Litigators Beware: Bad News Can Trigger USPTO Ethics Investigation

Bad news sells.  As the author Douglas Adams observed, “Nothing travels faster than the speed of light with the possible exception of bad news, which obeys its own special laws.”

Take IP litigation, for example.  The mainstream IP media regularly reports on both allegations and court decisions regarding issues relating to attorney conduct–or alleged misconduct.  Some of the more common topics, which are frequently raised in eye-catching headlines, include news reports on allegations or decisions concerning inequitable conduct or fraud, attorneys’ fees awards, Rule 11 violations, discovery misconduct, sanctions, abuse of process, and law firm disqualifications.

As bad as those decisions are for the practitioners who are on the receiving end, many IP attorneys are surprised to learn that the bad news is merely a harbinger for more bad news: an ethics investigation by the USPTO’s Office of Enrollment and Discipline.

OED’s Authority to Investigate

It is a common misconception that the OED only investigates misconduct that is reported to them by the filing of a formal written “complaint” or “grievance.”  Not true.  The OED is authorized to start an ethics investigation when it receives “information” from “any source” — as long as that information “suggest[s] possible grounds of discipline.”  The “source” need not be in any particular form, and in fact, the information itself need not even be directed to the OED.

The news media counts as “any source.”  OED staff attorneys follow-up on relevant news media articles and look to the underlying action that prompted the reporting.  In litigation matters, for example, the OED will review the underlying court papers and documents that caused the news report in the first instance.  If such information “suggests” a “possible” grounds for discipline of a USPTO practitioner, then that information qualifies as a “grievance” even though it was never sent to the OED or intended for the OED.

Whether the conduct that is the subject of the news article occurred during practice before the USPTO also is irrelevant for the OED’s purposes.  In fact, attorneys who never actively practice before the Office can be the subject of an OED ethics investigation arising from their conduct (or alleged misconduct).  This includes conduct alleged in the course of IP litigation.

The OED takes such allegations of attorney misconduct quite seriously.  Many practitioners are surprised to learn the OED is actively on the lookout for news reporting potential ethical misconduct — a practice that is virtually unprecedented among state disciplinary authorities.

The Need for Speed

Why the OED take such an active–and proactive–interest in policing the patent and trademark practitioners who fall within the scope of its disciplinary jurisdiction most likely is the result of the extraordinarily short statute of limitations for the OED to file a disciplinary complaint.

In particular, pursuant to 35 U.S.C. Section 32, the OED has one year after the date on which the misconduct forming the basis of a disciplinary proceeding is “made known” to the OED to file a formal disciplinary complaint.  The OED’s one-year statute of limitations is the fastest of any state or federal attorney disciplinary agency in the United States.  In fact, many jurisdictions have no statute of limitations for charging an attorney with violating the rules of professional conduct.

Because of the short limitations period, if the OED receives news about a particular practitioner that suggests “possible” grounds that he or she may have violated a USPTO disciplinary rule, then the Office must act quickly.  It has only one year to complete its ethics investigation and decide whether the conduct is sufficiently egregious that it warrants the filing of a formal disciplinary complaint.

OED “Bad News” Investigations

Online news media regularly reports on “bad” news arising from IP litigation.  Many of the “bad news” articles are highlighted by colorful headlines using select words drawn from court decisions or motions.

Some of the more popular “bad words” in news articles or decisions that can catch the attention of the OED include labels such as “frivolous,” “willful,” “baseless,” “unreasonable,” “reckless,” “weak,” “should have known,” “nonsensical,” “inappropriate,” “unprofessional,” “vexatious” and “harassing.”

If a court in a patent or trademark infringement case (or “bad news” article about an IP case) characterizes the conduct or positions of one of the parties using certain choice “bad words,” an OED ethics investigation may follow.

When the OED receives the “bad news,” the first step it takes is to determine whether any of the attorneys on the receiving end are subject to the USPTO’s disciplinary jurisdiction. The OED’s jurisdiction encompasses not only individuals registered to practice before the USPTO in patent matters (i.e. patent agents and patent attorneys), but also those tens of thousands of non-patent attorneys nationwide who practice before the office in trademark and “other nonpatent matters.”

If the USPTO has discipline over the individual in question, then it does a preliminary evaluation of the information to ensure it is sufficiently detailed to present “possible” grounds for discipline of a specified practitioner.  Although this is not a particularly high threshold, many claims of possible ethics violations are weeded out at this stage, without any knowledge of the practitioner.  On the other hand, some sources of information are inherently more likely to get past the initial vetting process.  In the case of a court decision, for example, the OED typically takes the decision at face value and assumes the findings of fact and conclusions of law set forth in the court’s opinion are correct.

Litigation misconduct often implicates a number of USPTO disciplinary rules, including rules proscribing conduct “prejudicial to the administration of justice,” conduct reflecting adversely on a practitioner’s fitness to practice, and conduct that evidences a lack of candor to the tribunal or opposing party.

If the information passes the initial screening test, a formal investigation is commenced by the OED.  It then becomes a race against time, and the OED Director must move relatively quickly to complete a formal investigation and decide what action to take–which could include dropping the matter, issuing a private “warning,” or formally charging the practitioner by filing a disciplinary complaint.

Be Mindful Of Bad News

While some may argue that any news is good news, those IP litigators who are the subject of “bad news” would likely disagree.

Anyone subject to the USPTO’s disciplinary jurisdiction can be sanctioned by for violating the Office’s rules of ethics. The possible sanctions that may be imposed by the USPTO range from a public reprimand, to a suspension, to an exclusion from practice before the USPTO.

Litigators must be mindful that a bad decision may trigger an OED ethics investigation. Such investigations are time-consuming, distracting and stressful. Ethics cases involving alleged IP litigation misconduct are often fact-intensive and complex. And the OED takes such “bad news” matters quite seriously.

Whenever “bad news” hits the wires, IP litigation counsel and their firms should be prepared to receive an inquiry from the OED. Those IP litigation practitioners who act quickly, even before receiving news of an OED investigation, may be able to implement defensive strategies to minimize or eliminate the associated risks of possible discipline.



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