Tony Scardino, USPTO Deputy Director (Acting)

Anthony P. ScardinoTony Scardino, Chief Financial Officer of the agency is now also the Acting Deputy Director of the USPTO (as recently revealed by the USPTO FOIA Response).  It is a bit of an oddity as to how Scardino jumped to the head of the line in almost violation of the USPTO rules of succession that provides for CFO to take an acting head leadership role only if there is no Commissioner for Patents, Commissioner of Trademarks, or Administrator for Policy and External Affairs.  However, the rules of succession do not provide in particularity as to who becomes Acting Deputy Director when the Deputy leaves but the Director is still in place.  Thus, I would suggest that Dir. Lee is within her authority to select a qualifying person to fill that role. (It may also be that the PTO has a non-public succession plan.)

The statute requires the Deputy Director and Deputy Under Secretary of Commerce to be a person “who has a professional background and experience in patent or trademark law.”  35 USC 3(b).  Scardino’s professional background and experience in IP law appears to be wholly based upon his 7-years as Chief Financial Officer of the Agency.  Under the prior Peterlin precedent, Scardino’s experience is almost certainly sufficient.  See, Aharonian v. Gutierrez, 524 F. Supp. 2d 54, 55 (D.D.C. 2007):

[O]ne would expect Congress to speak in precise terms if it intended the courts to monitor the minimal qualifications for agency officers. Here, Congress has given only the broadest of instructions—that the Deputy Director should have “a professional background and experience in patent or trademark law.” 35 U.S.C. § 3(b). The statute is silent as to the content of those terms. Were the decision subjected to APA review, the Court—not Congress—would be the ultimate source of the standards by which the qualifications of Ms. Peterlin would be judged: Is a law degree necessary? Is it sufficient? Are law school courses in intellectual property a requirement? Is certification to practice before the USPTO? Is law firm experience? How many years? If Congress had intended the extraordinary situation in which judicial review would reach to the very qualifications of agency officers for their policymaking positions, its statute would not be drawn “in such broad terms that … there is no law to apply.” See Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 410, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971) (citation omitted).

Thus, although we have a very interesting question as to why Scardino was moved up rather than PTO Commissioner Drew Hirshfeld, the shift would be quite difficult to challenge in court.  Almost certainly, this leapfrogging came about with substantial input from the Trump Administration.  That result leads me to the potentially disturbing potential that the next appointed PTO leaders will also sidestep the requirements of “professional background and experience in patent or trademark law.”

One difference between Scardino and Peterlin is that Peterlin is an attorney while Scardino is not (nor is he a patent agent).  This is relevant because Scardino is also deemed a member of the Patent Trial and Appeal Board.  The statute requires, however, that those members “be persons of competent legal knowledge and scientific ability.” 35 U.S.C. 6.  Of course, his CPA background may assist with judging Covered Business Method (CBM) cases.   Note here – I think that the best interpretation of the statute is that while the Director and Deputy Director are both members of the Board, the competency requirement of Section 6 only applies to the appointed judges.

 

About Dennis Crouch

Law Professor at the University of Missouri School of Law. Co-director of the Center for Intellectual Property and Entrepreneurship.

26 thoughts on “Tony Scardino, USPTO Deputy Director (Acting)

  1. Suppose Scardino IS appointed Deputy Director or Director. Not as if anyone of you would add your names to a lawsuit to challenge his appointment. So stop whining, especially you anonymous types. Heck, the ABA and others pushed Congress to enact 35 USC 3 after the disastrous reign of Lehman. So for both Dudas and Peterlin, where were they to make use of the law they demanded? Leadership is dead in this field.

    However, if Scardino would be willing to issue a (Deputy) Director order to USPTO examiners and judges that it is a violation of the APA to use undefined words such as “abstract” to reject patent applications (such use a violation of Due Process – an administrative abuse, which sadly the courts are not subject to), then he has my support to be (Deputy) Director.

    Can someone ask Scardino if he would be willing to issue such an order (the precedent being Kappos’ Beauregard memo, which sadly, most patent prosecutors don’t care to read, if you look at the reams of crappy Beauregard claims being written these days).

    1. Greg, perhaps not “unidentified,” but “undefined.” If an examiner is going to say that my claim is directed to an abstract idea, I want him to state at least what an abstract ideas is.

      Now, we all can think we know what it means from the behavior of the court. But due process requires the rule of law; and the law is not the discretion of the king despite what Henry VIII was told.

  2. Perfectly sensible. Not like putatively “qualified” government personnel demonstrate overwhelming competency – why not try something new?

  3. I read the rules of succession a bit differently. Section 2.04 gives the order of succession if the Under Sec is vacant. It does not apply here since Michelle Lee is still Under Sec.

    Sec 2.05 is more interesting and applicable. It says when the Under Sec and Deputy are absent, then any of the named officials may perform the duties of Under Sec (essentially, serve as Acting) in their place. CFO is on this list.

    2.05 seems closer to the current situation. The Deputy spot is vacant, but there is no designated order of succession for Deputy. Thus it seems it would be up to the Under Sec to decide who to designate the Acting Deputy. Since CFO may be chosen as Acting Under Sec under 2.05, why wouldn’t they be able to fill the lesser position of Acting Deputy as well?

    Note this argument only applies to Acting Deputy. The requirements to be named permanent Deputy are different, as mentioned above.

    I’m not taking a position on the advisability of choosing CFO for this role. I’m only saying that it seems completely allowable under the rules – which admittedly do not address this situation directly.

    1. Sec. 2.04 governs what happens when the top two positions are “vacant” (e.g., due to resignation); whereas Sec. 2.05 governs what happens when the positions are “absent” (e.g., due to illness or international travel). This makes sense because you need an automatic line of succession (per Sec. 2.04) when no person exists in the top two positions to choose among the possible successors (as can happen in the event of temporary absence in Sec. 2.05). Here, the Deputy position is “vacant” because Russ Slifer resigned; therefore, Sec. 2.04 applies.

      1. Incorrect. Sec 2.04 first sentence covers when the Under Sec position is vacant. 2.04 second and third sentence covers when both the Under Sec and Deputy positions are vacant. Neither case applies here.

        Even if 2.04 did apply, it only gives an order of succession for the Acting Under Sec. It says nothing about who would be Acting Deputy in any scenario. There is nothing in the rules about that situation.

        2.05 is not an exact fit either. The Under Sec is not absent, hence it does not apply directly. 2.05 is just evidence that CFO is allowed to fill in for the Under Sec in certain situations, without a strict order among senior officials required. Applying that principle to the current situation, CFO appears to be an acceptable choice for an interim role as Deputy.

        Regardless, it’s clearly not against the rules, which do not cover this situation.

  4. In these times of great patent law debates, technical expertise is of secondary importance for leadership of the PTO. I suggested some time ago that we should consider appointing an economist who would understand the big picture on how pulling the rug out from under the patent system by increasing costs and decreasing reliability, taking away the advantages of inventing in America, and of not biasing toward US manufacturing, would harm the US economy as a whole.

    I suspect that Scardino was chosen because of these greater issues.

    1. I suggested some time ago that we should consider appointing an economist

      That makes good sense … for the position of Chief Financial Officer.

    2. Trump, who is running the government like an enterprise in the service of the American people, might appreciate the tax revenue generation potential of the US patent portfolio against the trade deficits as well. Put a number on that, and you might get the administrations attention as well. I wonder if the IRS would have the data. There is after all special statutory treatment of patent license and sales revenue and gains. Trump’s people might even go after the inter-comapny cash flow of the large entities jiggering their tax liabilities with their complex off-shore tax haven patent holding entities.

      1. I agree – such “off-shoring” should be made to be so onerous that Big Corp drops that practice.

        1. Or we can drop the corporate tax and switch to the Boarder Adjustment Tax. And in a flash, off-shoring would be useless.

          1. Not familiar with that – can you add a little more?

            1. The TL:DR version of the Border Adjustment Tax:

              A tax (current proposal of 20%) on all goods and services sold within the U.S. regardless of the origin of the good or which entity the profits are attributable to. For example, if Apple sales an iPhone in the US, they pay 20% tax on that sale. If they sale an iPhone in Ireland, they do not pay any tax on that sale. If any portion of the sale in the US is attributable to an Irish subsidiary, the tax still has to be paid.

              Planet Money episode #751 can explain it better than I can, to be honest.

  5. Well, this just seems wrong. Not out of the ordinary under Trump, but wrong.

  6. DC: The statute requires, however, that those members “be persons of competent legal knowledge and scientific ability.” 35 U.S.C. 6. Of course, his CPA background may assist with judging Covered Business Method (CBM) cases.

    ROTFLMAO

  7. How do we know that Scardino isn’t going to undermine the US patent system and work under the covers to promote Italian patents?

    I look forward to the Patent Maximalist Patriot’s deep, deep thoughts on this important topic which is always of such extreme and eternal importance to them. Have we seen Scardino’s long form birth certificate?

    1. MM, “promote Italian patents…”

      On display, folks.

  8. It is a bit of a presumption that this choice was made by Ms. Lee.

    1. I was thinking something along these lines. It seems likely that Scardino’s promotion is part of some larger deal worked out during those several weeks when Lee’s job was in doubt and Ross’s confirmation was still pending.

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