Executive Orders on Agency Practice

By Jason Rantanen

Yesterday, the President issued two significant executive orders relating to agency practice: the “Executive Order on Promoting the Rule of Law Through Improved Agency Guidance Documents” and the “Executive Order on Promoting the Rule of Law Through Transparency and Fairness in Civil Administrative Enforcement and Adjudication.”

The order on guidance documents requires agencies to provide their guidance documents on easily searchable websites along with disclaimers about their legal effect.  In addition, for new guidance documents that are “significant,”  the order requires public notice and comment of at least 30 days and approval by “the agency head or by an agency component head appointed by the President, before issuance.”   “Significant guidance document” is defined as including the usual >$100 million effect on the economy, but also encompasses guidance documents that raise novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles of [EO] 12866.”

The order on adjudications seeks to require greater public notice of both agency jurisdiction and the relevant legals standards applied by agencies in enforcement actions and adjudications.  Provisions include the requirement that “When an agency takes an administrative enforcement action, engages in adjudication, or otherwise makes a determination that has legal consequence for a person, it may apply only standards of conduct that have been publicly stated in a manner that would not cause unfair surprise.”  The order also limits the use of guidance documents by the agency:

Sec. 3Proper Reliance on Guidance Documents.  Guidance documents may not be used to impose new standards of conduct on persons outside the executive branch except as expressly authorized by law or as expressly incorporated into a contract.  When an agency takes an administrative enforcement action, engages in adjudication, or otherwise makes a determination that has legal consequence for a person, it must establish a violation of law by applying statutes or regulations.  The agency may not treat noncompliance with a standard of conduct announced solely in a guidance document as itself a violation of applicable statutes or regulations.  When an agency uses a guidance document to state the legal applicability of a statute or regulation, that document can do no more, with respect to prohibition of conduct, than articulate the agency’s understanding of how a statute or regulation applies to particular circumstances.  An agency may cite a guidance document to convey that understanding in an administrative enforcement action or adjudication only if it has notified the public of such document in advance through publication, either in full or by citation if publicly available, in the Federal Register (or on the portion of the agency’s website that contains a single, searchable, indexed database of all guidance documents in effect).

The orders include several limitations on their scope and effect, but overall they’re very wide-reaching.  I’m especially interested in the ways in which they might affect the USPTO, but really need to spend some time thinking through the implications.  For example, on the one hand, the MPEP is specifically directed to examiners, not patent applicants.  On the other hand, it’s often quoted directly by examiners in office action responses and relied on fairly heavily by applicants.   Lots to unpack here.

There are some great posts over at the Notice and Comment blog about the two orders.  Thanks to Chris Walker for pointing these out.

55 thoughts on “Executive Orders on Agency Practice

  1. 9

    Dear Prof Rantenen @ 1.1—

    The MPEP is a big book. Some parts slot into one legal pigeonhole, some another. Some parts slot only into illegal pigeonholes, and those tend to be exactly the kinds of “binding rule by guidance” that EO 13891 is directed at forbidding. Lots of parts of the MPEP do not “articulate the agency’s understanding of how a statute or regulation applies to particular circumstances” (at least as that term is defined in the administrative law).

    The limits of “articulates agency’s understanding” and “interpretative rules” were set out by the Supreme Court in June, in Kisor v Wilkie. link to supremecourt.gov Agencies may use guidance only to interpret “genuine ambiguity,” not to “create de facto a new regulation.” (The range of “interpretative rules” and interpretations eligible for Chevron or Auer deference are essentially coextensive.)

    1. 9.1

      Examples of unlawful reaching beyond interpreting ambiguity in statute or regulation include the following:

      MPEP § 714.14 and Ex parte Quayle limiting what an applicant can do after allowance—a perfectly rational rule, but not embodied in any regulation or any other document having force of law.

      MPEP § 802.01—brazenly rewriting statutory “independent and distinct” into “independent or distinct.” That’s flat out lying in my book.

      MPEP § 819—an applicant can’t shift inventions after a restriction. There’s no such regulation. The PTO can’t impose this kind of requirement by guidance.

      MPEP § 1207.04—PTO grants itself the right to not decide appeals. Baloney.

      MPEP § 2144.03(C) first two sentences—PTO purports to shift burden of proof to an applicant, to prove a negative. Both illegal and nonsensical.

      MPEP § 601.05(a) as rewritten in 2015 (the 2012 version was taken straight from the Federal Register, it’s fine, it’s the 2015 rewrite that I complain about)—the PTO added all kinds of super nitpicky requirements to the ability to perfect priority claims. Why? So that the PTO can collect $1600 fee every time the PTO cheats its way into delay in honoring a priority claim. MPEP § 601.05(a) is just plain old graft.

    2. 9.2

      Other parts of the MPEP specify mandatory requirements for examiners. Those are just fine, under Accardi v Shaughnessy link to law.cornell.edu (so long as the PTO enforces them—which the PTO doesn’t if it will affect fee collections. Another example of plain old graft.).

      A thorough explanation of the bounds of proper use of guidance is in my article, The PTAB is Not an Article III Court, Part 3: Precedential and Informative Opinions, at link to cambridgetechlaw.com That article is probably helpful to understand the basic administrative law that has applied for decades.

      Maybe these two executive orders are a signal that OMB is sick of paying the DoJ to defend know-nothing-and-care-even-less agencies. These two executive orders are mostly primers on long-established law, explained in baby talk, so that even agencies with fee structures that discourage observance of law, and dumb dumb dumb lawyers (naming no names) can get on board with the law.

      I wrote an article on these two executive orders, and sent it to Dennis Sunday evening—hopefully it will appear in these pages in the next day or two.

      David

  2. 8

    When is Fraud Iancu going to resign?

    1. 8.1

      Other than your feelings, what exactly is your point here Malcolm?

      Is there anyone other than you that has even hinted at a call for resignation from Director Iancu?

      On what possible basis does your mindless ad hominem label of “Fraud” find any semblance of reasonable accusation?

      Labelling others just because you don’t like them and name-calling out of that sheer pettiness of YOUR feelings being hurt is so very Trump of you.

      1. 8.1.1

        “Because I don’t like him”?

        LOL

        1. 8.1.1.1

          That’s not a substantive answer as to what possible basis for your mindless ad hominem label of “Fraud.”

          But you already knew that, eh?

    1. 7.1

      I wonder if you realize that the underlying mechanics in that article apply equally to both sides of the aisle….

      (It would be very Trump of you to think that it ONLY applies to one side)

      1. 7.1.1

        I wonder if you realize that you’re an elfin quintessential glibertarian “both sides!” i d i o t.

        1. 7.1.1.1

          Your feelings are noted as is the fact that those feelings do not change the veracity of my post.

          But hey, keep on pounding that table of emotions of yours. It’s sooo effective

          1. 7.1.1.1.1

            Routine and evidence-backed observations about the i d i o c y of glibertarians like you are not “feelings”.

            But I understand why you’d pretend otherwise. Just hush now and get to back to beating yourself off to that huge Grover Norquist poster hanging in your basement room.

            1. 7.1.1.1.1.1

              You are projecting again Malcolm, as you routinely do.

              ANY “evidence” you supplied here supports my statements — not yours.

              Like I stated, how very Trump of you to only see politics as “that other side.”

              1. 7.1.1.1.1.1.1

                Would anybody here care to explain to Bildo the current state of the two political parties in the United States?

                LOL

                Meet Bildo. He was born yesterday. Microencephaly is brutal.

                1. How Trump of you to respond only with insults while it is you that continues to miss the point.

                  Really — it’s absolutely stultifying.

  3. 6

    Perznit Pssygrabber and his a h o l e cronies ignore the law every day, and blatantly so.

    Why should anyone care about some “order” from them? They’re just l y in g criminals, trying to destroy the country and reap the spoils.

    Time to just get the baseball bats and the guns ready so we can pound them into dust. What’s the alternative?

    1. 6.1

      Aiming for four expungements on the exact same rant within two days…?

      1. 6.1.1

        Cite?

      2. 6.1.2

        BTW, if no cite (of course, you have none . . . again), you can try “personal communication to self.”

        1. 6.1.2.1

          Hi Shifty.

          By the way, asking for “cite” is a term of art, and you clearly are not using that term correctly here.

          You must have dropped out of law school without grasping that understanding.

  4. 5

    I wonder what Dave Boundy would say as to more Executive Orders that may (will) be ignored by the Patent Office — when the Patent Office wishes to do so.

    See: link to ipwatchdog.com

    1. 5.1

      Who cares what David Boundy thinks?

      Why does it matter? David will go where the money flows into his pockets. That’s all anyone needs to know.

      1. 5.1.1

        Your feelings are noted.

        As is your disassociation with actual knowledge on administrative law matters.

      2. 5.1.2

        It must be a huge burden to be the only ethical attorney, heck the only ethical human, on earth. You must be incredibly lonely.

        1. 5.1.2.1

          It must be a huge burden for you to have to endure a successful patent attorney pointing out basic facts to everyone about our profession’s “culture” and its woefully compromised elites.

          Being an ethical person as opposed to an entitled whining money-grubbing hypocrite really isn’t that hard. You should try it some time.

          1. 5.1.2.1.1

            That you think that you are an ethical person is…

            …stultifying.

            You are the Trump of morality.

      3. 5.1.3

        Dear MM —

        Look at my amicus brief in Facebook v Windy City. No dollars whatsover from any source.

        Be careful of jumping to conclusions, stating facts that don’t exist, and imputing motivation. It turns your hair orange.

        David

  5. 4

    Presumably the ulterior motive for this has nothing to do with the PTO (an organization whose “customers” are wealthy seekers of private rights) and everything to do with the EPA and other “protecting” agencies which traditionally have guarded the rights of the public (especially the less well-heeled members of the public) against corporate (and governmental) abuse.

  6. 3

    Why would I pay attention to an “order” from this l u n a t ic?

    1. 3.1

      Seeing a THIRD expungement for your rants has already occurred (for the very same rant – very same NON-PATENT LAW rant), I will merely note that the reply to this question (a cogent and legally sound reply, quite putting aside the vitriol that SHOULD accompany a reply to your rants) was swept up in the expungements.

      But seeing as you have in the past claim to capture all posts (perhaps for your blockbuster book coming out in a couple of NEVER), you may well have that answer at your fingertips.

  7. 2

    ““Significant guidance document” is defined as including the usual >$100 million effect on the economy, but also encompasses guidance documents that raise novel legal or policy issues arsing out of legal mandates, the President’s priorities, or the principles of [EO] 12866.”” I think you have a typo there. Or maybe you meant legal or policy issues arsing out of certain officials’ derrieres?

    1. 2.1

      Whoops! Thanks- I’ve fixed that.

  8. 1

    Good question about the MPEP. But isn’t the MPEP an advance public notice approved by the Director and familiar to all PTO practitioners and no surprise? Are not MPEP provision questions even on PTO patent agent and attorney exams?

    1. 1.1

      I agree on the notice piece – there’s certainly no surprise in the examiner citing the MPEP or what it says! I’m thinking more of this part:

      When an agency takes an administrative enforcement action, engages in adjudication, or otherwise makes a determination that has legal consequence for a person, it must establish a violation of law by applying statutes or regulations. The agency may not treat noncompliance with a standard of conduct announced solely in a guidance document as itself a violation of applicable statutes or regulations. When an agency uses a guidance document to state the legal applicability of a statute or regulation, that document can do no more, with respect to prohibition of conduct, than articulate the agency’s understanding of how a statute or regulation applies to particular circumstances.

      To be clear: I’m still not sure that there’s an issue here, because the MPEP itself does precisely what the order says: “articulate the agency’s understanding of how a statute or regulation applies to particular circumstances.” The fine line that I see is use of the language from the MPEP for that purpose and use of the MPEP to provide the applicable standard.

      1. 1.1.1

        For example, the Examiner, following the MPEP, could issue a restriction between two inventions that are unrelated, or that are distinct, and cite the MPEP.
        Now, the Examiner can only cite the 35 USC121. The statute states: “if two or more independent and distinct inventions are claimed in one application, the Director may require the application to be restricted to one of the inventions.” Note that MPEP uses “or” between “unrelated” and “distinct,” but the statute uses “and.” I am curious to see whether restriction practice will evolve because of this order.

        1. 1.1.1.1

          I am amazed that the PTO has never fixed this and other problems with examiner “restriction” practices after many years of AIPLA and other complaints.
          But examiners are not going to stop citing the MPEP in spite of this Executive Order, and inconsistency with 35 USC 121 will presumably continue as long as erroneous restrictions can only be petitioned rather than appealed?
          [Nor, frankly, do many corporations or law firms effectively complain about getting extra applications and patents as a result of added divisionals forced by excessive restrictions. Some do not even effectively use re-joiner practices.]

          1. 1.1.1.1.1

            continue as long as erroneous restrictions can only be petitioned rather than appealed?

            Good point Paul – the petition process needs a serious overhaul.

            Also a good point: “getting extra applications and patents as a result of added divisionals forced by excessive restrictions

            Of course, one should always properly use re-joinder practices, even if the client wants to take the “gift” of building a portfolio through the Office restriction practice.

          2. 1.1.1.1.2

            “I am amazed that the PTO has never fixed this and other problems with examiner ‘restriction’ practices after many years of AIPLA and other complaints.”

            The PTO used to host a “Partnering in Patents” meeting on the Thursday afternoon before the opening Friday of the AIPLA annular meeting. I attended one in around 2003. I think it was like “Partnering in Patents XVI” (because you gotta use Roman numerals like it was the SuperBowl). Anyway, at the meeting some lifer PTO’er was making a presentation and said that the two biggest complaints the PTO receives from applicants and the bar were: 1) restriction practice and 2) final rejection practice.

            If the PTO were to poll applicants and the bar in 2019 what do you think the two biggest complaints would be?

            1. 1.1.1.1.2.1

              Annular meeting?

              Annual.

          3. 1.1.1.1.3

            “But examiners are not going to stop citing the MPEP in spite of this Executive Order, and inconsistency with 35 USC 121 will presumably continue as long as erroneous restrictions can only be petitioned rather than appealed?”

            I would think that you could perhaps bring a lawlsuit under some manner or other of statute if you really want to force the PTO’s hand, but then the PTO will likely just get the congress to codify current practice better or else make restrictions even “worse” for applicants.

        2. 1.1.1.2

          There are MANY errors in the MPEP – both direct and as applied.

          As to prosecution and the “tendency” to use the MPEP (as opposed to case law) in answers TO the Office, I have seen several sides of the ‘debate.’ The “best” reason that I recall for using the MPEP was that examiners simply gave more ‘credit’ and were willing to move if the MPEP were used. Some with whom I have discusses this had a position that case law was only used if the prosecution looked like it was heading for appeal land.

          Personally, I have typically used double citation – both the case law and the MPEP (with helpful better interpretations of the case law where the Office interpretation/application was clearly deficient.

          1. 1.1.1.2.1

            “There are MANY errors in the MPEP – both direct and as applied.”

            And the award for understatement of the century goes to…

            1. 1.1.1.2.1.1

          2. 1.1.1.2.2

            “Personally, I have typically used double citation”

            So now you’re doing imaginary Office responses, too? Onward and Upward!

            1. 1.1.1.2.2.1

        3. 1.1.1.3

          “I am curious to see whether restriction practice will evolve because of this order.”

          Don’t be.

      2. 1.1.2

        Jason,

        “Notice” on its own is meaningless in the present context.

        The context includes a meaningful opportunity for the public to comment (timely) to that notice, as well as a meaningful response back to the public on its inputs.

        1. 1.1.2.1

          Good point. A public comment period is missing from MPEP changes.

          1. 1.1.2.1.1

            Not just a public comment period.

            As I understand it, one of Boundy’s irritants is that merely providing the opportunity to provide comments is not sufficient and that the comments are to be addressed (especially ones that raise material issues of law).

            If one merely provides for intake of comments, but does nothing with them, as the intent of providing that period of comments been satisfied?

      3. 1.1.3

        Dear Prof Rantenen —

        The MPEP is a big book. Some parts slot into one legal pigeonhole, some another, and some slot only into illegal pigeonholes. Lots of parts do not “articulate the agency’s understanding of how a statute or regulation applies to particular circumstances” (at least as that term is defined in the administrative law).

        The limits of “articulates agency;s understanding” and “interpretative rules” were set out by the Supreme Court in June, in Kisor v Wilkie. link to supremecourt.gov Agencies may use guidance only to interpret “genuine ambiguity,” not to “create de facto a new regulation.” (The range of “interpretative rules” and interpretations eligible for Chevron or Auer deference are essentially coextensive.)

        Examples of unlawful reaching beyond interpreting ambiguity in statute or regulation include the following:

        MPEP § 714.14 and Ex parte Quayle limiting what an applicant can do after allowance—a perfectly rational rule, but not embodied in any regulation or any other document having force of law.

        MPEP § 802.01—brazenly rewriting statutory “independent and distinct” into “independent or distinct.” That’s flat out lying in my book.

        MPEP § 819—an applicant can’t shift inventions after a restriction. There’s no such regulation. The PTO can’t impose this kind of requirement by guidance.

        MPEP § 1207.04—PTO grants itself the right to not decide appeals. Baloney.

        MPEP § 2144.03(C) first two sentences—PTO purports to shift burden of proof to an applicant, to prove a negative. Both illegal and nonsensical.

        MPEP § 601.05(a) as rewritten in 2015 (the 2012 version was taken straight from the Federal Register, it’s fine, it’s the 2015 rewrite that I complain about)—the PTO added all kinds of super nitpicky requirements to the ability to perfect priority claims. Why? So that the PTO can collect $1600 fee every time the PTO cheats its way into delay in honoring a priority claim. MPEP § 601.05(a) is just plain old graft.

        Other parts of the MPEP specify mandatory requirements for examiners. Those are just fine, under Accardi v Shaughnessy link to law.cornell.edu (so long as the PTO enforces them—which the PTO doesn’t if it will affect fee collections. Another example of plain old graft.).

        A thorough explanation of the bounds of proper use of guidance is in my article, The PTAB is Not an Article III Court, Part 3: Precedential and Informative Opinions, at link to cambridgetechlaw.com Probably helpful to understand the scope of what’s going on in these two executive orders.

    2. 1.2

      Dear Paul —

      Sorry, that comment is irrational.

      I don’t understand the phrase “an advance public notice approved by the Director” What “advance” notice does the public have of new stuff thrown into the MPEP? Especially when the PTO applies MPEP requirements retroactively?

      It’s almost 3000 pages—am I supposed to download all of it and run a text compare for every update? When regs are amended via notice and comment, I know exactly what changed, and the rationale. WHat similar notice do I have for MPEP changes?

      Example—MPEP § 601.05(a) got a complete rewrite in 2015, to add all kinds of requirements that appear nowhere in regulation. For example, a requirement that priority claims be in reverse chronological order—that’s only in MPEP § 601.05(a), not in any regulation. The amendment to the MPEP didn’t comply with the Administrative Procedure Act, Paperwork Reduction Act, Regulatory Flexibility Act, or anything else. Should you have to pay $1600 for a “late” priority claim because of a non-compliance with the MPEP, if you complied with the regulations? In response to a couple petitions I’ve filed, the PTO makes up new standards out of thin air, and in all but words tells the law to go take a hike. Now what?

      How does the MPEP slot into the relevant laws (5 U.S.C. § 552(a)(1) and (2), § 553, § 604, 605, 44 U.S.C § 3507)?

      How does “MPEP questions on the exam” relate to any statute, or excuse the PTO from complying with statute today? I took the exam in 1992—am I bound by all the new mandatory rules that the PTO illegally snuck into the MPEP without notice and comment since then?

      “The fact that the PTO may have failed to adhere to a statutory mandate over an extended period of time does not justify its continuing to do so.” In re Donaldson Co., 16 F.3d 1189, 1194, 29 USPQ2d 1845, 1849 (Fed. Cir. 1994); Metropolitan Stevedore Co. v. Rambo, 515 U.S. 291, 300 (1995) (“Age is no antidote to clear inconsistency with a statute.”). How do you practice law—when any other counterparty is screwing your client by running roughshod over the law, you wouldn’t give that counterparty a pass and tell your client to bend over and take it, would you? What’s the rationale for rolling your clients over for the self-interested lawlessness by the PTO?

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