Will Compliance with the New Rules Be Enforced by the Patent Office through the Office of Enrollment and Discipline?
By Kevin E. Noonan --
The Patent Office has met the enemy, and it is the patent bar. This has been evident since the original Notice of Proposed Rulemaking with regard to the continuation and claims limitations rules, where the Office blamed the bar for the proliferation of continuation applications and alleged prolixity of claiming. According to the Office, patent attorneys are routinely guilty of incompetence, malfeasance, or misfeasance in representing their clients before the Office, and many if not all of the current Patent Office administration's management problems would be solved if the bar would join the Office in a partnership to improve patent pendency and quality (to paraphrase the upbeat portion of Commissioner Doll's stump speech). Unfortunately for the bar, "partnering" means just following orders, a definition typical of the current administration's views.
Just in case the bar hasn't appreciated the message, the Office sent Harry Moatz (at left), Director of the Office of Enrollment and Discipline (OED), to reinforce the message at a recent Intellectual Property Owners (IPO) meeting in New York. In only the second slide of his presentation, Mr. Moatz reminds us that the Office has the capacity to discipline registered practitioners who do not "comply with the regulations promulgated under [the Office's rulemaking authority]." In particular, this applies to the new rules published on August 21st and going into effect on November 1st. Specifically, the OED is "considering" attorney conduct with regard to the duty to make a reasonable inquiry and the obligation to avoid submitting papers "for improper purpose or delay." The Office will be monitoring compliance to detect any violations of these duties, as well as attorney "incompetence or neglect."
Mr. Moatz cited 37 C.F.R. § 10.18(b) as requiring that an attorney fulfill a duty to make an inquiry "reasonable under the circumstances" to avoid submitting papers for an "improper purpose" or delay. This duty, as understood by the Office, includes an affirmative duty that an attorney read every paper submitted to the Office. While on its face not an unreasonable requirement, in practice this duty applies to each and every prior art reference submitted in compliance with Rule 56. Mr. Moatz affirmatively stated that this rule applied to each paper submitted to the Office regardless of its source, and that the paper must be read "in its entirety." (This raises an interesting dilemma if a foreign patent office cites a reference that is not relevant to U.S. prosecution, such as a reference that is not prior art in the U.S. due to the one-year grace period. If an attorney submits this reference in an Information Disclosure Statement, is it for an "improper purpose"?) Moreover, while imposing the requirement that an attorney review a reference for its materiality, the need to perform this analysis does not excuse delay in submitting the reference; this requirement certainly appears to set up a classic Catch-22 situation.
A close reading of the rule indicates that this does not appear to be its purpose: 37 C.F.R. § 10.18(b)(1) states that submitting a paper certifies that any statement made therein does not "cover up" a material fact "by any trick, scheme or device," and 37 C.F.R. § 10.18(b)(2) imposes a duty to make reasonable inquiry that the paper is not filed for any "improper purpose." The Office is interpreting these requirements to have the same attributes as Rule 11 of the Federal Rules of Civil Procedure, without any apparent justification (and in view of the differences between ex parte prosecution and inter partes litigation, without any logical underpinnings). The Office clearly intends to apply these rules to require a prefiling inquiry, although the Office concedes that time constraints might demand that an application be filed before completion of the reasonable inquiry, resulting in a duty to file documents or amendments to comply. Of course, this requirement may be in conflict with the well-established principle that an applicant (or his or her counsel) is under no obligation to perform a prefiling search (which could qualify as a "reasonable inquiry").
Mr. Moatz provided a number of examples of conduct that might run afoul of the Office's ethical rules. These include:
- filing a reference material to patentability "buried among a large number of cumulative references, where the buried reference anticipates one or more claims;" under these circumstances there cannot have been a "reasonable inquiry";
- filing an application with claims that are anticipated by at least one publication authored by one of the inventors;
- adding an "undue" number of claims with multiple dependent claims (where the fact that multiple dependencies can involve "thousands of claims" appears to be sufficient to establish that there could have been no reasonable inquiry); and
- filing a paper without the required fee, due to insufficient funds or stopped payment.
There are certainly ways in which the Office could apply these rules reasonably to stem actual abuses; however, the timing of this message from the Office does not suggest that reasonableness will be the watchword.
Mr. Moatz's presentation also contained a discussion of inequitable conduct. Again, the presentation emphasized an attorney's continuing duty to make a reasonable inquiry. The presentation cited Brasseler, U.S.A. LLP v. Styker Sales Corp., 267 F.3d 1370 (Fed. Cir. 2001) in this regard, a case where the CAFC characterized attorney conduct as constituting a "studied refusal to timely investigate" and failure to disclose material information. This requirement is illustrated by the following scenario:
- A first practitioner advises applicant that prior art is material to patentability of the claimed invention and must be disclosed to the USPTO.
- The applicant refuses to follow this course of action and discharges the first practitioner.
- The applicant engages a second practitioner without telling the second practitioner of the potentially damaging prior art.
- Under § 10.85(b), the first practitioner would be required to disclose this situation to the Office.
(see Practice Before the Patent and Trademark Office, Final Rule 50, FR 5158, 5165 (Feb 8, 1985)). While not unreasonable on its face, this example raises questions about the extent to which the first practitioner "knows" the applicant has filed the application without disclosing the "potentially damaging" prior art. Is mere publication of an application enough, or does the rule require actual knowledge? Does the duty of reasonable inquiry apply in this instance as well, where the first practitioner does not represent the applicant and is not involved in (and may have no reason to know about) filing or prosecution of the improper filing by the second practitioner? The presentation does not make this clear, and application of the rule is thus fraught with undefined interpretations of the meaning of the "reasonable inquiry" requirement.
There is a perverse beauty to Mr. Moatz's message. The Office is not proposing any new rules; indeed, Mr. Moatz reminded his listeners that these rules were promulgated in 1997. This warning from the Office merely threatens to apply the existing rules of conduct to force compliance inter alia with the new procedural rules. The possibility exists that these rules of conduct will be applied fairly and that discipline will be applied only to those practitioners who affirmatively break the Office's ethical rules or practice fraudulently in violation of their duties. However, the timing and emphasis of Mr. Moatz's presentation suggests otherwise. Under these circumstances, the only thing that is certain is that the members of the patent bar have been warned.
For additional information regarding specific provisions of the New Rules, please see:
