Guest Post: New USPTO Proposed Ethics Rules, Part I

Guest Post by Professor Lisa Dolak.

On October 18, 2012, U.S. Patent and Trademark Office issued a Notice of proposed rulemaking relating to "Changes to Representation of Others Before The United States Patent and Trademark Office." The essence of the proposal is to replace the current ABA Model Code-based USPTO ethics rules with a version of the ABA Model Rules, versions of which have been adopted in 50 jurisdictions (49 states and the District of Columbia).

In the Notice, the USPTO indicates that its goal is to modernize its ethics rules and to harmonize them with those that already govern most of the registered and non-registered practitioners who represent others before the USPTO, "while addressing circumstances particular to practice before the office". The Notice references several sources that may provide useful interpretative guidance regarding the proposed rules, including existing USPTO-specific precedent, "the Comments and Annotations to the ABA Model Rules", and "opinions issued by State bars and disciplinary decisions based on similar professional conduct rules in the States." Significantly, however, the Notice expressly disclaims the imposition of significantly new standards on those who are subject to USPTO enrollment and discipline oversight, stating "any change is not a significant deviation from rules of professional conduct for practitioners that are already required by the Office."

For the most part, the USPTO seeks to conform its rules governing professional conduct to the ABA Model Rules, with certain specific language tailored to the specialized nature of practice before the USPTO. The Notice also highlights, however, the ways in which the USPTO's new rules would deviate from the ABA Model Rules. And it proposes revisions to certain provisions of the rules governing the conduct of disciplinary investigations, which rules were adopted in 2008.

The first thing to note is the proposed numbering scheme for the new USPTO Rules of Professional Conduct. For example, proposed USPTO Rule of Professional Conduct 11.107 corresponds to ABA Model Rule 1.7. USPTO Rule 11.302 would parallel Model Rule 3.2, and USPTO Rule 11.804 – the proposed new USPTO rule relating to "misconduct" – corresponds to Model Rule 8.4. It appears, in fact, that the USPTO has endeavored to match up its proposed rules to the Model Rules by subsection, where appropriate. Thus, proposed "Sections 11.804(a) – (f) correspond to the ABA Model Rules of Professional Conduct 8.4(a) – (f), respectively."

Some examples of the many instances where the USPTO indicates an intent to conform with the corresponding ABA Model Rule include proposed sections:

  • 11.107, relating to concurrent conflicts of interest (see ABA Model Rule 1.7);
  • 11.109, relating to conflicts of interest and duties to former clients (see ABA Model Rule 1.9);
  • 11.110, relating to the imputation of conflicts within law firms (see ABA Model Rule 1.10);
  • 11.116, relating to a practitioner's obligations in declining or terminating client representations (see ABA Model Rule 1.16);
  • 11.401, relating to a practitioner's obligation to be truthful when dealing with third parties on a client's behalf (see ABA Model Rule 4.1); and
  • 11.501 and 11.502, relating to the responsibilities, respectively, of a supervisory practitioner and a subordinate practitioner (see ABA Model Rules 5.1 and 5.2).

In other respects, the proposed rules would be tailored to account for particularized aspects of USPTO practice. For example,

  • with regard to proposed Section 11.105 relating to a practitioner's responsibilities regarding fees, the Notice states that "[n]othing in paragraph (c) should be construed to prohibit practitioners gaining proprietary interests in patents" in accordance with USPTO rules.

In addition, there are several proposed rules that are modified to reinforce or accommodate the duty of disclosure or the inequitable conduct doctrine. The proposed rule (Section 11.106) relating to confidentiality obligations "includes exceptions in the case of inequitable conduct before the Office in addition to crimes and frauds". A subsection of this rule would permit a practitioner to reveal information relating to a representation to the extent the practitioner reasonably believes necessary "[t]o prevent, mitigate or rectify substantial injury to the financial interests or property of another that is reasonably certain to result or has resulted from . . . inequitable conduct before the Office." Significantly, another subsection of Section 11.106 would expressly reinforce a practitioner's duty of disclosure, notwithstanding his or her confidentiality obligations ("A practitioner shall disclose to the Office information necessary to comply with applicable duty of disclosure provisions.").

Similarly, proposed Section 11.303(e) provides: "In a proceeding before the Office, a practitioner shall disclose to the Office information necessary to comply with applicable duty of disclosure provisions." According to the USPTO, "[t]he practitioner's responsibility to present the client's case with persuasive force is qualified by the practitioner's duty of candor to the tribunal. See Lipman v. Dickinson, 174 F.3d 1363, 50 USPQ2d 1490 (Fed. Cir. 1999)."

Another manifestation of the USPTO's efforts to implement specialized patent-related policy is found in proposed Section 11.303(a)(2), which extends the practitioner's duty to disclose adverse controlling legal authority beyond inter partes situations to ex parte proceedings (where the authority is not otherwise disclosed). In the Notice of proposed rulemaking, the USPTO indicates that this rule is justified by the effect that USPTO decisions have on the public interest.

In other notable aspects of the Notice, the USPTO:

  • notes that it has not incorporated into the proposed rules any of the recently(August 2012)-adopted changes to the Model Rules, "since the states have not adopted those changes at this time";
  • reminds practitioners that "[f]ailure to comply with [state professional conduct] rules may lead to . . . possible reciprocal action against the practitioner by the USPTO"; and
  • proposes to remove the practitioner maintenance fee currently set forth in 37 C.F.R. § 11. 8(b), because "the Office has suspended collection of those fees".

Finally, proposed section 11.1 would provide definitions of terms used in the proposed professional conduct rules, including "practitioner" (which would include registered attorneys and agents as well as persons authorized to represent persons before the USPTO in trademark and non-patent matters and persons given limited recognition in patent matters), "informed consent", "reasonable belief"/"reasonably believes", "screened", "writing", and "written". One of the more notable subsections would define "[f]raud" and "fraudulent", as follows:

Fraud or fraudulent means conduct that involves a misrepresentation of material fact made with intent to deceive or a state of mind so reckless respecting consequences as to be the equivalent of intent, where there is justifiable reliance on the misrepresentation by the party deceived, inducing the party to act thereon, and where there is injury to the party deceived resulting from reliance on the misrepresentation. Fraud also may be established by a purposeful omission or failure to state a material fact, which omission or failure to state makes other statements misleading, and where the other elements of justifiable reliance and injury are established.

With regard to fraud and fraudulent behavior, the Notice expressly acknowledges the USPTO's decision not to adopt the corresponding ABA Model Rules definitions. "Instead, the Office believes a uniform definition based on common law should apply to all individuals subject to the USPTO Rules of Professional Conduct." "Accordingly," the Notice states, the proposed rules adopt "the definition of common law fraud . . . discussed by the United States Court of Appeals for the Federal Circuit." The proposed adoption of a specific definition of "fraud" is notable, given the USPTO's obligations under the AIA to report instances of detected "material fraud" in the context of supplemental examination to the Attorney General, and its decision not to include a definition of "material fraud" in the final rules governing supplemental examination.

Other aspects of the Notice, including key ways in which the proposed rules deviate from the Model Rules, and how the USPTO proposes to modify existing rules relating to disciplinary investigations, will be highlighted in subsequent posts.

Comments relating to the proposed rules are due 60 days after their publication in the Federal Register. Based on the anticipated publication of the proposed rules on Thursday, October 18, the deadline for comments will be Monday, December 17, 2012.

3 thoughts on “Guest Post: New USPTO Proposed Ethics Rules, Part I

  1. Good post.

    I would worry about the application of Candor Toward the Tribunal rule to the PTO. Specifically, the duration of the candor in Model Rule 3.3(c) (37 CFR § 11.303(c)). The “duties stated in paragraphs (a) and (b) continue to the conclusion of the proceeding…” But when is the conclusion of the proceedings?

    Is the conclusion of the proceedings after the patent issues? Or after a patent expires? Or somewhere in between that twenty year span?

  2. Good share. “Fraud or fraudulent means conduct that involves a misrepresentation of material fact made with intent to deceive or a state of mind so reckless respecting consequences as to be the equivalent of intent, where there is justifiable reliance on the misrepresentation by the party deceived, inducing the party to act thereon, and where there is injury to the party deceived resulting from reliance on the misrepresentation.” As we konw these things may happen and the rules seems very necessary and we should try to follow it

  3. “Similarly, proposed Section 11.303(e) provides: ‘In a proceeding before the Office, a practitioner shall disclose to the Office information necessary to comply with applicable duty of disclosure provisions.” According to the USPTO, “[t]he practitioner’s responsibility to present the client’s case with persuasive force is qualified by the practitioner’s duty of candor to the tribunal. See Lipman v. Dickinson, 174 F.3d 1363, 50 USPQ2d 1490 (Fed. Cir. 1999).’”

    As we know, Rule 56 is not the law. Therasense is.

    Question, is a legal act or position taken under Therasense a punishable violation if the duties required by Rule 56 are stricter?

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