The OED Asserts it Has Jurisdiction to Discipline You in Far Broader Circumstances Than You might Think

This follows up on a post below about former client conflicts, about the catch-all rules.

The OED, of course, regulates patent agents and patent lawyers.  A practitioner who violates a provision of the PTO Code can be disciplined by the OED.  Discipline can include disbarment, suspension, a public reprimand, or a private reprimand.  So, if a practitioner steals money from a client for whom he is prosecuting a case, there's no doubt the OED would have jurisdiction to discipline the practitioner.

Over the years, I've had practitioners contact me because the OED was coming after them for things the practitioner did in, for example, patent litigation involving a patent that the practitioner had nothing to do with prosecuting.  Say, for example, the lawyer overcharged the patentee for representing it in an infringement suit.

There are lots of rules in the PTO that could "reach" this conduct and so permit the OED to discipline the practitioner for conduct having nothing to do with practice before the Office.  For example, 37 C.F.R. § 10.23(b)(5) prohibits conduct that is “prejudicial to the administration of justice.”  (In the forthcoming edition of our book, I go into what the PTO says that phrase means, but let's put that to the side.)  Thus, on its face section 10.23(b)(5) would reach this conduct: overcharge a plaintiff in a patent suit, and lose your ability to prosecute patents.

 In my view, the OED does lack jurisdiction, but the OED believes otherwise, and some have agreed with it in articles.

Let's start with the text of this rule:  on its face, it reaches the conduct I've described (assuming that overcharging is, in fact, "prejudicial to the administration of justice."  Nothing in the rule itself says that it has to be prejudicial to the administration of justice at the PTO.  And, some say the rule means what it says.  An important commentator, Cameron K. Weiffenbach,  wrote

Disciplinary Rule 37 C.F.R. § 10.23(b)(5) is directed to conduct that is “prejudicial to the administration of justice.”

The expression “prejudicial to the administration of justice” is not defined in the USPTO rules. This rule is, however, associated with misconduct in court proceedings.

The USPTO does not use the term “court” in its rules, but the term “tribunal,” which the USPTO defines, includes the “courts, the office [USPTO], and other adjudicatory bodies.” 37 C.F.R. § 10.1(z).

Thus, conduct that could constitute violation of 37 C.F.R. § 10.23(b)(5) could be conduct that impairs the public confidence in the USPTO such as lying to a client or to the USPTO, or neglecting a matter before the USPTO or even failing to pay a parking ticket

(Emph. added.)

Again, I know the OED believes that this rule reaches very far.  From what I have seen, the OED believes it can come after you for conduct done anywhere if it is "prejudicial to the administration of justice."  And, I have to tell you, there are several other provisions of the PTO Code that aren't limited, expressly, to practice beforre the Office.

Why do I think that it doesn't have jurisdiction unless it's a matter before the Office?  Well, because the PTO said so, repeatedly, and to avoid an interpretation of this very rule that would let it have that power.

Here's what happened.

When the PTO was adopting the PTO Code back before 1985, many people complained that, as then proposed, the PTO Code applied to anything the practitioner was doing — in prosecution, or not.  The PTO repeatedly responded to those comments before adopting the final rules by doing three things: (1) it adopted 37 CFR 10.1 to say that the PTO was intending solely to regulate practice before the Office; (2) the PTO amended many rules in light of comments to include a provision in 37 CFR 10.1 that says "with respect to practice before the Office," and (3) with respect to other rules, in comments the PTO repeatedly said, basically, "we don't have to include a phrase saying this specific rule only applies to conduct before the Office because 10.1 says no rule reaches that far."  

With respect to this specific rule —  "prejudicial to the administration of justice" provision — in fact, the PTO said that that rule was limited to practice before the Office, and pointed to Section 10.1 as a basis for not having to say so explicitly.

So, where we are in my view is:  these catch-all rules can't catch anything that does not constitute "practice before the Office."  The PTO said they didn't, so they can't.

But, like I said, I've had folks make that argument to the OED, and I know it disagrees.  Seems to me there's a problem with that, but you need to be aware of it.

In closing, and to be clear, there are rules in the procedural rules at the OED that allow for "reciprocal discipline."  So, if a state bar (or, I suppose, a federal court) were to discipline a lawyer for overcharging a patent infringement client, or for failing to pay that parking ticket, the OED could also impose discipline.  But, without getting boring on you (ha, you say, you did that at the headline!), there are a lot of procedural protections in that circumstance that aren't present even where, say, a judge were to issue an order sanctioning a practitioner for something done in litigation.

Finally, I'll note that there are some choice of law issues beneath all of this that lead me to believe that he OED would never be applying these rules to conduct that occured in a parking ticket matter, or a patent infringement suit, but those are for another day.

About David

Professor of Law, Mercer University School of Law. Formerly Of Counsel, Taylor English Duma, LLP and in 2012-13, judicial clerk to Chief Judge Rader.

21 thoughts on “The OED Asserts it Has Jurisdiction to Discipline You in Far Broader Circumstances Than You might Think

  1. 21

    Hi Lori,I am the new Alumni Director at Lees-McRae College and hope that we have all your information upadted. I am impressed that you are writing a book. You are right MANY, MANY stories of Emily. I am on Facebook as Abigail Lord or the LMC Alumni. I look forward to hearing from you.Take care,Abby

  2. 20

    All of the kernel work we’re doing for OLPC is going upesrtam. Right now that largely means drivers for the platform. Our config isn’t that different than a standard kernel, it just leaves out a pile of drivers. When we sit down and work on the suspend code and work on the memory compression that will also end up upesrtam and might be useful in other contexts.

  3. 19

    Thanks for your answer. I was wdonering how much of your work is going upstream, either in the Fedora fork of the kernel and in the main kernel itself. What I wonder is how much we are going to see of the olpc implementation on regular kernels to be use on laptops. Most distributions now have kernel for the architecture used, and for desktop/server, but not much for laptops. It’d be great if custom kernels for laptops were developed, benefiting from your great work on the olpc.

  4. 18

    What’s the chances for shmetoing like Squeak and Croquet working on it? I know Alan Kay is one of the prime movers in Squeak and would be interested if it’ll run within the OLPC scheme of things? I have my own program, OAR, which I’m trying to get running on Fedora Core 6, using Squeak and Croquet for reducing the recidivism rates within our nation’s various DOC’s. With a really inexpensive laptop, I’d have a better shot at success for it’s adoption. Our prisons are third world countries with 2.7 million men and women living in them. How about one laptop per convict? Ric

  5. 17

    As we mentioned back in July, the Southlake Carroll PTO Craft Fair will rerutn for its 19th incarnation on Saturday, November 5th from 9AM to 5PM and Sunday, November 6th from 11AM to 5PM. The weekend-long event will take place at Carroll Senior High School.

  6. 16

    This is hard-won patent that took too long to pescroute. Runwayfinder could have avoided the situation by negotiating the license while it was still an application. But I have seen businesses, or I should say their owners, decide to ignore a situation as a way to deal with it. It is unfortunate and leads to unnecessary outcomes. Essentially, patent licenses are an affordable way to protect yourself. I very much recommend you let someone else own the patent. Ownership is an expensive and unpredictable process. Licensing fees generally look like rounding errors and are built into the cost of goods for all legitimate business. However, I approach companies for licensing and have seem similar behavior. They feel like they have been damaged in some way because they were not the first to invent. Pride maybe. I had one company literally pick and leave the country after a 5 minute conversation. Breaking their leases cost more than paying a license. The most typical negative response to the patent owner is I will sue you until you run out of money. That posturing is generally a sure sign I have more money. So, while patent trolls get the bad name, licensees are not always pleasant, or ethical, themselves. Their personalized license plates read LETEMSUE. It appears that might have happened here.

  7. 15

    Thanks on both issues, Alun. On the second one it sounds like it’s just not what was intended, but care is a good thing.

    On the first one, it sounds like the company and agent are skirting around a big problem. I am surprised though the VA bar didn’t understand that this was in their ballpark.

  8. 14

    As for the PAIR disclaimer, it does not seem right. I am not a US citizen, but I am a registered patent agent inside the US. I admit that by checking to say I have read the wording and then accessing PAIR, it does not comply with the actual wording presented. However, I generally have the paper file in front of me at the time, and have access to all the information about the invention on the firm’s server. IOW, I have usually already read everything that matters (except the status of the case) before I access PAIR, so the invention has already been disclosed to an alien (me). Most of the time the inventors are aliens outside the US, as we do very little domestic work. Theoretically, domestic clients might need an export licence to have their applications prosecuted by me, but if that were ever actually enforced I would fear for my continued employment.

  9. 13

    I am aware of a situation where a patent search company in Virginia run by a non-lawyer non-patent agent was employing a patent agent to prosecute applications for third parties. As I see it, the patent agent would be committing prohibited fee splitting, and their employer would be carrying out the unauthorised practice of law. Unfortunately, the OED could not discipline the agent as I did not know the person’s name. I knew the identity of their employer, but as pointed out above, the OED has no jurisdiction over UPL issues. Unfortunately, the VA bar told me (quite wrongly IMO) that they would refer unauthorised practice of law before the PTO to the OED, which is extrememly unfortunate, as the VA bar has jurisdiction and the OED does not. For all I know, the problems that I reported to the OED and the VA bar may still be going on.

  10. 12

    Anon, that’s a great law professor answer, but in my role as a lawyer, I’ll tell you that’s cold, expensive, time-consuming comfort.

    Oldster, the OED opinions fall into 2 big camps: reciprocal discipline (state disciplines lawyer, then PTO does so relying on state’s action) and the OED’s independent grievances. It’s this latter category that I worry about here. I’d have to think through the last couple sentences of your post, though — usually choice of law principles will end up being so that if the conduct occurs during practice before an agency then, no matter whether it’s the OED or the state doing the discipline, the PTO rules would apply. Yes, the state would discipline only if the lawyer violated a PTO rule… Welcome to my world.

  11. 11

    @Anonymous Practitioner — You might think so, but out of curiosity I glanced at some randomly selected diciplinary opinions. All but one that I looked at resulted in no more than a few month suspension and most only resulted in probation, but most were based on the fact that the practioner had been disciplined by his or her state bar for acts that were totally unrelated to the PTO. A friend of mine who was admitted to the PTO but had not practiced there for many years was once put on probation by OED for conduct that would not have been a violation of PTO rules, soley because he was put on probation by our state. Interestingly, if he had done the same thing in conjunction with practice before the PTO, he would not have been disciplined by the state because our state bar applies the rules of a Federal Agency for practice before that agency if they differ from the state rules.

  12. 10

    The OED’s self-awarded power to prosecute anything beyond prosecuting matters “before the office” is strictly nominal, i.e., limited to the confines of its own imagination.

    The moment that it punishes a practitioner for conduct beyond practice-related matters, the practitioner will sue for reinstatement of privileges. The court of law will find that the OED acted outside of the confines of CFR, the practitioner’s privileges will be reinstated, and thus will end the expansive powers of the OED.

  13. 9

    Just passing, I’d have to think on that.

    Wes, yes, the OED can discipline TM lawyers. 37 CFR 10.1. In reading all the OED decisions (that was fun!), the number of patent practitioners being disciplined far exceeded TM lawyers. More deadlines, more substantive issues, I suppose.

  14. 8

    What about Trademark attorneys?

    Does the PTO have authority, or ever exercise authority, over attorneys filing TMs or interacting with applicants of similar marks?

    While they are not registered before the PTO as patent attorneys, they still can conduct misconduct (I know several that use questionable tactics with other applicants).

  15. 7

    Dan’s comment reminded me that perhaps this is a good place to ask the following questions:

    1) As a US citizen registered patent attorney/agent, can one access private PAIR from outside the US?

    2) As a non US citizen registered patent attorney/agent, can one access private PAIR from inside the US?

    A close reading of the message one agrees to by checking the box would seem to indicate that the answer is no, but that does not seem right.

  16. 6

    Dan, thank you. That’s news to me. I’m familiar with some other, um, conduct that people have engaged in that fall into that gap, but not that particular one.

    I assume that even those of these folks in the US wouldn’t care that there’s also a criminal statute (35 usc 33, I think it is but I’ve only had one cup of joe) that would likely capture that conduct, or they wouldn’t be doing it in the first place. But you’re right — 2 losers, those who abide by the rules, and those clients who get patents that are probably not of very good quality, one would think.

  17. 5

    David, I’d point out that the OED also has far less jurisdiction than one might hope: it has NO jurisdiction over people who practice without a license, and worse, the USPTO itself facilitates such unauthorized practice.

    If you wonder how it’s possible to practice without a license, remember that any inventor can get an electronic filing certificate, and any shmoe can get a customer number. Once that has happened, person can ask the USPTO to link the two, at which point he can file electronically for anyone, even if he’s not a registered practitioner. The OED has no jurisdiction in such a case, and as far as I can tell, no one at the PTO – not the people people in charge of electronic filing, not the examiners – bothers to check to see if the person filing is allowed to file on behalf of others.

    If you’re in the USA and you try that, you run the risk of being prosecuted, although I think both the FBI and the prosecutors have bigger fish to fry. But if you’re outside the USA you can do this with impunity, and nobody will do a thing. I’m aware of at least two people in Israel who have been doing this for years, and I’ve heard that it goes in Taiwan as well.

    The OED’s posture is thus a classic one of, No good deed goes unpunished: those of us who try to play the rules get punished by the OED, those who don’t get off free and don’t ever need to trouble themselves with issues like conflicts of interest, prior art reporting requirements, or advising the client of options to protect itself.

  18. 4

    OED – “Office of Enrollment and Discipline,” which is the grievance unit within the USPTO.

    PS DIP – my comments enjoy the company. Patent agents create some really strange issues, to put it mildly. That one will have to wait for me to think, since there are a number of issues. “I’ll be back.”

    Cooper’s Lament: If you’re ever confronted with the OED coming after you, you’ll feel like the trash near the bottom of the pile that caused the police to come out. (Boy, I haven’t listened to that record — and I mean record — in a long time. I remember, “instead of picking their’s up, we decided to throw ours down.”) It’s one thing to get a traffic ticket, it’s another thing to face an OED investigation…

  19. 3

    Re: OED discipline for getting a parking ticket:

    Even the state bar to which I’m admitted didn’t care about parking (or speeding) tickets. OED’s view reminds me of the climax of Alice’s Restaurant:

    “I mean, I mean, I’m just sittin’ here on the bench, just sittin’ here on the Group W bench, because you want to know if I’m moral enough to join the army and burn women, kids, houses and villages after being a litterbug?”

    “Kid, we don’t like your kind.”

  20. 2

    Your comments look lonely today, so I’ll ping you with a question re: agents and attorneys.

    Attorneys can not be bound by non-competes according to the State Bar since we don’t want to limit a client’s choice of legal counsel. What about agents who are not under a State Bar but are still providing legal advice?

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