By Allen Hoover
As posted November 8, 2007, the PTO has proposed to implement new rules for appeals. Among the new rules is proposed rule 41.46. This rule (repeated below) has largely escaped much public notice. Nonetheless, the rule is very problematic and your readers should be aware of it.
(a) Imposition of sanctions. A sanction may be imposed against an appellant for misconduct, including:
(1) Failure to comply with an order entered in the appeal or an applicable rule.
(2) Advancing or maintaining a misleading or frivolous request for relief or argument.
(3) Engaging in dilatory tactics.
(b) Nature of sanction. Sanctions may include entry of:
(1) An order declining to enter a docketing notice.
(2) An order holding certain facts to have been established in the appeal.
(3) An order expunging a paper or precluding an appellant from filing a paper.
(4) An order precluding an appellant from presenting or contesting a particular issue.
(5) An order excluding evidence.
(6) An order requiring terminal disclaimer of patent term.
(7) An order holding an application on appeal to be abandoned or a reexamination proceeding terminated.
(8) An order dismissing an appeal.
(9) An order denying an oral hearing.
(10) An order terminating an oral hearing.
This proposed new rule has several problems, and should not be adopted.
First of all, the PTO already has ethical rules that govern all practitioners. These rules have been in place for a long time, generally track the rules of ethics that exist for attorneys, and are well understood.
It's not clear whether new Rule 41.56 rule would create a category of misconduct that is not covered by the current ethical rules. In other words, might an attorney be found to have committed misconduct for activity that is appropriate and permissible under the ethical rules? If so, the PTO is defining a new sphere of activity -- "ethical misconduct." If not, this rule is redundant to the existing ethical rules.
Second, it's not clear what activities might constitute "misconduct." The PTO has not provided guidance for determining what might constitute misconduct. Even the two specific grounds stated in the rule -- presenting a "frivolous" argument or engaging in "dilatory" tactics -- are not at all clear. For instance, if the applicant uses the full period set by rule to file a brief, would that be "dilatory"?
Third, there is apparently no intent required before misconduct is found. If an applicant failed to comply with some formal requirement, such as omitting an appendix, that arguably could be misconduct under the rules.
Fourth, the standard for determining whether misconduct has occurred is not stated. The PTO's comments state "Whether and which sanction, if any, should be imposed in any specific circumstance would be matters within the discretion of the Board." This standard is subjective and arbitrary. Rule 41.56 is a punitive rule. An attorney found to have committed misconduct might have to report that finding to the state bar authorities, and an applicant who commits misconduct faces several severe sanctions. More notice as to the standards for determining misconduct is needed.
Fifth, the rule is redundant. If an applicant makes an argument that is frivolous, the appeal will be rejected and the application will not be allowed. As to "dilatory tactics," most appeal deadlines are set by rule. Failure to meet these rules will result in dismissal of the appeal.
Sixth, it is questionable whether the Board has authority to issue the sanctions specified under rule (especially the requirement for a terminal disclaimer). It's questionable whether the Board has authority to issue sanctions at all. At least for practitioners, that is the province of the Office of Enrollment and Discipline.
Seventh, there is evidently no process for appealing from a finding of misconduct.
Eighth, and most generally, this rule seems to be a solution needing a problem.
I hope that the PTO rethinks this rule and decides not to adopt it.
Mr. Hoover is an IP attorney at Banner & Witcoff in Chicago. He was named an Illionois “Super Laywer” by his peers in the state.