by Dennis Crouch
In a stunning development, the USPTO recently terminated proceedings in approximately 3,100 patent applications due to the fraudulent use of a practitioner’s signature. This mass termination, announced on October 2, 2024, stems from an investigation that uncovered misconduct involving the unauthorized use of a registered patent agent’s electronic signature.
The outcome here appears potentially over the top in the way that it punishes the patent applicants — almost all Chinese companies — for unknowingly participating in the fraud. As one attorney who is now representing one of the impacted applicants explained to me: “punishing the applicants for the actions of the practitioner goes a bit far, especially where the punishment is termination with no remedy.” A number of the applicants used Chinese counsel who identified and hired the offending firm (W&K) years ago and worked with them for some time without issue. I would not be surprised if some of these applicants push for judicial review, perhaps by filing an APA action.
At the center of the fraud is Dr. Yu “Mark” Wang, who operated a patent services firm called Wayne and King LLC (also known as W&K). Wang, who is not a registered patent practitioner, allegedly used the electronic signature of registered patent practitioner Jie Yang on thousands of patent documents filed with the USPTO without Yang’s knowledge or consent. At the time, Yang was a registered patent agent and later became a patent attorney.
According to the USPTO’s findings, Wang incorporated Wayne and King as a general limited liability company in Delaware in 2014. The company advertised itself as a “patent service firm in New York” that “provides patent prosecution and litigation service allover [sic] the world.” The scheme began shortly after Yang became a registered patent agent in December 2018.
According to Yang’s testimony, Wang, whom she had known since 2001 as a trusted friend, approached her about gaining practical patent prosecution experience by working with W&K. Yang agreed, believing this would be an opportunity to learn from someone she thought was an experienced patent agent.
However, the promise of substantive work never materialized. Instead, Wang allegedly gained access to Yang’s USPTO.gov account and, without her knowledge, directed all notifications to email addresses under his control and changed the account password repeatedly. Yang states that she “never had access to any client files or documents relating to W&K patent matters” and “did not draft client documents relating to W&K patent matters.”
The scale of this fraudulent scheme is staggering. According to Wang’s own admission, “W&K filed an estimated 4,000 patent documents with the USPTO where someone other than [Yang] had signed [Yang’s] signature to the document.” These documents included numerous micro-entity certifications falsely asserting micro-entity status for applicants.
Yang claims she was unaware of these filings until October 2022, when she received an initial request for information from the USPTO’s Office of Enrollment and Discipline (OED). Upon learning of the unauthorized use of her signature, Yang was “stunned by evidence indicating her purported S-signature had been entered by Dr. Wang; persons affiliated with Wayne and King . . . on many patent documents filed in the USPTO that she was unaware of and had not reviewed or drafted.”
The USPTO’s Response: On August 25, 2023, the USPTO issued a Show Cause Order requiring affected applicants to demonstrate why sanctions should not be imposed for the impermissible entry of Yang’s purported S-signature. After receiving no responses to this order, the USPTO took the drastic step of terminating proceedings in the affected applications.
In the Final Order issued by Assistant Commissioner for Patents Brian E. Hanlon, the USPTO cited several key regulations that were violated:
- 37 C.F.R. § 1.4(d)(2)(i), which requires that a person must insert their own signature.
- 37 C.F.R. § 1.4(d)(4)(ii), which states that the person inserting an S-signature certifies that the signature is their own.
- 37 C.F.R. § 11.18(b)(2), which requires that papers submitted to the USPTO are not presented for any improper purpose and that allegations have evidentiary support.
Regarding the signature of the patent attorney or agent, the order goes on to quote from the MPEP to explain that an attorneys signature must be directly typed by the practitioner unless “physically unable to use a keyboard.”
The “must insert his or her own signature” requirement [of 1.4(d)] is met by the signer directly typing their own signature using a keyboard. The requirement does not permit one person (e.g., a secretary) to type in the signature of a second person (e.g., a practitioner) even if the second person directs the first person to do so. A person physically unable to use a keyboard, however, may, while simultaneously reviewing the document for signature, direct another person to press the appropriate keys to form the S-signature.
MPEP 502.02 subsection (II). The USPTO emphasized the importance of these rules in maintaining the integrity of the patent system.
While many cases of signature misuse might not result in forced abandonment of thousands of applications, the PTO determined that this case was particularly egregious and that the major penalty was necessary as a deterrent:
The egregious nature of the conduct at issue warrants termination of the application proceedings. A lesser sanction than termination of proceedings would not remedy the conduct nor deter future misconduct.
Disciplinary Action Against Jie Yang: While the USPTO’s termination order focuses on the affected applications, a separate disciplinary proceeding was conducted against Jie Yang. On February 2, 2024, the USPTO issued a Final Order in the matter of Jie Yang (Proceeding No. D2024-04), which sheds further light on the situation and imposes sanctions on Yang for her role in the misconduct.
The disciplinary order acknowledges that Yang was, to some extent, a victim of Wang’s deception. However, it also holds her accountable for failing to adequately supervise the use of her credentials. The order states that Yang violated 37 C.F.R. § 11.804(d) by “engaging in conduct prejudicial to the administration of justice including conduct prejudicial to the integrity of the federal patent examination and issuance process.” As a result, Yang has been publicly reprimanded and placed on temporary probation. During this period, she is permitted to practice before the USPTO in patent matters.
The USPTO noted several mitigating factors in Yang’s case, including her “extraordinarily prompt, candid, and full cooperation with OED’s investigation” and her efforts to contact affected foreign applicants or their representatives to advise them of the situation.
While the USPTO’s actions aim to protect the integrity of the patent system, they have also raised concerns among some practitioners and applicants who represent foreign applicants. The USPTO suggested in its press release that applicants should check to ensure that they are working with a registered practitioner — but here they would have found Yang’s registration number.
This mass termination of patent applications will certainly be a wake-up call for the patent community, especially foreign applicants seeking an inexpensive mechanism for obtaining U.S. patents.