Attn: Harry I. Moatz
Director of Enrollment and Discipline
Mail Stop OED-Ethics Rules
U.S. Patent and Trademark Office
P.O. Box 1450
Alexandria, VA 22313-1450
RE: Notice of Proposed Rulemaking Changes to
Representation of Others Before
the United States Patent and Trademark Office; Proposed Rule 68 Fed. Reg.
69441 (December 12, 2003)
Dear Director Moatz:
In the Federal Register Notice dated December 12, 2003,
the U.S. Patent and Trademark Office (“PTO”)
requested public comments regarding the above identified
Notice of Proposed Rulemaking. As a member of the State Bar
of Texas Intellectual Property Section, I am expressing my
concern with some of the proposed PTO rules, including
11.104(a)(2), 11.106 through 11.110, 11.802-804, 11.8(d), and
11.13(g)(4). See Federal Register, Vol. 68, No. 239 dated
Friday December 12, 2003.
After reviewing the proposed rules I am shocked at the PTO’s misguided attempt to intrude on the attorney client relationship. The proposed rules totally disregard existing regulations and precedent which have provided stability to the practice of law in the Intellectual property field.
Furthermore, it appears that the proposed rules are an attempt to to solve a relatively insignificant problem that the existing rules deal with quite adequately. How many serious proceedings occur on an annual basis? It is my understanding that the very few serious infractions occur on an annual basis.
It is also my understanding that to date, the Office of Enrollment and Discipline has done an excellent job regulating agents and attorneys practitioners within the framework of the existing rules. If a few problem areas exist, these areas should be addressed, but not with a confusing plethora of ambiguous, intrusive and in some cases, constitiutionally questionable new rules that attempt to expand the authority of the PTO beyond its statutory mandate.
Proposed Rules 11.106 through 11.110 regarding Confidentiality of Client Information and Conflict of Interest are more onerous and require a higher standard than that imposed by the ABA Model Rules of Professional Conduct and the Texas Disciplinary Rules of Professional Conduct. In particular, unlike the Model Rules and Texas Rules which require consent of a client following consultation, proposed rules 11.106(a)(1) and 11.107 require a client to give “informed consent in writing after full disclosure.” The proposed definition of “full disclosure,” requires the practitioner to give an explanation of the differing interests involved in a transaction, the advantages of seeking independent legal advice, and a detailed explanation of the risks and disadvantages to the client entailed in any agreement or arrangement, including not only any financial losses that will or may foreseeably occur to the client, but also any liabilities that will or may foreseeably accrue to the client. This proposed PTO rule appears to codify potential business conflicts into ethical conflicts. Business conflicts are not within the legitimate scope of the PTO authority.
The PTO states that this departure from the Model Rules is intended to provide both the client and practitioner with certainty regarding communication and a stronger record (Id. at 69464). However, no justification is provided as to why practitioners before the PTO need a stronger record or greater certainty regarding communication. The extra burden and increased cost of client representation such proposed rules would have on the practitioner on a daily basis far outweigh the benefit of adopting rules stricter than the Model Rules.
It is respectfully recommended that the more stringent requirement of the “written consent after full disclosure” provision be reevaluated and that the PTO adopt the ABA Model Rules relating thereto.
Also, Proposed Rule 11.104(a)(2) regarding communications with intermediaries of foreign clients is impractical, unnecessary and should be deleted from the proposed rules. This Proposed Rule appears to require practitioners representing a foreign client through a foreign patent agent or associate to obtain written consent from the client to conduct communications through the foreign firm. While the ultimate client is not the foreign patent agent or associate, in most cases the ultimate client relies on the foreign patent agent or associate to choose a practitioner who is registered to practice before the PTO. Communications from the PTO practitioner to the ultimate client should flow through the foreign agent or associate as a matter of course. This Proposed Rule is impractical and unnecessary.
In addition, Proposed Rule 11.803(d)(1) contains a requirement for mandatory self-reporting within ten days by a practitioner who is found guilty or pleads no contest to apparently any criminal charge other than traffic violations that do not involve alcohol. Although the word “Crime” is defined in Proposed Rule 11.1 to include only felonies, Rule 11.802(d)(a) on its face contains an enigmatic exception for certain misdemeanor crimes, indicating that the self-reporting rule would encompass crimes less serious than felonies. It may be a laudatory goal for the PTO to eliminate from the practice persons convicted of serious thefts or crimes of violence, but it is difficult to see the need for the PTO to gather information about matters such as pleas of no contest or convictions for such “crimes” as littering, fishing without a license or even driving while intoxicated, or to make it a rule violation if one fails to self-report such matters to the PTO. Moreover, this proposed rule has no analog in the current PTO rules, the Model Rules or the Texas Rules. Instead, it is apparently an overzealous attempt to monitor all moral infractions by practitioners, no matter how tenuous the relationship to patent office practice, and to create a trap for the unwary practitioner who likely would not realize the need to report these matters to the PTO because state bar rules do not require it. The PTO should not seek to become a inquistor and judge of of minor moral infractions. The proposed draconian rule is not justified or justifiable.
Regarding proposed 11.3(d), PTO employees are not above the law and should not be immune from disciplinary action. Permitting PTO employees to breach the standards of ethical conduct to which private practitioners are subject serves no valid purpose and could, conceivably encourage improper behavior by PTO employees. Proposed Rule 11.3(d) should not be adopted.
Proposed Rule 11.804(h)(9) is unnecessarily harsh and should be modified or deleted. This Rule provides that the failure to report a change of address within 30 days is professional misconduct. The rule is unfair, unnecessary and draconian.
The proposed rules also provide unlimited access to the financial records of a firm to which an attorney or agent may not even be entitled. The unlimited access is apparently at the sole discretion of the OED, whether or not cause exists for such intrusion. There is no justification for allowing such unwarranted, unjustifiable intrusions into the business practices of law firms, attorneys and agents. Proposed Rules 11.16 and 11.22(k) should not be adopted.
Equally unjustified is the proposed rule requiring a $100 annual fee. See Proposed Rule 11.8(d). This is in effect yet another tax that does not tie the source of the funds with the expenditures for which the fee is purportedly gathered. The PTO has attempted to justify this proposed fee by claiming it would cover the costs of the disciplinary system and be used to maintain the roster of practitioners. However, it is well known that the PTO does not have control over the use of funds it receives and the assurances to the contrary in the Federal Register are not binding. This proposed fee would simply add more money to that which can be diverted elsewhere. Consequently, there is no justification for the proposed fee.
Finally, the proposed rule regarding continuing education (CLE) requirements should be scrapped. Most, if not all state bar associations require ongong CLE. Most if not all patent attorneys meet these requirements with patent related programs. Further, the OED is not in a position to decide what CLE is appropriate for an attorney engaged primarily in licensing or litigation. The requirements apprear to be an invitation for favoritism. Those programs and instructors favored by the decision makers in the OED will be approved. Those out of favor will not be approved.
In summary, the proposed rules appear to heavy handed attempt to solve a problem that does not exist, or can be dealt with within the framework of the existing rules. Further, the proposed rules leaves one with the impression that the OED intends to become a investigator and judge of all purported immoral activity by patent practitioners. This is not an appropriate role for the PTO.
Time does not permit me to engage in a more extensive review of the proposed rules. However, base upon the sections that I have reviewed, my opinion is that the proposed rules should be scrapped. Other practitioners with whom I have discussed the proposed rules, feel the same.
State Bar of Texas, Section of Intellectual Property