Eugene J. Rosenthal
Sent: Tuesday, February 10, 2004 6:55 PM
To: ethicsrules comments
Cc: ot1 @...; finston@...; ejr@...; swilliamson@...; jmilton@...; steve@...; jcurtin@...
Subject: Comments on proposed ethics rules.
Please see the attached file for a set of comments regarding the proposed new rules which is being submitted on behalf of several practioners.
<<PTO rules comments . doc»
Mail Stop OED-Ethics Rules
United States Patent and Trademark Office
P.O. Box 1450
Alexandria, VA 22313
Attn: Harry I. Moatz
Overall, the proposed updated to the procedures regarding enrollment and discipline entitled "Changes to Representation of Others Before the United States Patent and Trademark Office" are ill conceived and create more problems than they solve.
The undersigned have never been inspired to write to any government agency to request changes in proposed rules until now. Unfortunately, the proposed changes are so bad that they have prompted the writing of the following comments.
While the goals stated as the reasoning behind the proposed rules may seem laudable, the fact is, most of the reasoning does not hold up, and certainly not the way the changes implement such reasoning.
First, the rationale for the new fees to be collected from registered practitioners is alleged to be that
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 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.
In simple terms, the PTO seems to be stating that since
the practitioners benefit from the disciplinary system and
the roster of registered practitioners, they should pay for
its maintenance, rather than the applicants who pay the
application, issue, or maintenance fees. However, this is at
best unintentionally misleading, and most likely just plain
First, it is noted that there is no proposed reduction in fees for application, issue, or maintenance, accompanying these rules. Thus it is clear that the PTO is really not providing any monetary relief to applicants, and so it is not meeting its stated goal. Instead the PTO is simply collecting additional money from practitioners, which is unjustified. Thus, the collection of the fees is revenue enhancing to the PTO, rather than being revenue neutral, which is what it should be to meet the goal of not passing the OED costs on to the applicants.
Second, it is highly likely that practitioners will build the cost of the new fee into their cost of doing business in one way or another. As a result, the costs of the new fees will actually be passed on to their clients. Thus, the public that was supposed to be protected from the cost of the disciplinary system, etc., will still be directly bearing that cost no less than under the current arrangement. However, because the system is cumbersome and time consuming for the practitioner, the overall cost that is likely to be
passed on the public will be higher than the cost as collected by the PTO through the current system.
Third, notwithstanding the assurances stated in the proposed rulemaking, there really is no way that the PTO can guarantee that the funds collected will not be siphoned off for other government purposes, as is presently done with application fees, issue fees, and maintenance fees that are being paid by the same public. Indeed, given prior government behavior, it is believed to be more likely than not that the collected funds will be improperly diverted.
As to the alleged benefit to practitioners of the maintenance of the register vis-avis the public, as an advertising benefit this is relatively small. For example, the undersigned have received extremely few calls over our numerous collective years of practice based on the list maintained by the PTO. It is suggested that reputation and word of mouth contribute overwhelmingly to a practitioner's ability to successfully obtain clients, rather than the PTO registry.
Something that does not seem to have been considered regarding the proposed fees, and certainly was not explained that the undersigned are aware of, is the fact that there is no registration of trademark attorneys, since any general practitioner may practice before the PTO in trademark matters. As a result, if the proposed system is adopted, the entire cost for the OED will fall upon the registered patent practitioners. That is unfair, not only to the patent practitioners, but also to their clients, who would now be solely burdened with paying the fees, especially considering that the trademark attorneys are subject to discipline by the OED in the same manner as the patent practitioners. By continuing to fund the OED from application fees, issue fees, and maintenance fees, including trademark related fees, the costs are fairly divided over the whole public that benefits from the PTO.
Thus, the best way to serve the public and keep costs low is to keep the present system and to not implement the proposed fees and rules associated therewith.
While it may be true that there are some pro se applicants who would be, at first glance, bearing some of the cost of the OED unfairly, this apparent unfairness can be addressed in two ways. First, such individuals would be subject to some of the rules of discipline, so it would not be unfair to ask them to pay something toward the OED. Second, the fee scheduled could be revised along the lines of the small-entity philosophy, in that a pro se applicant would be entitled to a small fee reduction of some type, e.g., in the initial filing fee. However, since, as mentioned above, the PTO did not see fit to reduce any of the application, issue, or maintenance fees, notwithstanding the extra funds that it proposes to collect, it is suspected that on a per-application basis the OED cost is de minimus, and this whole issue could also be ignored on that basis.
Turning now to the issue of the Registration Examination and the proposed changes thereto, it seems that developing a bank of questions and then simply reusing them is looking for big trouble. Test preparation services have methods of obtaining questions that were used on actual exams. For example, they can request that an applicant memorize one or more questions and supply that information to the preparation service. Thus, soon enough, all of the questions in this new vaunted database of questions will be known to the test preparation services, which would then convey them to all of the applicants. As a result, the Registration Examination will become much less meaningful, if not totally worthless.
Regarding the proposal that no other materials be allowed into the Examination other than the Code, Rules, and MPEP, it seems that doing so makes the test less reflective of the environment in which patent practice actually takes place. Oftentimes, other materials are better organized and user friendly than the Code, Rules and MPEP, leading to an easier way to obtain the correct practice for a client. Furthermore, such materials almost always point to the correct place in the Code, Rules or MPEP for further confirmation. Of course, it is understood that the OED wants to limit what can be brought in, because it is likely that, if the proposed system is adopted, applicants that have gone to test preparation services will likely have materials containing the exact questions and answers, for the reasons set forth hereinabove. However, rather than be an argument in favor of limiting what can be taken into the test, this is an argument for not going to a bank of questions for the Examination.
With regard to the rules for regrading of an exam question, the proposed system, while perhaps meeting the minimal requirements to pass muster under law, seems to have missed the element of fundamental fairness which embodies the present system, and is usually the cornerstone of PTO rules and practice. When an applicant requests a regrade of a question, it is because he believes either there was something wrong with the question or that the official answer to the question is wrong. Given the number of questions that it is understood have had problems in the past, it seems unfair to deny an applicant the right to question a particular question or answer. Sometimes, you must admit, some of the applicants know better than even the test makers, or the questions are written in such a way as to be fairly open to different interpretations that lead to different correct answers.
Thus, it seems that while it may cost more, it would be better for the public overall, and more fair to the applicants, to maintain the current examination and review/appeal system. It is suggested that applicants would be willing to entertain a slightly higher examination cost to maintain the current system.
Regarding the proposed CLE requirements, they are a) totally unnecessary and b) unduly burdensome, without necessarily improving a practitioners' knowledge, for the following reasons.
First, the PTO's concern regarding the CLE requirements seems to relate primarily, if not exclusively, to changes in the rules of practice before the PTO. Over the last fourteen years, major rule changes have been relatively infrequent and it would seem that most practitioners are aware of the rule changes and attempt to comply with them. This is because there is plenty of advance notice as to the rule changes, including both a proposed rule set that is submitted for comments and then there is a fair amount of time, often on the order of months, before a final rule set goes into effect. Furthermore, it seems that most corporate patent departments and law firms regularly monitor the PTO for proposed and final rule changes and communicate such information among their staff. In fact, that is how the undersigned found out about the current proposed rule changes. Moreover, with the available email communication direct to each practitioner, the chance that a practitioner will be unaware of a rule change is drastically diminished.
Second, there is a natural feedback that informs practitioners as to rule changes if they were not aware of them. This is because the PTO will not accept papers that don't conform to the rules, and notifies the practitioner sending in any such non-conforming
paper to that effect. The practitioner thus becomes aware of the changes in the rules and knows to conform to them in the future.
Also, since the CLE would not apply to the public that files applications pro se, and there are always inadvertent errors that can crop up even for the best of practitioners, there would still have to be a mechanism for responding to improper papers and soliciting a corrected response. Since this function cannot be eliminated from the PTO anyway, it could act as a final backup should the odd practitioner not be aware of a change in the rules.
Furthermore, if practitioners fail to exercise reasonable diligence in staying up to date with the Office rules, the results they seek for their clients will not be satisfactory. This will lead to complaints by the clients, either to the PTO, or to the effect of ruining the practitioner's reputation. In the event of complaints to the PTO, the PTO will be able to sanction the practitioner under the ethical rules, e.g., for not zealously representing the clients' interests or for not being competent to handle a matter. So ultimately, without a burdensome regime imposed on all practitioners, those few who may be bad apples could be dealt with appropriately.
Third, it has been the practical experience of the undersigned that practitioners become aware of the rules before they go into effect. The undersigned personally review the work of various outside counsels from many firms and solo practitioners that prosecute applications on behalf of our corporate employer and the failure to follow the rules in the filing of papers in the PTO that did not conform to the then current rules has not been an issue.
Fourth, the entire process set up for CLE seems to impose extra burdens on the practitioner without bringing any rewards. The requirement for a practitioner to obtain a 100% correct score on an Internet-delivered examination, which a practitioner can take as many times as necessary, leads simply to one taking notes as to the correct answers each time a question is answered wrong or correct, and eventually a 100% score will be obtained. It doesn't really lead to useful knowledge of the rules. What actually leads to useful knowledge of the rules is awareness that the rules have change and an actual need to submit a paper or undergo a procedure pursuant to the changed rules. To better communicate that there are changes in the rules that practitioners should be aware of, the PTO should communicate with practitioners both via email and in notices that accompany each office action or paper sent to practitioners over a period of time before the rules go into effect.
Fifth, the PTO seems to have gotten along just fine for 200 years without requiring CLE from their registered practitioners. It's hard to believe that suddenly there has arisen such a profound lack of knowledge about the rules that a CLE requirement is necessary.
Sixth, since the CLE requirements don't apply to trademark practitioners or to the public, the effects of the proposed CLE requirement will be minimal at best, while the burden appears to be quite large, both from an administrative point of view in the PTO as well as in the practitioner's office.
Seventh, the way the CLE requirement is set up also seem to go against the rationale for changing from the model code to the model rules. Regarding the change from the code to the rules, the PTO claims to be conforming their ethical requirements to that used in the majority of the states. Similarly, the PTO, if it must have a CLE
requirement, should conform it to that of most of the states. It is believed that he majority of the states have CLE requirements, and none of them require exams, and certainly not that one receive an 100% correct score on an exam. Likewise, not even the Bar exam requires that an applicant receive a 100% correct score. In fact, not even judges are required to be 100% accurate. To conform to state requirements, if there must be CLE for the PTO, it should be presented in a format similar to those used by state bars. Even better, the CLE requirement of the PTO should be such that in meeting the PTO's CLE requirements that of most states is also met, so that practitioners could simultaneously meet their state CLE requirement and the PTO's.
In conclusion, the PTO's proposed CLE regime seems intent on solving a problem that doesn't exist using a solution that does not appear designed to solve even the stated problem. If the PTO is concerned about the caliber of the practice before it, it is suggested that it revert to a system such as when the registration exam was a rigorous and difficult exercise, as evidenced by the infamous 28% pass rates, and passing required actual skillful claim drafting. It is further suggested that the training of the Examining corps be intensified, to produce more accurate and insightful Office actions.
Turning to the whole registration regime, with various categories of active, inactive, and so forth, again it seems to be unduly burdensome, and provides no benefit to the practitioner. It seems fairly clear that if the fee requirement and CLE are eliminated, as suggested above, there is no justification for the entire regime. Furthermore, the regime is burdensome and seems designed-other than to insure that the PTO can collect its fee-simply to trip up the practitioner. Moreover, again, it appears unfair, in that it doesn't apply to trademark practitioners who benefit just as much from the PTO and the OED as their patent practitioner counterparts.
Regarding communication by email, while the PTO's efforts to modernize are laudatory, people often change their emails more frequently than their physical addresses. Thus, the PTO should be able to maintain several, e.g., at least 3, email addresses per practitioner, e.g., a home email address, a work email address, and a "permanent" email address which is often forwarded somewhere else. The Office should send electronic communication to all of these addresses to maximize the chance that a message is actually received by the intended practitioner. The cost of doing this is virtually nothing.
The whole voluntary inactivation regime is also exceedingly burdensome. The fees saved and avoidance of an at-most once-a-year CLE aren't worth the trouble when to return to active status one must complete the CLE requirements, undergo a moral character examination, file a declaration that they have read the most recent revisions of the Patent Act and rules, and still pay a fee.
Section 11.115 regarding the Safekeeping of Property should be eliminated and instead reference should be made to conforming financial practice of attorneys to that of the state bar of the state in which an attorney is actually practicing, or to an identified one of the state bars to which an attorney practicing outside of the United States is admitted. For agents, reference should be made to conforming financial practice to that of the state bar of the state in which the agent is actually practicing, and to the Bar of the District of Columbia for agents practicing outside of the country. Doing so will allow each attorney to have a single, unified set of financial guidelines for their practices, whether before the PTO or not, and will avoid any possibility of conflict between the requirements of the state bars and the PTO.
Thank you for your attention to, and consideration of, these comments.
Eugene J. Rosenthal, Attorney
Reg. No. 36,658
Martin I. Finston, Attorney
Reg. No. 31,613,
Ozer M. N. Teitelbaum
Reg. No. 36,698
Steve Mendelsohn, Attorney
Reg. No. 35,951
James Milton, Attorney
Reg. No. 46,935
Samuel R. Williamson, Attorney
Reg. No. 28,768
John E. Curtin, Attorney
Reg. No. 37,602