, engaging in meaningful dialogue by writing the OED, or even seeking review of the RFIs within the USPTO proves fruitless.

VI. My Experience with Requirements For Information

As I had previously indicated, I was subjected to numerous RFIs. I attempted to challenge the RFIs with both diplomacy and advocacy. I can share a few examples from my own experience:

1. The OED is Unreceptive to Correspondence or Debate Regarding The RFIs

I received an RFI from the OED that was based upon an unsigned, undated, typewritten letter, purportedly from my client. My concern was that if it was not clear that the letter was actually written by my client, I could not determine whether my client had actually and knowingly waived his right to confidentiality. Accordingly, I expressed to the OED staff attorney my hesitation in providing confidential information regarding my client, and requested from the OED any details regarding the circumstances of the suspicious letter. The OED initially withheld information regarding the circumstances of the letter, and then ultimately revealed that it came from my client's wife - not my client. When I protested, the OED ultimately responded with a letter entitled "LACK OF RESPONSE: FIRST NOTICE". When I further protested, the OED drafted a waiver of attorney-client privilege, contacted my client, and obtained his signature. The waiver misinformed my client of his rights, including his absolute right to confidentiality.

2. There is No Mechanism to Challenge the Propriety of the RFIs

Within a single week, the OED mailed me three (3) separate RFIs, totaling over 150 questions with extensive document requests. The questions went well beyond any colorable claim of misconduct, and delved into every area of my practice and business. They required that I submit nearly every conceivable record, memo, or note that I had regarding my practice. Each of these RFIs, however, required a response within 30 days. Accordingly, my responses were due in the days immediately proceeding and invnediately following Christmas.

I considered these RFIs to be unreasonable, burdensome, invasive, yet unrelated to any legitimate issue of misconduct. Searching the rules and MPEP for any guidance regarding the permissible scope of RFIs or any procedure for testing the propriety of these RFIs proved fruitless. I was soon to learn that there were no rules, because the RFI was an unwritten procedure, invented by the OED. I filed a "Petition to Invoke the Supervisory Authority of the Commissioner", requesting guidance from the Commissioner regarding the propriety of the RFIs.

Four months later I received a letter from the United States Patent Office General Counsel, James Toupin, appearing as counsel to the Commissioner. Mr. Toupin told ine that the Petition I filed was inapplicable to the OED. Nevertheless, in this letter Mr. Toupin informed me that he was also supervisor of the OED, stated that the RFTs were "narrowly tailored to the specific issues", and warned me of my duty to respond. He further stated "this is not a final decision from which you may appeal or otherwise seek review".

When I wrote Mr. Toupin and asked whether his letter to me was the "adjudicative response" requested by my petition, or whether he was responding as the Commissioner's lawyer, he specified that his response was indeed the "adjudicative response" to my petition. I subsequently asked Mr. Toupin by letter: how could his previous letter be the "adjudicative response" to my petition, if it was not subject to review or appeal? Mr. Toupin would never answer this letter in which I raised my obvious due process concerns. Simultaneously, the OED denied me any extension of tine to await the response of Mr. Toupin. My attempts to seek review or guidance successfully "stonewalled", I ultimately responded to the three RFIs.

3. The OED is unwilling to engage in dialogue with practitioners:

On several occasions, I requested a meeting with OED director, Mr. Harry Moatz, or with his staff to discuss their concerns as well as ways to work together for the benefit of the legal profession. When I requested the meeting orally through his staff attorney, Mr. Lawrence Anderson. I was advised that "The Director does not have time for such meetings", and that if I had any ethical concerns I should seek independent counsel. When I reiterated my request in writing to Mr. Moatz, he never responded.

4. The OED Claims Immunity From Suit

With every other attempt to determine the extent of my duty to cooperate with legitimate investigations of the OED while being free from unreasonable RFIs thwarted, I filed a Bivens action against various members of the OED in Federal Court. This is the first and only time I have ever felt it necessary to sue anyone!

In a 119 paragraph complaint, I provided detailed allegations of my dealings with the OED, claiming that my Constitutional Rights had been violated by the OED's misuse of the RFIs, and their actions to circumvent my attempts to seek review. The OED Director claimed to be immune from suit, even for malicious acts, and actions in bad faith. The OED Director successfully obtained dismissal of the suit by claiming absolute quasi-judicial immunity. By obtaining the dismissal, the OED avoided answering any of the allegations in my 119 paragraph complaint. The Fourth Circuit Court of Appeals has yet to rule on the issue of whether the OED director is entitled

to absolute immunity for his investigative acts. In the meantime, the RFIs stand unreviewable: even when a practitioner takes the drastic step of tiling suit.

Through my experience, these examples show that the RFIs are unreviewable, and further that the OED does not respond well to any challenge or protest, or even attempt to cooperate other than in the manner dictated by them.

VII. The "Requirements for Information" are Administrative Subpoenas Issued b, the OED Without Statutory Authority, and Without the Necessary Safeguards

To those versed in administrative law, the RFI should look familiar: it is clearly an "administrative subpoena". It requires the practitioner to respond, under penalty of misconduct. The RFI, however, differs from other administrative subpoenas in several key ways.

First, there is no authority whatsoever for the OED to issue the RFI. The Administrative Procedure Act requires that any "requirement of a report" be authorized by law (5 U.S.C. 555(c)). There is, however, no statutory authority for the RFI. Without such authority, such a requirement for information may also be considered a "search" under the 4'" Amendment. Proposed rule 37 CFR § 11.22(j) would be the first PTO rule attempting to legitimize a technique that the OED has already been using for years. However, the lack of any statutory authority would probably even make the proposed rule invalid.`

Second, administrative subpoenas must be enforced by court action. If a person refuses to comply with an administrative subpoena, the agency must bring an action to compel compliance. At that point, the subject of the subpoena would have the opportunity to be heard by a judge, and perhaps advance arguments in favor of quashing the subpoena. With the RFIs, however, there is no judge to complain to, and no opportunity to quash. If one concedes that in some cases the OED night issue unreasonable RFIs, it is contrary to logic that in such circumstances there would be no forum for review!

Third, noncompliance with an administrative subpoena by itself carries no penalty. The subject of a subpoena can only encounter a penalty after the agency brings a court action to compel compliance, and the non-complying party loses yet continues to disobey the court order. In sharp contrast, failure to comply with the RFI is itself actionable, despite the lack of any opportunity to quash. Thus, a practitioner can only assert his or her legal rights at his or her own risk. The only way to test the propriety of an RFI is to wait for the Committee on Discipline to find probable cause, and then defend a disciplinary action for "failure to cooperate". If the hearing officer then determines that the RFI was

2 Quite curiously the Department of Commerce uses a similar technique in the Federal Trade Commission, known as Civil Investigative Demands ("CIDs"). The CIDs, however, are conducted pursuant to law, having been created by an act of Congress. The CIDs also have built in safeguards and procedures for challenge.

reasonable and should have been answered by the practitioner, then the practitioner will have already committed misconduct!

Thus, it should now be clear that the procedures seemingly proposed in 37 CFR § 11.22(j) are not new. The commentary regarding these proposed rules, however, provide very little information regarding the past use of the RFIs, problems encountered, or how this procedure can be used while respecting the rights of the practitioner. In fact, all of the above concerns that impact the enforceability of this regulation, and more, have been previously raised to the OED. Apparently, however, they do not consider any of these issues to be worthy of revealing to the patent bar in their commentary.

The petitions proposed in 37 CFR § 11.2 (c) and (d) will not provide the necessary review for a practitioner seeking guidance regarding the propriety of an RFI, and the necessity to comply, for several reasons. First, petitioning the OED Director will not stay the period of response by the practitioner. Thus, the practitioner would be required to comply with the RFI anyway, and by the time the petition is answered, it would be moot. Second, it is stated that filing these petition waives the right to reconsideration or appeal. Third, the petitioner is limited in that he/she cannot file any "new evidence" in rapport of the petition. Fourth, the petitioner is not entitled to an oral hearing, unless considered necessary by the l1SPT0 director. Finally, there is no indication that the person deciding the decision will be unbiased. In fact, it seems pointless to petition the OED Director regarding investigatory actions already taken at his behest! In fact, it should be clear that two people, Mr. Harry Moatz and Mr. James Toupin together write the disciplinary riles, enforce the disciplinary rules, and ultimately pass judgment on violations of the disciplinary rules, as well as make judgments regarding the propriety of their own enforcement actions!

The RFI is an extremely dangerous tool of the OED. It is immensely invasive, burdensome, and disruptive to the practitioner. Without any prospect of review, the RFIs undermine the integrity of our system, our faith justice and in the legal profession ....

VIII. The OED Seeks Authority to Request Information From a Practitioner's "Non-Complaining Clients"

Once again, without experience with the problems that can be created when the OED contacts a non-complaining client of a practitioner, one might not realize the potential harm.

I invite each patent practitioner to consider your relationship with any one of your clients. Then imagine that the Patent Office contacts this client, informs them that you are under investigation, and requests information from them about you. Do you think this will cause immediate mistrust of you by your client? Do you think it will thwart your efforts to act on your client's behalf? Would you feet a sudden need to explain even your most routine actions to your client? Would you feel that you are suddenly fighting an uphill battle to regain their trust?

The distrust that would be created if the OED took this action is the most obvious repercussion. However, there also exists a potential for greater harm, and the creation of ethical dilemmas.

Imagine now that the OED drafts and sends your client a document entitled: "Waiver and Authorization", which states:

"...subject to exceptions, the attorney client privilege entitles a client to keep privileged communications between a lawyer and the client in the course of their relationship in professional confidence ...Exceptions to the privilege may include, but are not limited to the duty under 37 CFR 1.56 to disclose information material to the patentability of an invention, and communications relevant to an issue of breach of duty by a lawyer to his client. I hereby waive the attorney client privilege ...."

If your client received this document:

1. Would you have a problem with the legal advice that was given to your client by
the OED in this document?
2. Would you be concerned that the above quoted language implies that your
relationship is alread subject to an "exception", regarding "communications
relevant to an issue of breach of duty by a lawyer to his client"?
3. Would you feel that your client was being coerced or intimidated, fearing saying
"no" to the Patent Office? Might your client feel that if they said "no" it would
have a negative impact on the Patent Office's handling of their patent application?
4. What if the client showed you the "waiver" sent by the OED, and asked for your
advice? Would you feel a conflict suddenly prevented you from advising you

Hopefully, no practitioners will be subjected to these and other difficulties that would inevitably result from such an ill-advised step by the OED!

Unfortunately, I have. The OED sent the "Waiver" that I quoted above to one of my clients. From the unsigned, undated, typewritten letter that was forwarded to the OED, it wasn't clear that my client had even intended to complain to the OED, or about me at all. Rather than simply confirm the authenticity of my client's letter, however, the OED made certain that it not only became a complaint suitable for investigation, but that I could no longer ethically communicate with my client. These are dangerous tactics! In my case, at least it was possible that the client intended to complaint against me. What the OED is asking for in proposed rule 37 CFR § 10.220)(2), however, is the authority to contact client(s) of a practitioner under investigation ? without any prior grounds for believing that client might have a complaint!

IX. The OED Must Warn The Practitioner That They Have Concluded Or Closed an Investigation Out of Respect For the Rights of the Practitioner:

Proposed rule 37 CFR § 11.22(n) requests the authority to close an investigation "without warning".

Without knowing the standard procedures of the OED, one might be easily mislead by the wording of this proposed rule. The rule first indicates that an investigation might conclude with a "warning" to the practitioner regarding their conduct. The rule then gives the OED the option to end an investigation "without warning". One might logically conclude that this means the OED can end an investigation without providing a warning to the practitioner regarding their conduct.

My experience with the OED can once again shed some light on the true meaning of this proposed rule. In particular, the OED initiates an investigation with a "Requirement For Information" and requires a response within 30 days. The OED might follow up the practitioner's response with a "Second Requirement for Information". This second requirement may come one month, two months, six months, a year later, or not at all. Thus, even after a substantial period of time has passed with silence by the OED, the practitioner cannot safely assume the investigation has been closed or concluded. In many cases, the OED does not inform the practitioner that an investigation has closed! Thus, even by the passage of time, the practitioner never knows if the investigation has been closed or if he/she is still under the gun!

The failure of the OED to formally close an investigation, or to notify the practitioner that it has been closed has a serious effect on the practitioner. First, an ethical investigation is a nerve-racking affair. Once an investigation has been opened, the practitioner cannot truly rest without the assurance that they can put the subject allegation of misconduct behind them. The OED, however, does not allow the practitioner to have such "peace of mind". Further, once the OED has initiated an investigation, the practitioner cannot obtain professional liability insurance without reporting the investigation in response to the ubiquitous question on the insurance application regarding "any open disciplinary investigations".

In my recent lawsuit against members of the OED, I have raised this very allegation: that the failure to close investigations or warn practitioners that an investigation has been closed has a serious effect on the rights of the practitioner. It seems apparent that the proposed rule is an attempt to legitimize an ongoing practice of the OED. It should now be clear why the OED seeks the authority to "close an investigation without warning", and that doing so has serious consequences for the rights of the practitioner who is never informed that the investigation has been completed.

J X. The OED Must be Held Accountable For Its Actions

In proposed rule 37 CFR § 11.3(d), the OED seeks to immunize their official actions from "disciplinary complaint under this Part for any conduct in the course of their official duties". In my opinion, it would be unwise to allow the OED to create their own immunity, since they have not demonstrated the necessity for the same.

Immunity is typically only granted where public policy requires it. In theory, immunities must be granted for certain important activities, where people might otherwise be deterred from those activities by the threat of liability. For example, prosecutors are given inununity for their involvement in the judicial process, because if they were a ready target for unhappy criminal defendants, few prosecutors would dare take on the toughest criminals, or even dare do the job at all. Immunities, however, require trust. Most prosecutors are elected officials. They are ultimately accountable to the public they serve. If they act wrongfully, they will be removed from office by their constituency.

It is important now to note that the officials of the OED are not accountable to anybody. They are not elected - not by the patent bar nor anyone else. They are not trusted members of the profession. In fact, according to his biography, OED director Harry Moatz has been in government service his entire career. (One can only wonder whether he ever represented a client in the private sector,) If the members of the patent bar believe that he is not upholding the values of the legal profession, or is not sensitive to the needs or difficulties of the profession, they are powerless to do anything about it. With the grant of immunity, if his actions become "malicious" or in "bad faith", even the entire patent bar acting together would be powerless to do anything about it.

The OED has not demonstrated any compelling need for immunity. Is it unreasonably difficult for the OED Director and staff attorneys to follow the same ethical rules they are charged with upholding? In the absence of a strong public policy favoring immunity, it would be hypocritical. The commentary does not inform us what lead to this rule. Were members of the OED previously charged with misconduct in the course of their duties? If so, did it interfere with their discharge of their official duties?

In the past, I brought to the attention of the OED officials, that certain of their actions, made in the guise of upholding the values of the legal profession, are themselves unethical. Perhaps their recognition that they sometimes violate the very ethical rules they promulgate, has fueled the necessity to create their own immunity.

As previously noted, in my lawsuit against the OED, I alleged violations of the United States Constitution, actions that were in bad faith, and actions that were performed without legal authority, and beyond the scope of the jurisdiction of the OED. The OED sought, and successfully obtained, dismissal of the action on the grounds that they are absolutely immune from suit. The director of the OED claimed that quasi-judicial immunity makes him absolutely immune for all of his official actions, even if done so maliciously, or in bad faith.

In Buckley vs. Fitzsimmons 509 U.S. 269 (1993), the United States Supreme Court stated that absolute "prosecutorial" immunity is not a matter of the "position", but the function performed. Accordingly, the Supreme Court drew the line between the "investigative" and "advocative" functions of a person in a prosecutorial position. In Buckley, the Supreme Court stated: "When a prosecutor performs the investigative functions normally performed by a detective or police officer, it is "neither appropriate nor justifiable that, for the same act, immunity should protect the one and not the other." Thus, the Supreme Court denied immunity to a prosecutor, for actions taken during investigation.

The OED director has claimed, however, that even his investigative actions are absolutely immune. The Fourth Circuit Court of Appeals has yet to rule whether he is entitled to immunity. The lessons, however, are clear: The OED officials believe themselves to be absolutely above challenge, and challenging alleged wrongful actions of the OED is already difficult, if not impossible. Thus, it would be unwise for the patent bar to allow the OED to increase their power and limit their accountability, when they already believe themselves to be wholly unaccountable for their actions.

Hopefully this scenario helps shed light on the real justification behind proposed rule 11.3(d). Unsure of how the court may rule, the OED is seeking to create their own immunity. Although it does not expressly create immunity from tort liability, the existence of the rule certainly creates a context by which a future court may infer an intention for these officials to be immune for their official actions, even in tort.

This rulemaking process itself demonstrates a fundamental problem with the OED. The OED, and the USPTO may choose to ignore any and all comments made by the public, by patent practitioners, and even by patent bar organizations! In reality we have no power. If they wish to enact these rules, they will. If we do have a say, however, we must say "no" now. Ironically, the two people who have the greatest control over the OED, and thus the fate of patent practitioners, Harry Moatz, and James Toupin, are the very ones who will review these commentaries and ultimately decide whether to makes these rules final. How can two non-elected officials act as Executive, Judiciary, and Legislature, and for all intents and purposes control the patent profession? Where are the checks and balances that form such an important part of our system of government?

It should be clear that any grant of immunity requires trust. Before we grant immunity, we must first trust the grantee. If we ever disagree with what they do, there will be nothing we can do about it.

In my opinion, it would not be wise to grant immunity to the OED, since they have not demonstrated any sense of accountability - not to the practitioners they target, and not even to the. legal profession. If there is any trend that is appropriate, it would be toward creating accountability in the OED, and checks and balances, to ensure that they act on behalf of the legal profession while upholding the values of the legal profession, rather than empowering them to act without consequences.

XI. Because The Investigative Authority of the OED is So Prone to Abuse It Would Be Unwise to Vest Within The OED the Unfettered Discretion to Search The Financial Books and Records of Any Practitioner

Among other things, the proposed rules state that in return for being registered, a practitioner agrees that the OED Director may examiner the financial books and records of the practitioner. 37 CFR § 11.16. The proposed rules would make it misconduct for the practitioner to fail "to provide requested financial records" or reply "evasively in the conduct of an investigation".

Once again, my past experience with the OED indicates that this is a power subject to abuse by the OED. In each RFI they issued to me, the OED made substantial requests for "documents, records, billings, notes, correspondence, E-mails, electronic records, electronic files, electronic documents, memoranda, reports, and other written materials". Such requests were well beyond the scope of the matter they were investigating. It is my understanding that the OED has buried countless other practitioners beneath such requests, such that they ultimately surrendered their licenses to practice before the USPTO rather than submit to the burden of endless RFIs.

Without the benefit of prior experience with the OED, most would expect the OED to use the authority to inspect financial records reasonably. I can attest that the OED has required financial documents to an extreme in every investigation I know of. Even if their handling of me were an isolated situation, it is clear that it is prone to abuse. If they do not act reasonably, however, what is the remedy? No one is accountable for the decision to inflict such a burden. By this point, it should be abundantly clear that there is no way for a practitioner to challenge the propriety of the burden imposed upon him or her without risking one's license.

XII. Conclusion

There are so many proposed rules that are objectionable, that it is impossible to discuss the problematic nature of each one. 1 believe, however, the key is to recognize:

1. Because the actions of the OED are carried out in secret, it is difficult for the patent bar to fully appreciate the full impact the proposed rules might have on the patent bar.
2. Because the actions of the OED are carried out in secret, they must be more forthcoming with the true implications of the rules that they propose to allow practitioners to reasonably comment on and knowingly endorse such rules.

3. Because the .proposed changes are so dramatic, it would be wise to proceed with caution to avoid the great potential for harm to the legal profession.

4. Because the OED has at times used their investigative authority for purposes other than investigating reasonable allegations of misconduct, the trend should be toward accountability and creating checks and balances, rather than enlarging their authority.

5. Because the OED rules have proved to be subject to abuse, it is imperative that any proposed governing rules for the OED include safeguards to prevent abase.

6. Because the proposed rules unreasonably enlarge the authority of the OED, and create serious issues of enforceability, they must be rejected wholesale.

We must be especially suspicious of the attempt by the OED to promulgate rules without explaining the significance which is known to them, yet would be not readily apparent to the average patent practitioner. It is undeniable that Mr. Moatz has drafted these rules from his decades of experience at the OED. We must be certain, however, to acknowledge that the rules are therefore likely drafted to obliterate difficulties he has encountered in doing his job - difficulties to which we are not privy. Indeed, some of these difficulties might include practitioners' legitimate exercise of their rights, persistent complaints by practitioners, opposition to his political agendas, and even his exposure to liability.

It is a well known principle. that if left alone, the tendency of an administrative agency will 'be to expand its power, rather than restrict it. It is oar duty to 'be certain that we do not allow the OED Director to "legislate away" all of the difficulties of his job, at the expense of the rights of patent practitioners, at the expense of our clients, and at the expense of the legal profession. For this reason, I am hopeful that the patent bar will finally stand up to the OED, and demand accountability and truthfulness. In the context of the proposed rules, I am hopeful that the Director of the USPTO will rethink the propriety of making these rules final.

I welcome inquiries by other members of the patent bar about my experiences, and also welcome other practitioners to contact me with their own experiences.

Richard W. Goldstein
Registered Patent Attorney
2071 Clove Road
Staten Island, NY 10304
(718) 727-9780

United States Patent and Trademark Office
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Last Modified: 7/4/2009 5:31:17 PM