Edward J. Kondracki
Sent: Tuesday, February 10, 2004 5:48 PM
To: ethicsrules comments
Subject: Proposed new requirements for patent attorneys
Attention Harry L. Moetz:
Dear Mr. Moetz,
I have studied the proposed rules and, frankly, I am shocked at the extent to which some of the rules which the PTO proposes intrude on the attorney client relationship . The proposed rules ignore time tested regulations and precedent which have given stability to the practice of law, from an ethical viewpoint, in the Intellectual property field.
With 28000 registered patent attorneys and agents, how many serious proceedings have been initiated, and how have the rules failed to regulate the patent bar. I have heard the figure of four or five per year quoted. This proposal seems to me to be a case of trying to kill a flee with a sledge hammer.
In my forty years of practice as a patent attorney, I have found that the rules, revised periodically when certain situations demanded revision, have adequately serve the patent bar. When a rule is found to be totally inadequate or defective for a particular situation, a modest revision might be in order, but to scrap the entire past practice and propose fifty single space pages of new regulations is unnecessary. Because the PTO Office of Enrollment and Discipline has done an excellent job regulating agents and attorneys practitioners, the proposed rules should be scrapped. If a few problem areas exist, they should be addressed, but please put the sledgehammer back in the shed.
I will comment on those individual rules which I find to be overreaching, burdensome and generally unnecessary.
Opening of Financial Records
A practitioner, in return for being registered . . . agrees that the OED Director may examine financial books and records maintained by or for the practitioner for the practice before the Office, including, without limitation, any and all trust accounts, including any trust account that may not be in compliance with the Rules of Professional Conduct, fiduciary accounts, and operating accounts maintained by the practitioner or his or her law firm. 11.16; see also 11.22(k).
The proposed rules provide unlimited access to the financial records of a firm to which an attorney or agent may not even be entitled. This is an unwarranted intrusion in the business practices of attorneys and by a government agency and is much too intrusive. Proposed Rules 11.16 and 11.22(k) should not be adopted.
No rules specifically authorize contacting non-complaining clients.
OED investigators may contact non-complaining clients upon
receiving authorization of the PTO's Committee of Discipline.
Most, if not all, states by their rules governing the practice of law bar contacts between an attorney and the client of another attorney when it is known that the client is represented by an attorney. OED is in the position of an attorney and any contacts with a non complaining client should be through the client's attorney. This rule interferes with an established attorney-client relationship. If OED is investigating an attorney, it has adequate resources by which to conduct its investigation.
No continuing education requirement.
Mandatory Continuing Legal Education will be required. The program must be either (a) offered by the USPTO over the Internet including a test or (b) offered by a USPTO-approved sponsor. If the program is offered by a USPTO-approved sponsor, the USPTO shall specify the "legal, procedural and policy subject matter." 11.13(a)(ii).
The PTO should not be permitted to interfere with state sponsored or approved Mandatory Continuing Legal Education courses. Any attorney who satisfies a state's MCLE requirements should be deemed in compliance with the PTO's new requirements. The PTO should give full credit for MCLE credits derived through sponsored CLE courses. A further requirement for additional PTO CLE credits is burdensome on practitioners.
No bar dues owed to PTO.
Annual fee starting at $100 will be required of all practitioners.1.21(a)(7).
The annual fee would be acceptable if it could be shown that the cost of operating the Office of Enrollment and Discipline could not be met by the present budget. The last couple of years have witnessed excessive collections by the PTO and pleas to Congress to restore this money to the PTO. So long as the PTO is collecting excess fees over its needs, there is no need to tax the Patent Bar. Will the PTO also tax general practitioners who appear before the Trademark section of the PTO? There is no sound reason why one half of those who practice before the Patent and Trademark Office are taxed and the other half is not. Past experience has shown that the PTO is collecting sufficient fees to meet the cost of operation of the OED without further taxation of the patent bar.
Attorneys may be disciplined for applying for a patent on a "frivolous invention." 11.101
Attorneys do not apply for inventions, inventors do. An inventor is the applicant, not the attorney. An attorney might advise his client that the invention in his opinion is frivolous, but to the inventor that invention may be an answer to a long felt need that he has experienced.
This standard would be contrary to law which permits the grant of patents on inventions which are new, useful and non-obvious. There is no body of law guiding practitioners on when an invention is "frivolous" and no law which precludes the grant of such invention, if indeed the invention is "frivolous". Making it misconduct on the part of an attorney for filing an application on behalf of an inventor because it is a "frivolous invention" would be contrary to what the law authorizes and have an undue chilling effect on patent applications and would serve to demoralize and discourage inventors from the task of inventing. Attorneys might be forced to discourage filing applications on meritorious inventions, being afraid to be second guessed by an Examiner or OED representative who deems the invention "frivolous". Rule 11.101(c)(4) should not be adopted.
Regulation of Participation In Bar Associations
Attorneys involved in bar associations cannot participate in a decision of the association unless they reveal the existence of any client that may be materially benefited by the decision (11.604):
A practitioner may serve as a director, officer, or member of an organization involved in reform of the law or its administration notwithstanding that the reform may affect the interests of a client of the practitioner. When the practitioner knows that the interests of a client may be materially benefited by a decision in which the practitioner participates, the practitioner shall disclose that fact but need not identify the client.
This is a BAD proposal. It is vague and in its vagueness the new proposed rule could unnecessarily meddle in bar association activities wholly unrelated to practice before the Office. What is meant by "participates". Does an attorney "participate" when he fills out a questioner? Does an attorney "participate" when he votes on a recommendation being considered by the American Bar Association or the American Patent Law Association or the DC Bar Association, or the Association for the Protection of Industrial Property?
Any lobbying effort by a member of an organization, for
example the PAC arm of the AIPLA,
will presumably be for the benefit of a client. That fact should be obvious on its face.
Why a rule to disclose "The interest of my client may be benefited by a favorable decision
to the matter under consideration" If I advocate a "first to file system" or "first to
invent system", of course the interest of my clients would be affected by the decision.
That is the purpose of participation. Does the name of the client make a difference.
The requirement for a practitioner to disclose the existence of a client that would benefit from an organization's proposal, or face the loss of license to practice, would have an undue chilling effect on public discourse and legal reform. Proposed Rule 11.604 should not be adopted.
Malicious Complaints Existing Rule:
Rule 10.23(c)(12) currently prohibits knowingly filing "a
frivolous complaint alleging a violation by a practitioner of
the Patent and Trademark Office Code of Professional
Proposed rule 11.3(d) states:
Complaints submitted to the OED Director or any other official of the Office shall be qualifiedly privileged for the purpose that no claim or action in tort predicated thereon may be instituted or maintained.
Proposed rule 11.3(d), which offers "immunity" for filing of complaints should not be adopted, because the present rule provide sufficient safeguards. The rule as proposed would shield PTO employees as well as others who might file a frivolous complaint. It should not be adopted.
PTO employees are not exempt from disciplinary complaints.
Proposed Rule 11.3(d) states:
The OED Director, and all staff, assistants and employees of the Office of General Counsel, Solicitor's Office, the Office of Enrollment and Discipline, and the members of the Committee on Discipline, the Committee on Enrollment, the employees of the Office providing regrades of examinations, and employees of the Office developing questions for the registration examination shall be immune from disciplinary complaint under this Part for any conduct in the course of their official duties.
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 would only encourage improper behavior by PTO employees. Proposed Rule 11.3(d) should not be adopted.
Disciplinary proceedings are heard by Administrative Law
Judges. 37 CFR 10.139(a).The
PTO has interpreted this to authorize use of any ALJ, even one not employed by the PTO.
Note that 35 U.S.C. 32 says "the Director shall have the discretion to designate any
attorney who is an officer or employee of the United States Patent and Trademark Office to
conduct the hearing required by this section." In practice, the PTO currently refers all
disciplinary proceedings to the Environmental Protection Agency for decision.
The new rules state that disciplinary proceedings will be
heard by a hearing officer that
has "suitable experience and training to conduct the hearing, reach a determination, and
render an initial decision in an equitable manner." 11.32 and 11.39(b)(4).
Disciplinary proceedings should be conducted by someone
familiar with Intellectual Property law as it is practiced
before the Office. The current practice of having
disciplinary proceedings adjudicated by the U.S.
Environmental Protection Agency should be
discontinued. The rules should reflect the requirement of 35 U.S.C. 32 that all
disciplinary hearings be conducted by a PTO employee. After "hearing officer" the words
--who is an employee of the Patent and Trademark Office-- should be added.
A suspension of a practitioner ordered by the PTO is typically stayed during review by the District Court.
Suspensions are effective immediately even when an appeal to court is pending. 11.58(c).
Suspension of a Practitioner's license is tantamount to the end of his ability to earn a living in the vocation that he has been trained. This is a serious penalty. A Practitioner should have an unqualified right to court review of any decision by the PTO to suspend his/her license under 35 U.S.C. 32 and the right to practice until the agency decision is affirmed.
Currently, a suspended practitioner may be reinstated after serving the period of suspension, according to 37 CFR 10.160(c):
The Director may grant a petition for reinstatement when the individual makes a clear and convincing showing that the individual will conduct himself or herself in accordance with the regulations of this part and that granting a petition for reinstatement is not contrary to the public interest.
In order to be reinstated under proposed rule 11.60(a), a suspended practitioner would need to show "rehabilitation" even when he has already served his full sentence of suspension.
The showing of "clear and convincing" evidence under the
present rule should be sufficient. Even under our criminal
laws, offenders are not required to show rehabilitation when
their term of confinement or probation ends. A suspended
who serves a full sentence of suspension should be automatically reinstated. Proposed
Rule 11.60(a) should not be adopted.
Existing Rule: None
The PTO now proposes to regulate sexual conduct of registered practitioners:
Sec. 11.806 Sexual relations with clients and third persons.
(a) Sexual relations means sexual intercourse or the touching of an
intimate part of another person for the purpose of sexual arousal,
sexual gratification, or sexual abuse.
(b) A practitioner shall not:
(1) Require or demand sexual relations with a client or third party
incident to or as a condition of any professional representation;
(2) Require or demand sexual relations with an employee incident to or as a condition of employment; or
(3) Employ coercion, intimidation, or undue influence in entering into sexual relations with a client.
(c) Paragraph (b) of this section shall not apply to sexual relations between a practitioner and his or her spouse or significant other, or to ongoing consensual sexual relationships that predate the initiation of the practitioner-client relationship or practitioner-employee relationship.
(d) Where a practitioner in a firm has sexual relations with a client but does not participate in the representation of that client, the practitioners in the firm shall not be subject to discipline under this section solely because of the occurrence of such sexual relations.
The PTO is proposing to enter a field where it has no justifiable business. Proposed Rule 11.806 should not be adopted. SUMMARY
The proposed changes to the rules 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."
The scarcity of significant cases among 28000 registered agents and attorneys does not justify a wholesale abandonment of existing rules. The PTO's Office of Enrollment and Discipline has done an excellent job regulating registered practitioners over the years. Given the fact that the current time tested rules have generally worked fine for this purpose, there is no need for scrapping the current system and imposing a set of new regulations which will prove to be burdensome and expensive. These rules will also result in excessive and unnecessary government interference. The sledgehammer approach to kill a flee is nothing more than an attempt at bureaucratic interference in areas where the PTO has no justifiable right to be. The disadvantages of the proposed rules are far outweighed by the public interest in maintaining a time tested system with established precedents. As the saying goes " if it ain't broke, there is no reason to fix it".
Edward J. Kondracki
1751 Pinnacle Drive - Suite 500
McLean, Virginia 22102 3833
Tel: 703 610 8627 fax: 703 610 8686
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