by Dennis Crouch
The U.S. Solicitor General has filed the Government’s opposition to Chestek PLLC’s petition for a writ of certiorari in a case challenging the USPTO’s authority to implement certain procedural rules without notice-and-comment rulemaking. The case has has significant implications for the agency’s regulatory powers. In particular, the Federal Circuit’s decision frees the agency so that it most situations it can conduct rulemaking without any notice-and-comment. Chestek offers some similarities to another APA case pending at the Federal Circuit, Apple v. Vidal, that similarly questions whether the FINTIV discretionary denial rules should have gone through notice-and-comment.
If you recall, this case center’s on the USPTO’s attempt to address trademark fraud. One approach that the agency has taken is to require trademark applicants to provide their domicile address (defined as their permanent legal residence or principal place of business) rather than just a mailing address. 84 Fed. Reg. 31,498 (July 2, 2019). The agency found that many of the fraudulent filing were from foreign applicants using a U.S. mailing address. This requirement is designed to help weed those out. Chestek refused to provide her home address to the USPTO because of privacy concerns, leading the USPTO to reject her trademark application.
Chestek’s core argument against the rulemaking centers on the interpretation of 35 U.S.C. § 2(b)(2), which directs the USPTO to promulgate regulations “in accordance with section 553 of title 5” (the Administrative Procedure Act). Chestek contends that this statutory language requires the USPTO to follow notice-and-comment procedures for all rules issued under § 2(b)(2), including procedural rules that would otherwise be exempt under 5 U.S.C. § 553(b)(A). Chestek argues that because the Federal Circuit has interpreted § 2(b)(2) as authorizing only procedural rules, applying the APA’s procedural rule exception would render the reference to § 553 in § 2(b)(2) meaningless, violating the canon against surplusage. Furthermore, Chestek asserts that Congress’s intent in including the § 553 reference was to ensure public participation in USPTO rulemaking, given the significant impact that even procedural rules can have on trademark applicants and registrants. Chestek argues that this interpretation is necessary to provide a check on the USPTO’s rulemaking authority and to ensure transparency in the agency’s decision-making process.
- Read the Government Opposition Brief
- Dennis Crouch, Democracy on Trial: Chestek and the Future of USPTO Accountability, Patently-O (June 2024) (discussing amici)
- Dennis Crouch, How Chestek Impacts USPTO’s Rulemaking Authority and the Push to Restore, Patently-O (May 2024) (discussing petition)
- Dennis Crouch, The Sky’s the Limit: How Chestek Frees the USPTO, Patently-O (Feb. 2024) (discussing the Federal Circuit decision)
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Dennis Crouch, The Battle Over Domicile Disclosure by Trademark Applicants, Patently-O (Dec. 2023) (case preview)
The Opposition: When looking at certiorari opposition briefs, my first glance is usually directed to the question presented. It is common these days for the opposition brief to restate the question presented in a more favorable manor — recognizing that the question presented is potentially the advocacy keystone. Although the U.S. Gov’t typically does less restating than private parties, this case still shows some:
- Petitioner’s Question: Whether the PTO is exempt from notice-and-comment requirements when exercising its rulemaking power under 35 U.S.C. § 2(b)(2).
- USPTO’s Question: Whether the United States Patent and Trademark Office, in promulgating a rule that requires trademark applications to include the applicant’s domicile address, was subject to the notice-and-comment rulemaking requirements of 5 U.S.C. 553(b).
This difference here is significant. Chestek’s framing is broader, potentially encompassing all rulemaking under § 2(b)(2). The USPTO’s version, however, is narrower and more specific to the domicile address rule at issue. This framing difference highlights the government’s strategy to focus the Court’s attention on the particular rule and facts at issue in this case rather than engaging in a broader debate about the USPTO’s rulemaking authority.
The APA is clear that purely procedural rules are exempt from notice-and-comment requirements. 5 U.S.C. § 553(b)(A). And the government brief argues that the Patent Act incorporates this exception into 2(b)(2). In other words, the statutory statement that PTO rulemaking be done “in accordance with section 553” only requires notice-and-comment if required under section 553.
The government challenges Chestek’s claim that applying the APA’s procedural rule exception would render § 2(b)(2)’s reference to Section 553 meaningless. First, even if § 2(b)(2) is confined to procedural rules, the cross-reference to Section 553 still has meaningful practical import, such as the right to petition for rule changes under § 553(e). In addition, the government argues that Section 2(b) actually permits substantive rulemaking. Although Federal Circuit precedent was not overruled on this point, the Supreme Court in Cuozzo certainly gave some side-eye — noting that Section 2(b)(2) “does not clearly contain the [Federal] Circuit’s claimed limitation” to purely procedural rules. Cuozzo Speed Techs., LLC v. Lee, 579 U.S. 261 (2016). Although this issue of the potential substantive nature of a Section 2 rulemaking has not directly returned to the Federal Circuit since Cuozzo, at least one panel recently highlighted the Cuozzo shade:
The [Supreme] Court questioned whether section 2(b)(2)(A) itself [is] limited to procedural rules, noting that the statute “does not clearly contain the Circuit’s claimed limitation.” Cuozzo, 579 U.S. at 277, 136 S.Ct. 2131.
SoftView LLC v. Apple Inc., 108 F.4th 1366 (Fed. Cir. 2024). I’ll note here that if the Supreme Court takes the case, there is a good chance that it would revisit the procedural vs. substantive debate — including the question of whether domicile address rule is purely procedural rule. But, truthfully it is not a good vehicle for this particular question because the home address does seem procedural.
The government brief also does a nice job of explaining that if Congress had intended all USPTO rules to undergo notice and comment, it could have included an express requirement in § 2(b)(2), as it has done in other federal laws.
Whether the FINTIV discretionary IPR denial rules should have gone through notice-and-comment is a good question, but not one of significance, since it could only affect a small handful of IPRs per year under the AIA. So the significance is if cert is granted and there is a Sup. Ct. decision that affects other PTO requirements that were not made by formal rulemaking, especially those not related to the AIA.
This reminds me of my HOA. There are Operating Rules that, under state law, require the HOA to provide notice to the membership as well as the opportunity to submit comments when the HOA wishes to amend/add/delete a rule. Operating Rules are any rule that applies to the management and operation of the HOA or the conduct of its business and affairs. Rules that don’t fall under this description don’t require notice and the opportunity for members to comment.
Problems arise when the HOA Board decides to get cute by doing a bait and switch when it comes to the rules. Some time ago, my HOA put out notice that they were going to delete a particular rule. However, at the meeting, they went ahead and deleted the old rule but then proposed adding a new rule in its place, and adopted the new rule in the same meeting. There was no prior notice to the members that a new rule was being contemplated to replace the old rule and therefore no one had any opportunity to provide comments on the new rule before it was adopted. The new rule fell under the category of rules that require a notice and comment period.
All this and twice in 2023, the USPTO has leaked said trademark attorneys’ home addresses.
Twice in 2024, the USPTO has leaked patent application information.
These data breaches remind me of John Doll’s frustrations as a TC1600 Group Director, circa 2000. Always one for a colorful metaphor accompanied by hand gestures, he likened the examination process to that of material being strained through a colander. The process was beyond his ability to manage, because he only had so many fingers to plug up all the “orifices.”
While the courts decide whether we should trust America’s innovation Agency with further rule making authority, I wonder why anyone’d trust the agency with (i) creating/maintaining IT systems and (ii) maintaining confidential data?
link to linkedin.com
Shattering news to hear about these two incidents. It’s almost impossible to get trademark patent attorney home address information, given that it’s some of the most desirable and highly protected information on the planet. Even searching for that information on the Internet tends to draw the attention of authorities. During the brief period in which I practiced trademark law, in fact, I was often visited at home early in the morning by operatives disguised as Jehovah’s Witnesses. Needless to say I did not answer the door.
Mooney, do you work at being a p*r*!*c*k, or does it come naturally?
There have been data leaks from the USPTO. The PTO doesn’t need TM applicant home addresses, but lies and says it does, and then says “Don’t worry, we won’t tell”, but then it allows data leaks.
Rule is substantive, not procedural, and the PTO played bait-and-switch in promulgating it. Same cr@p it does with patent rules. PTO needs to get smacked down big time.
B-b-b-ut Malcolm is ‘not’ anti-patent.
His cognitive dissonance on display yet again.
“PTO needs to get smacked down big time.”
That.
Vidal is a pox and cancer on the Patent Office . . . and therefore on America as well.
She. Must. Go.
Yesterday.
Re: “Twice in 2024, the USPTO has leaked patent application information.”
Has that or any other PTO IT leak ever exposed the technology contents of unpublished applications? Do you have a news source for it? [That is a far more serious IPL concern and foreign intellegence threat than leaked trademark attorney addresses.]