Coming Soon: Annual Bar Dues and CLE Requirements

The USPTO has quietly proposed adding new annual bar dues ($240 – $410) for patent practitioners as well a continuing legal education (CLE) requirement.  The proposal is buried in the Table of Proposed Fees that will serve as the basis for an upcoming September 6, 2018 PPAC meeting on fees.

The Agency has not yet released any other information regarding the proposal. However, the suggestion from the fee requirement here is that the CLE requirement would only be a “soft” requirement — if you complete the CLE then the Annual Active Patent Practitioner Fee would be reduced.  The USPTO previously proposed annual fees back in 2003.

29 thoughts on “Coming Soon: Annual Bar Dues and CLE Requirements

  1. 11

    There should be a CLE requirement. But practitioners (attorneys AND agents) should be able to satisfy it with whatever CLE, if any, they are required to do for their respective state bar membership. Obviously the PTO should be able to decide whether to give credit for courses taken, but they shouldn’t be able to refuse credit for courses that are clearly patent related. If I take a 4 hour CLE on trusts and estates law in Virginia, I shouldn’t get credit. But if I take a two hour PLI or IPO CLE on the impact of Berkheimer, obviously I should get credit.

    A system of ensuring practitioner compliance shouldn’t be that difficult to implement and maintain. But what are the odds that the PTO will get it right?

    (Hint: I’m thinking of a big round number.)

  2. 10

    Gene’s blog today adds this new twist to other comments here that “yes there IS a problem, but this fee alone will not stop it.” [Unless these fees are used for more OED enforcement?]:
    “37 C.F.R. 11.5(b) defines practice before the Office to include preparing documents in contemplation of filing, and corresponding and communicating with the Office. The rule says that practitioners can employ non-practitioner assistants, but the rule should prevent non-practitioner filing services from filing applications on behalf of individuals. Some of the largest filers of applications are non-practitioner filing services [does he mean “invention promotion” companies?], both on the patent and trademark side. The Office has to know who these filers are because they are corporations (not law firms) corresponding and communicating with the Office after having assisted individuals with the preparation of documents in contemplation of filing. They are engaging in the practice of law, yet OED and the USPTO has not done nothing to stop these rather blatant violations of Rule 11.5(b).”*
    [He also attacks non-enforcement of their own indicated export regs violations by using foreign application preparers of U.S. inventions].

    *Not entirely true, as I remember enforcement actions that went all the way to the Fed. Cir. against mass filers of large numbers of design patent applications for huge fees by an invention promotion company where the only thing “ornamental” was something they sketched on the outside of utilitarian objects (like a bait bucket) in design application drawings. [Massive fraud of large numbers of inventors thinking they were getting patent protection.]

  3. 9

    WHAT ABOUT INACTIVE MEMBER FEES? NOT ALL REGISTERED PATENT ATTORNEYS ARE FILING PATENT APPLICATIONS IN THE USPTO.

    1. 9.1

      WHAT ABOUT INACTIVE CAPSLOCK KEYS? NOT ALL REGISTERED PATENT ATTORNEYS ARE HAPPY BEING SHOUTED AT OVER THE INTERTUBES.

      (Sorry, hard to resist).

    2. 9.2

      As an in-house attorney I don’t file applications but I do use my bar number to manage applications via PAIR.

      And I can certainly imagine hopping back-and-froth between private and corporate practice a few times in my career, and some in-house jobs require you to do your own prep/pros in addition to portfolio managment.

      So, while patent filing might be an initial cut of the practicing attorneys it is a pretty inaccurate method.

  4. 8

    Dennis,
    Do you think it’s worth filing a comment to request the following: In California (and probably other states), a practitioner who wants to keep their bar license but isn’t actively doing any legal work can request a status change from “active” to “inactive.” “Inactive” attorneys pay a much smaller annual fee, and can change back to “active” merely by paying the full fees and complying with MCLE requirements. This procedure lets attorneys reduce their fee expense without having to resign from the bar — if an attorney resigns from the bar, getting reinstated is far more complicated. It would be nice if the PTO would do something similar.
    (As you know, since I’m retired but still doing non-PTO volunteer work, I rarely use my USPTO bar membership.)
    Thanks,
    Michael Barclay

    1. 8.1

      At one time [around 2006?] the PTO floated a proposal to do just that – providing for a registered practitioner “inactive status” renewable with CLE – but it quietly died like their prior proposal for MCLE.
      Some state bars provide for a retired status as well as an inactive status. But as far as I am aware neither allows actual active legal practice in that state. However, there are good pro-bono activities for indigent clients by retired attorneys that do not require active status, such as Social Security and unemployment insurance appeals, small business counsels, etc.
      I am told that some retired PTO practitioners who want or need extra income do part time non-legal work assisting patent firms or corporations with prior art and other evidence-searching activities, or business advice.

  5. 7

    One thing I don’t like in the proposed new fees is the new surcharge of 400/200/100 if you don’t file a new application in DOCX format. We file everything in PDF. I use DOC format that I convert to PDF. Many of our clients send us drawings in PDF. Not sure if the surcharge will apply to drawings.

    I’m not in favor of the bar dues and CLE requirements.

  6. 6

    “Furthermore, the OED does far more than maintain a register of those who passed the PTO agents exam once upon a time and still wish to hold themselves out as professional experts for client PTO practice business. In particular, the OED must conduct investigations, administrative trials and sanctions or disbarments for misconduct, malpractice or ethics violations. ”

    Sure, Paul, it does these things. About 40 a year, give or take.

    Somewhat morbidly, over the last 15-20 years I’ve read every OED discipline decision.

    The majority of these are not PTO related misconduct but rather simple reciprocal discipline mirroring what happened after a state bar’s investigation. Most are not even contested. Many are not even responded to – the OED sends a letter proposing the reciprocal discipline and no one is home.

    But with > 46,000 registered practitioners and an average dues cost of 325, you’d need to spend almost $400,000 per year per case on these investigations to use up the new funding.

    I suggest the actual average cost is less than $20,000 per.

    1. 6.1

      Mellow, even if “The majority of these [attorneys] are not PTO related misconduct” that still leaves a substantial number of bad apples that are, and the others may well be client risks for bad PTO work even if not caught at it. More importantly, state attorney discipline does not include any patent agents, who have no state bar requirements or supervision.
      In any case, I’m not arguing the Amount of the fee, just the need for some kind of fee to help weed out a lot of obsolete agents and attorneys from the huge current listed number of publicly offered PTO registered practitioners. Especially since the PTO exam years ago eliminated any requirement for actual claim and amendment writing and went to an open book multiple choice computer test.
      Would any of you go to an old doctor who never learned anything new since passing his or her first medical exam other than perhaps from dead patient autopsy reports?

      1. 6.1.1

        “In any case, I’m not arguing the Amount of the fee”

        Fair enough. I just suggest the one (apparent) need of the OED unmet by the other fees it charges could be met by something on the order of a $15 head tax and that there is no rational relationship between the amount of discipline the OED doles out – and its attendant cost – and the amounts proposed. Wonder what all the rest of the money will be used for – “FREE FREEDOM FRIES FOR ALL CONGRESSONES”, perhaps.

        “the need for some kind of fee to help weed out a lot of obsolete agents and attorneys from the huge current listed number of publicly offered PTO registered practitioners. ”

        I’m not sure what charging a fee will do for this problem. If someone is retired but wants to keep up their standing, I see no harm done to the public – they’re retired. But these are just the sort of people who will be chased off by a fee.

        On the other hand, those who are obsolete from a skill-set standpoint but are still working, and so are dangerous to the public, will pony up the fee so they can keep making money.

        My point being, I do not see how charging these fees is much of a targeted fix for the problem you complain of.

        Mandatory CLE with mandatory annual competency testing might weed out the “obsolete agents and attorneys”. But we’re unlikely to get there.

        1. 6.1.1.1

          +1

  7. 5

    This proposal is a solution in search of a problem — and an attempt to turn attorneys and agents into yet another net-profit revenue source for what is supposed to be (per Art. I, Sect. 8) a benefit to the public.

    Does CLE need to be mandatory? Not at all. When I practiced in Michigan we asked the bar’s Institute for Continuing Legal Education for more IP classes. Moreover, ICLE told us that IP attorneys already had the highest voluntary (repeat, *voluntary*) participation in CLE among all attorneys.

    Are malpractice claims against patent attorneys a booming industry? No, not even close.

    So where is the problem? Poor patent searches and examination by inexperienced kids at the PTO, dubious opinions from Fed Cir and S Ct judges having limited qualifications, and a failure of Congress to respond to these and other issues.

    Overpriced CLE and/or an extortionary, highly profitable fee (how about a senior discount) isn’t going to solve the real issues with improvidently granted patents.

    But I’m tilting at windmills here. IRS Enrolled Agents have had CLE requirements for years and I’m finding it difficult to draw a distinction between non-attorney EAs and non-attorney Patent Agents, each permitted by examination (and admission fees) to practice before their respective agencies.

    So new fees and CLE are coming, unless the organized bars earn their keep and lobby against them.

    1. 5.1

      Case,

      On the “other blog,” comments were made that reflect the same type of “let’s apply CLE and capability tests to the other side (such as examiners, judges and Justices) in order to really make an impact.”

    2. 5.2

      Agree that MCLE would be much more effective than a mere small fee. And thanks for the info on IRS enrolled agents.
      But if there is no problem, why is IP attorney malpractice insurance so expensive? And what kind of client protection or recovery can clients get from patent agents with no insurance?

      1. 5.2.1

        Hi Paul, while I don’t know how much PL insurance costs (having never been a solo), my understanding is that the cost of patent practitioner PL or malpractice insurance is less related to probability of occurrence, and more related to probability that a given occurrence of “but for” error could cause the patentee to lose out on a monumental (multi-hundred million dollar) judgment.

        I am curious why you posit the “patent agents with no insurance”?

        The agents I know who work for themselves (as opposed to working for corporations or law firms) carry IP malpractice insurance.

        Of course, I do not know every patent agent. But then, there are still a number of states (most, I believe) not requiring attorney PL insurance, either. How many patent attorneys are not insured?

        1. 5.2.1.1

          I doubt if there are many patent attorneys w/o malpractice insurance but there is no actual requirement for patent agents and I have no idea how many have it if they are not law firm employees.
          I have had several interesting talks with patent lawyer malpractice insurance representatives at AIPLA conventions over the years, even though I never had a claim. One thing I learned is that there are a surprising number of malpractice claims you never heard of because few malpractice claims make it to court or to the media, they get quietly settled by the insurance companies. Most have to do with PTO representation, NOT to allegedly losing big bucks in D.C. patent suits. [Nor do the usual $ max limits on malpractice insurance coverage fully cover the later anyway.]

          1. 5.2.1.1.1

            Some reported examples are docketing failures, alcohol or other drug problems, ignorance of PTO requirements or other client representation failures, including not properly withdrawing from representation obligations, especially after non-payments of fees, unauthorized or improper application abandonments, working with “invention promotion” companies, etc., etc.

          2. 5.2.1.1.2

            Paul,

            Somewhat recently, over on that other blog, this topic came up and there was a number of superb comments.

  8. 4

    The USPTO previously proposed annual fees back in 2003.

    While certainly possible that is was also floated back in 2003, I seem to recall another more recent “float” within the last decade that brought such quick rebuke that the idea was quickly dismissed.

  9. 3

    I will maintain the list of all registered patent agents and attorneys for a mere $500,000/year!

    Also, how does this square with the Paperwork Reduction Act?

  10. 2

    You’re detained for hours every year, while someone reads a powerpoint, and you’re forced to pay for the privilege.

    Seems like you’re making bad choices about your sources of CLE credit.

    You can get CLE credit from all sorts of things: attending the NAPP / AIPLA / LES / etc. annual meetings; publishing law books and journal articles; teaching for a law school; a huge variety of CLE-approved webinars. Some law firms offer CLE seminars for free in various practice areas.

    Sure, I’ve attended some CLE activities that turned out to be a dud, but I just chose not to use those sources again!

    A pox on anyone who suggests with a straight face that it’s anything other than a racket.

    Most “rackets” are engineered to require people to use a specific vendor of a good or service, so that the vendor can leverage lack of competition by jacking up the prices (and sharing the profits with the rulemakers).

    Case in point: Florida’s compulsory drug testing for public assistance – where all such drug testing is provided by a specific company (which bills the state a huge sum)… and in which certain politicians have investments. That’s a racket.

    If CLE is a racket, then I have to ask who it’s benefiting, since there isn’t a closed group of CLE providers. You can call it outdated, misguided, ineffective, etc. – but it’s not a racket.

    There’s no worthy purpose in compelling attorneys to stay educated about the law? I have to disagree with you on principle.

    But it is worth asking whether the PTO really has a problem with practitioners relying on outdated legal principles – or whether the PTO is tilting at windmills.

    The PTO doesn’t spend hundreds of dollar per name to keep a list of which attorneys and agents have which active registration numbers.

    Now, here, I agree with you. When this was first proposed years ago, I found the notion that the PTO wanted to charge every practitioner like $300/year to cover the costs of… well, maintaining an Excel spreadsheet, essentially. Just to ballpark the figures – 20k active practitioners * $300 annually = $6 million. I hope we’re getting some more value for our dues than that!

    1. 2.1

      This is to agree with the “worthy purpose in compelling attorneys to stay educated about the law” and to address: “But it is worth asking whether the PTO really has a problem with practitioners relying on outdated legal principles?”
      I don’t see how the latter can be denied given the number of misunderstandings expressed on this blog of various aspects of the AIA, PTO Rule changes, and other patent law and practice issues on this blog.
      Furthermore, the OED does far more than maintain a register of those who passed the PTO agents exam once upon a time and still wish to hold themselves out as professional experts for client PTO practice business. In particular, the OED must conduct investigations, administrative trials and sanctions or disbarments for misconduct, malpractice or ethics violations. Thirdly, almost all attorneys now already have to meet MCLE requirements anyway, for their state bars. Most practicing patent attorneys can take some of their MCLE patent-related. The PTO is about the only “bar” left that has no MCLE requirement at all [which does not enhance its professional respect], and this is still not even a proposal for MCLE, only a CLE fee break. The proposed fee here is insignificant, and tax deductable, for any actual practitioner.
      P.S. In my opinion the PTO should also require proof of maintained malpractice insurance by registered and active PTO practitioners for client protection, as many state bars now do.

      1. 2.1.1

        Just as one example, the charts Dennis provided showing all the years it took to get a significant number of PTO practitioners to finally stop harming their clients by filing only “means-function” claims for years after Fed. Cir. decisions had clearly held that practice to both narrow claim scope and risk 112 claim support attacks. [Personally I had to practically beat a few corporate patent attorneys who never took patent CLE over the head to get them to stop.]

        1. 2.1.1.1

          Just another example for those who insist PTO practitioners never need CLE. From back when a major new PTO Rule change required a standardized format for application appeal briefs for the Board. A top PTO official said at the time that for the first months after that Rule change went into effect something like 40% of practitioners were still sending in appeal briefs in whatever old format they had been using before, to get bounced.
          Of course in those days we did not have Dennis and his Patently-O blog to keep us informed, and so rapidly. But how many PTO registered practitioners do not even skim this or other patent CLE blogs? I know some, and there must be many others. If this registered agents and attorneys fee proposal is adopted and the OED starts sending out letters, I bet there will be thousands of surprised “Whats This?” responses.

          1. 2.1.1.1.1

            Speaking of malpractice …

            How many “determine-and-infer” cases are still being filed by practitioners who don’t understand Prometheus v. Mayo, which is among the simplest ineligibility fact patterns you can possibly imagine?

            I’m guessing a LOT.

            Same with post-Alice “do it on a computer” cases.

        2. 2.1.1.2

          Dennis provided showing all the years it took to get a significant number of PTO practitioners to finally stop harming their clients by filing only “means-function” claims for years after Fed. Cir. decisions had clearly held that practice to both narrow claim scope and risk 112 claim support attacks.

          “That’s not malpractice. Because Mark Cuban.” – David Stein

    2. 2.2

      At least we can agree on the fees. PTO is taking money from people who practice before it because it can.

      For CLE… I get no credit for most of the reading, writing, inn of court stuff, training at work, or teaching colleagues I do that actually keeps me sharp. AIPLA and the like are able to charge north of $1000 for conferences because of CLE requirements, and even going to that or something similar every year and attending every session often leaves me a few hours short. So I log onto PLI, listen to the one or two things tangentially relevant to my practice, and endure the annual detention ritual that some state bars have decided is the price of admission. The people who benefit from the racket are those like PLI, in much the same way that BarBri benefits from the racket of 50 separate bar exams that test topics no one practices and generally fail to weed out incompetence.

      Iancu is looking to raise funds, and the list of registered PTO practitioners is a target he’s chosen. I don’t think it’s any more complicated than that. The notion that fees are meant to serve any purpose other than this is ridiculous. CLE seems like just another pretext: “we can get an extra $70/year out of everyone if we throw another hurdle in their path that they can avoid by paying us off.”

  11. 1

    This seems unreasonable (I have stronger words in mind but will hold them for now). Annual fees and CLE requirements are some things state bars do because they can, not because there’s any worthy purpose behind them. The PTO doesn’t spend hundreds of dollar per name to keep a list of which attorneys and agents have which active registration numbers.

    And CLE… a pox on anyone who suggests with a straight face that it’s anything other than a racket. It may have been well-intentioned decades ago, but in its modern form, it’s a detention and extortion against people who’ve done nothing wrong except choose to become lawyers. You’re detained for hours every year, while someone reads a powerpoint, and you’re forced to pay for the privilege. People who take any pride in their professional craft typically learn through other means. Then they have to shell out money for this charade every year.

    May Iancu soon join this list.

    link to en.wikipedia.org

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