USPTO Issues Final Rule for Implementing Statute of Limitations Provisions for Office Disciplinary Proceedings

[author: Donald Zuhn]

USPTO SealThe U.S. Patent and Trademark Office published its final rule to implement the statute of limitations provisions for office disciplinary proceedings of the Leahy-Smith America Invents Act (77 Fed. Reg. 45247).  The final rule, which takes effect on August 30, 2012, is the second of several final rule notices that the Office will be publishing in order to implement AIA provisions.

As we noted when the Office published its notice of proposed rulemaking to implement the statute of limitations provisions for office disciplinary proceedings in January (see "USPTO Proposes Rules Changes for Implementing AIA Provisions -- Statute of Limitations Provisions for Office Disciplinary Proceedings"), § 32 of Title 35 -- prior to amendment by the AIA -- read as follows:

The Director may, after notice and opportunity for a hearing, suspend or exclude, either generally or in any particular case, from further practice before the Patent and Trademark Office, any person, agent, or attorney shown to be incompetent or disreputable, or guilty of gross misconduct, or who does not comply with the regulations established under section 2(b)(2)(D) of this title, or who shall, by word, circular, letter, or advertising, with intent to defraud in any manner, deceive, mislead, or threaten any applicant or prospective applicant, or other person having immediate or prospective business before the Office.  The reasons for any such suspension or exclusion shall be duly recorded.  The Director shall have the discretion to designate any attorney who is an officer or employee of the United States Patent and Trademark Office to conduct the hearing required by this section.  The United States District Court for the District of Columbia, under such conditions and upon such proceedings as it by its rules determines, may review the action of the Director upon the petition of the person so refused recognition or so suspended or excluded.

Section 2(b)(2)(D) of Title 35 permits the Office to require "agents, attorneys, or other persons representing applicants or other parties before the Office,  . . . to show that they are of good moral character and reputation and are possessed of the necessary qualifications to render to applicants or other persons valuable service, advice, and assistance in the presentation or prosecution of their applications or other business before the Office."

Section 3(k) of the AIA amended § 32 by adding the following sentence before the last sentence:

A proceeding under this section shall be commenced not later than the earlier of either the date that is 10 years after the date on which the misconduct forming the basis for the proceeding occurred, or 1 year after the date on which the misconduct forming the basis for the proceeding is made known to an officer or employee of the Office as prescribed in the regulations established under section 2(b)(2)(D).

Prior to the AIA's amendment of § 32, disciplinary actions for violations of the USPTO Code of Professional Responsibility were generally understood to be subject to a five-year statute of limitations pursuant to 28 U.S.C. § 2462.  In its proposed rulemaking, the Office noted that with passage of the AIA, "Congress provided the Office with five additional years to bring an action, thus ensuring that the Office had additional flexibility to initiate 'a [disciplinary] proceeding for the vast bulk of misconduct that is discovered, while also staying within the limits of what attorneys can reasonably be expected to remember'" (quoting the Congressional Record S1372–1373 (daily ed. March 8, 2011) (statement of Sen. Kyl)).  The Office also noted that "[t]he one-year limitation period in the AIA reflects that disciplinary actions should be filed in a timely manner from the date when misconduct forming the basis of a disciplinary complaint against a practitioner is made known to 'that section of PTO charged with conducting section 32 proceedings.'"

The Office's notice of proposed rulemaking indicated that the Office can initiate disciplinary proceedings via three types of disciplinary complaints:  complaints predicated on the receipt of a probable cause determination from the Committee on Discipline; complaints seeking reciprocal discipline; and complaints seeking interim suspension based on a serious crime conviction.  Prior to the filing of a disciplinary complaint against a practitioner, the Office of Enrollment and Discipline (OED) Director: (1) performs a preliminary screening of the allegations made against the practitioner; (2) requests information from the practitioner about the alleged conduct; (3) conducts a thorough investigation after providing the practitioner an opportunity to respond to the allegations; and (4) submits the investigated case to the Committee on Discipline for a determination of whether there is probable cause to bring charges against the practitioner.

In the final rule notice, the Office indicates that:

[It] is adopting procedural rules which:  Specify that a disciplinary complaint shall be filed within one year after the date on which the Office of Enrollment and Discipline (OED) Director receives a grievance forming the basis of the complaint, and in no event more than ten years after the date on which the misconduct forming the basis for the proceeding occurred; define grievance as a written submission from any source received by the OED Director that presents possible grounds for discipline of a specified practitioner; and clarify that the one-year time frame for filing a complaint may be tolled by written agreement.

The Office also made some changes to the proposed rules in response to comments received following publication of the Office's notice of proposed rulemaking.  Although the Office had proposed that the one-year statute of limitations period for complaints predicated on the receipt of a probable cause determination from the Committee on Discipline would begin on the date on which the OED Director receives a complete, written response to a request for information and evidence from the practitioner.  The final rule, however, notes that this regulation is not being adopted, and that a disciplinary proceeding will instead be commenced one year from the date the OED Director receives a grievance.

The final rule notice also indicates that the Office has adopted three new rules:

(1) A disciplinary complaint shall be filed within one year after the date on which the OED Director receives a grievance forming the basis of the complaint, and in no event more than ten years after the date on which the misconduct forming the basis for the proceeding occurred, (2) a grievance is defined as a written submission from any source received by the OED Director that presents possible grounds for discipline of a specified practitioner, and (3) the one-year period for filing a complaint may be tolled by written agreement.