USPTO Adopts New Rules Concerning Representation of Others Before the Agency

Effective September 15, 2008, the United States Patent and Trademark Office (Office) is adopting new rules to address the implications of a practitioner’s signature and clarify the scope of patent agent practice with regard to assignment preparation and infringement opinions. The new rules also govern

• the conduct of disciplinary investigations,
• issuing of warnings when closing such investigations,
• non-disciplinary transfer to disability inactive status,
• reinstatement to practice before the Office, and
• recognition to practice before the Office in trademark cases.

With regard to practitioner's signatures under new 37 C.F.R. §11.18 entitled "Signature and certificate for correspondence filed in the Office":

. . .(b) By presenting to the Office or hearing officer in a disciplinary proceeding (whether by signing, filing, submitting, or later advocating) any paper, the party presenting such paper, whether a practitioner or non-practitioner, is certifying that—

(1) All statements made therein of the party’s own knowledge are true, all statements made therein on information and belief are believed to be true, and all statements made therein are made with the knowledge that whoever, in any matter within the jurisdiction of the Office, knowingly and willfully falsifies, conceals, or covers up by any trick, scheme, or device a material fact, or knowingly and willfully makes any false, fictitious, or fraudulent statements or representations, or knowingly and willfully makes or uses any false writing or document knowing the same to contain any false, fictitious, or fraudulent statement or entry, shall be subject to the penalties set forth under 18 U.S.C. 1001 and any other applicable criminal statute, and violations of the provisions of this section may jeopardize the probative value of the paper; and

(2) To the best of the party’s knowledge, information and belief, formed after an inquiry reasonable under the circumstances,

(i) The paper is not being presented for any improper purpose, such as to harass someone or to cause unnecessary delay or needless increase in the cost of any proceeding before the Office;

(ii) The other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law;

(iii) The allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and

(iv) The denials of factual contentions are warranted on the evidence, or if specifically so identified, are reasonably based on a lack of information or belief.

(c) Violations of any of paragraphs (b)(2)(i) through (iv) of this section are, after notice and reasonable opportunity to respond, subject to such sanctions or actions as deemed appropriate by the USPTO Director, which may include, but are not limited to, any combination of—

(1) Striking the offending paper;
(2) Referring a practitioner’s conduct to the Director of Enrollment and Discipline for appropriate action;
(3) Precluding a party or practitioner from submitting a paper, or presenting or contesting an issue;
(4) Affecting the weight given to the offending paper; or
(5) Terminating the proceedings in the Office.

(d) Any practitioner violating the provisions of this section may also be subject to disciplinary action.

The Office anticipates that in taking action under § 11.18, it "would use the proper considerations utilized in issuing sanctions or taking action under [FRCP] Rule 11. Consideration may be given, for example, to whether the improper conduct was willful or negligent; whether it was part of a pattern of activity, or an isolated event; whether it infected an entire application, or only one particular paper; whether the person has engaged in similar conduct in other matters; whether the conduct was intended to injure; what effect the conduct had on the administrative process in time and expense; whether the responsible person is trained in law; what is needed to deter that person from repetition in the same case; and what is needed to deter similar conduct by others. All of these in a particular case may be proper considerations."

According to the official response to one comment that "queried the meaning of the terms ‘‘unnecessary delay’’ or ‘‘needless increase’’ and suggested that there could be good and sufficient reasons for a delay, such as poverty and that a practitioner’s advice to a client to file an application to keep the case alive should not be regarded as unnecessary delay:"

The relevant language of § 11.18(b)(2)(i), "not being presented for any improper purpose, such as to harass someone or to cause unnecessary delay or needless increase in the cost of’ is taken from Rule 11 of the Federal Rules of Civil Procedure. Rule 11, titled "Signing of Pleadings, Motions, and Other Papers; Representations to Court; Sanctions,’’ provides, in pertinent part, ‘‘(b) Representations to Court. By presenting to the court (whether by signing, filing, submitting, or later advocating) a pleading, written motion, or other paper, an attorney or unrepresented party is certifying that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, (1) it is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.’’ The case law under Rule 11 construing the terms '‘unnecessary delay' or 'needless increase' provides practitioners with sufficient guidance for construing the use of the same terms in § 11.18(b)(1)(i). [T]he provisions of § 11.18(b)(1)(i) cover an array of different situations occurring in both patent and trademark proceedings. For example, the provision applies to: Third party filing a paper requesting withdrawal of an applicant’s previously published patent application from issue to consider prior art; to a third party filing papers in an applicant’s patent application to assert that the third party owns the claimed invention and discharging the practitioner engaged by the applicant to prosecute the application; as well as to a third party filing a notice of express abandonment in an applicant’s patent or trademark application. Applicants having legally sufficient reasons to properly file continuing applications may do so in compliance with § 11.18(b)(1)(i)."

There was no further guidance on what are "legally sufficient reasons to properly file continuing applications."

With regard to patent agent practice, the comments note that

Patent agents are not empowered by their registration to provide advice about title and enforcement of patents. Accordingly, it is appropriate to set forth authority of practitioners to prepare an assignment or cause an assignment to be executed by virtue of their registration. Preparing an assignment or causing an assignment to be executed is appropriate only when they are reasonably necessary and incidental to the preparation and prosecution of a patent application, or other proceeding before the Office involving a patent application or patent in which the practitioner is authorized to participate. . . .

Contrary to several comments, the Office has not taken the position that a registered patent agent could prepare a patent assignment or license for a patent if not prohibited by state law.

. . . Section 11.5(b)(1) permits any registered practitioner to replicate the terms of the form agreements for an assignment in contemplation of filing or prosecuting a patent application, and submit the same to the Office for recordation in connection with a concurrently filed or pending patent application.

. . . The suggestion to define practice before the Office as rendering opinions on validity and infringement for clients has not been adopted. Whether a validity opinion involves practice before the Office depends on the circumstances in which the opinion is sought and furnished. For example, an opinion of the validity of another party's patent when the client is contemplating litigation and not seeking reexamination of the other party's patent could not be reasonably necessary and incident to the preparation and prosecution of patent applications or other proceedings before the Office involving a patent application or patent. In such situations, the opinion may constitute unauthorized practice of law. See Mahoning Cty. Bar Assn. v. Harpman, 608 N.E.2d 872 (Ohio Bd.Unauth.Prac. 1993). Similarly, a validity opinion for the sale or purchase of the patent is neither the preparation nor the prosecution of a patent application. Likewise, the opinion is not a proceeding before the Office involving a patent application or patent.

Registration to practice before the Office in patent cases does not authorize a person to provide a validity opinion that is not reasonably necessary and incident to representing parties before the Office. In contrast, a validity opinion issued in contemplation of filing a request for reexamination would be in contemplation of a proceeding before the Office involving a patent. Due to registration to practice before the Office in patent cases, a practitioner may issue a validity opinion in contemplation of filing a request for reexamination.

In no circumstance would practice before the Office include the rendering of opinions on infringement. Under the law, the Office has no authority to resolve infringement cases. Thus, registration to practice before the Office in patent cases does not include authority to render infringement opinions. See Mahoning Cty. Bar Assn. v. Harpman, supra.” 73 Fed. Reg. at 47670; emphasis added.

TGIF for the Ethics of Procedural Compliance at the USPTO, here.