Dear Mr. Moatz,

I have the following comments on the proposed new rules for Representation of Others Before the United States Patent and Trademark Office (USPTO) published in a notice in the Federal Register on December 12, 2003 (68 Fed. Reg. 69442) (hereafter the New Rules).
These comments are solely my own and may not represent those of my employer or of any clients of my employer. These comments are submitted on June 14, 2004 as June 11, 2004 was a federal holiday.
Preliminarily, I think the review period has been far too short (even with extensions) for such a large (122 pages!) and significant rule change, particularly given the recent and likely future changes in various state rules of professional conduct for lawyers. I have not even tried to attempt the daunting task of reviewing Subpart D of the New Rules, for example, in light of the ABA Model Rules (which are evolving) and the various state and other Rules of Professional Conduct (which also are evolving) with which those rules may conflict. For a review of Subpart D, I commend the AIPLA comments of June 6, 2004, many with which I agree.
I trust the USPTO will (and I urge it to) publish these New Rules (likely with revisions) again for further public review and still keep them as proposed. A dialogue on the issues covered in these New Rules must continue at least somewhat further before they become final.
Mandatory Continuing Training – Rules 11.12 and 11.13
“If it ain’t broke why fix it?”
Fundamentally, I have difficulty in identifying why there is a need to implement new mandatory continuing training when so many other important issues could be addressed by the USPTO with its limited resources, e.g., reducing pendency of patent applications to reasonable periods (many software patent applications are waiting 3 years for their first Office Action), stronger examination to avoid issuance of invalid patents, better processes to ensure patent prosecution is handled without frustrating error, better documentation handling, and many other more important and urgent endeavors.
I don’t perceive any competence problem with practitioners at present or likely in the future. It certainly hasn’t been identified in the New Rules. The New Rules refer to “members of the public criticizing the competence of practitioners”. Who specifically are making these charges and what are the specifics and numbers of these charges? Have any surveys been conducted to determine alleged practitioner incompetence? Some bare anecdotal evidence doesn’t seem to me to be a sufficient basis to impose a large administrative burden on practitioners and the USPTO alike. The New Rules charge that the lack of currency with practice requirements impedes the efficiency and quality of the patent application process. Again, what are the specifics and number of these charges? Further, I commend looking at the basic issue of that charge – the large number of substantive rule changes. Perhaps the USPTO ought to slow down making so many substantive rule changes so practitioners and USPTO staff alike can become familiar with them – the application process seems to have worked fine for decades and I don’t see why in the last 5-10 years there has been an overwhelming need for the avalanche of substantive rule changes issued by the USPTO. Moreover, many USPTO staff often fail to understand all these new substantive rule changes themselves – perhaps a large part of the purported problem lies within the USPTO. The New Rules refer to petition practice but again cite no specifics or numbers. Mandatory training of practitioners also will do nothing to change the time from filing to the first office action in a patent application. The focus on mandatory continuing training as some type of panacea to pendency is simply misdirected.
In view of the lack of hard data supplied by the USPTO in the New Rules, I decided to perform my own rough, unscientific analysis to determine this sudden rash of practitioner incompetence demanding drastic measures such as mandatory continuing training. I reviewed the final decisions of the OED database at http://www.uspto.gov/web/offices/com/sol/foia/oed/oed.htm to see the number of final discipline orders issued against practitioners. I found an under whelming 41 orders from the period 1996 to 2003. That’s an average of about 5 a year for 28,000 registered practitioners (as the New Rules identify). As a comparison, the Virginia state bar has a membership of about 23,750 lawyers in 2002 and the number of discipline order was 393 in 2002 (http://www.vsb.org/vsbfacts.html) – 40 times more discipline orders for fewer practitioner. Further, while I have not studied it, I imagine the vast majority of the complaints made to the USPTO regarding the disciplined practitioners referenced above have nothing to do with their technical and legal competence. I imagine most complaints relate to failure to communicate, inappropriate use of funds, etc., skills that would never be addressed by any USPTO mandatory continuing training.
I think it is plain to see from the foregoing that there should be no particular cause for concern that requires the huge time and effort spent by the USPTO to prepare and the profession to review these New Rules or the adoption of the drastic measures proposed therein. Perhaps practitioners suffer higher per capita complaints/claims relative to other professions such as doctors and engineers or to this profession in other jurisdictions (e.g. Japan, Europe) but the New Rules don’t identify that possible concern. There may be “bad apples” in the profession but is it necessary for all practitioners to suffer the costs of mandatory continuing training? Won’t it be easier and less costly simply to discipline those “bad apples.”. So I wonder “if it ain’t broke why fix it”?
I think the basic technical (and in many cases, legal) education and passing of a rigorous patent bar examination that is prerequisite to becoming a practitioner is more than adequate – for example, patent attorneys have typically achieved a 4 year undergraduate technical degree, a 3 year law degree, a passing grade in one or more state bar exams, and a passing grade in the patent bar examination. Such training and achievements are much more than the vast majority of workers in the United States at all levels of seniority - the vast majority of those workers not requiring any mandatory continuing training. What is the compelling need to impose more burden on practitioners than any other member of society? Is the USPTO’s aim to drive practitioners or the work they do out of the profession or out of the United States to jurisdictions where there is no mandatory continuing training? No other country in the world that I am aware of presently requires mandatory continuing training for its patent professionals – not, for example, Europe, Japan or Canada. Why sets practice in front of the USPTO apart?
I submit that most, if not all, practitioners recognize the importance of career-long learning and professional development. Concern for quality is a part of that recognition but I would suggest that market forces and malpractice concerns are an even more important factor in driving continuing education. The patent prosecution services business is extremely competitive and if service is not satisfactory (whether from the viewpoint of legal skill, technical skill, responsiveness, timeliness, costliness, etc.) the client can (and will) surely find that better service - whether in the United States or elsewhere. There are always transaction costs to switching patent prosecution service providers but they are becoming lower by the day due to increased global competition in provision of services as well as a result of new technologies (e.g. General Electric and Philips are already beginning to send patent prosecution related services to India where it can be done at lower cost by personnel that would not be subject to mandatory continuing training). The market forces practitioners to stay abreast of the latest developments and to aim for the best service possible. Inadequate or inappropriate service also may be severely punished by malpractice suits. Are not these market forces and malpractice concerns sufficient? Does the USPTO consider there is a market failure or foresee a market failure in this area? If not, isn’t the current system sufficient? Personally, I think the current system is more than adequate. Practitioners regularly and voluntarily update their skills otherwise there wouldn’t be the market for the hundreds of legal and practice seminars and courses offered whose flyers seem to fill my and my colleague’s mailboxes. To me, the tone of the New Rules implies that practitioners can’t take care of their own competence. I think the USPTO underestimates and misunderstands its practitioners, marketplace economics, and the pressing desires of the public.
Further, most practitioners are patent attorneys. Patent attorneys are already heavily regulated by their respective states where they are admitted and by the rules of professional conduct for lawyers of those states. Each such state has their own disciplinary mechanism for remedying attorney misconduct. No patent attorney wants to be disciplined by their state bar. Also, many, if not most, state bars impose mandatory continuing legal education. How much more regulation, supervision and training is needed? Where does mandatory continuing training/education end – when practitioners are too occupied with mandatory continuing training to do any business with the USPTO? Does every citizen of the United States need mandatory continuing training to be a good citizen? Further, most, if not all, other administrative agencies of the United States do not impose mandatory continuing training for persons practicing in front of that agency. What is the compelling governmental interest to discriminate against practitioners that practice in front of the USPTO?
I think that the USPTO and the practitioner community must continue to find ways to serve the public effectively. I understand the desire for the USPTO to be proactive in this regard. But, at what cost? Surely the proposed mandatory continuing training will be another cost of doing business that will be reflected in client’s bills. Isn’t that one of the public’s major complaints - practitioner’s fees are too high? Such additional costs could also be another reason for clients to move their U.S. patent prosecution services out of the United States to lower cost venues (as has already started). Mandatory continuing training and its administrative burdens also means more time spent away from client’s affairs and likely more non-returned client calls. Aren’t complaints about practitioner non-responsiveness already high enough? Further, I would think empirical (or at least anecdotal) evidence would point out that practitioners already have unusually high work burdens. Do they need to be overworked more and lose more time from their families? I think the proposed mandatory continuing training seems likely to incur more costs on the profession as a whole than benefits returned. To think satisfaction of the mandatory continuing training is only going to take 2 hours seems unrealistic – just dealing with computer incompatibilities can take a whole day.
Additionally, I would ask what is the basis, support or proof that mandatory continuing training is going to reduce or eliminate the “problem” identified in the New Rules. No evidence is provided and no analysis undertaken of the current situation let alone how mandatory continuing training is going to remedy the situation (assuming there is some type of significant problem). Sure it seems to make some intuitive sense but it assumes much. No system or human is perfect and there will always be errors. No amount of training is going to eliminate errors. Further, stress, time pressures, overwork, etc. cause the majority of errors, omissions and bad practice. Training on USPTO rules and regulations simply won’t be effective in reducing these errors, omissions and bad practice. Sight should not be lost of the cost-benefit analysis of whether the cost (in the broad sense of the term) and effectiveness of the solution will return proportionate or greater benefits. The New Rules have not convinced me that this balance tips in favor of mandatory continuing training.
I propose the USPTO more rigorously study this issue before moving so quickly. Perhaps, the USPTO can study the complaints against practitioners and survey the public and other interested parties to determine if there is a statistically significant problem in gross, presently or anticipated in the future. No system is perfect. If there is a statistically significant problem, the data should be analyzed to determine the cause(s) of the problem. With the cause(s) accurately identified, effective solutions can then be proposed to remedy the problem by attacking the cause(s). For each solution, a cost-benefit analysis should be made. Once this is completed, the solutions along with the cost-benefit analyses should be presented to the practitioners for review. I see no such analysis in the New Rules and I don’t think the correct approach is to review solutions (such as mandatory continuing training) without knowing exactly the kind and extent of problem sought to be remedied, without knowing the cause(s) of that problems, without knowing whether the proposed solutions will be effective in their goal, without knowing the costs and without knowing whether the benefits are proportionate or greater than those costs.
Finally, I query the statutory basis for mandatory continuing training. 35 USC 2(b)(2)(D) permits the USPTO to govern the recognition and conduct of practitioners and may require them, to become recognized, to show their good moral character and their necessary legal/technical qualifications. I fail to see how mandatory continuing education relates to the recognition (a practitioner that would be subject to mandatory continuing training already being recognized) and conduct of practitioners. Further, the only review of legal/technical qualifications by the USPTO identified in the statute is for recognition, not thereafter. Accordingly, mandatory continuing training may be ultra vires.
Suggestions
Unless and until proven to be needed and effective, I think the mandatory continuing training rules should be eliminated.
If the USPTO nevertheless thinks it is an effective use of its limited resources to impose mandatory continuing training, I would suggest at least some significant changes to Rule 11.12.
First, the scope and content of the “continuing education program” is too undefined. How difficult will this training be? Will it be 3 days of 8 hour tests (or more)? The New Rules simply provide no limits and so practitioners are dependent on the whim and benevolence of the OED. Unacceptable.
The continuing education program will be required from time to time. Can it be any more ambiguous? Will the USPTO announce the course on September 29 and require completion by September 30? Everything else in patent prosecution has well-defined due dates and/or generous time limits. This should be no exception.
Announcement through the Official Gazette and the OED web site is inadequate. Failure to complete this mandatory continuing training has the possibility of destroying a practitioner’s livelihood (something for which he or she has spent years upon years preparing and training for). The least the USPTO can do is send a notice to each individual practitioner.
With no fee for taking the USPTO delivered mandatory continuing training, I fail to see how mandatory continuing education programs supplied by USPTO pre-approved sponsors will be successful. These private providers will need to charge practitioners unless the USPTO plans to subsidize them (a practice fraught with danger so I will assume these private providers are not subsidized). I trust the mandatory continuing training required by these private providers will be substantially the same or more difficult than that offered by the USPTO. If the programs offered by the private providers are easier, then it will simply set-up a scheme where the have practitioners “buy” their mandatory continuing training, while the have-not practitioners suffer. Also, I also consider it a conflict of interest if the USPTO is both a provider of the mandatory continuing training and the judge of who can be an approved mandatory training provider. I think the USPTO should do one or the other, not both.
It is not clear how a practitioner satisfies his or her mandatory continuing training obligation if he or she uses a USPTO pre-approved sponsor. Does the practitioner have to depend his or her livelihood on the sponsor providing timely notice of completion of the training?
That law firms, professional corporations and corporate law departments are not eligible to become approved sponsors seems absurd. Is this to make the mandatory continuing training cost artificially high?
Attorneys should be exempted from the mandatory continuing training at least because of their significant basic training, i.e., 3 year law degree and successful passage of one or more state bar examinations. Otherwise, patent attorneys with an obligation to satisfy their bar(s)’s continuing legal education requirement should be waived from or at least receive credit towards the USPTO mandatory continuing training if that bar continuing legal education comprises patent law courses. Patent attorneys already have a technical degree, have a law degree, have passed the patent bar, have passed a state bar and are required to meet continuing legal education requirements. How much more training do these practitioners need? In contrast, patent agents typically only have a technical degree.
There also should be provisions for unintentional or unavoidable failure to perform the mandatory continuing training since the failure to perform can be fatal to a practitioner’s livelihood.
Further, I trust the USPTO would put considerable thought into how to resolve the continuing legal training burden imposed on USPTO practitioners called to legal bars or admitted to practice in front of other patent offices that also require mandatory continuing training. In this global economy, this will be a real problem. To many practitioners, there lives may become filled up with the arcane and bureaucratic business of sorting out whether certain training will be accepted by their state(s) or patent office(s), finding courses to take in order to get the most credit for the dollar, spending countless hours trying to get credits recorded, etc.
Lastly, I think it is vital that the USPTO has a robust mechanism to maintain the status and address information of practitioners. For example, I recommend that the USPTO provide an electronic service through the USPTO web site by which a practitioner can make address and other changes directly and personally. Incorrect address information can be fatal so a practitioner should have real time access to and ability to change such information. Also, a practitioner should be able to easily determine that mandatory continuing training information has been received and a practitioner’s registration maintained.
Annual Fee – Rule 11.8(d) and Rule 11.11(b)
I fail to see why it is necessary to set-up an annual fee for maintaining registration as a practitioner. The annual fee will likely not be an economic burden on practitioners that will “clean out dead wood” from the register. The annual fee will simply be priced into the fees paid by the practitioner’s clients. As noted above with respect to mandatory continuing training, this annual fee is only going to lead to more complaints (probably to the USPTO) that practitioners charge too much for their services. Why are practitioners in front of the USPTO being singled out for an annual fee when many other practitioners in front of other U.S. government agencies don’t pay an annual fee? Indeed, many other agencies, who don’t charge practitioners any fee let alone an annual fee, don’t have the means to recover their expenses through user fees like the USPTO.
Further, the annual fee is an administrative burden on practitioners that can only have terrible consequences to the livelihoods of practitioners. What does the OED hope to gain (except more revenue and scorn) by striking innocent practitioners off the list (and subjecting them to discipline) when the OED fails to record an address change correctly or the mailed notice from OED simply doesn’t reach the practitioner?
The annual fee requirement will simply set up more administrative bureaucracy in the USPTO – something that’s definitely not needed. Why can’t the OED get the money for their programs from application fees, maintenance fees or other fees? The annual fee will also impose more administrative burden on practitioners, burden that probably exceeds the $100 fee.
I also query the statutory basis for an annual fee. 35 USC 2(b)(2)(D) permits the USPTO to govern the recognition and conduct of practitioners and may require them, before being registered, to show their good moral character and their necessary legal/technical qualifications. I fail to see how an annual fee relates to the recognition (a practitioner already being recognized) and conduct of practitioners. Accordingly, an annual fee may be ultra vires.
If an annual fee is put in place, the USPTO should at least send a notice to each individual practitioner identifying the fee that is due and when it is due. If payment is late, a notice should be sent my registered mail and, if the practitioner provides an e-mail address, by e-mail. A notice by e-mail alone is insufficient as e-mail can often be incorrectly filtered out by spam filters. A modest penalty should only be imposed for the late payment, not for “each rule violated”. When a practitioner is administratively suspended, a notice should be sent to the practitioner to that effect and advise the practitioner of his or her ability to be reinstated. The practitioner should be able to pay a more substantial fee for reinstatement, not for “each rule violated”. Further, there should be provisions for unintentional or unavoidable late payment. After all, the consequences of a practitioner to fail to pay a relatively small $100 fee is the loss of his or her livelihood – it should be difficult for a practitioner to be stricken from the register for failure to pay a fee. These changes would align the U.S. system with systems in other countries that have had much more experience with this subject (e.g., Canada). I think there should also be an option to pay the annual fee in advance, e.g., a practitioner should be able to pay up a lifetime or some portion thereof of annual fees to be safe in his or her livelihood.
Additionally, I think it is vital that the USPTO has a robust mechanism to maintain the status and address information of practitioners. For example, I recommend that the USPTO provide an electronic service through the USPTO web site by which a practitioner can make address and other changes directly and personally. Incorrect address information can be fatal so a practitioner should have real time access and ability to change such information. Also, a practitioner should be able to easily determine that fees have been received and his or her registration has been maintained.
Finally, the fee must be exclusively used for OED purposes and must not be diverted by Congress. Otherwise, there is no point to this annual fee – just raise application fees by several dollars.
Miscellaneous Comments
Rule 11.6
I fail to see why residence is a necessary condition to maintaining registration as a patent attorney, patent agent or “foreigner” as specified in Rule 11.6. Is it the belief of the USPTO that somehow someone lacks the technical or legal skill once one resides outside the United States? That doesn’t seem to be a problem for a United States citizen according to Rule 11.6. Further, the reason can’t be to exercise some sort of legal supervisory jurisdiction over that person since “foreigners” seem to me to be pretty unreachable to the USPTO and if someone, whether a U.S. citizen or otherwise, resides outside of the U.S. they are going to be practically out of reach of the USPTO under the New Rules. It may be appropriate to lose registration status once one loses immigration status in the United States but I don’t understand why that should happen on change of residence. Consider a permanent resident patent attorney in the U.S. working for a U.S. corporation. This patent attorney is assigned to Japan for a year and then returns to the U.S. Alas, that permanent resident patent attorney may no longer practice as a patent attorney and must now re-apply even though that patent attorney may have been performing U.S. patent prosecution the whole time in Japan.
Subject matter not addressed in Rule 11.7 or elsewhere in the New Rules
I think the New Rules should limit the number of times a candidate for registration as a practitioner can take the registration exam in a particular time period. That a candidate can take the registration exam every 30 days is completely inappropriate. Where is the incentive to become strongly familiar with the subject matter? A candidate just needs to pay the fee and try over and over and over. Eventually, the candidate will get lucky and answer an appropriate number of questions correctly (or have seen a large proportion of the questions). Also, with the rumors that the exam will be available every day, it will become apparent very quickly what all the questions are in the database (unless this database plans to have millions of questions) and their corresponding answers. The registration exam will simply become a test of memorization, not of analytical skill. If the USPTO thinks they have a current problem with competent practitioners, wait until the registered practitioners from these exams begin to practice. I think the USPTO should have the exam administered twice a year – 6 months is enough “penalty” for a failure and the likelihood of all the questions and answers being discovered will be relatively small.
Rule 11.7(d)(3)
Allowing former non-examiners from the USPTO to be waived from the registration examination is inappropriate. Allowing examiners to be exempted from the registration examination (while to me also questionable) can at least be justified in that their practice as examiners is a proxy for the substance of the registration exam. I fail to see how the activities of non-examiners at the USPTO can be seen as such a proxy. If a patent litigator at the USPTO can be exempted from the registration examination, why can’t a patent litigator in private practice be similarly exempt? Fundamentally, they may have the same knowledge and experience and may equally not know the USPTO rules and regulations for patent prosecution yet one is exempt from the registration exam and the other is not.
Rule 11.16
The USPTO should only be able to examine the financial books and records of a practitioner when the practitioner is subject to review for violation of a disciplinary rule. The possibility for the USPTO to review a practitioner’s financial books and records at any time for any reason is unwarranted. Further, measures are needed to protect attorney-client privilege and to protect the privacy of the practitioner’s clients (whose sensitive information may be included in the practitioner’s financial books and records).
Rule 11.20(b)
I don’t consider it appropriate that the USPTO may require a practitioner to make restitution or satisfy some other “reasonable condition”. The USPTO’s authority extends to practice before the USPTO and its powers should be limited to the control of the practice of the practitioner in front of the USPTO, e.g., through suspension or exclusion. Restitution extends beyond this mandate and is more appropriately addressed through other channels, for example, legal proceedings, which have the means and expertise to determine appropriate restitution amounts. Further, the scope of the term “reasonable condition” is too broad and ambiguous. The public should know exactly the types of punishments they may face so they can choose whether to enter or stay in this profession or not.
Rule 11.24(e)
Double punishment seems inappropriate, particularly restitution. Only discipline that is unavailable to the state bar and unique to the USPTO should be available to the USPTO. Otherwise, this provision discriminates against attorneys since agents are unlikely to be subject to any discipline.
Rule 11.58(b)(1)(ii)
This should read, in part, as “Provide notice to all bars of which the practitioner is a member as an attorney.” The practitioner should only have to notify state bars of which the practitioner is a member, not possibly every organization to which the practitioner is a member.
Rule 11.58(b)(2)(v)
This paragraph should be deleted as being redundant with the substance of Rule 11.58(b)(2)(vi).
Rule 11.58(b)(4)
This should read at the end “as to that business.” Former practitioners should be able to advertise to persons that have business before the USPTO for services other than patent prosecution in front of the USPTO as such activities are outside of the jurisdiction of the USPTO.
Rule 11.58(e)(3)
I think most of the exclusions herein are beyond the regulatory scope of the USPTO and extend into the regulation of the practice of law, something governed by the states. In my view, the USPTO’s authority extends to the recognition of practitioners before the USPTO (i.e., maintaining the list of registered practitioners) and controlling the appearance of practitioners before the USPTO (i.e., permitting practitioners to participate in USPTO proceedings and to control communications with USPTO personnel). I feel direct control of day to day activities of practitioners (particularly practitioners that are lawyers) is beyond the scope of the USPTO’s powers. For example, I believe the USPTO can’t limit a lawyer from providing advice on patent law, something which I think the USPTO attempts to restrict, for example, through Rule 11.58(e)(3)(ii).
Rule 11.59(a)
I think “and any appropriate bar association” should be removed from the end of this provision. A suspended or excluded practitioner will have already been sufficiently vilified. Just because the practitioner is suspended or excluded should not damage his or her ability to continue practice in another field. Notifying bar associations can only do more damage to the suspended or excluded practitioner than good to the general public as the practitioner’s suspension or exclusion may not necessarily adversely reflect on his or her provision of services other than before the USPTO. Further, this provision discriminates against attorneys as agents are not members of bar associations.

Please confirm receipt.

Respectfully submitted,
Jean-Paul Hoffman