[Federal Register Volume 68, Number 239 (Friday, December 12, 2003)]
[Proposed Rules]
[Pages 69442-69562]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-29150]



[[Page 69441]]

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Part II





Department of Commerce





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Patent and Trademark Office



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37 CFR Parts 1, 2, 10 and 11



Changes to Representation of Others Before the United States Patent and 
Trademark Office; Proposed Rule

  Federal Register / Vol. 68, No. 239 / Friday, December 12, 2003 / 
Proposed Rules  

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DEPARTMENT OF COMMERCE

Patent and Trademark Office

37 CFR Parts 1, 2, 10 and 11

[Docket No.: 2002-C-005]
RIN 0651-AB55


Changes to Representation of Others Before the United States 
Patent and Trademark Office

AGENCY: United States Patent and Trademark Office, Commerce.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The United States Patent and Trademark Office (Office or 
USPTO) proposes to update the procedures regarding enrollment and 
discipline. The Office also proposes to replace the current USPTO Code 
of Professional Responsibility, which is based on the Model Code of 
Professional Responsibility of the American Bar Association, with new 
USPTO Rules of Professional Conduct, largely based on the Model Rules 
of Professional Conduct of the American Bar Association.

DATES: To be ensured of consideration, written comments must be 
received on or before February 10, 2004.

ADDRESSES: Comments should be sent by electronic mail over the Internet 
addressed to: [email protected]. Comments may also be 
submitted by mail addressed to: Mail Stop OED-Ethics Rules, United 
States Patent and Trademark Office, P.O. Box 1450, Alexandria, Virginia 
22313-1450 or by facsimile to (703) 306-4134, marked to the attention 
of Harry I. Moatz. Although comments may be submitted by mail or 
facsimile, the Office prefers to receive comments via the Internet. If 
comments are submitted by mail, the Office would prefer that the 
comments be submitted on a DOS formatted 3\1/2\-inch disk accompanied 
by a paper copy. The comments will be available for public inspection 
at the Office of Enrollment and Discipline, located in Room 1103, 
Crystal Plaza 6, 2221 South Clark Street, Arlington, Virginia, and will 
be available through anonymous file transfer protocol (ftp) via the 
Internet (address: http://www.uspto.gov). Since comments will be made 
available for public inspection, information that is not desired to be 
made public, such as an address or telephone number, should not be 
included in the comments.

FOR FURTHER INFORMATION CONTACT: Harry I. Moatz ((703) 305-9145), 
Director of Enrollment and Discipline (OED Director), directly by 
phone, or by facsimile to (703) 305-4136, marked to the attention of 
Mr. Moatz, or by mail addressed to: Mail Stop OED-Ethics Rules, U.S. 
Patent and Trademark Office, P.O. Box 1450, Alexandria, Virginia 22313-
1450.

SUPPLEMENTARY INFORMATION: At this time, nearly 28,000 individuals are 
registered as patent attorneys and agents, of whom about 80% have 
indicated that they are attorneys. The registered patent attorneys have 
offices located in all fifty States and the District of Columbia. More 
than 2,500 individuals applied for admission to the registration 
examination given on October 18, 2000. At the same time, the 
Martindale-Hubbell reports that there are more than 900,000 lawyers and 
law firms listed in its legal directory. More than 17,000 attorneys are 
members of the Intellectual Property Law Committee of the American Bar 
Association. Any attorney who is a member in good standing of the bar 
of the highest court of a State or the District of Columbia is eligible 
to practice before the Office in trademark and other non-patent 
matters. 5 U.S.C. 500(a). Forty-two of the bars have adopted the Model 
Rules of Professional Conduct of the American Bar Association or a 
modification thereof, and two have disciplinary rules which are a 
combination of the Model Code and the Model Rules of Professional 
Conduct of the American Bar Association. Adopting ethics rules that are 
largely based on the Model Rules of Professional Conduct of the 
American Bar Association would provide attorneys, as well as registered 
patent agents, with consistent ethical standards, and large bodies of 
both case law and ethics opinions.
    This notice of proposed rule making sets out rules in three areas:
    (1) Rules of general applicability, and rules governing the 
recognition of individuals to practice as attorneys and agents before 
the Office in patent, trademark, and other non-patent matters 
(Sec. Sec.  11.1-11.18);
    (2) Rules governing investigation and disciplinary proceedings for 
possible violations of the Office Rules of Professional Conduct 
(Sec. Sec.  11.19-11.62). Disciplinary proceedings can result in 
reprimand, suspension or exclusion (disbarment) of individuals from 
practicing before the Office who, after notice and opportunity for a 
hearing, are found to have violated an imperative USPTO Rule of 
Professional Conduct; and
    (3) Rules setting out the proposed Office Rules of Professional 
Conduct (Sec. Sec.  11.100-11.806).
    These changes are intended to improve the Office's processes for 
handling applications for registration, petitions, investigations, and 
disciplinary proceedings. The changes also are intended to bring 
standards of ethical practice before the Office into closer conformity 
with the Rules of Professional Conduct adopted by the majority of 
States, while addressing circumstances particular to practice before 
the Office. As these environments change (e.g., by adoption of 
amendments to the Model Rules of Professional Conduct of the American 
Bar Association) the Office will consider whether to make further 
changes to the rules.
    This proposed rule making is being conducted under the auspices of 
the General Counsel of the United States Patent and Trademark Office, 
James Toupin (703) 308-2000, and the supervision of the OED Director, 
Harry I. Moatz (703) 305-9145). They would appreciate feedback on the 
overall rule making process in addition to any comments on the merits 
of the proposed rules.
    Table 1 shows the principal sources of the proposed rules relating 
to (1) admission to practice of attorneys and agents in patent matters, 
and (2) practice in trademark and non-patent matters.
    Table 2 shows the principal sources of the rules proposed for 
disciplinary proceedings.
    Table 3 shows the principal sources of the rules proposed for the 
Office Rules of Professional Conduct.
    Discussion of Specific Rules:
    Section 1.1 would be amended to add paragraph (4) to provide an 
address for correspondence for the Office of Enrollment and Discipline 
in enrollment, registration and investigation matters.
    Section 1.4 would be amended to revise the references from 
Sec. Sec.  10.18(b)(2), 10.18(c), and 10.23(c)(15) to Sec. Sec.  
11.18(b)(2), 11.18(c), and 11.804(c)(i)(15), respectively.
    Section 1.21 would be amended to revise one paragraph into two 
distinct fees, add ten paragraphs to provide for ten new fees, as well 
as to reserve paragraph (3), redesignate another paragraph and change a 
section citation therein. These fees are intended to fund the costs of 
the registration examination process, disciplinary system, and maintain 
the roster of registered practitioners up-to-date. Bar disciplinary 
activities are generally regarded as being in the interest of 
maintaining the Bar's reputation for integrity and supporting the 
willingness of potential clients to engage the services of 
practitioners. The continual

[[Page 69443]]

updating of the USPTO roster is also in the interest of assuring that 
registered practitioners are identified to the public they seek to 
serve. The cost is currently met by funds from application, issue, or 
maintenance fees. By adopting these fees to be paid by registered 
practitioners, the costs of these activities are not passed on to 
applicants. Thus, USPTO will recover the costs associated with these 
activities from the practitioners instead of the public in general. The 
funds would be directed to these activities and would not be diverted 
to support other proposals. The fees are based on the status of the 
registered practitioner.
    The USPTO is revising the way in which its registration examination 
is administered. Currently, the examination is administered twice a 
year, using a unique set of questions each time. The USPTO is moving to 
a frequently administered computer-based examination using a slate of 
questions randomly selected from a large data bank of questions and 
answers that will be publicly available. This change will make the 
testing process more efficient and will benefit applicants by 
permitting instant notification of test results, eliminating the 
current approximately six weeks needed to report the results of a 
paper-based examination. The computer-based examination will also 
facilitate more frequent administration and permit the test to be given 
simultaneously in many locations, thus reducing delays and travel 
expenses for applicants. Paragraph 1.21(a)(1)(ii)(B) would increase the 
examination fee to $450 for the test administered by the USPTO in order 
to recover the full costs of the examination process. Paragraph 
1.21(a)(1)(ii)(A) would introduce a reduced examination fee of $200 for 
the test administered by a private sector entity. The $200 fee would 
cover the costs of establishing and maintaining an up-to-date question 
and answer data bank to be used in the computerized delivery of the 
examination, but excludes the costs of actual test administration. This 
$200 fee will apply where administrative testing arrangements are made 
by a private sector entity. Applicants paying the $200 fee would 
schedule the test with the private sector entity, and pay a service 
fee, estimated to be $150, to the entity.
    A registered practitioner in active status is one who is able to 
represent clients and conduct business before the USPTO in patent 
cases. To maintain active status, the practitioner would pay the annual 
fee required under Sec. Sec.  1.21(a)(7)(i) and 11.8(d) and comply with 
the continuing legal education (CLE) requirements under Sec. Sec.  
11.12(a) and (e). With respect to the CLE requirement, an inactive or 
administratively suspended practitioner would have to contact the OED 
Director to be advised which CLE's to take.
    A registered practitioner in inactive status would be prohibited 
from representing clients and continuing to practice before the Office 
in patent cases. Inactive status may be of an administrative nature 
where the status is inconsistent with the role of a practitioner, as in 
the cases of examiners working for the Office and judges. Inactive 
status also may be voluntary, as in the case of practitioners who have 
retired or are unable to continue their practice due to disability-
related matters but still desire to maintain a recognized professional 
association with the USPTO. Practitioners with a disability may become 
inactive.
    A registered practitioner under administrative inactive status is 
not responsible for payment of the annual fee, or complying with the 
CLE requirements while in this status, but will have to complete the 
continuing education requirements for restoration to active status. A 
registered practitioner under voluntary inactive status is responsible 
for paying a reduced annual fee and completing the CLE requirements 
during the period of inactivation. For the purposes of this section, 
the fee for a registered practitioner in voluntary inactive status is 
25% of the fee for a registered practitioner in active status. If a 
condition occurs that automatically terminates a practitioner's 
administrative inactive status, e.g., separation from the USPTO, it 
would be permissible for that practitioner to seek a voluntary inactive 
status where the practitioner does not intend to represent clients and 
practice before the Office, but still desires to maintain a 
professionally recognized association with the Office.
    A registered practitioner who is administratively suspended is one 
who has failed to pay the annual fee required under Sec.  11.8(d) or to 
comply with the continuing legal education requirements under 
Sec. Sec.  11.12(a) and (e). Registered practitioners under active 
status can be administratively suspended under failure to comply with 
payment of the annual fee or failure to meet the CLE requirements. 
Registered practitioners under voluntary inactive status can only be 
administratively suspended for failure to comply with payment of the 
reduced annual fee.
    Paragraph 1.21(a)(5)(i) would be added for a new fee for review of 
a decision by the OED Director. Paragraphs 1.21(a)(7) (i) and (ii) 
would be added for a new annual fee for registered patent attorneys and 
agents based on their active or inactive status. Paragraphs 1.21(a)(7) 
(iii) provides for a new fee due with a request from a practitioner 
seeking restoration to active status from inactive status. Paragraph 
1.21(a)(7) (iv) would be added for payment of the balance due on the 
annual fee upon restoring active status to a registered practitioner in 
inactive status. Paragraph 1.21(a)(8) would be added for a new annual 
fee for individuals granted limited recognition. An individual granted 
limited recognition would not be eligible for voluntary inactive 
status. Paragraph 1.21(a)(9) would be added to set fees associated with 
the administrative suspension of a registered practitioner. Paragraph 
1.21(a)(9)(i) would be added for a new fee for delinquency in payment 
of the annual fee or completing the required CLE requirements. 
Paragraph 1.21(a)(9)(ii) would be added for a new fee for reinstatement 
following administrative suspension. Paragraph 1.21(a)(5) has been 
redesignated (a)(5)(ii), and section citation of 10.2(c) would be 
changed to Sec.  11.2(d). Redesignated (a)(5)(ii), and section citation 
of 10.2(c) would be changed to Sec.  11.2(d). Paragraph 1.21(a)(10) 
would be added for a fee paid on application by a person for 
recognition or registration after disbarment, suspension, or 
resignation pending disciplinary proceedings in any other jurisdiction; 
on petition for reinstatement by a person excluded, suspended, or 
excluded on consent from practice before the Office; on application by 
a person for recognition or registration who is asserting 
rehabilitation from prior conduct that resulted in an adverse decision 
in the Office regarding the person's moral character; and on 
application by a person for recognition or registration after being 
convicted of a felony or crime involving moral turpitude or breach of 
fiduciary duty. Paragraph 1.21(a)(11) would be added for a paper 
version of the continuing training program and furnished narrative. 
Paragraph 1.21(a)(12) would be added for Application by Sponsor for 
Pre-approval of a Continuing Education Program.
    Paragraph (a)(5) of Sec.  1.21 would be revised to add two 
paragraphs. Paragraph (i) would introduce a fee for review by the OED 
Director of a decision by a staff member of the Office of Enrollment 
and Discipline. Section

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1.21(a)(5) would be revised and redesignated (a)(5)(ii).
    Paragraph (a)(6) of Sec.  1.21 would be eventually revised by 
deleting the fee for regrade and reserve the omitted paragraph.
    Paragraph (a)(7) of Sec.  1.21 is proposed to be added to provide 
for a new annual fee paid by active and voluntary inactive registered 
patent attorneys and agents.
    Paragraph (a)(8) of Sec.  1.21(a)(8) is proposed to be added to 
provide for a new annual fee paid by individuals granted limited 
recognition to practice before the Office.
    Paragraph (a)(9) of Sec.  1.21 is proposed to be added to provide 
for new fees associated with delinquency resulting in administrative 
suspension of a registered practitioner, and reinstatement of the 
practitioner.
    Paragraph (a)(12) of Sec.  1.21 is proposed to be added to provide 
for a fee to be paid by a sponsor upon submitting to the OED Director 
all information called for by the ``Application by Sponsor for Pre-
approval of a Continuing Education Program.''
    Section 1.31 would be amended to revise the references from 
Sec. Sec.  10.6 and 10.9 to Sec. Sec.  11.6 and 11.9, respectively.
    Section 1.33(c) would be amended to revise the references from 
Sec. Sec.  10.5 and 10.11 to Sec. Sec.  11.5 and 11.11, respectively.
    Section 1.455 would be amended to revise the reference from Sec.  
10.10 to Sec.  11.10.
    Section 2.11 would be amended to revise the reference from Sec.  
10.14 to Sec.  11.14.
    Section 2.17(a) would be amended to revise the reference from 
Sec. Sec.  10.1 and 10.14 to Sec. Sec.  11.1 and 11.14, respectively.
    Section 2.17(c) would be amended to revise the reference from Sec.  
10.1 to Sec.  11.1.
    Section 2.24 would be amended to revise the reference from Sec.  
10.14 to Sec.  11.14.
    Section 2.161(b)(3) would be amended to revise the reference from 
Sec.  10.1 to Sec.  11.1.
    Section 11.1 would set out definitions of terms used in Part 11. 
The defined terms include: affidavit, application, attorney, belief, 
consent, consult, differing interests, employee of a tribunal, firm, 
fraud, full disclosure, giving information, hearing officer, knowingly, 
law clerk, legal counsel, legal profession, legal service, legal 
system, matter, OED Director, Office, partner, person, practitioner, 
proceeding before the Office, professional legal corporation, 
reasonable, reasonably should know, registration, respondent, secret, 
solicit, state, substantial, tribunal, and United States.
    In the proposed rules, the word ``individual'' is used to mean a 
natural person, as opposed to a juristic entity. The definition of 
``person'' is similar to the definition of ``person'' in 1 U.S.C. 1. 
``Attorney'' is defined in the same manner as the term is used in 5 
U.S.C. 500(b). The proposed definition includes an attorney who is a 
member of one bar in good standing, and ``under an order of any court 
or Federal agency suspending, enjoining, restraining, disbarring or 
otherwise restricting'' the attorney from practice before the bar of 
another state or Federal agency. The broad definition is believed 
necessary inasmuch as 5 U.S.C. 500(b) provides that ``an individual who 
is a member in good standing of the bar of the highest court of a State 
may represent a person before an agency * * *.'' Though an attorney 
suspended in one state and a member in good standing in another state 
could represent a person before the Office, nevertheless the grounds 
for suspension in one state may give rise to grounds for suspending the 
attorney from practice before the Office, 5 U.S.C. 500(d)(2), after 
notice and opportunity for a hearing. See Selling v. Radford, 243 U.S. 
46 (1917).
    The phrase ``full disclosure'' is used to define the explanation a 
practitioner must give a client regarding potential and actual 
conflicts of interest. The explanation is based on discussions of full 
disclosure found in Opinion No. 1997-148, Standing Committee on 
Professional Responsibility and Conduct (California), and in In re 
James, 452 A.2d 163 (D.C. App. 1982).
    Section 11.2, like current Sec.  10.2, would continue to provide 
for the OED Director. The proposed rule sets out the duties of the OED 
Director, including receiving and acting upon applications, conducting 
investigations concerning the moral character and reputation of 
individuals seeking registration, conducting investigations of possible 
violations by practitioners of the Office Rules of Professional 
Conduct, initiating disciplinary proceedings, dismissing complaints or 
closing investigations, and filing with the Director of the United 
States Patent and Trademark Office (``USPTO Director'') certificates of 
convictions of practitioners. Except as otherwise noted, any final 
decision of the OED Director refusing to register an individual, refund 
a fee, recognize an individual, or reinstate a suspended or excluded 
practitioner would be reviewable by the USPTO Director. A fee, set 
forth in 37 CFR 1.21(a)(5), would be charged.
    Section 11.3 would provide for waiver of the rules and qualified 
immunity.
    Paragraph (a) of Sec.  11.3, like current Sec.  10.170, would 
provide for suspension, except as provided in section (b), in an 
extraordinary situation, when justice requires, of any requirement of 
the regulations of this part which is not a requirement of the 
statutes.
    Paragraph (b) of Sec.  11.3 would prohibit waiver of any provision 
of the Office Rules of Professional Conduct, Sec. Sec.  11.100 through 
11.806; the disciplinary jurisdiction of the rules, Sec.  11.19; or the 
procedures for interim suspension and disciplinary proceeding based on 
reciprocal discipline or conviction of a serious crime, Sec.  11.24.
    Paragraph (c) of Sec.  11.3, like current Sec.  10.170(b), would 
provide that a petition to waive a rule will not stay a disciplinary 
proceeding unless ordered by the USPTO Director or a hearing officer.
    Paragraph (d) of Sec.  11.3 would provide a qualified privilege for 
complaints submitted to the OED Director. This privilege should arise 
from the necessity to reduce to the extent possible any probability 
that an ethics complainant having honest cause to complain may be 
intimidated by a practitioner into not filing a complaint. Some states 
recognize that a complainant has absolute immunity for filing a 
complaint regardless of the outcome of the proceeding. See Drummond v. 
Stahl, 127 Ariz. 122, 618 P.2d 616 (Ct. App. Div 1 1980), cert. denied, 
450 U.S. 967, 101 S.Ct. 1484, 67 L. Ed. 2d 616 (1981); Katz v. Rosen, 
48 Cal. App. 3d 1032, 121 Cal. Rptr. 853 (1st. Dist. 1975); Field v. 
Kearns, 43 Conn. App. 265, 682 A.2d 148 (1996), cert. denied, 239 Conn. 
942, 684 A.2d 711 (1996); Jarvis v. Drake, 250 Kan. 645,830 P.2d 23 
(1992); Kerpelman v. Bricker, 23 Md. App. 628, 329 A.2d 423 (1974); 
Netterville v. Lear Siegler, Inc., 397 So.2d 1109 (Miss. 1981); Sinnett 
v. Albert, 188 Neb. 176, 195 N.W.2d 506 (1972); Weiner v. Weintraub, 22 
N.Y.2d 330, 292 N.Y.S.2d 667, 239 N.E.2d 540 (1968); Elsass v. Tabler, 
131 Ohio App.3d 66, 721 N.E.2d 503 (1999); McAfee v. Feller, 452 S.W.2d 
56 (Tex. Civ. App. Houston 14th Dist. 1970). Complaints filed with a 
state bar committee are absolutely privileged as communications made in 
a quasi-judicial proceeding. E.g., Goldstein v. Serio, 496 So.2d 412 
(La. Ct. App. 4th Cir. 1986), writ denied, 501 So.2d 208, 209 (La. 
1987).
    Under English common law, the ``absolute privilege'' from 
defamation actions that attaches to all statements and testimony by 
witnesses, judges, and parties in the course of any judicial proceeding 
has been held to apply to

[[Page 69445]]

testimony and statements made in the course of solicitor disciplinary 
proceedings. See Addis v. Crocker, 1 Q.B. 11, 2 All E.R. 629 CA. See 
Halisbury's Laws of England, Libel and Slander 28:98-101. Several 
states provide absolute privilege for complaints and testimony in 
ethics proceedings through statutes, court rules, or rules of attorney 
discipline. See Alaska Attorney Rules, Disciplinary Enforcement Rule 9 
(Supp.1983); Ariz. Rules Regulating Conduct of Attorneys, Rule XII 
(Michie Supp. 1983); Cal. Art. 5.5 Sec.  6094 (1984); Colo.R.C.P. Rule 
259(C) (Michie Supp. 1983); Stone v. Rosen, 348 So. 2d 397 
(Fla.Dist.Ct.App. 3 1977); Ga. Code App. to Title 9, Part IV, State Bar 
Rule 4-221(g); Hawaii S. Ct. Rule 16.7 (1992); La. Rev. Stat. Ann. 
Sec.  37 ch. 4 App., Art. of Incorp. Of La. State Bar Ass'n., Art. 15 
Sec.  13 (West Supp. 1983); Minn. Rules of Law: Prof. Resp., Rule 21 
(1977); Miss. Code Ann. Sec.  73-3-345 (1992); N.J.S.Ct.Rule 1:20-
11(b)(1984); Sullivan v. Crisona, 283 N.Y.S.2d 62 (Sup. Ct. 1967) 
(interpreting N.Y. Judiciary Law Sec.  90); N.D. Cent. Code Sec.  27-
14-03 (1974); Okla. Ct. Rules Governing Disciplinary Proc., Chap. 1, 
App. 1-A, Rule 5, Sec.5.4 (1981); S.C. Rules on Disciplinary Procedure 
for Att'ys Sec. Sec.  11, 26 (Lawyers Coop. Supp. 1983) (complaints may 
be subject to contempt sanctions and injunction against malicious 
filing, but privilege prevents lawsuits predicated on filing or 
testimony); S.D. Codified Laws Ann. Sec.  16-19-30 (1994); W. Va. State 
Bar Bylaws Art. VI Sec.  43 (1982); Wyo. Ct. Rules, Disciplinary Code 
for the Wyo. State Bar, Rule VI (1973).
    Other jurisdictions provide qualified immunity or privilege. See 
Ind. S.Ct. Rules Part VI, Admission & Discipline Rule 23 Sec.  20 
(1983) (immunity in absence of malice); Kan.S.Ct.Rule 223 (same 
privilege as attaches in other judicial proceedings); Me. Bar Rule 
7(f)(1) (1983) (immunity in absence of malice); Neb.S.Ct. Rule 106 
(1983) (absolute privilege for good faith complainant); In re Proposed 
Rules Relating to Grievance Pro., 341 A.2d 272 (N.H. 1975) (approving 
proposed rules effective July 25, 1975, Rule 10 providing immunity for 
statements made in good faith).
    Communications made to licensing agencies in connection with an 
application for issuance, renewal, or revocation of a license have 
frequently been held to be entitled to absolute privilege. Alagna v. 
New York & Cuba Mail S.S. Co., 155 Misc. 796 279 NYS 319 (1935) 
(complaint to Federal Communications Commission complaining of conduct 
of licensed radio operators held absolutely privileged). Communications 
to Federal agencies responsible for protecting the public are 
privileged. See Holmes v. Eddy, 341 F.2d 477 (CA 4 1965) (holding 
communication to the Securities and Exchange Commission did not amount 
to defamation since Commission had statutory duty to protect public 
from frauds through stock issues, and communication was treated as 
confidential and not disclosed until beginning of court action); 
Riccobene v. Scales, 19 F.Supp 2d 577 (N.D. W. Va. 1998) (statements by 
attorney, representing Army officer's wife, to officer's superior made 
in course of representing the wife, are absolutely privileged as they 
were intended to obtain Army's help in ending domestic abuse, and Army 
had clear interest in receiving reports of domestic violence committed 
by soldiers).
    A person filing a complaint with the Office is proscribed from 
providing materially false written statements. Under 18 U.S.C 1001(a) 
criminal penalties are provided for whoever, in any matter within the 
jurisdiction of the Office ``knowingly and willfully * * * (2) makes 
any materially false, fictitious, or fraudulent statement or 
representation; or (3) makes or uses any false writing or document 
knowing the same to contain any materially false, fictitious, or 
fraudulent statement or entry.''
    The Office is responsible for protecting the public from persons, 
agents and attorneys demonstrated 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'' the Patent 
Statute. 35 U.S.C. 2(b)(2)(D). The proposed rule provides potential 
complainants with appropriate notice of the qualified immunity while 
enabling the Office to fulfill its responsibility.

Recognition To Practice Before the USPTO

    Section 11.4, like current Sec.  10.3, would provide for a 
Committee on Enrollment, which will advise the OED Director in 
connection with the Director's duties under Sec.  11.2(b)(2).
    Section 11.5 would provide for keeping a register of attorneys and 
agents recognized to practice before the Office in patent matters, and 
a definition of practice before the Office.
    Paragraph (a) of Sec.  11.5, like current Sec.  10.5, would 
continue to provide for maintaining a single register of attorneys and 
agents registered to practice before the Office. The proposed rule 
would conform to actual practice.
    Paragraph (b) of Sec.  11.5 would add a new concept for 
disciplinary and non-disciplinary matters. The paragraph introduces 
definitions for practice before the Office broadly, as well as practice 
before the Office in patent matters, and practice before the Office in 
trademark matters. The proposed broad definition of practice before the 
Office is similar to the definition of ``practice'' adopted by the 
Internal Revenue Service. 31 CFR 10.2(e). Practice before the Office 
would not include the physical or electronic delivery of documents to 
the Office.
    The definition of practice before the Office in patent matters is 
derived from Sperry v. Florida, 373 U.S. 379, 137 USPQ 578 (1963). In 
Sperry, the Supreme Court found that ``preparation and prosecution of 
patent applications for others constitutes the practice of law.'' The 
Court recognized that ``[s]uch conduct inevitably requires the 
practitioner to consider and advise his clients as to the patentability 
of their inventions under the statutory criteria, 35 U.S.C. 101-103, 
161, 171, as well as to consider the advisability of relying upon 
alternative forms of protection which may be available under state law. 
It also involves his participation in the drafting of the specification 
and claims of the patent application, 35 U.S.C. 112, which this Court 
long ago noted `constitute[s] one of the most difficult legal 
instruments to draw with accuracy,' Topliff [hairsp][hairsp]v. Topliff, 
145 U.S. 156, 171. And upon rejection of the application, the 
practitioner may also assist in the preparation of amendments, 37 CFR 
1.117-1.126,\1\ which frequently requires written argument to establish 
the patentability of the claimed invention under the applicable rules 
of law and in light of the prior art. 37 CFR 1.119.'' Sperry, 373 U.S. 
at 383, 137 USPQ at 579.
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    \1\ 37 CFR 1.117-1.119, and 1.122-1.124 no longer exist.
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    Consistent with the foregoing, courts in several jurisdictions have 
held the preparation of patent applications by unregistered individuals 
to be the unauthorized practice of law. See In re Amalgamated 
Development Co., Inc., 375 A.2d 494, 195 USPQ 192 (D.D.C. 1977), cert. 
denied, 434 U.S. 924 (1977); People v. O'Brien, 142 USPQ 239 (N.Y. 
1964); Cowgill v. Albright, 307 N.E. 2d 191, 191 USPQ 103 (Ct. App. 
Ohio 1973); and Virginia v. Blasius, 2 USPQ2d 1320 (Va. Cir. Ct. 1987).
    In Ohio, the preparation, filing and prosecution of patent 
applications before the Office has been recognized as the practice of 
law. Formal Opinion 91-25 (1991) of the Board of Commissioners on 
Grievances and Discipline of the Ohio Supreme Court.

[[Page 69446]]

    The definition of practice before the Office in trademark matters 
is derived in part from disciplinary cases concerning attorneys engaged 
to prepare and prosecute trademark matters. See Attorney Grievance 
Commission of Maryland v. Harper, 477 A.2d 756 (Md. 1984) (holding 
attorney neglected legal matter by failing to prosecute filed trademark 
application); State of Nebraska v. Gregory, 554 N.W.2d 422 (Neb. 1996) 
(holding attorney did not competently act or zealously represent a 
client by failing to file a trademark application); Office of 
Disciplinary Counsel v. Frease, 660 N.E.2d 1156 (Ohio 1996) (holding 
attorney neglected legal matter entrusted to him when he did not file 
applications for trademark registration). The definition is also 
derived from case law involving unauthorized practice of law wherein a 
layperson offered trademark registration services. See Statewide 
Grievance Committee v. Goldstein, 1996 Conn. Super. LEXIS 3430 (Conn. 
Super. 1996) (enjoining layperson from advertising, offering to 
complete, and completing blank legal documents for ``areas commonly 
understood to be the practice of law including * * * trademark and/or 
patent,'' soliciting information from customers and using the 
information ``to select, prepare or complete legal documents,'' and 
``providing written and/or oral instructions to customers advising them 
what to do with their legal documents.'').
    The definition of practice before the Office also includes private 
conduct relating to good character and integrity essential for a 
practitioner in patent, trademark, or other non-patent law matters. The 
definition is derived from case law disciplining attorneys for 
misconduct not related to the practice of law. Any misbehavior, private 
or professional, that reveals a lack of good character and integrity 
essential for a person to practice as an attorney constitutes a basis 
for discipline. Matter of Hasbrouck, 657 A.2d 878 (N.J. 1995); In re 
LaDuca, 140, 299 A.2d 405 (N.J. 1973). That a person's activity does 
not arise from a lawyer-client relationship, that the behavior is not 
related to the practice of law or that the offense is not committed in 
the attorney's professional capacity is immaterial. In re Suchanoff, 
460 A.2d 642 (N.J. 1983); In re Franklin, 365 A.2d 1361 (N.J. 1976).
    Section 11.6, like current Sec.  10.6, would provide for 
registration of individuals to practice before the Office in patent 
matters.
    Paragraphs (a) and (b) of Sec.  11.6 would provide for registration 
of attorneys and agents, respectively. Citizens of the United States 
could be registered regardless of their residence. The OED Director 
could register resident aliens, under appropriate circumstances. 
Registration of permanent resident aliens would be consistent with In 
re Griffiths, 413 U.S. 717 (1973) (permanent resident alien entitled to 
be admitted to Connecticut Bar notwithstanding status as alien). See 
also Raffaelli v. Committee of Bar Examiners, 496 P.2d 1264 (Cal. 1972) 
and Application of Park, 484 P.2d 1264 (Alas. 1971). The Office 
currently registers permanent resident aliens. See In re Bhogaraju, 178 
USPQ 628 (Comm'r Pat. 1973); In re Bramham, 181 USPQ 723 (Comm'r Pat. 
1974); and In re Keen, 187 USPQ 477 (Comm'r Pat. 1975).
    The proposed rules would restrict circumstances under which an 
alien could be registered. Registration would be precluded if the 
practice of patent law before the Office is inconsistent with the terms 
of any visa under which the alien is admitted to and continues to 
reside in the United States. Registration would be precluded, for 
example, when the visa petition does not describe that the alien as 
being authorized to be employed in the capacity of representing patent 
applicants before the Office. See In re Richardson, 203 USPQ 959 
(Comm'r Pat. 1979) (alien admitted to U.S. with H-3 visa for training 
could not practice patent law under terms of the visa), and In re 
Mikhail, 202 USPQ 71 (Comm'r Pat. 1976) (alien admitted to U.S. on B-1/
B-2 visa and visiting the U.S. temporarily for business or pleasure 
could not practice under the terms of the visa). It is nevertheless 
appropriate for some aliens to be granted limited recognition under 
Sec.  11.9. See In re Messulam, 185 USPQ 438 (Comm'r Pat. 1975) 
(granting limited recognition to alien admitted to U.S. on L-1 visa for 
purpose of rendering service to a single company for whom the alien had 
previously worked abroad and who would remain in the U.S. temporarily). 
See also In re Gresset, 189 USPQ 350 (Comm'r Pat. 1976).
    Paragraph (c) of Sec.  11.6, like current Sec.  10.6(c), would 
continue to provide for registration of foreign patent agents on the 
basis of substantial reciprocity. Paragraph (c) would add procedures 
for removing a patent agent's name from the register if the patent 
agent is no longer registered in good standing before the patent office 
of the country in which he or she resides, or no longer resides in the 
foreign country. The procedures would avoid any necessity of going 
through an administrative proceeding.
    Section 11.7, like current Sec.  10.7, would set forth the 
requirements for registration.
    Paragraphs (a)(1) and (a)(2) of Sec.  11.7, like current Sec.  
10.7(a), would continue to require an individual to apply for 
registration, and establish possession of good moral character, as well 
as legal, scientific and technical qualifications, and competence to 
advise and assist patent applicants.
    Paragraph (a)(3) of Sec.  11.7 would explicitly place the burden of 
proof of good moral character and reputation on the applicant, and 
provide ``clear and convincing'' as the standard of proof.
    Paragraph (b)(1) of Sec.  11.7, like current Sec.  10.7(b), would 
continue to require an individual to take and pass a registration 
examination in order to practice in patent matters before the Office.
    Paragraph (b)(2) of Sec.  11.7 would identify components of a 
complete registration application, give an individual submitting an 
incomplete application 60 days from the notice to file a complete 
application, and require individuals to update their applications 
wherever there is an addition to or change to information previously 
furnished with the application.
    Paragraph (c) of Sec.  11.7 would allow for a petition to the OED 
Director from any action refusing to register anindividual, refusing to 
admit an individual to the registration examination, refusing to 
reinstate an individual, or refusing to refund or defer any fee. The 
petition would be accompanied by the fee set forth in Sec.  1.21(a)(5).
    Paragraph (d) of Sec.  11.7, like current Sec.  10.7(b), would 
continue to provide for waiver of the examination for former patent 
examiners. Unlike Sec.  10.7(b), waiver no longer would be available 
(except for a grandfathering provision) merely upon successfully 
serving in the patent examining corps for four years. Paragraph (d) 
would introduce new conditions for waiver of the registration 
examination for former patent examiners and expand the occasions for 
waiving the examination for other Office employees.
    Currently, the requirement to take the examination may be waived in 
the case of any individual who has actively served for at least four 
years in the patent examining corps of the Office. The Office provides 
newly hired examiners with initial training. Thereafter, training 
provided by the Office is received on the job, or in more advanced 
formal training courses. Primary patent examiners are examiners who the 
Office has certified as having legal competence to act with a minimum 
of oversight. The Office also gives primary examiners a certificate 
granting authority to negotiate with

[[Page 69447]]

practitioners. Before an examiner is promoted to primary patent 
examiner, a group of patent applications that he or she has examined is 
reviewed for competence and compliance with rules and procedures. 
However, no test is administered to ascertain the examiner's knowledge 
of patent law, practice and procedure. After an examiner achieves 
primary status, there is no periodic testing/training to ensure that 
the individual maintains an expected level of competency in law, 
regulations and practice and procedures. Currently, subsequent training 
takes place in the form of lectures or memoranda following changes to 
the patent law and/or regulatory changes.
    To ensure competence the Office is instituting a formal 
certification and recertification program for patent examiners, in 
keeping with its 21st Century Strategic Plan. The program will require 
examiners being promoted to grade GS-13 to pass a competency 
examination based on the examination taken by persons seeking to be 
registered as a patent practitioner.
    Also, patent examiners, like licensed practitioners, would be 
required to receive training and pass recertification tests to update 
and maintain competence and proficiency in patent law, practices and 
procedures.
    The proposed rule would provide for waiver of the registration 
examination for two groups of former patent examiners who were serving 
in the patent examining corps at the time of their separation.
    Paragraph (d)(1) of Sec.  11.7 would address former patent 
examiners who, by a date to be determined, had not actively served four 
years in the patent examining corps, and who were serving in the corps 
at the time of their separation. The registration examination would be 
waived for a former examiner if he or she met four conditions. The 
former examiner must have (i) actively served in the patent examining 
corps of the Office, (ii) received a certificate of legal competency 
and negotiation authority; (iii) been rated, after receiving the 
certificate of legal competency and negotiation authority, at least 
fully successful in each quality performance element of his or her 
performance plan for the last two complete fiscal years as a patent 
examiner, and (iv) not have been under an oral or written warning 
regarding the quality performance elements at the time of separation 
from the patent examining corps.
    Paragraph (d)(2) of Sec.  11.7 would address former patent 
examiners who, by a date to be determined, have actively served four 
years in the patent examining corps, and who were serving in the corps 
at the time of their separation. The examination would be waived for 
the former examiner if he or she meets three conditions. The former 
examiner must (i) have actively served for at least four years in the 
patent examining corps of the Office by the date to be determined, have 
been rated at least fully successful in each quality performance 
element of his or her performance plan for the last two complete fiscal 
years as a patent examiner in the Office; and (iii) not have been under 
an oral or written warning regarding the quality performance elements 
at the time of separation from the patent examining corps.
    Requiring that an examiner be rated at least fully successful in 
the quality performance elements of his or her performance plan is in 
accord with prior practice. Former examiners, who upon separation from 
the Office, were rated unacceptable for quality performance elements 
have been required to take the registration examination. Accord, 
Commissioner's Decision, leg.01.pdf, posted on the Office Web site as 
www.uspto.gov/web/offices/com/sol/ foia/oed/legal/leg01.pdf.
    Paragraph (d)(3) of Sec.  11.7 would address certain former Office 
employees who were not serving in the patent examining corps upon their 
separation from the Office. The examination would be waived for a 
former Office employee meeting four requirements. The former employee 
must demonstrate by petition that he or she possesses the necessary 
legal qualifications to render to patent applicants and others valuable 
service and assistance in the preparation and prosecution of their 
applications or other business before the Office by showing that (A) he 
or she has exhibited comprehensive knowledge of patent law equivalent 
to that shown by passing the registration examination as a result of 
having been in a position of responsibility in the Office in which he 
or she: (i) Provided substantial guidance on patent examination policy, 
including the development of rule or procedure changes, patent 
examination guidelines, changes to the Manual of Patent Examining 
Procedure, or development of training or testing materials for the 
patent examining corps; or (ii) represented the Office in patent cases 
before Federal courts; and (B) was rated at least fully successful in 
each quality performance element of his or her performance plan for the 
position for the last two complete rating periods in the Office, and 
was not under an oral warning regarding the quality performance 
elements at the time of separation from the Office.
    Paragraph (d)(4) of Sec.  11.7 would provide additional conditions 
for waiver of the examination for each individual covered in paragraphs 
(d)(1) through (d)(3). To be eligible for consideration for waiver, the 
individual must file a complete application within two years of 
separation from the Office, together with the fee required by Sec.  
1.21(a)(1)(i). All other individuals and former examiners filing an 
application or paying a fee more than two years after separation from 
the Office would be required to take and pass the examination in order 
to demonstrate competence to represent applicants before the Office. If 
the examination is not waived, the individual or former examiner also 
would have to pay the examination fee required by Sec.  1.21(a)(1)(ii) 
within 30 days of notice.
    Paragraph (e) of Sec.  11.7 would eliminate the provision for 
regrade of an examination. The current rule requires the Office to 
treat each regrade request individually. Candidates requesting regrade 
seek, in effect, individualized regrading. Individualized regrading can 
promote the occurrence of arbitrary and capricious decisions.
    The standard for review of the grading of the registration 
examination is ``whether the officials of the Patent Office acted 
fairly and without discrimination in the grading of the plaintiff's 
examination, pursuant to a uniform standard.'' See Cupples v. Marzall, 
101 F.Supp. 579, 583 (D.D.C. 1952). The Office uses a set of model 
answers in grading examination answers. The use of Office Model Answers 
to grade the examination satisfies the Cupples standard ``because it 
provides a set of uniform standards by which all examinations can be 
fairly judged and is therefore not arbitrary and capricious.'' Worley 
v. USPTO, 2000 U.S. Dist. LEXIS 16992, 16997 (D.D.C. 2000). In 
contrast, ``permitting individualized and subjective regrading upon 
request would promote, not reduce, the likelihood that the Office would 
make arbitrary and capricious decisions regarding who passes and fails 
the Patent Bar examination.'' Worley, at 16998. See also Kyriazis v. 
Dickinson, No. 99-2299, slip op. at 7 (D.D.C. Dec. 8, 2000) (``this 
Court rejects Plaintiff's argument that a regrade of question 16 of the 
examination should consist of an individual determination as to whether 
Mr. Kyriazis's explanation for his answer constitutes the correct 
interpretation of patent law, rather than a determination whether the 
grading conformed with the PTO's Model Answers'').
    To treat each regrade request individually requires dedication of

[[Page 69448]]

considerable resources. Further, such regrades require release of both 
the questions and Model Answers. In turn, release of the questions and 
answers necessitates preparation of new examinations twice each year. 
Producing new examinations twice each year requires dedication of 
considerable resources. The Office is already pressed for staff and 
time to provide these services. The Office intends to change the 
delivery of the registration examination. The examination would no 
longer be administered twice a year in a paper and pencil format. 
Instead, a private sector party would deliver the examination at 
computer terminals at that party's test sites. It is anticipated that 
the examination would be administered each business day. The 
examination would not be delivered to applicants on the Internet. The 
registration examination is and will continue to be a multiple choice 
examination. The Office intends to develop a databank of multiple 
choice questions in following years that can be reused in subsequent 
examinations. The source of the questions and answers would be the 
patent laws, rules and procedures as related in the Manual of Patent 
Examining Procedure (MPEP) and policy statements issued by the Office. 
The examination would be ``open-book'' in the sense that the MPEP and 
policies would be accessible at the same computer terminals where the 
examination is taken. Paper forms of the MPEP or policies could not be 
brought into the private sector party's test site. New questions would 
be introduced as MPEP revisions or policy statements introduce new 
policies, rules, procedures, or statutory law changes. The USPTO would 
announce when questions are added to the data base addressing revisions 
of the MPEP or new policy statements. Questions would be retired as 
necessary and consistent with the changes. Reuse of questions could 
reduce the time and resources needed to develop the examination each 
time it is given. To reuse questions and reduce pressure on the staff, 
it would be necessary to cease publication of the questions and the 
corresponding answers. This would preserve the fairness of the test for 
later applicants.
    The Multistate Bar Examination (MBE), like the registration 
examination, is a multiple choice examination. Questions on the MBE are 
reused in later years. An individual may review on his own MBE 
examination papers under the guidelines established by the National 
Conference of Bar Examiners, i.e., under supervision and without taking 
notes. See Fields v. Kelly, 986 F.2d 225, 227 (8th Cir 1993). Under 
proposed paragraph (g), an unsuccessful applicant would schedule an 
opportunity to review, i.e., inspect the examination questions and 
answers he or she incorrectly answered under supervision without taking 
notes. The questions could not be copied. This would be the same as the 
guidelines established by the National Conference of Bar Examiners for 
inspection of the MBE.
    Under proposed paragraph (e), an unsuccessful applicant satisfying 
the admission requirements would have a right to sit for future 
examinations. The due process clause of the Fourteenth Amendment does 
not require that unsuccessful applicants be given the opportunity for a 
regrade. The applicant is afforded due process by permitting him or her 
to sit for the examination again. See Lucero v. Ogden, 718 F.2d 355 
(10th Cir. 1983), cert. denied, 465 U.S. 1035, 79 L. Ed. 2d 706, 104 
S.Ct. 1308 (1984) (``Courts have consistently refrained from entering 
the arena of regrading bar examinations when an unqualified right of 
reexamination exists.''); Tyler v. Vickery, 517 F.2d 1089, 1103 (5th 
Cir. 1975), cert. denied, 426 U.S. 940, 49 L. Ed. 2d 393, 96 S.Ct. 2660 
(1976); Poats v. Givan, 651 F.2d 495, 497 (7th Cir. 1981); Davidson v. 
State of Georgia, 622 F.2d 895, 897 (5th Cir. 1980); Sutton v. Lionel, 
585 F.2d 400, 403 (9th Cir. 1978); Whitfield v. Illinois Board of Bar 
Examiners, 504 F.2d 474, 478 (7th Cir. 1974) (Constitution does not 
require an unsuccessful applicant be permitted to see his examination 
papers and to compare them with model answers or answers of successful 
applicants); Bailey v. Board of Law Examiners, 508 F.Supp. 106, 110 
(W.D. Tex. 1980); and Singleton v. Louisiana State Bar Ass'n., 413 
F.Supp. 1092, 1099-1100 (E.D. La. 1976).
    Limiting access to the questions would not deny the unsuccessful 
applicant equal protection of the laws. Inasmuch as some of the 
questions appear in following years, the questions must be kept secret 
in order to preserve the fairness of the test for later applicants. See 
Fields v. Kelly, 986 F.2d at 227. An unsuccessful applicant also is not 
deprived of a property right without due process by limiting access to 
the questions. Providing an opportunity to review the examination under 
supervision without taking notes affords the applicant a hearing at the 
administrative level. Id. at 228.
    The Administrative Procedures Act provides procedural protections 
in matters involving an ``adjudication,'' which includes licensing. 5 
U.S.C. 554. However, the Act also provides that these protections are 
not required where there is involved ``proceedings in which decisions 
rest solely on inspections, tests, or elections * * *. ``5 U.S.C. 
554(a)(3). This subsection implicitly recognizes that ``where 
examinations are available, further procedural protections are 
unnecessary. See also 1 K. Davis, Administrative Law Treatise Sec.  
7.09 (1958).'' Whitfield v. Illinois Board of Bar Examiners, 504 F.2d 
474, 478 (7th Cir. 1974).
    Paragraph (f) of Sec.  11.7 would continue the current practice in 
which applicants seeking reciprocal recognition under Sec.  11.6(c) 
must file an application and pay the fee set forth in Sec.  1.21(a)(6). 
It would introduce the practice of paying the application fee required 
by Sec.  1.21(a)(1)(i).
    Paragraph (g) of Sec.  11.7 would continue the practice of 
soliciting information bearing on the moral character and reputation of 
individuals seeking recognition. If information from any source is 
received that tends to reflect adversely on the moral character or 
reputation of an individual seeking recognition, the OED Director would 
conduct an investigation into the individual's moral character and 
reputation.
    The proposed regulation specifies that the information sought 
bearing on the moral character and reputation of individuals includes 
events regardless of whether the records have been expunged or sealed 
by a state court. In accordance with the supremacy clause of the United 
States Constitution, ``a federal agency acting within the scope of its 
congressionally delegated authority may pre-empt state regulation.'' 
Louisiana Public Service Comm'n. v. FCC, 476 U.S. 355, 369, 90 L. Ed. 
2d 369, 106 S.Ct. 1890 (1986). The pre-emptive force of a Federal 
agency's regulation does not depend on express Congressional 
authorization. Instead, the correct focus is on ``the proper bounds of 
[the Federal agency's] lawful authority to undertake such action.'' 
City of New York v. FCC, 486 U.S. 57, 64, 100 L. Ed. 2d 48, 108 S.Ct. 
1637 (1988).
    Congress has authorized the USPTO Director to adopt regulations 
requiring individuals to demonstrate that they are of good moral 
character and reputation before being recognized. 35 U.S.C. 2(b)(2)(D). 
The statute does not mention expungement as a means for removing 
statutory disqualifications. Congress does not appear to have 
contemplated these expungements would limit the USPTO Director's 
authority under statute. Requiring disclosure of expunged offenses is a 
rational and

[[Page 69449]]

reasonable method to promote licensing individuals presently possessing 
good moral character and reputation. In Dickerson v. New Banner 
Institute, Inc., 460 U.S. 103, 103 S.Ct. 986, 74 L. Ed. 2d 845 (1983), 
the Supreme Court held that an Iowa expungement of a judgment did not 
remove disabilities imposed by the Federal Gun Control Act of 1968 on 
the basis of the state conviction, and that the expungement did not 
nullify the conviction. Information regarding expunged offenses is 
clearly relevant to, though not necessarily determinative of, an 
applicant's moral character. See Wilson v. Wilson, 416 F.Supp. 984 (D. 
Oregon 1976). Expungement, for example, does not signify that the 
person was innocent of the crime. Rather, expungement alleviates 
certain continuing effects of a conviction under various laws. State 
bar examiners consider the commission of any crime, including expunged 
offenses, in weighing an applicant's overall character and fitness to 
practice law. See In re Leff, 619 P.2d 232 (Ariz. 1980); State Bar v. 
Langert, 276 P.2d 596 (Calif. 1954); Florida Board of Bar Examiners Re: 
Certified Question--Felony Convictions--Federal Youth Corrections Act, 
361 So.2d 424 (Fla. 1978); In re Majorek, 508 N.W.2d 275 (Neb. 1993); 
In re McLaughlin, 675 A.2d 1101 (N.J. 1995); and In re Davis, 403 
N.E.2d 189 (Ohio 1980). Requiring disclosure of arrests, even if a 
state court has ordered expungement, does not violate a constitutional 
right to privacy. See AFL-CIO v. HUD, 118 F.3d 786 (D.D.C. 1997). The 
proposed rule would provide applicants with notice of the requirement 
for disclosure of expunged records.
    The USPTO is seeking comments on the two alternatives proposed 
below for accepting a state bar's determination on the moral character 
of persons seeking to become registered practitioners who at the time 
of filing of their USPTO application, have been admitted as an attorney 
in a State Bar and continue to be in good standing.
    One option is to require applicants who are attorneys to submit a 
certified copy of their State Bar application and moral character 
determination. The Office may accept the moral character determination 
as meeting the requirements set forth in Sec.  11.7(g).
    The second option is to require these applicants to submit a 
certified copy of their State Bar application and moral character 
determination and for the Office to accept the State Bar's character 
determination as meeting the requirements set forth in Sec.  11.7(g) 
if, after review, the Office finds no substantial discrepancy between 
the information provided with their USPTO application and the State Bar 
application and moral character determination. In such a case, OED will 
accept the moral character determination of the State Bar as meeting 
the requirements set forth in Sec.  11.7(g), so long as this acceptance 
is not inconsistent with other rules and the requirements of 35 U.S.C. 
2(b)(2)(D). If the USPTO finds that there is substantial discrepancy or 
if OED obtains or receives other or new information, or if the 
determination of moral character conflicts with other rules or Sec.  
2(b)(2)(D), the USPTO reserves the right to make an independent 
decision.
    The first option, accepting the state bar's determination on moral 
character without further review, is administratively convenient. 
However, it raises the issue of equal treatment between patent 
attorneys and patent agents as to standards applied. The nature of the 
patent application proceedings before the USPTO allows for registered 
practitioners to represent clients before the Office who may or may not 
be attorneys. In addition, ``Congress placed the responsibility on 
Director to protect the public.'' 35 U.S.C. Sec.  2(b)(2)(D).\2\ Under 
35 U.S.C. Sec.  32, the USPTO is under an obligation to consider the 
moral character of all applicants seeking to become registered 
practitioners. The states and USPTO have concurrent authority to 
protect the public. Kroll v. Finnerty, 242 F.3d 1359 (Fed. Cir. 2001). 
Thus, the USPTO may not have authority to resolve all moral character 
questions of attorneys by deferral to the state determinations. 
Complete deference to a determination on moral character made by state 
bars is inconsistent with the USPTO's responsibility of protecting the 
public. Further, it is possible that state bars may be unaware of 
violations brought to the attention of the Office. The Office cannot 
circumvent its responsibility to protect the public. In tandem, it is 
not the Office's intent to place an unnecessary burden on state bars to 
make determinations on issues that can be equally addressed by both 
entities. Thus, while it is appropriate to consider the determination 
on moral character made by state bars as part of the application 
process at the USPTO, it is inconsistent with the statute to accept the 
state bar determination as dispositive of the issue for USPTO purposes.
    Under the first option, the USPTO would give deference to the state 
bars if the Office allows patent attorneys to submit a copy of their 
state bar applications and moral character determinations. Under the 
second option, the USPTO would still give deference, but reserves the 
authority to look further into the issue of moral character if there is 
substantial discrepancy between the information provided in the USPTO 
application form and the state bar application or if new information is 
provided related to this matter. This is a satisfactory compromise that 
enables both the states and the USPTO to exercise their respective 
authorities to protect the public.
    Paragraph (h) of Sec.  11.7 would define moral character. The 
definition is derived from Konigsberg v. State Bar of Cal., 353 U.S. 
252, 77 S.Ct. 722, 1 L.Ed.2d 810 (1957); and In re Matthews, 462 A.2d 
165 (NJ 1983). This paragraph also would provide a nonexclusive list of 
moral character factors considered by the OED Director. The list would 
be substantially the same as that considered by the Committee of Bar 
Examiners of the State Bar of California in ``Statement on Moral 
Character Requirement For Admission to Practice Law in California,'' 
which is available at www.calbar.org/shared/2admndx.htm.
    Paragraph (h)(1) of Sec.  11.7 would provide not only that an 
applicant convicted of a felony or crime involving moral turpitude or 
breach of fiduciary duty is presumed not to be of good moral character, 
but also that the individual would be ineligible to apply for 
registration until two years after completion of any sentence and 
probation or parole. See In re Dortch, 687 A.2d 245 (Md. 1997); Seide 
v. Committee of Bar Examiners (Calif.), 782 P.2d 602 (Cal. 1989). The 
individual would have to pay the fee required by Sec.  1.21(a)(10) with 
the application for registration.
    Paragraph (h)(4) of Sec.  11.7 would provide that an attorney 
disbarred or suspended from the practice of law, or an attorney who 
resigns in lieu of discipline would not be eligible to apply for 
registration for a period of two years following completion of the 
discipline. The OED Director would have discretion to waive the two-
year period only if the individual demonstrates that he or she has been 
reinstated to practice law in the State where he or she had been 
disbarred or suspended, or had resigned. The attorney would have to

[[Page 69450]]

pay the fee required by Sec.  1.21(a)(10) with the application for 
registration.
    Paragraph (i) of Sec.  11.7 would identify factors that may be 
taken into consideration when evaluating rehabilitation of an applicant 
seeking a moral character determination for registration.
---------------------------------------------------------------------------

    \2\ ``[T]he primary responsibility for protection of the public 
from unqualified practitioners before the Patent [and Trademark] 
Office rests with the Commissioner of Patents [and Trademarks].'' 
Gager v. Ladd, 212 F.Supp. 671, 673, 136 USPQ 627, 628 (D.D.C. 
1963), (quoting with approval Cupples v. Marzall, 101 F.Supp. 579, 
583, 92 USPQ 169, 172 (D.D.C. 1952), aff'd, 204 F.2d 58, 97 USPQ 1 
(D.C. Cir. 1953)).
---------------------------------------------------------------------------

    Paragraph (j) of Sec.  11.7 would provide procedures for the OED 
Director and Committee on Enrollment to hear cases arising if the OED 
Director believes that any evidence suggests that an individual lacks 
good moral character and reputation. The procedures are in accord with 
those recognized in Willner v. Committee on Character and Fitness, 373 
U.S. 96, 83 S.Ct. 1175 (1963) as providing due process. When the 
evidence is information supplied or confirmed by the individual, or is 
of an undisputed documentary character, the hearing will be on the 
written record. When a person or source whose reliability or veracity 
is questioned supplies the evidence, the individual may choose to have 
a hearing on the written record, or have an oral hearing to confront 
and cross-examine the person or source providing the evidence. The 
expense of an oral hearing could be a serious burden on an individual 
who is both distant from the Office and without an established 
practice. The rule provides such an individual with an alternative to 
an oral hearing, i.e., being heard on a written record with briefing. 
The procedures for an oral hearing are similar to those adopted by the 
District of Columbia Court of Appeals. Rule 46(f) and (g). An oral 
hearing will provide the Committee and OED Director with an opportunity 
to observe the individual's demeanor.
    Paragraph (k) of Sec.  11.7 would allow an individual whose 
application for registration has been rejected because of lack of good 
moral character and reputation to reapply for registration. The 
individual would be permitted to reapply five years after the ruling, 
unless otherwise provided. The individual would also be required to 
take and pass the registration examination. This provision follows the 
same time provisions of Rule 201.12 of the Rules Governing Admission to 
the Bar of the State of Colorado. The individual would have to pay the 
fee required by Sec.  1.21(a)(10) with the application for 
registration.
    Section 11.8 would continue the practice under current 37 CFR 10.8 
of requiring an oath and payment of a fee prior to registration, and 
conform to the practice of filing a completed Data Sheet.
    Paragraph (a) of Sec.  11.8 would provide a two-year period within 
which an applicant who passes the registration examination may complete 
registration. In effect, a passing score would be good for two years. 
The Office would deem this period reasonable for individuals who have 
not been registered, and not completed their registration within two 
years. Their continued familiarity with the Patent Statute, Office 
practices and procedures, and changes thereto in the interim is not 
established, and they could not lawfully practice before the Office in 
patent matters in that period. The two-year period is similar to the 
time afforded District of Columbia Bar applicants, who may request 
acceptance of a prior Multistate Bar Examination or essay exam result 
provided, inter alia, the prior administration of the examination was 
within 25 months of the examination about to be administered. See Rules 
46(b)(8)(A)(3) and 46(b)(8)(B)(3) of the Rules of the District of 
Columbia Court of Appeals.
    Under paragraph (a) of Sec.  11.8, limited recognition would no 
longer be granted to individuals while awaiting registration. The 
period candidates await registration is expected to be reduced by the 
Office's soliciting information tending to affect the eligibility of 
candidates based on their character on both the Office Web site as well 
as the Official Gazette. The names of the candidates receiving a 
passing score will be published. The public will be given 60 days from 
publication on the Web to provide the information.
    Paragraph (b) of Sec.  11.8 would add procedures for applicants 
seeking registration as a patent attorney or agent. An individual 
seeking registration as a patent attorney would have to demonstrate 
that he or she is a member in good standing with the bar of the highest 
court of a state.
    Paragraph (c) of Sec.  11.8 would codify a practice of requiring 
individuals to update the information and answers they provide on their 
applications based on events occurring between the date an individual 
signs an application, and the date he or she is registered or 
recognized to practice before the Office in patent matters. This would 
include not only changes of address, but also events that may reflect 
adversely on the individual's moral character. The latter would serve 
the integrity of the registration process to require the applicant to 
update information and answers, and show that the individual continues 
to satisfy the requirements of Sec.  11.7(a)(2)(i).
    Paragraph (d) of Sec.  11.8 would introduce an annual fee to be 
paid by registered practitioners. The amount of the fee would be set 
forth in Sec.  1.21(a)(7). The annual fee would be due in three-month 
intervals depending on the first initial of a practitioner's last name. 
The roster would be divided into four units. The payment period for 
last names beginning with A-E shall be every January 1 through March 
31; the payment period for last names beginning with F-K shall be every 
April 1 through June 30; the payment period for last names beginning 
with L through R shall be every July 1 through September 30; and the 
payment period for last names beginning with S through Z shall be every 
October 1 through December 31.
    In the past, the fees paid by applicants and patentees have 
supported the costs of the activities that maintain the patent 
practitioner's community reputation for integrity. The proposed annual 
fee is introduced pursuant to 35 U.S.C. 41(d). The annual fee is 
intended to fund the costs of the disciplinary system, and maintaining 
the roster of registered practitioners up-to-date by (i) annually 
surveying the practitioners for current address/telephone/e-mail 
information, and (ii) daily updating the roster with new changes of 
address. With an annual fee, the Office would be funding the 
disciplinary system as State Bars do, by dues from the bar members. Bar 
disciplinary activities are generally regarded as being in the interest 
of maintaining the Bar's reputation for integrity and supporting the 
willingness of potential clients to engage the services of 
practitioners. The continual updating of the USPTO roster is also in 
the interest of assuring that registered practitioners are identified 
to the public they seek to serve. The current cost of USPTO 
disciplinary and roster maintenance programs is a little in excess of 
$100 per year per registered practitioner. That cost is currently met 
by funds from application, issue, or maintenance fees. It is 
problematic to charge applicants for this activity, since many of the 
complaints concern applications that were not filed or were filed or 
prosecuted improperly or should not have been filed in the first place, 
or patentees, who have received the benefit of competent counsel. The 
anomaly is magnified by the need for disciplinary action concerning 
practitioners who have been convicted of felonies, or disciplined by 
state bars for matters other than practice before the Office. By 
adopting an annual fee to be paid by registered practitioners, the 
costs of these activities is not passed on to applicants. Thus, USPTO 
will recover the costs associated with these activities from the 
practitioners instead of the public in general. The funds received from 
the annual fee would be directed

[[Page 69451]]

to these activities and would not be diverted to support other 
proposals. The annual fee would not be imposed on persons during the 
calendar year in which they are first registered to practice before the 
Office. Failure to comply with this rule would subject a registered 
practitioner to penalties set forth in Sec.  11.11(b).
    Section 11.9 would continue the same practice under current Sec.  
10.9 of providing limited recognition of individuals under the 
appropriate circumstances.
    Paragraph (a) of Sec.  11.9 would continue to provide for limited 
recognition of individuals to practice before the Office in a 
particular patent application or applications. The practice would be 
limited to individuals who are not attorneys representing the 
individual's close relative, such as a child, elderly parent.
    Paragraph (b) of Sec.  11.9 would provide for aliens, residing in 
the United States, to obtain limited recognition to practice before the 
Office in a particular patent application or applications if the 
Immigration and Naturalization Service or the Department of State has 
authorized the alien to be employed in the capacity of representing a 
patent applicant by preparing and prosecuting the applicant's U.S. 
patent application. Recognition may be granted if the applicant 
satisfies the provisions of Sec.  11.7(a), (b), and (c) or (d). 
Consistent with current practice, limited recognition would be granted 
in maximum increments of one year, but would not be granted or extended 
to an alien residing abroad. Limited recognition also would not be 
granted to aliens admitted to the United States to be trained. 
Recognition to practice before the Office, like admission to practice 
law in any other jurisdiction, is not a training opportunity.
    Paragraph (c) of Sec.  11.9 would continue to provide for limited 
recognition of an individual not registered under Sec.  11.6 to 
prosecute an international application only before the U.S. 
International Searching Authority and the U.S. International 
Preliminary Examining Authority.
    Paragraph (d) of Sec.  11.9 would provide for a limited recognition 
fee paid by an individual granted limited recognition under paragraphs 
(b) or (c) of Sec.  11.9. The same individuals would also be required 
to pay an annual fee upon renewal or extension of the limited 
recognition previously granted. Failure to comply with the rule would 
subject the individual to loss of recognition.
    Section 11.10 would set forth provisions regarding post-employment 
restrictions on practice before the Office. Paragraph (a) would permit 
only practitioners who are registered under Sec.  11.6 or individuals 
given limited recognition under Sec.  11.9 to prosecute patent 
applications of others before the Office.
    Paragraph (b) of Sec.  11.10 would parallel the provisions of 18 
U.S.C. 207(a) and (b). The proposal would parallel the basic 
restrictions of Sec.  207(a) on any registered former Office employee 
acting as representative, or intending to bring influence, in a 
particular matter in which he or she personally and substantially 
participated as an employee of the Office. The proposal also would 
parallel the basic two-year restriction of Sec.  207(b) on any 
registered former Office employee acting as representative or with 
intent to influence as to a particular matter for which the employee 
had official responsibility. In addition, the proposal would proscribe 
the same conduct occurring behind the scenes by prohibiting conduct 
that ``aids in any manner'' the representation or communication with 
intent to influence. It is appropriate that the conduct proscribed by 
Sec. Sec.  207(a) and (b) be extended to conduct occurring behind the 
scene. The conduct is proscribed by current Sec.  10.10(b). A patent 
can be held unenforceable where a former patent examiner engaged in 
behind the scene efforts to obtain a reissue patent on a patent in 
which he or she personally and substantially participated as an 
examiner. See Kearny & Trecker Corp. v. Giddings & Lewis, Inc., 452 
F.2d 579 (7th Cir. 1971), cert. denied, 92 S.Ct. 1500 (1972).
    Paragraph (c) of Sec.  11.10 would introduce citation of the 
statutory and regulation provisions governing the post employment 
conduct of unregistered former employees. The provisions cover any 
unregistered former employees, who represent another person in an 
appearance or, by other communication, attempts to influence the 
Government, including the Office, concerning a particular matter in 
which he or she was involved. For example, a former patent examiner, 
whether or not he or she becomes a registered practitioner, may not 
appear as an expert witness against the Government in connection with a 
patent granted on an application he or she examined as a patent 
examiner.
    Paragraph (d) of 11.10, like current Sec.  10.10(c), would continue 
to proscribe an employee of the Office from prosecuting or aiding in 
any manner in the prosecution of a patent application for another.
    Paragraph (e) of Sec.  11.10 would continue the prohibition against 
conflicts of interest contained in current Sec.  10.10(d). A number of 
statutory and regulatory provisions affect U.S. Government employees 
who are registered to practice before the Office. These provisions 
include 18 U.S.C. 203 and 205.
    Section 205 is a criminal statute which ``precludes an officer or 
employee of the Government from acting as an agent or attorney for 
anyone else before a department, agency or court in connection with any 
particular matter in which the United States is a party or has a direct 
and substantial interest.'' Memorandum of Attorney General Robert F. 
Kennedy Regarding Conflict of Interest Provisions of Public Law 87-848, 
Feb 1, 1963, 28 F.R. 985. In interpreting a predecessor statute to 
Sec.  205, Acting Attorney General Peyton Ford determined that ``the 
United States is a party or directly or indirectly interested'' in 
proceedings involving the filing and prosecution before the Patent 
Office of an application for patent, and that the predecessor statute 
therefore ``proscribe[d] the participation in such proceedings of 
Government employees for compensation on behalf of private parties.'' 
Opinion of the Attorney General of the United States, Vol. 41, Op. No. 
4, 82 USPQ 165 (Atty. Gen. 1949). Under the current statute, 
``[s]ection 203 bars services rendered for compensation solicited or 
received, but not those rendered without such compensation; section 205 
bars both kinds of services.'' Memorandum of Attorney General Robert F. 
Kennedy Regarding Conflict of Interest Provisions of Public Law 87-848, 
Feb 1, 1963, 28 F.R. 985. Accord, OGE Informal Advisory Letter 91 X 11, 
1991 WL 521202 (O.G.E.). Sections 203 and 205 apply to full-time and 
part-time employees.
    OGE Informal Advisory Letter 91 X 11, 1991 WL 521202 (O.G.E.) 
recognizes one exception. The prohibition does not apply if an 
executive branch employee is ``a special employee'' as defined in 18 
U.S.C. 202(a). The OGE Informal Advisory Letter also recognizes that 
the exception does not apply to a special Government employee for those 
particular matters involving specific parties in which the employee 
participated as a Government employee and, if the employee served in 
the department more than sixty days, to those matters pending before 
the department where he or she is employed. A special Government 
employee is one who is ``employed to perform * * * for a period not to 
exceed one hundred and thirty days during any period of three hundred 
and sixty five consecutive days, temporary duties either on a full-time 
or

[[Page 69452]]

intermittent basis * * * Status as a special Government employee is 
determined at the time of appointment.'' Section 202(a). The OGE 
Informal Advisory Letter also recognizes that individuals serving in 
the U.S. Military reserves as officers, are considered under the 
provisions of section 202(a) to be special Government employees unless 
they are called to active duty and serve for more than a specified 
threshold period. The OGE Informal Advisory Letter indicates that 
reservists in the enlisted ranks are not deemed subject to sections 203 
or 205 when called to active duty.
    In view of such provisions, the opinion of the Attorney General, 
and the OGE Informal Advisory Letter, the position of the Office would 
be that full-time and part-time U.S. Government employees other than 
special Government employees, may not solicit or accept private 
clients, or represent clients other than their agency before the 
Office. Accordingly, the Office of Enrollment and Discipline requires 
registered practitioners who are employed by the U.S. Government full-
time or part-time to list their Government addresses as their official 
addresses of record.
    Section 11.11 would continue the requirement under current Sec.  
10.11 that a registered practitioner notify OED of a change of address 
separately from any notice given in any patent applications.
    Paragraph (a) of Sec.  11.11, similarly to current Sec.  10.11(a), 
would provide for requiring practitioners to notify the OED Director of 
their postal address and telephone number for his or her business, as 
well as every change thereto. Additionally, it would require 
practitioners to notify the OED Director of the e-mail address for 
their business and every change to the e-mail address. Notice of the 
change of address or telephone number would have to be given within 
thirty days of the date of the change. Practitioners will be encouraged 
to provide their business e-mail address to facilitate the Office's 
ability to communicate with the practitioners. A practitioner who is an 
attorney in good standing with the bar of the highest court of one or 
more states would also be required to provide the OED Director with the 
state bar identification number associated with each membership. This 
will enable the OED Director to distinguish between individual 
attorneys having the same or similar names. Further, the section 
identifies the information that the OED Director will routinely publish 
on the roster about each registered practitioner recognized to practice 
before the Office in patent cases.
    Paragraph (b)(1) of Sec.  11.11 would provide for administrative 
suspension for failure to comply with the payment of the annual fee 
required by Sec.  11.8(d) or Sec. Sec.  11.12(a) and (e). The OED 
Director would mail a notice to the practitioner advising of 
noncompliance, demanding compliance within sixty days, and payment of a 
delinquency fee for each rule violated.
    Paragraph (b)(2) of Sec.  11.11 would provide that upon failure to 
comply with the directive within the allowed time, the practitioner 
would be notified in writing that the practitioner has been 
administratively suspended and may no longer practice before the Office 
in patent matters, or hold himself or herself out as being registered 
or recognized to practice before the Office in patent matters. The OED 
Director would publish notice of the administrative suspension in the 
Official Gazette. The administrative suspension would not relieve the 
delinquent attorney or agent of his or her annual responsibility to pay 
his or her dues to the USPTO Director.
    Paragraph (b)(4) of Sec.  11.11 would provide that an 
administratively suspended attorney or agent would be responsible both 
for paying his or her annual fee required by Sec.  11.8(d) and for 
completing the required continuing training programs.
    Paragraph (b)(6) of Sec.  11.11 would provide that administratively 
suspended practitioners cannot practice before the Office in patent 
cases while under administrative suspension.
    Paragraph (c) of Sec.  11.11 would provide for inactivation of a 
registered practitioner who becomes employed by the Office.
    Paragraph (c)(1) of Sec.  11.11 would provide that a registered 
practitioner, upon separating from the Office and seeking reactivation, 
must complete the required continuing training programs if the 
practitioner did not pass recertification tests required during the 
practitioner's employment at the Office and appropriate to 
practitioner's grade and position in the Office.
    Paragraph (d) of Sec.  11.11 would provide for voluntary 
inactivation of a registered practitioner. This section accommodates 
registered practitioners who are not active in representing clients 
before the USPTO, but still desire to maintain a recognized 
professional association with the USPTO. The USPTO will not inquire 
into reasons for seeking voluntary inactivation except that voluntary 
inactivation will be denied if the practitioner is delinquent on paying 
annual dues. Voluntary inactivation will not preclude the USPTO from 
inquiring or continuing to inquire into possible ethical violations by 
the practitioner. Reasons for seeking voluntary inactivation may 
include retirement, health condition of the practitioner (long-term 
illnesses), or a practitioner's decision to practice in another 
substantive area.
    Paragraph (d)(1) of Sec.  11.11 would provide that a registered 
practitioner may seek voluntary inactivation by filing a written 
request to be endorsed as inactive.
    Paragraph (d)(2) of Sec.  11.11 would provide that a registered 
practitioner whose status has been changed to a voluntary inactive 
status would be responsible both for paying his or her annual fee 
required by Sec.  11.8(d) for such status and for completing the 
required continuing legal education programs while in such status. For 
purposes of this section, the annual fee for practitioners in inactive 
status is 25% of the fee for practitioners in active status.
    Paragraph (d)(3) of Sec.  11.11 would provide that a registered 
practitioner in inactive status is still subject to investigation or 
discipline for ethical violations during the period of inactivation.
    Paragraph (d)(4) of Sec.  11.11 would provide that a registered 
practitioner in arrears in dues or under administrative suspension for 
fee delinquency is ineligible to seek or enter into voluntary inactive 
status.
    Paragraph (d)(5) of Sec.  11.11 would provide that practitioners 
may not practice before the Office in patent cases while under inactive 
status.
    Paragraph (d)(6) of Sec.  11.11 would provide for restoration to 
active status of a registered practitioner who is in voluntary inactive 
status in accordance with Sec.  11.11(d). The Office provides options 
for practitioners who are no longer attorneys in good standing at their 
state bars but seek active status before the USPTO. Since practitioners 
before the USPTO need not be attorneys, a practitioner who has ceased 
to be a member in good standing of the highest court of a state for 
reasons other than ethical grounds may still seek to represent clients 
before the USPTO as a patent agent. Generally, attorneys are held to 
the standard of ethics in effect at their respective state bars. It 
becomes necessary to ensure that attorneys who are no longer members in 
good standing in a state bar explain the basis of such status when 
seeking restoration to active status before the USPTO. This section 
seeks to avoid the possibility that an attorney under a disciplinary 
proceeding or investigation at his or her state bar does not circumvent 
the obligation of informing the USPTO of

[[Page 69453]]

any matter that detrimentally impacts the determination of the 
practitioner's moral character.
    Any registered practitioner who is voluntarily inactivated pursuant 
to paragraph (d) of this section and who is an attorney may comply with 
the submission of information and material pertaining to the 
practitioner's moral character on proof of being a member in good 
standing with the highest court of a state. If the registered 
practitioner is no longer a member in good standing at the state bar, 
the practitioner must submit a signed declaration or affidavit 
explaining the circumstances surrounding their status at the state bar 
to the satisfaction of the OED Director that the reason for not being a 
member in good standing is not predicated on moral character. If the 
statement submitted is not to the satisfaction of the OED Director, the 
OED Director may decline restoration to active status on grounds of 
present lack of good moral character as set forth in Sec.  11.7. Any 
adverse decision by the OED Director is reviewable under Sec.  11.2. 
This does not preclude the practitioner from submitting additional 
evidence to establish the requisite moral character.
    Paragraph (e) of Sec.  11.11 would allow for resignation from 
practice before the Office of a registered practitioner who is neither 
under investigation under Sec.  11.22 for a possible violation of the 
Rules of Professional Conduct, nor subject to an adverse probable cause 
determination by a panel of the Committee on Discipline under Sec.  
11.23(b).
    Paragraph (f) of Sec.  11.11 would establish a procedure for 
reinstatement of a registered practitioner who has been 
administratively suspended pursuant to Sec.  11.11(b) or Sec.  
11.12(e), or who has resigned pursuant to Sec.  11.11(d).
    Section 11.12 would introduce mandatory continuing education for 
practitioners licensed to practice in patent cases before the Office. 
Such continuing education would apply to all licensed practitioners, 
whether they are registered patent attorneys, patent agents, or persons 
granted limited recognition. With two exceptions, all licensed 
practitioners are currently required to pass the registration 
examination. The registration examination may be waived for former 
patent examiners who actively served for at least four years in the 
patent examining corps and separate from the Office without an legal 
competence issue. Also, by long-standing custom, foreign patent agents 
who are registered under 37 CFR 10.7(c) on the basis of reciprocity 
with their foreign patent office have not been required to take and 
pass the registration examination. A licensed practitioner has been 
qualified through passing the registration examination. However, there 
is no requirement for periodic education to ensure that individuals 
maintain an expected level of competency in law, regulations, practices 
and procedures.
    It is in the interest of the practitioner community, applicants and 
the efficiency of the USPTO that practitioners keep their legal 
knowledge current. In recent years there have been numerous changes to 
the Patent Act, and in the regulations governing the filing and 
prosecution of patent applications. After significant court decisions 
and other events, the Office has issued memoranda describing new 
procedures and policy to be followed by Office employees as well as 
registered practitioners and those granted limited recognition. Though 
licensed practitioners are ethically prohibited from handling a legal 
matter without preparation adequate in the circumstances, this has not 
prevented members of the public from criticizing the competence of 
practitioners. Such lapses can reflect adversely on the integrity of 
the intellectual property system, as well as on the reliability of 
practitioners as a whole. The ethics rules have not compelled 
practitioners to promptly become and remain familiar with changes to 
patent application practices and procedures.
    A licensed practitioner's lack of currency with practice 
requirements impedes the efficiency and quality of the application 
process under current conditions. Within the USPTO, there is an office 
devoted to handling petitions, often by practitioners, seeking relief 
from some ``unintentional'' events, as well as ``unavoidable'' events, 
such as occur when new procedures and policies are not followed. Some 
petitions seeking relief from mistakes reflect an unawareness of the 
requirements of new rules, practices and procedures, as well as some 
well-established practices and procedures. This continual need for 
rework is an obstacle to improving pendency. Other mistakes may not be 
similarly curable.
    The trend toward continuing legal education requirements by state 
bars is not sufficient to maintain the currency of knowledge among 
licensed practitioners regarding patent practice before the Office. 
First, while some attorneys may be required to take continuing legal 
education as a matter of state bar requirements, such requirements do 
not apply to patent agents and are not specific to obtaining additional 
patent education. The Office's licensing of patent agents who are not 
attorneys effectively preempts the states' restrictions on practicing 
law without a license. Thus it is incumbent on the Office to assure 
that agents are required to be kept up-to-date on legal matters in ways 
equivalent to the requirements now imposed by forty state bars on 
lawyers. The foreign patent agents also are not subject to the 
restrictions and continuing legal education requirements imposed by 
states. Similarly, although one state is now considering special 
certification for patent lawyers, its proposal defers to the Office's 
authority over licensing patent practitioners and thus imposes no 
certification requirements based on Office practice. None of the states 
mandating continuing legal education (CLE) require registered patent 
attorneys to receive updated education in new Office practices and 
procedures.
    To assure the public that licensed practitioners maintain their 
competence and proficiency, the Office proposes to deliver required 
education materials via the Internet and otherwise to practitioners and 
to certify their scrutiny of those materials through an interactive 
computer-delivered examination. Alternatively, the Office would accept 
mandatory continuing education given by a pre-approved sponsor. Section 
11.12 would apply only to licensed practitioners, not to inventors 
applying pro se. The availability of the education, however, will make 
the patent process more accessible to inventors, while helping the 
quality and efficiency of prosecution.
    Delivery of mandatory continuing education by the USPTO meets the 
need for equal availability of the program worldwide. The Office can 
provide this service at a minimal cost because we are building on a 
program we conduct for examiners. The Office is going to seek CLE 
credits for the program from state bars requiring attorneys to meet 
certain continuing legal education requirements. However, the Office is 
not sure all state bars with the requirements will recognize the 
mandatory education program offered by the Office. Therefore, the 
Office believes that regular continuing education sponsors should be 
able to offer the program content in alternative formats that are 
acceptable to state bars.
    It is anticipated that the Office would publish on the Internet 
written material followed by self-administered questions and answers 
that would be linked to Office publications on Office's Web site that 
would provide the answers. The publications would include new rules, 
policy announcements, rule packages, question and answer memoranda, the

[[Page 69454]]

Manual of Patent Examining Procedure, narrative guidelines, and other 
narratives containing new information the Office wants to deliver. The 
function of the program would be to assure that licensed practitioners, 
like patent examiners, have read and absorbed key content of these 
publications. The USPTO is planning to institute similar education of 
patent examiners.
    Unlike traditional continuing legal education courses that must be 
taken at particular times and places, because the self-assessment 
update program would be available on the Internet, it could be taken 
when and where the practitioner selects. Paper copies of the questions 
and narratives would be made available to practitioners lacking access 
to the Internet. A licensed practitioner could take the program and 
complete it, or take part and store it until he or she has more time to 
complete it. The practitioner also would have the option to take it 
repeatedly and as often as desired until all questions are correctly 
answered. It would not be necessary for practitioners to take courses, 
such as continuing legal education courses offered by other parties, in 
order to complete the program.
    A practitioner would have the option of obtaining the education 
from a USPTO pre-approved sponsor. The practitioner would be 
responsible for paying any fees charged by the sponsor for the program. 
The sponsor or the practitioner taking the program from the sponsor 
would be responsible for obtaining continuing legal education credit 
from a state bar. The Office would not seek such credit for the sponsor 
or the practitioner taking a course given by a sponsor.
    The self-assessment program offered by the Office would include 
multiple choice and/or true/false questions. Narrative material, such 
as a guideline or policy announcement, would either precede the 
question, or links to the narrative material would be embedded in the 
questions. To complete a required education program, all questions must 
be correctly answered. A licensed practitioner would have to complete 
the program within the dates set by the USPTO Director. Taking a USPTO 
pre-approved course that is offered by a USPTO pre-approved sponsor 
providing comparable education also could complete the required 
education program. Licensed practitioners failing to complete the 
program would be administratively suspended from practice before the 
Office. The results from the USPTO Web-based program would be instantly 
available, and electronically recorded in the Office.
    The education program requirement would not be onerous, since the 
self-assessment program would be self-administered and available on the 
Internet, and it would either contain or be linked to USPTO 
publications on its Web site that would provide the answers. Currently, 
forty states provide for or require continuing legal education for 
attorneys licensed in their respective jurisdictions. The Office will 
be communicating with the appropriate authorities in each of the states 
in an effort to have them accept the USPTO's education program as 
meeting their respective continuing legal education requirements.
    Paragraph (c) of Sec.  11.12 would provide four exemptions from 
completing the education. One exemption would be for newly registered 
practitioners during the fiscal year he or she is first registered. 
Another exemption would be for a practitioner who becomes inactive as a 
result of being employed by the Office if, while so employed, the 
practitioner passes all recertification programs required for patent 
examiners during the practitioner's employment at the Office and 
appropriate to practitioner's grade and position in the Office.
    The same paragraph permits completion of the education to be 
delayed for a specified time for ``good cause shown.'' The cause may be 
shown in conjunction with illness, hospitalization, or such other 
matters as determined by the OED Director. Good cause would not be 
shown by representations that a medical condition makes attendance only 
difficult or uncomfortable, that a practitioner is outside the United 
States, that a practitioner finds it most difficult to complete the 
program, that the practitioner obtains education by observing other 
practitioners, or that a practitioner is in advanced years.
    Paragraph (d)(1) of Sec.  11.12 would provide that persons seeking 
reinstatement after they resigned pursuant to Sec.  11.11(d), after 
their names were transferred to disability inactive status, or upon 
seeking reinstatement after being suspended or excluded must furnish 
the OED Director with proof that he or she has completed all education 
programs required by the USPTO Director during the fiscal year(s) the 
practitioner was inactive, suspended or excluded, or during the 
practitioner's resignation. Thereafter, the person would have the same 
education program requirement as other licensed practitioners.
    Section 11.13 would provide procedures for sponsors to be approved 
as offering a pre-approved mandatory continuing education program, as 
well as for practitioners receiving credit for completing the pre-
approved program offered by either the USPTO or by a USPTO pre-approved 
sponsor. Practitioners will not receive credit for completion of the 
required education by attending a program that is not pre-approved by 
the OED Director as providing the legal, procedural and policy subject 
matter identified by the USPTO Director as being required to satisfy 
the mandatory continuing education program.
    Section 11.14, like current Sec.  10.14, continues to set forth who 
may practice before the Office in trademark and other non-patent 
matters. The present procedure under Sec.  10.14 would continue, except 
that the definition of attorney is changed. See the discussion above 
under Sec.  11.1. The change in the definition of attorney is believed 
necessary in view of 5 U.S.C. 500(b), and the fact that an individual 
may be an attorney in good standing in a state even though suspended or 
disbarred in another state. In other non-patent matters, e.g., 
disciplinary proceedings or inter partes or ex partes patent or 
trademark matters, a party could be represented only by an attorney.
    Paragraph (a) of Sec.  11.14(a) would contain a sentence making 
clear that registration as a patent attorney does not entitle an 
individual to practice before the Office in trademark matters. On 
occasion in the past, an attorney suspended or disbarred by the highest 
court of a state continued to practice before the Office in trademark 
matters. The sentence would provide such individuals with notice that 
they may not rely on registration as a patent attorney to practice in 
trademark matters.
    Paragraph (f) of Sec.  11.14 would provide that an individual 
seeking reciprocal recognition under paragraph (c) must apply in 
writing for the recognition, and pay the fees required by Sec. Sec.  
1.21(a)(1)(i) and (a)(6) of this subchapter.
    Section 11.15 would provide that practitioners (individuals who 
practice before the Office in patent, trademark, or other non-patent 
matters) could be suspended or excluded. The USPTO Director has 
authority under 35 U.S.C. 32 to suspend or exclude practitioners 
registered to practice before the Office in patent matters. See also 5 
U.S.C. 500(e). The USPTO Director also has authority to suspend or 
exclude practitioners who practice before the Office in trademark and 
other non-patent matters. See 5 U.S.C. 500(d)(2); Herman v. Dulles, 205 
F.2d 715 (D.C. Cir. 1953); and Attorney General's

[[Page 69455]]

Manual on the Administrative Procedure Act, pp.65-66 (1947). See also 
Harary v. Blumenthal, 555 F.2d 1113 (2nd Cir. 1977) (certified public 
accountant disbarred from practice before IRS), and Koden v. U.S. 
Department of Justice, 564 F.2d 228 (7th Cir 1977) (suspending attorney 
from practice before INS).
    Section 11.18, with one exception, would continue the provisions 
under current Sec.  10.18 regarding who must sign documents filed in 
the Office, and responsibility for the content of documents filed in 
the Office. The exception is that the phrase ``claims and other'' found 
in Sec.  10.18(b)(2)(ii) would not be carried forward into paragraph 
(b)(2)(ii) of Sec.  11.18. The deletion is necessary inasmuch as Sec.  
11.18 is derived from Rule 11 of the Federal Rules of Civil Procedure, 
wherein a ``claim'' is not a patent claim. However, in the predecessor 
rule, Sec.  10.18, it is possible to construe ``claim'' to be a patent 
claim. Clearly, a patent claim is not the same claim under the Rule 11 
of the Federal Rules of Civil Procedure. The practice under Sec.  11.18 
is otherwise similar to that under Rule 11 of the Federal Rules of 
Civil Procedure.

Investigations and Disciplinary Proceedings

    Section 11.19 would introduce a definition of the disciplinary 
jurisdiction of the Office.
    Paragraph (a) of Sec.  11.19 would provide that practitioners 
registered or recognized to practice before the Office, practitioners 
administratively suspended under Sec.  11.11(b), practitioners 
disciplined by suspension or exclusion, as well as pro se patent 
applicants and any individual appearing in trademark or other non-
patent case in his or her own behalf, are subject to the disciplinary 
jurisdiction of the Office. The inclusion of administratively suspended 
practitioners, and practitioners disciplined by suspension or exclusion 
would permit the Office to take further action where appropriate or 
necessary. Thus, for example, a suspended practitioner continuing to 
practice before the Office despite suspension may be further 
disciplined for unauthorized practice before the Office. Similarly, a 
practitioner continuing to practice before the Office despite removal 
of his or her name from the register should not be able to use 
administrative suspension as a shield to avoid discipline for 
misconduct occurring before or after removal of the practitioner's name 
from the register.
    Paragraph (b) of Sec.  11.19 would recognize the authority of state 
bars to discipline practitioners for misconduct involving or related to 
practice before the Office in any matter.
    Paragraph (c)(1) of Sec.  11.19 would set out grounds for 
disciplining a practitioner, or a suspended or excluded practitioner. 
Grounds would include conviction of a crime; discipline imposed in 
another jurisdiction; failure to comply with any order of a Court, the 
USPTO Director, or OED Director; or failure to respond to a written 
inquiry from a Court, the USPTO Director, or OED Director in the course 
of a disciplinary investigation or proceeding without asserting, in 
writing, the grounds for refusing to do so.
    Paragraph (c)(2) of Sec.  11.19 would set out grounds for 
disciplining a pro se applicant. Grounds include violation of 
Sec. Sec.  11.303(a)(1), 11.304, 11.305(a), and 11.804. Pro se 
litigants in United States District Courts are subject to Rule 11 of 
the Federal Rules of Civil Procedure, which imposes sanctions for 
filing baseless or frivolous lawsuits wherein the pleadings are not 
well grounded in fact or in law, or in a good faith argument for 
extension, modification, or reversal of existing law, and had an 
improper purpose. By extension, comparable conduct before the Office 
would be subject to disciplinary action by the Office.
    Paragraph (d) of Sec.  11.19 would continue essentially the same 
procedure as current Sec.  10.130(b) for handling petitions to 
disqualify a practitioner in ex parte or inter partes matters in the 
Office on a case-by-case basis. See SEC v. Chenery Corp., 332 U.S. 194, 
203 (1974).
    Paragraph (e) of Sec.  11.19 would make clear that the Office can 
refer unauthorized practice allegations and convictions to the 
jurisdiction(s) where the act(s) occur. This can apply to unregistered 
individuals, including unregistered attorneys practicing before the 
Office in patent matters by ghostwriting applications and/or replies to 
Office actions to be signed and filed by inventors.
    Section 11.20 would continue the present procedure in current Sec.  
10.130(a) under which the USPTO Director imposes discipline. The 
statutory framework for practice before the Office in patent, 
trademark, and other non-patent law vests responsibility for discipline 
in the USPTO Director. 35 U.S.C. 2(b)(2)(c). The discipline imposed on 
practitioners includes reprimand, suspension or exclusion. Paragraph 
(a)(1) is based on 35 U.S.C. 32 and 5 U.S.C. 500(d). The term 
``exclude,'' rather than ``disbar,'' is used throughout the proposed 
rules because ``exclude'' is used in 35 U.S.C. 32. Probation has been 
employed by OED pursuant to 35 U.S.C. 32 and 5 U.S.C. 500(d). See 
Weiffenbach v. Lett, 1101 Official Gazette 59 (April 25, 1989).
    Paragraph (a)(2) of Sec.  11.20 would permit sanctions to be 
imposed on patent applicants representing themselves or other 
applicants under Sec.  1.31, a person or party representing themselves 
or others in a patent case pursuant to Sec.  1.33(b)(4), or by a 
representative appearing in a trademark application pursuant to Sec.  
11.14(e). A variety of sanctions can be imposed on pro se litigants 
subject to Rule 11 of the Federal Rules of Civil Procedure. The 
sanctions usually imposed serve two main purposes: deterrence and 
compensation. Subsidiary goals include punishing prosecution/litigation 
abuse, and facilitating case management. See Navarro-Ayala v. Nunez, 
968 F.2d 1421 (C.A. Puerto Rico 1992). Sanctions that may be imposed on 
pro se litigants may also be imposed on pro se applicants, including 
prohibition from commencing additional or continuing other proceedings 
before the Office without being represented by a licensed attorney or 
by leave of the Commissioner for Patents or the Commissioner for 
Trademarks to proceed pro se. Accord, Schramek v. Jones, 161 F.R.D. 119 
(D.C. Fla. 1995); and Ketchum v. Cruz, 775 F. Supp. 1399 (D. Colo. 
1991), aff'd, 961 F.2d 916 (1991).
    Paragraph (b) of Sec.  11.20 would provide for imposition of 
conditions with discipline as a condition of probation, to protect the 
public.
    Section 11.21 would provide for issuing warnings alerting the 
practitioner that he or she could be subject to disciplinary action if 
corrective action is not taken to bring his or her conduct into 
conformity with the Office's Rules of Professional Conduct. 5 U.S.C. 
558(c) authorizes warnings.
    Section 11.22 would continue the OED Director's authority under 
current Sec.  10.131(a) to investigate possible violations of Rules of 
Professional Conduct by practitioners. See Sec.  11.2(b)(2).
    Paragraph (b) of Sec.  11.22 would continue the provisions of 
current Sec.  10.131(a), under which a nonpractitioner can report to 
the OED Director a possible violation of Rules of Professional Conduct. 
The OED Director would be enabled to require that the report be 
presented in the form of an affidavit.
    Paragraph (c) of Sec.  11.22 would provide for initiating 
investigations upon complaint or information received from any source. 
The investigation would not be abated because of neglect by the 
complainant to prosecute a

[[Page 69456]]

charge, or in view of settlement, compromise, or restitution.
    Paragraph (d) of Sec.  11.22 would require a complaint alleging 
misconduct by a practitioner to be in writing and contain a brief 
statement of the facts upon which the complaint is based.
    Paragraph (e) of Sec.  11.22 would provide for screening 
complaints. Complaints would be docketed only if they are not unfounded 
on their face, if they contain allegations of conduct, that, if true, 
would constitute a violation of the practitioner's oath or the Rules of 
Professional Conduct that would merit discipline, and are within the 
jurisdiction of the Office.
    Paragraph (f) of Sec.  11.22 would provide for notifying the 
complainant when a complaint is not docketed, and giving the reasons 
therefor. This rule would provide that the OED Director's decision is 
not subject to review.
    Paragraph (g) of Sec.  11.22 would permit complainants to be 
advised of the docketing of the complaint.
    Paragraph (h) of Sec.  11.22 would provide for notifying a 
practitioner in writing when a formal investigation in the 
practitioner's conduct has been initiated.
    Paragraph (i) of Sec.  11.22 would provide for a practitioner to 
have 30 days to respond to an inquiry, and to allow only one 30-day 
extension of time. The response must set forth practitioner's position 
with respect to allegations contained in the complaint.
    Paragraph (j) of Sec.  11.22 would provide that the OED Director 
could request information from the complainant, practitioner, or any 
other person who may reasonably be expected to have information needed 
concerning the practitioner. A number of state bars were surveyed to 
identify whether a common practice existed on handling the issue of 
contacting a non-complaining client. Many states have no specific 
procedural rules but can and do contact the non-complaining client 
without the safeguards contained in proposed paragraph (j) of this 
section. For example, one state bar has no rule but contacts the 
attorney first, and then attempts to call the non-complaining client 
before the attorney communicates with the client. Another has no rule 
and does in fact contact the non-complaining client without first 
informing the attorney.
    In the absence of a consistent practice among the various state 
bars, the USPTO is placing formal safeguards through Section 11.22(j). 
We recognize that such contact can create the possibility of conflicts 
with the attorney. At the same time, there are cases in which 
disciplinary action is most necessary and the non-complaining client is 
unknowingly being victimized. The USPTO needs the discretion to 
undertake the appropriate investigation without necessarily going 
through the attorney. The USPTO wants to be careful to balance the 
competing interests with the creation of a formal procedure that 
provides appropriate safeguards to the attorney-client relationship.
    Paragraph (j) of Sec.  11.22 would provide that the OED Director 
could request information from the complainant, practitioner, or any 
other person who may reasonably be expected to have information needed 
concerning the practitioner. The attorney will be contacted first 
unless there is good cause to believe that such contact would interfere 
with the gathering of relevant material from the client. If the OED 
Director believes that there is good cause for such interference or the 
attorney declines to consent, the OED Director will provide a showing 
including reasons to the USPTO Director for review and clearance.
    Paragraph (k) of Sec.  11.22 would permit the OED Director to 
examine financial books and records maintained by a practitioner 
reflecting his or her practice before the Office.
    Paragraph (l) of Sec.  11.22 would provide that a practitioner's 
failure to respond or evasive response to the OED Director's written 
inquiries during an investigation would permit the Committee on 
Discipline to enter an appropriate finding of probable cause.
    Paragraph (m) of Sec.  11.22 would allow the OED Director to 
dispose of investigations by closure without issuance of a warning, 
institution of formal charges, diversion, or exclusion on consent.
    Paragraph (n) of Sec.  11.22 would permit the OED Director to 
terminate an investigation and decline to refer a matter to the 
Committee on Discipline in a variety of circumstances, including where 
the complaint is unfounded, the matter is not within the jurisdiction 
of the Office, the questioned or alleged conduct does not constitute 
misconduct, the available evidence shows that the practitioner did not 
engage or willfully engage in the questioned or alleged misconduct, 
that there is no credible evidence to support any allegation of 
misconduct by the practitioner, or that the available evidence could 
not reasonably be expected to support any allegation of misconduct 
under a ``clear and convincing'' evidentiary standard.
    Section 11.23 would continue the practice of current Sec.  10.4 of 
providing for a Committee on Discipline.
    Paragraph (a) of Sec.  11.23 would describe the organization of the 
Committee on Discipline. The Committee would have two or more 
subcommittees having three members each to facilitate processing of the 
matters the OED Director refers to the Committee. The Committee would 
designate a Contact Member to review and approve or suggest 
modifications of recommendations by OED Director for dismissals, and 
warnings.
    Paragraph (b) of Sec.  11.23 would set forth the powers and duties 
of the Committee on Discipline. The Committee would designate a Contact 
Member to review, and approve or suggest modifications of, 
recommendations by OED Director of dismissals and warnings. The 
Committee would prepare and forward its own probable cause 
recommendations to the OED Director.
    Paragraph (c) of Sec.  11.23 would provide that no discovery could 
be had of deliberations of the Committee on Discipline. See Morgan v. 
United States, 313 U.S. 409, 422 (1941). Accordingly, under the 
proposed rules, a disciplinary proceeding would resolve whether a 
practitioner has or has not committed violations alleged in the 
complaint that the Committee authorized to be filed under Sec.  11.26.
    Section 11.24 would provide for interim suspension and discipline 
based on reciprocal discipline of a practitioner suspended or 
disbarred, or who resigns in lieu of discipline. The USPTO Director, 
upon being provided with a certified copy of a disciplinary court's 
record disciplining a practitioner, would suspend the practitioner in 
the interim. The practitioner would be provided with a forty-day period 
to show cause why reciprocal discipline should not be imposed. A 
certified copy of the record of suspension, disbarment, or resignation 
shall be conclusive evidence of the commission of professional 
misconduct. The practitioner may challenge imposition of reciprocal 
discipline on four specific grounds, i.e., lack of notice or 
opportunity to be heard, infirmity of proof of establishing misconduct, 
grave injustice resulting from imposing the same discipline, or the 
misconduct warrants imposition of a different discipline.
    Section 11.25 would provide for interim suspension and discipline 
of a practitioner convicted of committing a serious crime or other 
crime coupled with confinement or commitment to imprisonment. The USPTO 
Director, upon being provided with a certified copy of a court's record 
or docket entry, would suspend the practitioner from

[[Page 69457]]

practice before the Office in the interim until the conviction becomes 
final. Practitioners would be disqualified from practicing before the 
Office if confined or committed to prison. Upon the conviction becoming 
final, the practitioner would be provided with a forty-day period to 
show cause why discipline should not be imposed. A practitioner 
convicted of a serious crime involving moral turpitude per se, or a 
crime wherein the underlying conduct involved moral turpitude, would be 
excluded. The practitioner may challenge imposition of discipline if 
material facts are in dispute.
    Section 11.26 would provide a program for diversion from a 
disciplinary proceeding.
    Paragraph (a) of Sec.  11.26 would permit the OED Director to offer 
diversion to a practitioner under investigation, subject to 
limitations.
    Paragraph (b) of Sec.  11.26 would make diversion available in 
cases of alleged minor misconduct. However, diversion would not be 
available when the alleged misconduct resulted in, or is likely to 
result in, prejudice to a client or another person; discipline was 
previously imposed, a warning previously issued, or diversion was 
previously offered and accepted (unless exceptional circumstances 
justify waiver of this limitation); the alleged misconduct involves 
fraud, dishonesty, deceit, misappropriation or conversion of client 
funds or other things of value, or misrepresentation; or the alleged 
misconduct constitutes a criminal offense under applicable law.
    Paragraph (c) of Sec.  11.26 would set forth procedures for 
diversion.
    Paragraph (d) of Sec.  11.26 would provide a diversion program that 
is designed to remedy the alleged misconduct of the practitioner. It 
may include participation in formal courses of education sponsored by a 
voluntary bar organization, a law school, or another organization; 
completion of an individualized program of instruction specified in the 
agreement or supervised by another entity; or any other arrangement 
agreed to by the parties which is designed to improve the ability of 
the practitioner or other individual to practice in accordance with the 
Rules of Professional Conduct.
    Paragraph (e) of Sec.  11.26 would close an investigation if the 
practitioner completes the diversion program. If the practitioner does 
not successfully complete the diversion program, the OED Director would 
be able to take such other action as is authorized and prescribed under 
section 11.32.
    Section 11.27 would provide for excluding a practitioner on 
consent. This would be the sole manner for settling any disciplinary 
matter.
    Paragraph (a) of Sec.  11.27 would provide that a practitioner 
under investigation or the subject of a pending proceeding may consent 
to exclusion, but only by delivering to the OED Director an affidavit 
declaring the practitioner's consent to exclusion. The affidavit would 
state, inter alia, that the consent is freely and voluntarily rendered, 
that the practitioner is aware that there is currently pending an 
investigation into, or a proceeding involving, allegations of 
misconduct, the nature of which shall be specifically set forth in the 
affidavit; that the practitioner acknowledges that the material facts 
upon which the allegations of misconduct are predicated are true; and 
that the practitioner submits the consent because the practitioner 
knows that if disciplinary proceedings based on the alleged misconduct 
were brought, the practitioner could not successfully defend against 
them.
    Paragraph (b) of Sec.  11.27 would provide that the affidavit and 
any related papers are submitted to the USPTO Director for review and 
approval. The USPTO Director would enter an order excluding the 
practitioner on consent.
    Paragraph (c) of Sec.  11.27 would provide for informing the 
hearing officer of receipt of the required affidavit, and for transfer 
of the disciplinary proceeding to the USPTO Director.
    Paragraph (d) of Sec.  11.27 would proscribe a practitioner 
excluded by consent from petitioning for reinstatement for five years, 
require compliance with the provisions of Sec.  11.58, and require 
reinstatement be sought in accordance with Sec.  11.60.
    Section 11.28 would provide procedures for addressing four broad 
groups of practitioners. The first are those judicially declared to be 
``mentally incompetent'' or ``involuntarily committed to a mental 
hospital.'' The second are disabled practitioners who are mentally or 
physically infirm. The third are practitioners addicted to any chemical 
or having a psychological dependency upon intoxicants or drugs. The 
fourth are incapacitated practitioners who suffer from a disability or 
addiction of such nature as to cause the practitioner to be unfit to be 
entrusted with professional matters.
    Definitions of ``mentally incompetent,'' ``involuntarily committed 
to a mental hospital,'' ``disability,'' ``addiction,'' 
``incapacitated,'' ``significant evidence of rehabilitation,'' and 
``disability matter'' would be found in Sec.  11.1.
    Paragraph (a) of Sec.  11.28 would set forth the scope and purpose 
of disability proceedings. Such proceedings would determine whether a 
practitioner has been judicially declared to be mentally incompetent or 
involuntarily committed to a mental hospital as an inpatient; whether 
the hearing officer should apply to a court for an order requiring a 
practitioner to submit to an examination by qualified medical experts 
regarding an alleged disability or addiction; whether a practitioner is 
incapacitated from continuing to practice before the Office by reason 
of disability or addiction; whether the OED Director should hold in 
abeyance a disciplinary investigation, or a hearing officer should hold 
in abeyance a disciplinary proceeding, because of a practitioner's 
alleged disability or addiction; whether a practitioner (having 
previously been suspended solely on the basis of a judicial order 
declaring the practitioner to be mentally incompetent) has subsequently 
been judicially declared to be competent and is therefore entitled to 
have the prior suspension terminated; whether a practitioner (having 
previously been suspended solely on the basis of an involuntary 
commitment to a mental hospital as an inpatient) has subsequently been 
discharged from inpatient status and is therefore entitled to have the 
prior order of suspension terminated; and whether a practitioner 
(having previously acknowledged or having been found by the hearing 
officer or USPTO Director to have suffered from a prior disability or 
addiction sufficient to warrant suspension (whether or not any 
suspension has yet occurred)), has recovered to the extent, and for the 
period of time, sufficient to justify the conclusion that the 
practitioner is fit to resume or continue the practice before the 
Office and/or is fit to defend the alleged charges against the 
practitioner in a disciplinary investigation or disciplinary proceeding 
that has been held in abeyance pending such recovery.
    Paragraph (b) of Sec.  11.28 would provide that the hearing officer 
may authorize the OED Director to apply to a court of competent 
jurisdiction for an order appointing counsel to represent the 
practitioner whose disability or addiction is under consideration if it 
appears to the hearing officer's satisfaction, based on the 
practitioner's motion or notice of the OED Director, that otherwise the 
practitioner will appear pro se and may therefore be without adequate 
representation.

[[Page 69458]]

    Paragraph (c) of Sec.  11.28 would provide that all proceedings 
addressing disability matters before the hearing officer be initiated 
by motion. The motion would contain a brief statement of all material 
facts, a proposed petition and/or recommendation to be filed with the 
USPTO Director if the movant's request is granted by the hearing 
officer, and affidavits, medical reports, official records, or other 
documents setting forth or establishing any of the material facts on 
which the movant is relying. The non-moving party's reply would set 
forth all objections, an admission, denial or lack of knowledge with 
respect to each of the material facts in the movant's papers, and 
affidavits, medical reports, official records, or other documents 
setting forth facts on which the non-moving party intends to rely for 
purposes of disputing or denying any material fact set forth in the 
movant's papers.
    Paragraph (d) of Sec.  11.28 would provide a procedure addressing a 
practitioner judicially declared to be mentally incompetent or 
involuntarily committed to a mental hospital as an inpatient. The 
procedure would include action by the OED Director (paragraph (1)).
    Paragraph (e) of Sec.  11.28 would provide a procedure to address 
circumstances in which a practitioner is incapacitated from continuing 
to practice before the Office because of disability or addiction, but 
is nonetheless likely to offer or attempt to perform legal services 
while so incapacitated. The procedure would include action by the OED 
Director (paragraph (1)), and the required evidence (paragraph (2)).
    Paragraph (f) of Sec.  11.28 would locate in one paragraph the 
provision for further proceedings for paragraphs (d) and (e). The 
procedure would include action by the Committee on Discipline Panel 
(paragraph (1)), action by OED Director (paragraph (2)), response by 
Practitioner (paragraph (3)), initial decision by the hearing officer 
(paragraph (4)), appeal to the USPTO Director (paragraph (5)), and 
action by USPTO Director (paragraph (6)).
    Paragraph (g) of Sec.  11.28 would provide a procedure for the 
circumstance in which a practitioner files a motion requesting the 
hearing officer to enter an order holding a disciplinary proceeding in 
abeyance based on the contention that the practitioner is suffering 
from a disability or addiction that makes it impossible for the 
practitioner to adequately defend the charges in the disciplinary 
proceeding. The procedure would include the practitioner's motion 
(paragraph (1)), and disposition of the practitioner's motion 
(paragraph (2)).
    Paragraph (h) of Sec.  11.28 would provide a procedure for deciding 
allegations that a practitioner has recovered from a prior disability. 
This paragraph would apply to proceedings for reactivation as well as 
for resumption of disciplinary matters held in abeyance. Paragraphs (2) 
and (3) would pertain to reactivation, whereas paragraph (4) would 
apply to resumption of disciplinary proceedings held in abeyance. The 
regulation would limit an incapacitated practitioner suspended under 
this section to applying for reinstatement once a year, unless the 
USPTO Director orders shorter intervals. The practitioner may be 
required to undergo examination by a qualified medical expert, selected 
by the OED Director, at the practitioner's expense. The practitioner 
also may be required to establish his or her competence and learning in 
the law.
    Paragraph (i) of Sec.  11.28 would provide that a hearing officer 
may order resumption of a disciplinary proceeding against a 
practitioner upon determining that the practitioner is not 
incapacitated from defending himself or herself, or not incapacitated 
from practicing before the Office.
    Section 11.32, like current Sec.  10.132, would provide a procedure 
for initiating a disciplinary proceeding and for referring the 
proceeding to a hearing officer. Under paragraph (2) of Sec.  11.32, 
when the OED Director is of the opinion that there is probable cause to 
believe that an imperative rule of the USPTO Rules of Professional 
Conduct has been violated, the OED Director would determine whether a 
practitioner should be given notice under 5 U.S.C. 558(c). Section 
558(c) provides, in part, ``Except in cases of willfulness or those in 
which public health, interest, or safety requires otherwise, the 
withdrawal, suspension, revocation, or annulment of a license is lawful 
only if, before the institution of agency proceedings therefor, the 
licensee has been given (1) notice by the agency in writing of the 
facts or conduct which may warrant the action; and (2) opportunity to 
demonstrate or achieve compliance with all lawful requirements.'' The 
provisions of 5 U.S.C. 558(c) would apply to a registered patent 
practitioner who is investigated for possible misconduct occurring in 
connection with either a patent or a trademark matter. However, the 
provisions of 5 U.S.C. 558(c) do not apply to disciplinary proceedings 
in the Office involving practitioners who are not registered inasmuch 
as the Office does not issue a license to such practitioners. 
Nevertheless, OED customarily provides unregistered practitioners with 
the opportunity to demonstrate or achieve compliance with all lawful 
requirements. Where a practitioner willfully violates an imperative 
rule of the USPTO Rules of Professional Conduct, notice and opportunity 
to demonstrate compliance would not be required. In certain cases, the 
public interest may require suspension of an incompetent practitioner 
or a practitioner who has been found guilty of a crime and committed to 
the custody of the Attorney General or has otherwise been incarcerated.
    After giving notice under 5 U.S.C. 558(c), or if no notice is 
needed, the OED Director would call a meeting of a panel of the 
Committee on Discipline. The Committee panel consisting of three USPTO 
employees, would determine by a majority vote whether there is probable 
cause to believe that a practitioner has violated an Office Rule of 
Professional Conduct. If the Committee determines that a violation has 
occurred, the OED Director would institute a disciplinary proceeding by 
filing a ``complaint'' under Sec.  11.34. Upon the filing of a 
complaint, an attorney under the Office of General Counsel designated 
to represent the OED Director would prosecute the disciplinary 
proceeding on behalf of the OED Director. Upon the filing of the 
complaint, the disciplinary proceedings will be referred to a hearing 
officer.
    A hearing officer would be used in disciplinary proceedings brought 
under 35 U.S.C. 32. The hearing officer may be an employee of the 
Office appointed by the USPTO Director, or an Administrative Law Judge 
(ALJ). The use of a hearing officer is not required to suspend or 
exclude a practitioner in trademark or other non-patent matters. See 
Herman v. Dulles, 205 F.2d 715 (D.C. Cir. 1958). Nevertheless, a 
hearing officer is qualified to handle disciplinary proceedings. 
Accordingly, as a matter of policy the Office is and will continue to 
use ALJ's, and take the opportunity to use Office employees as hearing 
officers.
    Section 11.34, like current Sec.  10.134, would set out the 
requirements of a complaint. A complaint would be deemed sufficient if 
it fairly informs the respondent of any violation of an imperative rule 
of the USPTO Rules of Professional Conduct which form the basis of the 
disciplinary proceeding so that the respondent is able to answer. See 
In re Ruffalo, 390 U.S. 540 (1968).
    Section 11.35, like current Sec.  10.135, would provide alternative 
methods for serving a complaint. Service of complaints by certified or 
registered

[[Page 69459]]

mail is not always available, because receipts are returned signed by 
individuals other than the respondent. Moreover, the Office may have to 
resort to proving who signed a particular receipt. Accordingly, Sec.  
11.35 provides that service may be accomplished by handing the 
complaint to the respondent. When service is by hand delivery, the 
party serving the respondent would file an affidavit with the OED 
Director. An alternative method for serving the complaint is to mail 
the complaint first-class mail or ``Express Mail'' to the last known 
address of the respondent. Although the proposed rule being considered 
does not so specify, under this rule the OED Director would probably 
attempt to contact the respondent shortly after mailing to determine 
whether the complaint had been received. A third method of service 
would be any method mutually agreeable to the OED Director and a 
respondent.
    Paragraph (b) of Sec.  11.35 would provide that if a complaint is 
returned by the Postal Service, a second complaint would be mailed. If 
the second complaint is returned, the respondent would be served by 
appropriate notice published in the Official Gazette for two 
consecutive weeks. Any time for answering would run from the second 
publication of the notice.
    Section 11.36 would continue, in paragraphs (a) through (e), to 
provide the same procedure as in current Sec.  10.136 for answering a 
complaint. For instance, under paragraph (a), an answer would be due 
within thirty days unless extended for up to no more than thirty 
additional days by the hearing officer. Paragraph (f) would provide 
procedures for giving notice of intent to raise an alleged disability 
in mitigation of the sanction that may be imposed. The regulation also 
would provide for appointment of monitor(s), and for suspension of 
respondent if the monitor reports violation of any terms or conditions 
under which the respondent continued to practice.
    Section 11.37, like current Sec.  10.137, would provide that false 
statements in an answer could be made the basis of supplemental 
charges.
    Section 11.38, like current Sec.  10.138, would provide that on 
filing of an answer, a disciplinary proceeding would become a contested 
case within the meaning of 35 U.S.C. 24. Evidence obtained by a 
subpoena issued under 35 U.S.C. 24 would not be admissible in evidence 
or considered unless leave to proceed under 35 U.S.C. 24 is first 
obtained from the hearing officer. Ordinarily, a subpoena under 35 
U.S.C. 24 is needed when a witness will not voluntarily appear. Often, 
subpoenas are issued to be sure that a witness appears--particularly if 
both counsel and the hearing officer have to travel to hear the 
testimony of a witness. Approval by the hearing officer before a 
subpoena is issued is necessary. Initially, the hearing officer can 
determine whether the evidence is relevant and/or whether a third party 
should be subjected to the inconvenience of a subpoena. In this 
respect, if the hearing officer does not believe any proffered evidence 
is admissible, the hearing officer may refuse to permit any party to 
proceed under 35 U.S.C. 24. If a party nevertheless caused a subpoena 
to issue, a motion to quash the subpoena would lie in the District 
Court, which issued the subpoena. Moreover, evidence obtained by 
subpoena without leave of the hearing officer would not be admitted or 
considered in the disciplinary proceeding. The proposed rule would 
adopt the policy of Sheehan v. Doyle, 513 F.2d 895, 898, 185 USPQ 489, 
492 (1st Cir.), cert. denied, 423 U.S. 874 (1975), and Sheehan v. 
Doyle, 529 F.2d 38, 40, 188 USPQ 545, 546 (1st Cir.), cert. denied, 429 
U.S. 879 (1976), rehearing denied, 429 U.S. 987 (1976), while rejecting 
the policy announced in Brown v. Braddick, 595 F.2d 961, 967, 203 USPQ 
95, 101-102 (5th Cir. 1979).
    Section 11.39, like current Sec.  10.139, would provide for an ALJ 
to conduct disciplinary proceedings. Additionally, a hearing officer 
appointed under 35 U.S.C. 32 also would be able to conduct the 
proceedings. Paragraph (b) of Sec.  11.39 would set out the authority 
of the hearing officer.
    Paragraph (2) of Sec.  11.39(c) would provide for the hearing 
officer's ruling on motions. See also Sec.  11.43. It should be noted 
that, under Sec.  11.42(e), a hearing officer could require papers to 
be served by ``Express Mail.''
    Paragraph (4) of Sec.  11.39(c) would require the hearing officer 
to authorize the taking of depositions in lieu of personal appearance 
at a hearing. The hearing officer would have discretion to authorize 
the taking of depositions. If demeanor is an issue for a particular 
witness, the hearing officer could exercise discretion and deny a 
request to take a deposition in lieu of appearance. When the hearing 
officer would authorize a deposition, notice and taking of the 
deposition would be governed by Sec.  11.51(a).
    Paragraph (8) of Sec.  11.39(c) would provide for the hearing 
officer adopting procedures for the orderly disposition of disciplinary 
proceedings. For example, the hearing officer could require the parties 
to file not only a pre-hearing exchange setting out the names of 
witnesses to be called, a summary of their expected testimony, and 
copies of exhibits to be used in their respective cases-in-chief; but 
also a pre-hearing brief discussing any disputed legal and factual 
issues.
    Paragraph (d) of Sec.  11.39 would provide for the hearing officer 
exercising such control over the disciplinary proceeding as to normally 
issue an initial decision within nine months from the filing of the 
complaint. The hearing officer, however, could issue an initial 
decision after nine months if in his or her opinion there exists 
unusual circumstances that preclude issuance of the initial decision 
within the nine-month period. The purpose of this provision would be to 
put parties on notice that the hearing officer has authority to 
complete his or her work within nine months, and that parties should 
plan to meet any time schedules set by the hearing officer. This 
paragraph would be designed to minimize delays. It is expected that the 
hearing officer would, as in the past, consult with the parties in 
setting times, and the nine-month provision will not set an undue 
hardship on either party.
    Paragraphs (e) and (f) of Sec.  11.39 would preclude interlocutory 
appeal by the OED Director or respondent from an order of the hearing 
officer except under limited circumstances. Under paragraph (d), the 
hearing officer could permit interlocutory review of his or her order 
when the interlocutory order involves a controlling question of 
procedure or law as to which there is a substantial ground for a 
difference of opinion and an immediate decision by the USPTO Director 
may materially advance the ultimate termination of the disciplinary 
proceeding or in an extraordinary situation where justice requires 
review. The standard would be the same as that of 28 U.S.C. 1292(b). 
Proceedings before the hearing officer would not be stayed for an 
interlocutory appeal unless the hearing officer or USPTO Director 
grants a stay. Under this section, stays would be granted only in the 
most compelling circumstances. The parties filing appeals or requests 
for review of interlocutory orders would not render the hearing officer 
ineffective.
    Section 11.40, like current Sec.  10.140, would provide for 
representation of respondent and the OED Director.
    Section 11.41, like current Sec.  10.141, would provide for the 
filing of papers. Under paragraph (a), the certificate of mailing 
practice under 37 CFR 1.8 and 1.10 is not applicable in disciplinary 
proceedings. Paragraph (b) would provide that papers filed after the

[[Page 69460]]

complaint and prior to entry of an initial decision would be filed with 
the hearing officer. The hearing officer would designate the address to 
which he or she would want papers mailed. The hearing officer, however, 
could require that papers be hand-delivered to his or her office. All 
papers filed after the initial decision would be filed with the OED 
Director, who would transmit to the USPTO Director any paper requiring 
action by the USPTO Director.
    Section 11.42, like current Sec.  10.142, would provide for the 
method of serving papers in disciplinary proceedings.
    Section 11.43, like current Sec.  10.143, would provide for filing 
of motions. No motion could be filed unless supported by a written 
statement that the moving party conferred with the opposing party for 
the purpose of resolving the issues raised by the motion and that 
agreement has not been reached. If the parties resolve the issue raised 
in the motion prior to a decision on the motion by the hearing officer, 
the parties would be required to notify the hearing officer.
    Section 11.44, like current Sec.  10.144, would provide for 
hearings before the hearing officer. Hearings would be transcribed and 
a copy of the transcript would be provided to the OED Director and the 
respondent at the expense of the Office. If the respondent fails to 
appear at the hearing, the hearing officer may proceed with the hearing 
in the absence of the respondent. Under paragraph (c), a hearing 
normally would not be open to the public. The need for closed hearings 
in matters involving patent applications is occasioned in part by 35 
U.S.C. 122. Apart from the Office obligation to keep information 
concerning patent applications confidential, until a practitioner is 
disciplined, it is believed that opening hearings to the public would 
constitute a clearly unwarranted invasion of privacy. The closure of 
the hearing, however, would not preclude the OED Director and 
respondent from approaching witnesses and providing those witnesses 
with sufficient information to determine whether they can give relevant 
information.
    Section 11.45, like current Sec.  10.145, would provide a procedure 
for handling cases where there is variance between the allegations and 
in pleading and evidence. Any party would be given reasonable 
opportunity to meet any allegations in an amended complaint or answer. 
See In re Ruffalo, 390 U.S. 544 (1968). The section is modified to 
provide that the matter need not be referred back to the Committee on 
Discipline to amend the complaint.
    Section 11.49, like current Sec.  10.149, would provide that the 
OED Director would have the burden of proving a violation of the 
imperative USPTO Rules of Professional Conduct by clear and convincing 
evidence. The Respondent would have the burden of proving any 
affirmative defense by clear and convincing evidence.
    It is reported that the USPTO is among a minority of agencies that 
apply the clear and convincing standard in their disciplinary 
proceedings. Agencies are not required to apply that standard to their 
disciplinary proceedings under the Administrative Procedure Act. See 
Steadman v. SEC, 450 U.S. 91 (1981); and Checkosky v. SEC, 23 F.3d 452, 
475 (D.C. Cir. 1994). See also Rules Governing Misconduct by Attorneys 
or Party Representative, Final Rule, 61 Fed. Register 65323, 65328-29 
(Dec 12, 1996). Comments are invited whether the USPTO should continue 
to use the ``clear and convincing'' standard, or adopt the 
preponderance of evidence standard established by the Administrative 
Procedure Act.
    Section 11.50, like current Sec.  10.150, would provide rules 
governing evidence. Under paragraph (a) of Sec.  11.50, the rules of 
evidence prevailing in courts of law and equity would not be 
controlling. This provision is based on 5 U.S.C. 556(d), which 
provides, in part, that ``[a]ny oral or documentary evidence may be 
received, but the agency as a matter of policy shall provide for the 
exclusion of irrelevant, immaterial, or unduly repetitious evidence.'' 
Thus, evidence in a disciplinary proceeding is not controlled by the 
Federal Rules of Evidence. See Klinestiver v. Drug Enforcement 
Administration, 606 F.2d 1128, 1130 (D.C. Cir. 1979). While most 
evidence admissible under the Federal Rules of Evidence would be 
admissible in a disciplinary proceeding, there is evidence that is not 
admissible under the Federal Rules of Evidence, but which may be 
admissible in a disciplinary proceeding. Paragraph (b) of Sec.  11.50 
would provide for admission into evidence of depositions taken under 
Sec.  11.51. Any deposition under Sec.  11.51(a) would have prior 
approval of the hearing officer. A deposition under Sec.  11.51(b) 
would not have prior approval, but may or may not be admissible. 
Admissibility of the latter deposition is within the discretion of the 
hearing officer. Under paragraph (c) of Sec.  11.50, Office documents, 
records, and papers would not have to be certified to be admissible. 
Under paragraph (e) of Sec.  11.50, objections to evidence would be in 
short form, all objections and rulings would be part of the record, and 
no exception to the ruling would be necessary to preserve the rights of 
the parties.
    Section 11.51, like current Sec.  10.151, would provide for 
depositions. Under paragraph (a) of Sec.  11.51, either the OED 
Director or the respondent may move for leave to take a deposition of a 
witness in lieu of personal appearance of the witness before the 
hearing officer. The hearing officer is authorized to grant leave to 
take the deposition upon a showing of good cause. The taking of 
depositions under paragraph (a) would not be for the purpose of 
discovery. A deposition would be taken only when it is not possible or 
desirable for the hearing officer to hear the witness in person. Under 
paragraph (b) of Sec.  11.51, the OED Director and the respondent could 
agree to take a deposition. Often depositions are desirable during 
settlement. The testimony of a witness may be ``locked-in'' through a 
deposition. The Office has settled several disciplinary matters in the 
past. However, under paragraph (b) of Sec.  11.51, the parties could 
not take depositions for use at a hearing without prior approval of the 
hearing officer. This provision is necessary for the hearing officer to 
maintain control over the proceeding.
    Section 11.52, like current Sec.  10.152, would provide for limited 
discovery. There are cases holding that discovery is not necessary in 
disciplinary proceedings. See In re Murray, 362 N.E.2d 128 (Ind. 1977); 
and In re Wireman, 367 N.E.2d 1368 (Ind. 1977). However, the USPTO 
proposes to limit some discovery while seeking to avoid delays 
frequently experienced in the discovery permitted by the Federal Rules 
of Civil Procedure. Under Sec.  11.52, the hearing officer could 
require parties to file and serve, prior to any hearing, a pre-hearing 
statement listing all proposed exhibits to be used in connection with 
the party's case-in-chief, a list of proposed witnesses, the identity 
of any Government employee who investigated the case, and copies of 
memoranda reflecting respondent's own statements. This provision is 
patterned after Silverman v. Commodities Futures Trading Commission, 
549 F.2d 28 (7th Cir. 1977). The hearing officer could determine when 
discovery authorized by paragraph (a) of Sec.  11.52 should be made.
    Paragraphs (a) and (b) of Sec.  11.52 would limit discovery to 
exhibits that a party intends to use as part of his or her case-in-
chief. Exhibits not used in a party's case-in-chief, but which might be 
used to impeach or cross-examine the other party's witnesses, would not 
have to be produced. If a document were to

[[Page 69461]]

be used both in a case-in-chief and to impeach, it would have to be 
produced.
    Paragraph (4) of Sec.  11.52(e) would provide for identifying any 
Government witness who investigated the matter. Respondent could then 
call the Government witness. Paragraph (5) of Sec.  11.52 would provide 
for producing copies of any statement made by the respondent.
    Section 11.53, like current Sec.  10.153, would afford the parties 
a reasonable opportunity to submit proposed findings and conclusions, 
and a post-hearing memorandum. See 5 U.S.C. 557(c).
    Section 11.54, like current Sec.  10.154, would provide for the 
hearing officer to file an ``initial decision.'' It would be expected 
that the hearing officer would make appropriate reference to the 
administrative record in explaining an initial decision. See, e.g., 
Food Marketing Institute v. Interstate Commerce Commission, 587 F.2d 
1285, 1292, n.20 (D.C. Cir. 1978). In the absence of an appeal to the 
USPTO Director under Sec.  11.55, the decision of the hearing officer 
would become the final decision in the disciplinary proceeding. See 5 
U.S.C. 557(b).
    Paragraph (b) of 11.54 would require the hearing officer to explain 
the reason(s) for any penalty. Four factors would guide the hearing 
officer and the USPTO Director in setting and approving penalties. The 
factors are the public interest, the seriousness of the violation of 
the imperative USPTO Rules of Professional Conduct, the deterrent 
effects deemed necessary, and the integrity of the bar. These factors 
are derived from numerous cases, including Silverman v. Commodities 
Futures Trading Commission, 562 F.2d 432, 439 (7th Cir. 1977); and In 
re Merritt, 363 N.E.2d 961, 971 (Ind. 1977). See also Florida Bar v. 
Murrell, 74 So.2d 221 (Fla. 1954). Under the proposed rules, a sanction 
would be a matter within the discretion of the hearing officer, with 
ultimate discretion in the USPTO Director. The discipline in each 
disciplinary case would be tailored for the individual case. See In re 
Wines, 660 P.2d 454 (Ariz. 1983). Manifestly, absolute uniformity or 
perfection would not be expected. Id. Likewise, relitigation of 
penalties imposed in prior cases would not be permitted. Id.
    Section 11.55, like current Sec.  10.155, would provide for an 
appeal from an initial decision of the hearing officer to the USPTO 
Director. Under paragraph (a) of Sec.  11.55, any appeal would have to 
be taken within thirty days after the initial decision of the hearing 
officer. A cross-appeal would have to be filed fourteen days after the 
date of service of the appeal or thirty days after the initial 
decision, whichever is later. Under paragraph (c) of Sec.  11.55, the 
USPTO Director may order reopening of a disciplinary proceeding in 
accordance with the principles that govern the granting of new trials 
based on newly discovered evidence that could not have been discovered 
by due diligence. Under paragraph (d) of Sec.  11.55, if an appeal is 
not taken, the initial decision of the hearing officer would become the 
decision of the USPTO Director. See Sec.  11.54(a).
    Section 11.56, like current Sec.  10.156, would provide for a 
decision by the USPTO Director. The USPTO Director could affirm, 
reverse, or modify an initial decision of a hearing officer, or remand 
the proceeding to the hearing officer for such further proceedings as 
the USPTO Director may deem appropriate. Under paragraph (c) of Sec.  
11.56, a respondent could make a single request for reconsideration or 
modification.
    Section 11.57, like current Sec.  10.157, would set out how 
judicial review could be obtained from a final decision of the USPTO 
Director. Judicial review must occur in the United States District 
Court for the District of Columbia in accordance with 35 U.S.C. 32, and 
Local Rule LCvR 83.7 of the United States District Court for the 
District of Columbia.
    Section 11.58, like current Sec.  11.158, would set out conditions 
imposed on a practitioner suspended or excluded from the practice of 
law before the Office. Paragraph (a) of Sec.  11.58 would make clear 
that a practitioner suspended or excluded under Sec.  11.56 will not be 
automatically reinstated. For example, a suspended or excluded 
practitioner would be required, inter alia, to comply with the 
provisions of Sec. Sec.  11.12 and 11.60 to be reinstated.
    Paragraph (b) of Sec.  11.58 sets out what a suspended or excluded 
practitioner would be required to do. Paragraph (1) of Sec.  11.58(b) 
would require the practitioner take a number of actions within twenty 
days after the date of entry of the order of suspension or exclusion. 
The actions include filing notices of withdrawal in pending patent and 
trademark applications, reexamination and interference proceedings, and 
every other matter pending before the Office within twenty days after 
the entry of the order. The practitioner would be required to notify 
affiliated bars, and all clients having business before the Office, of 
the discipline imposed and inability to act; notify practitioners for 
all opposing parties having business before the Office; deliver to all 
clients having business before the Office any papers or other property 
to which the clients are entitled; and refund any part of any fees paid 
in advance and unearned. A practitioner also would be required to 
remove from any telephone, legal, or other directory any advertisement, 
statement, or representation which would reasonably suggest that the 
practitioner is authorized to or does practice before the Office.
    Paragraph (2) of Sec.  11.58(b) would require the practitioner 
within 30 days after entry of the order of exclusion or suspension to 
file with the OED Director an affidavit certifying that the 
practitioner has fully complied with the provisions of the order, and 
with the Rules of Professional Conduct. Appended to the affidavit would 
be documents showing compliance with the suspension or exclusion order. 
The documents would include a copy of each form of notice, the names 
and addressees of the clients, practitioners, courts, and agencies to 
which notices were sent, and all return receipts or returned mail 
received up to the date of the affidavit. Also appended would be a 
schedule of all accounts where the practitioner holds or held as of the 
entry date of the order any client, trust, or fiduciary funds regarding 
practice before the Office, proof of the proper distribution of the 
client, trust and fiduciary funds; a list of all jurisdictions to which 
the practitioner is admitted to practice, and the steps taken to remove 
any advertisement or representation suggesting that the practitioner is 
authorized to or does practice before the Office.
    Paragraph (c) of Sec.  11.58 would require that an order of 
exclusion or suspension be effective immediately after entry except as 
provided in Sec. Sec.  11.24, 11.25, and 11.28, where the order would 
be effective immediately. The excluded or suspended practitioner, after 
entry of the order, would not accept any new retainer regarding 
immediate, pending, or prospective business before the Office, or 
engage as a practitioner for another in any new case or legal matter 
regarding practice before the Office. However, the practitioner would 
be granted limited recognition for thirty days to conclude other work 
on behalf of a client on any matters that were pending before the 
Office on the date of entry. If such work cannot be concluded, the 
practitioner would have to so advise the client so that the client 
could make other arrangements.
    Paragraph (d) of Sec.  11.58 would provide for an excluded or 
suspended practitioner to keep and maintain records of the various 
steps taken under this section, so that in any subsequent

[[Page 69462]]

proceeding, proof of compliance with this section and with the 
exclusion or suspension order will be available. Proof of compliance 
will be required as a condition precedent to reinstatement. These 
provisions were derived from District of Columbia Appellate Rule XI, 
section 14.
    Paragraph (e) of Sec.  11.58, like Sec.  10.158(c), would provide 
conditions under which a suspended or excluded practitioner could aid 
another practitioner in the practice of law before the Office. These 
provisions were derived from the same cases considered when current 
Sec.  10.158(c) was proposed, including In re Christianson, 215 N.W. 2d 
920 (N.D. 1974); In re Hawkins, 503 P.2d 95 (Wash. 1972); Florida Bar 
v. Thomson, 354 So.2d 3000 (Fla. 1975); In re Kraus, 670 P.2d 1012 
(Ore. 1983); In re Easler, 272 S.E.2d 32 (S.C. 1980); Crawford v. State 
Bar of California, 7 Cal. Rptr. 746 (Cal. 1960); and Ohio State Bar 
Ass'n. v. Hart, 375 N.E.2d 1246 (Ohio 1978). Like a suspended or 
disbarred attorney, who ``is not the same as a layman,'' In re 
Christianson, 215 N.W.2d at 925, the same would obtain for a 
practitioner suspended or excluded from practice before the Office. 
Thus, while a suspended or excluded practitioner would be permitted to 
be employed by a practitioner, the suspended or excluded practitioner 
would have to be a salaried employee of the practitioner for whom he or 
she works and could not share profits from practice before the Office. 
A suspended or excluded practitioner could not communicate directly 
with clients, render legal advice, or meet with witnesses regarding 
prospective or immediate business before the Office. A suspended or 
excluded practitioner could research the law, write patent or trademark 
applications (provided he or she did not interview clients or 
witnesses, the practitioner reviewed the application, and the 
practitioner signed the papers filed in the Office), or conduct patent 
or trademark searches. The provisions of Sec.  11.58 are considered 
necessary if suspension or exclusion is to have any significance.
    Paragraph (f) of Sec.  11.58, like current Sec.  10.158(d), would 
proscribe reinstatement of a suspended or excluded practitioner who has 
acted as paralegal or performed other services assisting another 
practitioner before the Office, unless an affidavit is filed explaining 
the nature of all paralegal and other services performed, and showing 
that the suspended or excluded practitioner complied with the 
provisions of this section and the imperative USPTO Rules of 
Professional Conduct.
    Comment is invited whether the USPTO should delete the provisions 
of Sec.  10.58(c) and (d), and not adopt proposed paragraphs (e) and 
(f) of Sec.  11.58. Permitting the suspended or excluded practitioner 
to aid another practitioner places at least some suspended or excluded 
practitioners in conflict with state laws or court orders. For example, 
a number of states' disciplinary jurisdictions prohibit suspended or 
excluded attorneys from acting as paralegals. Also, permitting a 
suspended or excluded practitioner to aid another practitioner provides 
the former with an opportunity to continue serving the same clients 
from whose cases the practitioner was required to withdraw. This can be 
not only confusing for the clients, but also provides the suspended or 
excluded practitioner with an opportunity to maintain some appearance 
of a continued practice. Further, the USPTO is and will continue to 
reciprocally discipline attorneys suspended or disbarred by state 
disciplinary authorities. Permitting the practitioner reciprocally 
disciplined by the USPTO to engage in conduct proscribed by state laws 
or court orders, such as aiding a practitioner by preparing patent or 
trademark applications, leads to conflicting circumstances. The same 
conflicts can arise if a state disciplines an attorney following 
discipline imposed by the USPTO. Accordingly, the USPTO wishes to 
consider comments favoring or disagreeing with such a change to the 
current practice.
    Section 11.59, like current Sec.  10.159, would provide for notice 
of suspension or exclusion. Under paragraph (a) of Sec.  11.59, upon 
issuance of an unfavorable final decision, the OED Director would give 
appropriate notice to employees of the Office, United States courts, 
the National Discipline Data Bank maintained by the American Bar 
Association Standing Committee on Professional Discipline and the 
appropriate authorities of any State in which a suspended or excluded 
practitioner is known to be a member of the bar. If a practitioner is 
registered under Sec.  11.6(c), the OED Director would also notify the 
patent office of the country where the practitioner resides. Under 
paragraph (b) of Sec.  11.59, the OED Director would publish an 
appropriate notice in the Official Gazette and the Office Web site. 
Under paragraph (c) of Sec.  11.59, the OED Director would maintain 
records that would be available to the public concerning disciplinary 
proceedings. The files of most disciplinary proceedings resulting in 
imposition of a public reprimand, suspension, or exclusion are 
presently available to the public for inspection in the Office of 
Enrollment and Discipline. Public availability would continue under the 
proposed rules being considered subject to the removal of any 
information required by law to be maintained in confidence or secrecy. 
Under paragraph (e) of Sec.  11.59, the order of exclusion when a 
practitioner is excluded on consent would be accessible, but the 
affidavit under paragraph (a) of Sec.  11.27 would not be accessible 
except upon order of the USPTO Director or on consent of the 
practitioner.
    Section 11.60, like current Sec.  10.160, would provide for a 
petition for reinstatement. Under paragraph (a) of Sec.  11.60 an 
excluded or suspended practitioner would not be permitted to resume 
practice of patent, trademark, or other non-patent law before the 
Office until reinstated by order of the OED Director or the USPTO 
Director. An excluded practitioner not otherwise ineligible for 
reinstatement may not apply for reinstatement until the expiration of 
at least five years from the effective date of the exclusion. Under 
paragraph (b) of Sec.  11.60, a practitioner suspended indefinitely 
because of disability may seek reinstatement, but reinstatement would 
not be ordered except on a showing by clear and convincing evidence 
that the disability has ended, that the practitioner has complied with 
Sec.  11.12, and that the practitioner is fit to resume the practice of 
law.
    Paragraph (c) of Sec.  11.60, like current Sec. Sec.  10.160(a) and 
(d), would proscribe a suspended practitioner from being eligible for 
reinstatement until a period of the time equal to the period of 
suspension elapses following compliance with Sec.  11.58, and an 
excluded practitioner would not be eligible for reinstatement until 
five years elapses following compliance with Sec.  11.58.
    Paragraph (d) of Sec.  11.60 would require a petition for 
reinstatement to include proof of rehabilitation. If the practitioner 
is not eligible for reinstatement apart from rehabilitation, or the 
petition is insufficient or defective on its face, the OED Director may 
dismiss the petition. Otherwise the OED Director would consider a 
petitioner's attempted showing of rehabilitation. The practitioner 
would have the burden of proof by clear and convincing evidence. The 
proof would establish that the practitioner has the moral character 
qualifications, competency, and learning in law required under Sec.  
11.7 for readmission, and that resumption of practice before

[[Page 69463]]

the Office would not be detrimental to the administration of justice, 
or subversive to the public interest.
    Paragraph (e) of Sec.  11.60 would provide that if the petitioner 
is found fit to resume practice before the Office, the OED Director 
will order reinstatement, which may be conditioned upon the making of 
partial or complete restitution to persons harmed by the misconduct 
that led to the suspension or exclusion, upon the payment of all or 
part of the costs of the disciplinary and reinstatement proceedings, or 
any combination thereof.
    Paragraph (f) of Sec.  11.60 would provide that if the petitioner 
is unfit to resume practice before the Office, the petitioner is 
provided an opportunity to show cause in writing why the petition 
should not be denied. If unpersuaded by the showing, the petition would 
be denied. The suspended or excluded practitioner may be required to 
take and pass an examination under Sec.  11.7(b), ethics courses, and/
or the Multistate Professional Responsibility Examination.
    Paragraph (g) of Sec.  11.60 would proscribe filing a further 
petition for reinstatement if the petition is denied until the 
expiration of at least one year following the denial unless the order 
of denial provides otherwise.
    Paragraph (h) of Sec.  11.60, like Sec.  10.160(e), would open to 
the public proceedings on any petition for reinstatement.
    Section 11.61 would have savings clauses.
    Section 11.62 would express a policy that if a practitioner dies, 
disappears, or is suspended for incapacity or disability, and there is 
no partner, associate, or other responsible practitioner capable of 
conducting the practitioner's affairs, a court of competent 
jurisdiction may appoint a registered practitioner to make appropriate 
disposition of any patent application files. All other matters would be 
handled in accordance with the laws of the local jurisdiction.

Rules of Professional Conduct

    The following comments contain several references to invention 
promotion companies (invention promoters). At the outset, the Office 
wishes to make clear that neither the current Disciplinary Rules nor 
the proposed Rules of Professional Conduct prohibit a practitioner from 
associating with an invention promoter. Moreover, neither the current 
Disciplinary Rules nor the proposed Rules of Professional Conduct 
prevent a practitioner from having an arrangement with an invention 
promoter, or from providing professional services in compliance with 
the rules. However, practitioners having arrangements with invention 
promoters face the same scrutiny that attorneys having arrangements 
with non-lawyer parties that market legal service (marketers) have 
faced. The arrangements with promoters have faced intense scrutiny 
throughout the country by ethics committees, courts, and disciplinary 
authorities. Decisions and opinions in other jurisdictions hold the 
arrangements unethical on a variety of bases. Practitioners should 
carefully examine their participation in any arrangement of this sort 
with a promoter.
    There is reasonable cause to scrutinize the arrangements with 
invention promoters. For more than two decades, the Federal Trade 
Commission (FTC) has investigated, and absent a settlement, has sought 
injunctive and other equitable relief against invention promoters for 
violations of Sec.  5 of the Federal Trade Commission Act, 15 U.S.C. 
45. The FTC has investigated whether or alleged that in one manner or 
another a promoter has engaged in unfair or deceptive acts or 
practices, in or affecting commerce, with customers who contracted with 
the promoter for invention development services. See Raymond Lee 
Organization, Inc., 92 F.T.C. 489 (1978), aff'd sub nom. Raymond Lee v. 
FTC, 679 F.2d 905 (D.C. Cir. 1980); FTC v. Invention Submission Corp., 
1991-1 Trade Cases Sec.  69,338, 1991 WL 47104 (D.D.C 1991); FTC v. 
American Institute for Research and Development, 219 B.R. 639 (D Mass. 
1998), modified sub nom. FTC v. American Inventors Corporation, 1996 WL 
641642 (D. Mass 1996); and FTC v. National Invention Services, Inc., 
1997 WL 718492 (D.N.J. 1997). Each promoter offered the services of a 
registered patent attorney. A patent attorney associated with one 
promoter was indicted on five counts of conspiracy to commit mail fraud 
and mail fraud, and a warrant for his arrest was issued in 1999 by the 
U.S. Postal Inspection Service. Inasmuch as equitable relief was 
obtained in each instance, it would be appropriate for the Rules of 
Professional Conduct to address the conduct that practitioners must 
address upon agreeing to accept referrals from promoters.
    Section 11.100 would provide guidance for interpreting the Office 
Rules of Professional Conduct. In interpreting these Rules, the 
specific would control the general in the sense that any rule that 
specifically addresses conduct would control the disposition of matters 
and the outcome of such matters would not turn upon the application of 
a more general rule that arguably also applies to the conduct in 
question. In a number of instances, there are specific rules that 
address specific types of conduct. The rule of interpretation expressed 
here is meant to make it clear that the general rule does not supplant, 
amend, enlarge, or extend the specific rule. So, for instance, the 
general terms of proposed rule 11.103 are not intended to govern 
conflicts of interest, which are particularly discussed in proposed 
rules 11.107, 11.108, and 11.109. Thus, conduct that is proper under 
the specific conflict rules is not improper under the more general rule 
of proposed rule 11.103. Except where the principle of priority is 
applicable, however, compliance with one rule does not generally excuse 
compliance with other rules. Accordingly, once a practitioner has 
analyzed the ethical considerations under a given rule, the 
practitioner must generally extend the analysis to ensure compliance 
with all other applicable rules.
    Sections 11.100 through 11.901 are proposed to establish Office 
Rules of Professional Conduct. Presently, practitioners representing 
parties in patent, trademark and other non-patent matters are required 
to conform to the Code of Professional Responsibility set forth in 37 
CFR 10.20 through 10.112. The Office believes that it would be more 
desirable to bring the Office disciplinary rules into greater 
conformity with the Rules of Professional Conduct followed by a 
majority of the states. Such conformity would provide not only 
consistency in practicing law before the Office as well as in the 
states, but also a body of precedent already developed in the states 
having ethics opinions and disciplinary results based on the Model 
Rules of Professional Conduct.
    The proposed Office Rules of Professional Conduct, in large part, 
follow the Model Rules of Professional Conduct of the American Bar 
Association. The concordance between the rules is based on two factors. 
First, many registered patent attorneys are members of bars that have 
adopted the Model Rules or a modified version thereof. Accordingly, 
they already would be subject to substantially the same Model Rules for 
conduct in connection with their practice. Rule 8.5. Second, adopting 
USPTO Rules of Professional Conduct that follow, in many respects, the 
Model Rules of Professional Conduct adopted in more than 40 
jurisdictions, facilitates both compliance with the rules, and the 
ability of practitioners to move between the employment by the Office, 
other

[[Page 69464]]

Government agencies, and the private sector.
    Several of the proposed Office Rules of Professional Conduct do not 
conform to the Model Rules of Professional Conduct of the American Bar 
Association. For example, the Rules of Professional Conduct of the Bar 
of the District of Columbia would be the source of proposed Sec. Sec.  
1.101(b), 11.102(f), 11.104(c), 11.105(e)(2)-(4), 11.106(a)(2)-(3), 
11.106(d)-(g), 11.601, and 11.701(b)(1)-(4) and (c). The Rules of 
Professional Responsibility of the Virginia State Bar would be the 
source of proposed Sec. Sec.  11.115(a), and (c) through (g). The 
source of the provisions in proposed Sec.  1.806 are the Court Rules of 
the New York Appellate Division, Second Department. Other proposed 
rules, addressing relations with invention promoters, would be 
original. Still other proposed rules would conform to disciplinary 
rules previously adopted by the USPTO or other Federal agencies, such 
as Sec.  11.804(h). It is necessary to diverge from the Model Rules of 
Professional Conduct of the American Bar Association. The Rules of 
Professional Conduct of the District of Columbia tend to address 
responsibilities of Government attorneys in greater depth than the 
Model Rules of Professional Conduct of the American Bar Association, 
particularly in connection with ``revolving door'' issues. This is 
appropriate inasmuch as numerous registered practitioners are employees 
of the United States Government and are admitted to practice law in the 
District of Columbia. Upon practicing before the Office, they are 
subject to the USPTO Rules of Professional Conduct adopted by the 
Office, as well as the Rules of Professional Conduct of the Bar of the 
District of Columbia. A detailed concordance between the proposed rules 
and the divergent sources can be found in Table 3, ``Principal Source 
of Sections 11.100 through 11.806,'' infra. Further, unlike the Model 
Rules that require consent of a client following consultation, the 
proposed rules would require the client give informed consent in 
writing after full disclosure. Compare, for example, Model Rule 1.6(a) 
with proposed rule 11.106(a). This departure is intended to provide 
both the client and practitioner with certainty regarding 
communication, and a stronger record.
    Section 11.100 would provide interpretive guidance of the proposed 
Rules of Professional Conduct. Some of the Rules are imperatives, cast 
in the terms ``shall'' or ``shall not.'' These define proper conduct 
for purposes of professional discipline. Other Rules, generally cast in 
the term ``may,'' are permissive and define areas under the Rules in 
which the practitioner has professional discretion. No disciplinary 
action should be taken when the practitioner chooses not to act, or 
acts, within the bounds of such discretion. Inasmuch as the Rules of 
Professional Conduct in many jurisdictions have the same or similar 
Rules, it is appropriate for the Office to adopt the same standards 
where such acts or conduct, in practice before the Office, would not be 
inconsistent with the protection of the public interest.
    Other Rules define the nature of relationships between the 
practitioner and others. The latter Rules are partly obligatory and 
disciplinary, and partly constitutive and descriptive in that they 
define a lawyer's professional role.
    Inasmuch as the rules pertain to practice before the Office, they 
do not address criminal or domestic relations practices addressed in 
the Rules of Professional Conduct adopted by the states. A practitioner 
engaging in criminal or domestic relations practice is subject to the 
state ethics rules. A practitioner disqualified from practicing 
elsewhere for misconduct should not be trusted or permitted to practice 
before the Office. Misconduct elsewhere should also be misconduct for 
purposes of practicing before the Office. See Sec. Sec.  11.25 and 
11.803(f)(1). Practitioners have been disciplined by the Office for 
conduct arising in the practice of law other than intellectual 
property. For example, the USPTO Director excluded an attorney after 
disbarment in Virginia following a criminal conviction for conduct 
arising from representing a client in a domestic relations matter. See 
In re Hodgson, 1023 Off. Gaz. 13 (Oct. 12, 1982).
    Section 11.101 would continue the present practice of 37 CFR 
10.77(a) and (b) requiring a practitioner to provide competent 
representation to a client. Paragraph (a) of Sec.  11.101 would specify 
that such competence requires the legal knowledge, skill, thoroughness 
and preparation reasonably necessary for the representation. The Office 
has disciplined practitioners lacking competence. See In re Wyden, 973 
Off. Gaz. 40 (Aug. 22 1978) (suspending agent for general incompetence 
in handling patent applications); and In re Paley, 961 Off. Gaz. 48 
(Aug. 30, 1977) (suspending agent for improper handling of 
application).
    Legal knowledge and skill. In determining whether a practitioner 
employs the requisite knowledge and skill in a particular matter, 
relevant factors include the relative complexity and specialized nature 
of the matter, the practitioner's general experience, the 
practitioner's training and experience in the field in question, the 
preparation and study the practitioner is able to give the matter, and 
whether it is feasible to refer the matter to, or associate or consult 
with, a practitioner of established competence in the field in 
question. In some instances, the required proficiency is that of a 
general patent practitioner. Expertise in a particular field of patent 
law, science, engineering, or technology may be required in some 
circumstances. One such circumstance would be where the practitioner, 
by representations made to the client, has led the client reasonably to 
expect a special level of expertise in the matter undertaken by the 
practitioner.
    A practitioner need not necessarily have special legal training or 
prior legal experience to handle legal problems of a type with which 
the practitioner is unfamiliar. However, basic training in scientific 
and technical matters is required for registration as a patent attorney 
or agent to provide a client with valuable service, advice and 
assistance in the presentation and prosecution of their patent 
applications before the Office. 35 U.S.C. 2(b)(2)(D). A newly admitted 
practitioner can be as competent as a practitioner with long 
experience. Some important legal skills, such as the analysis of 
precedent, the evaluation of evidence, and legal drafting, are required 
in all legal problems. Perhaps the most fundamental legal skill 
consists of determining what kind of legal problems a situation may 
involve, a skill that necessarily transcends any particular specialized 
knowledge. A practitioner can provide adequate representation in a 
wholly novel field through necessary study. Competent representation 
can also be provided through the association of a practitioner of 
established competence in the field in question.
    In an emergency a practitioner may give advice or assistance in a 
matter in which the practitioner does not have the skill ordinarily 
required where referral to or consultation or association with another 
practitioner would be impractical. Even in an emergency, however, 
assistance should be limited to that reasonably necessary in the 
circumstances, for ill-considered action under emergency conditions 
could jeopardize the client's interest.
    A practitioner may accept representation where the requisite level 
of competence can be achieved by reasonable preparation. A registered 
patent agent registered after January 1, 1957, who is not an attorney 
is not

[[Page 69465]]

authorized to, and cannot accept representation in trademark and other 
non-patent law. This applies as well to a practitioner who is appointed 
as counsel for an unrepresented person. See also Sec.  11.602.
    Thoroughness and preparation. Competent handling of a particular 
patent, trademark, or other non-patent matter includes inquiry into and 
analysis of the factual and legal elements of the problem, and use of 
methods and procedures meeting the standards of competent 
practitioners. It also includes adequate preparation, and continuing 
attention to the needs of the representation to assure that there is no 
neglect of such needs. The required attention and preparation are 
determined in part by what is at stake; like major litigation, complex 
transactions or inventions ordinarily require more elaborate treatment 
than matters of lesser consequence.
    Maintaining competence. To maintain the requisite knowledge and 
skill, a practitioner should engage in such continuing study and 
education as may be necessary to maintain competence, taking into 
account that the learning acquired through a practitioner's practical 
experience in actual representations may reduce or eliminate the need 
for special continuing study or education. If a system of peer review 
has been established, the practitioner should consider making use of it 
in appropriate circumstances.
    Paragraph (c) of Sec.  11.101 would define some, but not all, acts 
that would constitute violations of paragraphs (a) or (b) of this 
section. The USPTO believes that it would be helpful to practitioners 
if some specific prohibitions were set out in the rules. The 
prohibitions set out in paragraphs (1) through (8) of Sec.  11.101(c) 
represent violations that have occurred in the past or that the Office 
specifically seeks to prevent. The specific acts set out in paragraph 
(c) would not constitute a complete description of all acts in 
violation of paragraphs (a) or (b).
    Paragraph (1) of Sec.  11.101(c) would include as misconduct 
knowingly withholding from the Office information identifying a patent 
or patent application of another from which one or more claims have 
been copied. See Sec. Sec.  1.604(b) and 1.607(c) of this subpart.
    Section 11.102 would address the scope of representation. Both 
practitioner and client have authority and responsibility in the 
objectives and means of representation. The client has ultimate 
authority to determine the purposes to be served by legal 
representation, within the limits imposed by law and the practitioner's 
professional obligations. Within those limits, a client also has a 
right to consult with the practitioner about the means to be used in 
pursuing those objectives. At the same time, a practitioner is not 
required to pursue objectives or employ certain means simply because 
the client may wish that a practitioner do so. A clear distinction 
between objectives and means sometimes cannot be drawn, and in many 
cases the client-practitioner (including client-lawyer or client-agent) 
relationship partakes of a joint undertaking. In questions of means, 
the practitioner should assume responsibility for technical and legal 
tactical issues, but should defer to the client regarding such 
questions as the expense to be incurred and concern for third persons 
who might be adversely affected. Law defining a lawyer's scope of 
authority in litigation varies among jurisdictions.
    An agreement concerning the scope of representation must accord 
with the Rules of Professional Conduct and other law. Thus, the client 
may not be asked to agree to representation so limited in scope as to 
violate proposed Sec.  11.101, to surrender the client's right to 
terminate the practitioner's services, or the client's right to settle 
litigation that the practitioner might wish to continue.
    Unlike Rule 1.2(a) of the Model Rules of Professional Conduct, 
paragraph (a) of Sec.  11.102 would not address an attorney's duty in a 
criminal case to abide by the client's decision. Inasmuch as practice 
before the Office does not involve criminal proceedings, the portion of 
Model Rule 1.2(a) addressing a criminal case is not being proposed. 
Nevertheless, an attorney who practices both before the Office and in 
criminal cases would be subject to both the Office and State 
professional conduct rules. If, in the course of a criminal proceeding, 
the attorney violates the state's professional conduct rules and is 
disciplined by the state authorities, the attorney could be subject to 
discipline under the proposed rules. See Sec. Sec.  11.24 and 
11.803(f)(5).
    Paragraph (e) of Sec.  11.102 would continue a practitioner's 
responsibility to give an honest opinion about the actual consequences 
that appear likely to result from a client's conduct. The fact that a 
client uses advice in a course of action that is criminal or fraudulent 
does not, of itself, make a practitioner a party to the course of 
action. However, as in current Sec.  10.85(a)(8), a practitioner may 
not knowingly assist a client in criminal or fraudulent conduct. There 
is a critical distinction between presenting an analysis of legal 
aspects of questionable conduct, and recommending the means by which a 
crime or fraud might be committed with impunity.
    When the client's course of action has already begun and is 
continuing, the practitioner's responsibility is especially delicate. 
The practitioner is not permitted to reveal the client's wrongdoing, 
except where permitted by proposed Sec.  11.102(g) and proposed Sec.  
11.106. Moreover, the practitioner is required to avoid furthering the 
purpose, for example, by suggesting how it might be concealed. A 
practitioner may not continue assisting a client in conduct that the 
practitioner originally supposes is legally proper, but then discovers 
is criminal or fraudulent. Withdrawal from the representation, 
therefore, may be required.
    Where the client is a fiduciary, the practitioner may be charged 
with special obligations in dealings with a beneficiary.
    Paragraph (e) of Sec.  11.102 would apply whether or not the 
defrauded party is a party to the transaction. Hence, a practitioner 
should not participate in a sham transaction; for example, a 
transaction to effectuate fraudulent acquisition of a patent or 
trademark. Paragraph (e) would not preclude undertaking a defense 
incident to a general retainer for legal services to a lawful 
enterprise. The last clause of paragraph (e) recognizes that 
determining the validity or interpretation of a statute or regulation 
may require a course of action involving disobedience of the statute or 
regulation or of the interpretation placed upon it by governmental 
authorities.
    In a case in which the client appears to be suffering mental 
disability, the practitioner's duty to abide by the client's decisions 
is to be guided by reference to proposed rule 11.114.
    Paragraph (b) of Sec.  11.102 would provide that representing a 
client does not constitute approval of the client's views or 
activities. By the same token, legal representation should not be 
denied to people, including applicants, who are unable to afford legal 
services, or whose cause is controversial or the subject of popular 
disapproval. Unlike Rule 1.2(b) of the Model Rules of Professional 
Conduct, proposed Sec.  11.102(b) would not provide for practitioner's 
being appointed to represent any party. Inasmuch as the Office does not 
appoint practitioners to represent persons having business before the 
Office, the provision is believed to be unwarranted.
    Paragraph (c) of Sec.  11.102, would provide that the objectives or 
scope of services provided by the practitioner may be limited by 
agreement with the

[[Page 69466]]

client or by terms under which the practitioner's services are made 
available to the client. For example, a retainer may be for a 
specifically defined purpose, such as a utility patent application for 
an article of manufacture. The terms upon which representation is 
undertaken may exclude specific objectives or means. Such limitations 
may exclude objectives or means that the practitioner regards as 
repugnant or imprudent, or which the practitioner is not competent to 
handle. For example, a patent agent who is not an attorney should 
exclude services beyond the scope authorized by registration as a 
patent agent, such as preparing and prosecuting trademark and copyright 
registrations, patent validity or infringement opinions, or drafting or 
selecting contracts, including assignments. Practitioners taking 
referrals from invention promoters must assure that the promoter has 
not limited or attempted to limit by agreement with the inventor-client 
the scope of services the practitioner provides, and that the agreement 
is in compliance with Sec.  11.504(c). See Sec.  11.804(a).
    Paragraph (g) of Sec.  11.102, like current Sec.  10.85(b)(1), 
would require that a practitioner reveal to the Office a fraud that the 
client has perpetrated on the Office after calling upon the client to 
rectify the same, and the client refuses or is unable to do so.
    Section 11.103 would require a practitioner to act with diligence 
and zeal. Paragraphs (a), (b), and (c) of Sec.  11.103 would continue 
the policy in current Sec.  10.84(a).
    Paragraph (a) of Sec.  11.103 would continue to recognize that a 
practitioner has a duty, to both the client and to the legal system, to 
represent the client before the Office zealously within the bounds of 
the law, including the proposed Office Rules of Professional Conduct 
and other enforceable professional regulations. This duty requires the 
practitioner to pursue a matter on behalf of a client despite 
opposition, obstruction, or personal inconvenience to the practitioner, 
and to take whatever lawful and ethical measures are required to 
vindicate a client's cause or endeavor. A practitioner should act with 
commitment and dedication to the interests of the client. However, a 
practitioner is not bound to press for every advantage that might be 
realized for a client. A practitioner has professional discretion in 
determining the means by which a matter should be pursued. See proposed 
Sec.  11.102. A practitioner's workload should be controlled so that 
each matter can be handled adequately.
    This duty derives from the practitioner's recognition to practice 
in a profession that has the duty of assisting members of the public to 
secure and protect available legal rights and benefits. In our 
government of laws and not of individuals, each member of our society 
is entitled to have such member's conduct judged and regulated in 
accordance with the law; to seek any lawful objective through legally 
permissible means; and to present for adjudication any lawful claim, 
issue, or defense.
    Where the bounds of law are uncertain, the action of a practitioner 
may depend on whether the practitioner is serving as advocate or 
adviser. A practitioner may serve simultaneously as both advocate and 
adviser, but the two roles are essentially different. In asserting a 
position on behalf of a client, an advocate for the most part deals 
with past conduct and must take the facts as the advocate finds them. 
By contrast, a practitioner serving as adviser primarily assists the 
client in determining the course of future conduct and relationships. 
While serving as advocate, a practitioner should resolve in favor of 
the client doubts as to the bounds of the law, but even when acting as 
an advocate, a practitioner may not institute or defend a proceeding 
unless the positions taken are not frivolous. See proposed Sec.  
11.301. In serving a client as adviser, a practitioner, in appropriate 
circumstances, should give a practitioner's professional opinion as to 
what the ultimate decisions of the Office and courts would likely be as 
to the applicable law.
    In the exercise of professional judgment, a practitioner should 
always act in a manner consistent with the best interests of the 
client. However, when an action in the best interests of the client 
seems to be unjust, a practitioner may ask the client for permission to 
forgo such action. If the practitioner knows that the client expects 
assistance that is not in accord with the proposed Rules of 
Professional Conduct or other law, the practitioner must inform the 
client of the pertinent limitations on the practitioner's conduct. See 
proposed Sec. Sec.  11.102(e) and (f). This is believed to be entirely 
consistent with Link v. Wabash R.R., 370 U.S. 626, 633-34 (1962); 
Johnson v. Department of the Treasury, 721 F.2d 361 (Fed Cir. 1983). 
Similarly, the practitioner's obligation not to prejudice the interests 
of the client is subject to the duty of candor toward the tribunal 
under proposed Sec.  11.303 and the duty to expedite litigation under 
proposed Sec.  11.302.
    The duty of a practitioner to represent the client before the 
Office with zeal does not militate against the concurrent obligation to 
treat with consideration all persons involved in the legal process and 
to avoid the infliction of needless harm. Thus, the practitioner's duty 
to pursue a client's lawful objectives zealously does not prevent the 
practitioner from acceding to reasonable requests of opposing counsel, 
e.g., in an interference or reexamination, that do not prejudice the 
client's rights, from being punctual in fulfilling all professional 
commitments, from avoiding offensive tactics, or from treating all 
persons involved in the legal process with courtesy and consideration.
    Perhaps no professional shortcoming is more widely resented by 
clients than procrastination. A client's interests, including patent 
rights, often can be adversely affected by the passage of time or the 
change of conditions; in extreme instances, as when a practitioner 
overlooks a statute of limitations under 35 U.S.C. 102(b), the client's 
legal position may be destroyed. Even when the client's interests are 
not affected in substance, however, unreasonable delay can cause a 
client needless anxiety and undermine confidence in the practitioner's 
trustworthiness. Neglect of client matters is a serious violation of 
the obligation of diligence.
    Unless the relationship is terminated as provided in proposed Sec.  
11.116, a practitioner should carry through to conclusion all matters 
undertaken for a client. If a practitioner's employment is limited to a 
specific matter, the relationship terminates when the matter has been 
resolved. If a practitioner has served a client over a substantial 
period in a variety of matters, the client sometimes may assume that 
the practitioner will continue to serve on a continuing basis unless 
the practitioner gives notice of withdrawal. Doubt about whether a 
client-practitioner relationship still exists should be eliminated by 
the practitioner, preferably in writing, so that the client will not 
mistakenly suppose the practitioner is looking after the client's 
affairs when the practitioner has ceased to do so. For example, if a 
practitioner has prosecuted a patent application that has become 
abandoned for failure to respond to an Office action having a final 
rejection, but the practitioner has not been specifically instructed 
concerning pursuit of an appeal, the practitioner should advise the 
client of the possibility of appeal before relinquishing responsibility 
for the matter.
    Paragraph (c) of Sec.  11.103 would define some, but not all, acts 
that would constitute violations of paragraphs (a) or

[[Page 69467]]

(b) of this section. The USPTO believes that it would be helpful to 
practitioners if some specific prohibitions were set out in the rules. 
The prohibitions set out in paragraphs (1) through (3) of Sec.  
11.103(c) represent violations that have occurred in the past or that 
the Office specifically seeks to prevent. The specific acts set out in 
paragraph (c) would not constitute a complete description of all acts 
in violation of paragraphs (a) or (b).
    Section 11.103 is a rule of general applicability, and it is not 
meant to enlarge or restrict any specific rule. In particular, Sec.  
11.103 is not meant to govern conflicts of interest, which are 
addressed by proposed Sec. Sec.  11.107, 11.108, and 11.109.
    Section 11.104 would provide in paragraph (a) that a practitioner 
shall communicate with a client regarding the status of a matter, 
respond to a client's reasonable requests for information, sufficiently 
explain matters to permit the client to make informed decisions, and 
inform the client of settlement offers.
    The client should have sufficient information to participate 
intelligently in decisions concerning the objectives of the 
representation before the Office, and the means by which they are to be 
pursued, to the extent the client is willing and able to do so. For 
example, a practitioner prosecuting an application should provide the 
client with facts relevant to the matter, promptly inform the client of 
communications received from and sent to the Office and take other 
reasonable steps that permit the client to make a decision regarding 
the course of prosecution. Thus, a registered practitioner failing to 
timely communicate with one or more clients could be subject to 
discipline under this section. See In re Barndt, 27 USPQ2d 1749 (Comm'r 
Pat. 1993); Weiffenbach v. Logan, 27 USPQ2d 1870 (Comm'r Pat. 1993), 
aff'd. sub nom., Logan v. Comer, No. 93-0335 (D.D.C. 1994), aff'd. sub 
nom., Logan v. Lehman, No. 95-1216 (Fed. Cir. 1995). A practitioner who 
receives from opposing counsel an offer of settlement in an 
interference is required to inform the client promptly of its 
substance. See proposed rule 11.101(a). Even when a client delegates 
authority to the practitioner, the client should be kept advised of the 
status of the matter.
    A client is entitled to whatever information the client wishes 
about all aspects of the subject matter of the representation unless 
the client expressly consents not to have certain information passed 
on. The practitioner must be particularly careful to ensure that 
decisions of the client are made only after the client has been 
informed of all relevant considerations. The practitioner must initiate 
and maintain the consultative and decision-making process if the client 
does not do so, and must ensure that the ongoing process is thorough 
and complete.
    Adequacy of communication depends in part on the kind of advice or 
assistance involved. The guiding principle is that the practitioner 
should fulfill reasonable client expectations for information 
consistent with (1) the duty to act in the client's best interests, and 
(2) the client's overall requirements and objectives as to the 
character of representation.
    Maintenance Fees, and Section 8 and Section 15 Affidavits. Some 
practitioners maintain a long-term docket and periodically send 
communications to parties they may view as being former clients, 
regarding possible need for further action regarding a completed 
matter, such as payment of maintenance fees for patents. Whether, 
absent a specific agreement, the practitioners continue to have an 
attorney-client or agent-client relationship with the parties depends 
on the facts, such as the reasonable expectations or intent of the 
putative clients, evidence of objective facts supporting the existence 
of the expectation or intent, and evidence placing the practitioner on 
notice of the putative client's expectation or intent. A formal 
agreement to pay fees is not necessary. A recipient of a periodic 
notice, absent any other facts, may well have the subjective belief, 
supported by objective evidence they are receiving legal advice from 
the practitioner, that the practitioner and recipient continue to be in 
an attorney-client or agent-client relationship. A practitioner 
desiring to terminate an attorney-client or agent-client relationship 
upon completion of legal services should make the termination clear to 
the client, e.g., by sending a termination letter to the client upon 
issuance of a patent or registration of a mark, and advising the 
recipient of the notices, and that the communication is not for the 
offering of advice, but as a reminder. See Formal Opinion No. 1996-146, 
Legal Ethics Committee of the Oregon State Bar. The practitioner should 
also withdraw from representation in accordance with 37 CFR 1.36 and 
proposed rule 11.116.
    Responsibility to a Former Client. Even though a practitioner may 
have terminated any attorney-client or agent-client relationship with a 
client, the practitioner nevertheless would continue to have certain 
obligations to a former client. The proposed rules would continue the 
practice of placing certain obligations on the practitioner. For 
example, a practitioner's obligation to preserve in confidence 
information relating to representation of a client would continue after 
termination of the practitioner's employment. Section 11.106(g). Under 
Sec.  11.804(i)(8), practitioners would have a duty to inform a former 
client or timely notify the Office of an inability to notify a former 
client of certain correspondence received from the Office. The 
obligation is necessarily imposed for the proper conduct of proceedings 
before the Office, such as receipt of notices regarding maintenance 
fees, reexamination proceedings, and institution of inter partes patent 
and trademark proceedings.
    Practitioners not wishing to receive notices regarding maintenance 
fees may file a change of correspondence address under 37 CFR 1.33 
without filing a request to withdraw, or provide a fee address pursuant 
to 37 CFR 1.363 to which maintenance fee correspondence should be sent. 
Since Sec.  1.33(c) requires that all notices, official letters, and 
other communications for the patent owner(s) in reexamination 
proceedings will be directed to the attorney or agent of record in a 
patent file, a request for permission to withdraw under Sec. Sec.  1.36 
and 11.116 would have to be filed if a practitioner does not wish to 
receive correspondence regarding reexaminations.
    Invention promoters. A Commissioner published two notices in the 
Official Gazette, 1086 OG 457 (December 10, 1987), and 1091 OG 26 
regarding the ``Responsibilities of Practitioners Representing Clients 
in Proceedings Before The Patent and Trademark Office'' (Notices). The 
Notices address agency relationships between practitioners and 
intermediaries. For example, the Notices, inter alia, address the use 
of corporate liaisons to obtain instructions. The notices do not 
specifically refer to invention promoters. Nevertheless, some 
practitioners associated with invention promoters have relied upon the 
Notices to accept the invention promoter as the inventor's agent, take 
instructions from the agent, and conduct all communications through the 
agent. There are numerous ethics opinions and cases where attorneys 
have been warned or found to have aided the unauthorized practice of 
law by permitting a marketer to communicate directly with the client. 
For example, Formal Opinion 87, Ethics Committee of the Colorado Bar 
Association (1995), advises that an attorney aids the unauthorized 
practice of law where a non-lawyer markets a

[[Page 69468]]

living trust, gathers information from a consumer, forwards the 
information to a ``factory,'' where the lawyer may assist in preparing 
and reviewing living trust documents, and the non-lawyer delivers the 
documents to the consumer, but the attorney has no personal contact 
with the consumer. An attorney was found to have aided the unauthorized 
practice of law to process workmen's compensation claims by permitting 
a disbarred attorney to obtain clients' signatures on retainer 
agreements, gather factual information from clients, and have the 
clients execute medical authorization forms, and it was inferred that 
the disbarred attorney was called upon to explain the retainer 
agreement and other legal documents. See In re Discipio, 645 N.E.2d 906 
(Ill. 1994). See also Wayne County Bar Ass'n. v. Naumoff, 660 N.E.2d 
(Ohio 1996); Comm. On Professional Ethics & Conduct v. Baker, 492 
N.W.2d 695 (Iowa 1992); and In re Komar, 532 N.E.2d 801(Ill. 1988). The 
situations are analogous to invention promoters entering into 
agreements with inventors to engage a practitioner to prepare and 
prosecute a patent application for the inventor's invention, the 
promoter gathers information from the inventor for an application, then 
forwards the information and drawings to the practitioner to prepare an 
application, and thereafter secures the inventor's signature on the 
application. There is no direct communication between the practitioner 
and inventor.
    Clearly, the Office does not desire to have practitioners aiding 
non-lawyers and non-practitioners in the unauthorized practice of law. 
Section 11.505 would proscribe a practitioner from aiding in the 
unauthorized practice of law. Accordingly, adoption of proposed rule 
Sec.  11.104(a)(1) would require a practitioner, receiving clients from 
an invention promoter, to communicate directly with the client, and 
promptly report each Office action directly to the client.
    Further, the Director found that the guidance in the second of the 
two Notices was not ``intended to significantly extend the coverage of 
the first Notice to practitioners using invention developers as 
intermediaries, and concluded that the omission of invention developers 
from the Notices supports the inference that invention developers were 
not intended to be included as permissible intermediaries. Moatz v. 
Colitz, 2002 WL 32056607, (Com'r. Pat. & Trademarks Dec 03, 2002). With 
the adoption of the proposed rules, the Notices (Official Gazette, 1086 
OG 457 (December 10, 1987), and 1091 OG 26 regarding the 
``Responsibilities of Practitioners Representing Clients in Proceedings 
Before The Patent and Trademark Office'') would be withdrawn and 
superseded by these comments.
    Practitioners Must Maintain a Direct Relationship With Their 
Clients. Some practitioners relied upon promoters to obtain from the 
inventor all information used to prepare the patent application. In 
obtaining information for preparation of patent applications, the 
promoter may be a barrier to a direct relationship between the 
practitioner and the client-inventor. The barrier arises, for example, 
where the promoter instructs the inventor to communicate with the 
promoter and suggests that the inventor may incur additional charges if 
the inventor communicates directly with the practitioner. The barrier 
also might arise where the promoter provides the practitioner with a 
description of the invention that differs from or alters the inventor's 
description of the invention. For example, the information and drawings 
furnished by some promoters to the practitioner change an invention to 
have one or more surface indicia or elements not described by the 
inventor. Some unsophisticated inventors first learn of the changes 
when they receive their applications for review and signature. The 
inventors, being cautioned by a promoter that the inventors may incur 
additional costs by communicating with the practitioner, direct their 
questions to the promoter about the changes. The promoters advise the 
inventors that the changes were provided to improve the invention's 
potential to succeed in the market, and that the inventors should sign 
the declaration.
    A promoter also can interfere with communications when the 
practitioner relies on the promoter to convey communications, including 
the collection of Office fees. For example, some promoters have delayed 
or failed to forward to the inventor-clients copies of Office actions 
the promoter receives from the practitioner, or requests for funds. As 
a result of the delay or lack of communication with the inventor-
client, if the Office action is reported to the inventor-client, it may 
not be reported until after the period of response has expired. The 
patent application may become abandoned in these circumstances. 
Alternatively, a promoter may interfere with communications by 
instructing the inventor-clients to make their checks for filing or 
issue fees payable to the USPTO Director, deposit the checks in the 
promoter's own account, and issue their own checks that are sometimes 
returned to the Office unpaid. In these situations, the patent 
application becomes abandoned. It is problematic whether the funds 
delivered to the promoter may be recoverable.
    A practitioner receiving referrals from a promoter may be motivated 
to provide the shortest and least expensive reply to an Office action. 
Such practitioners can receive a relatively small, set fee from the 
promoter for a reply to the Office action, regardless of the length or 
complexity needed to respond. Minimizing communication with the 
inventor-client reduces overhead costs, and maximizes time available to 
produce responses for multiples of such clients. It also can avoid 
providing the inventor-client with an opportunity to suggest 
presentation of affidavit, e.g., an antedating affidavit under 37 CFR 
1.131, or comparative test results under 37 CFR 1.132. Accordingly, the 
practitioner may not report an Office action to the inventor-client 
until after a response has been prepared and filed. This deprives the 
unsophisticated inventor-client of the opportunity to contribute to the 
response.
    Paragraph (1) of Sec.  11.104(a) would require practitioners 
receiving clients from an invention promoter to communicate directly 
with the client, and promptly report Office actions and replies 
directly to the client.
    Paragraph (2) of Sec.  11.104(a) would provide that a practitioner 
accepting referrals from a foreign attorney or foreign agent located in 
a foreign country may, with the written consent of a client located in 
a foreign country, conduct said communications with the client through 
said foreign attorney or agent. It is common for instructions relating 
to the application of a foreign patent and trademark owner, who is the 
practitioner's client, to be given to the practitioner through a 
foreign attorney or foreign patent agent. The fact that a practitioner 
receives instructions from an invention or trademark owner through a 
foreign attorney or agent does not change the fact that the client is 
still the foreign invention or trademark owner. See Strojirensti v. 
Toyoda, 2 USPQ2d 1222 (Comm'r Pat. 1986), which at 1223 cited Toulmin 
v. Becker, 105 USPQ 511 (Ohio Ct. App. 1954) for the principle that 
``foreign patent agents or attorneys were not clients of U.S. patent 
attorney.''
    A practitioner would be permitted to communicate through, rely on 
instructions of, and accept payment from the foreign attorney or agent 
only if the practitioner has obtained the consent of the client after 
full disclosure in accordance with the provisions of Sec. Sec.  
11.106(a)(1) and (d), 11.107(a) and (b), and 11.108(f). An agreement 
between the client and the foreign

[[Page 69469]]

attorney or agent may establish an agency relationship between the 
foreign attorney or agent and the client such that the practitioner may 
obtain instructions from the foreign attorney or agent, except if the 
instructions are adverse to the client's interests. For example, if the 
foreign attorney or agent instructs the practitioner to abandon the 
application because the client had not paid the foreign attorney or 
agent, the practitioner should consult with the client directly before 
acting on the instructions.
    Ordinarily, the information to be provided is that appropriate for 
a client, who is a comprehending and responsible adult. This should 
obtain in all instances involving filing replies to Office actions. 
However, fully informing the client according to this standard may be 
impracticable, for example, where the client is a child or suffers from 
mental disability. See proposed rule 11.114. When the client is an 
organization or group, it is often impossible or inappropriate to 
inform every one of its members about its legal affairs; ordinarily, 
the practitioner should address communications to the appropriate 
officials of the organization. See proposed rule 11.113. Where many 
routine matters are involved, a system of limited or occasional 
reporting may be arranged with the client. Such communications as 
Office actions, notices of abandonment, and notices of allowance are 
not routine matters for a client. Practical exigency may also require a 
practitioner to act for a client without prior consultation. When the 
practitioner is attending an appeal hearing, for example, it is often 
not possible for the practitioner to consult with the client and obtain 
the client's acquiescence in tactical matters arising during the course 
of the hearing. It is sufficient if the practitioner consults with the 
client in advance of the hearing on significant issues that can be 
anticipated as arising during the course of the hearing, and consults 
after the hearing.
    In rare circumstances, a practitioner may be justified for 
humanitarian reasons, in delaying or not conveying transmission of 
information, for example, where the information would merely be 
upsetting to a terminally ill client. A practitioner may not withhold 
information to serve the practitioner's own interest or convenience, 
e.g., to conceal abandonment of an application. See Weiffenbach v. 
Logan, 27 USPQ2d 1870 (Comm'r Pat. 1993), aff'd. sub nom., Logan v. 
Comer, No. 93-0335 (D.D.C. 1994), aff'd. sub nom., Logan v. Lehman, 73 
F.3d 379 (Fed. Cir. 1995). No Office rules governing practice before 
the Office justify withholding information from a client to serve a 
practitioner, or to keep the client uninformed about an Office action.
    Paragraph (d) of Sec.  11.104 would define some, but not all, acts 
that would constitute violations of paragraph (a) of this section. The 
USPTO believes that it would be helpful to practitioners if some 
specific prohibitions were set out in the rules. The prohibitions set 
out in paragraph (1) of Sec.  11.104(d) represents violations that have 
occurred in the past or that the Office specifically seeks to prevent. 
The specific acts set out in paragraph (d) would not constitute a 
complete description of all acts in violation of paragraph (a).
    Paragraph (1) of Sec.  11.104(d) would address failure to inform a 
client or former client, or failure to timely notify the Office of an 
inability to notify a client or former client, of correspondence 
received from the Office or the client's or former client's opponent in 
an inter partes proceeding before the Office when the correspondence 
(i) could have a significant effect on a matter pending before the 
Office, (ii) is received by the practitioner on behalf of a client or 
former client and (iii) is correspondence of which a reasonable 
practitioner would believe under the circumstances the client or former 
client should be notified.
    Section 11.105 would continue to require fees be reasonable, and 
would introduce a requirement for written fee agreements.
    Basis or rate of fee. Paragraph (a) of Sec.  11.105 would continue 
the present practice for determining reasonableness of basis or rate of 
fees. When a practitioner has regularly represented a client, they 
ordinarily will have evolved an understanding concerning the basis or 
rate of the fee. In a new client-practitioner relationship, however, an 
understanding as to the fee should be promptly established. It is not 
necessary to recite all the factors that underlie the basis of the fee, 
but only those that are directly involved in its computation. It is 
sufficient, for example, to state that the basic rate is an hourly 
charge or a fixed amount or an estimated amount, or to identify the 
factors that may be taken into account in finally fixing the fee. When 
developments occur during the representation that render an earlier 
estimate substantially inaccurate, a revised estimate should be 
provided to the client. A written statement concerning the fee reduces 
the possibility of misunderstanding. Furnishing the client with a 
simple memorandum or a copy of the practitioner's customary fee 
schedule is usually sufficient if the basis or rate of the fee is set 
forth.
    Paragraph (b) of Sec.  11.105(b) would introduce a new requirement. 
A written statement concerning the fee, required to be furnished in 
advance in most cases by this section, would reduce the possibility of 
misunderstanding. In circumstances in which paragraph (b) requires that 
the basis for the practitioner's fee be in writing, an individualized 
writing specific to the particular client and representation is 
generally not required. Unless there are unique aspects of the fee 
arrangement, the practitioner may utilize a standardized letter, 
memorandum, or pamphlet explaining the practitioner's fee practices, 
and indicating those practices applicable to the specific 
representation. Such publications would, for example, explain 
applicable hourly billing rates, if billing on an hourly rate basis is 
contemplated, and indicate what charges (such as filing fees, Office 
fees, transcript costs, duplicating costs, and long-distance telephone 
charges) are imposed in addition to hourly rate charges.
    Where the services to be rendered are covered by a fixed-fee 
schedule that adequately informs the client of the charges to be 
imposed, a copy of such schedule may be utilized to satisfy the 
requirement for a writing. Such services as patentability opinions, for 
example, may be suitable for description in such a fixed-fee schedule.
    Written fee agreement. If a practitioner has not regularly 
represented a client, e.g., an inventor, the basis or hourly rate of 
the fee must be communicated directly to the client, in writing. The 
written communication must distinguish between the fees charged for 
preparing and filing a patent application, and the fee(s) for 
prosecuting a patent application. A clearly written communication 
regarding fees can avoid confusion regarding whether a fee for an 
application includes fees for prosecuting an application.
    A practitioner may require advance payment of a fee, but would be 
obliged to return any unearned portion. See proposed rule 11.116(d). A 
practitioner may accept property in payment for services, such as an 
ownership interest in an enterprise. However, a fee paid in property 
instead of money may be subject to special scrutiny. For example, it 
involves questions concerning both the value of the services and the 
practitioner's special knowledge of the value of the property. See 
Formal Opinion 300, Legal Ethics Committee of the District of Columbia 
(2000) (addressing ethical considerations when

[[Page 69470]]

a practitioner is asked to accept stock in lieu of legal fees). 
Further, a fee paid in property, such as acquisition of ownership of a 
percentage of the rights to an invention, would require compliance with 
Sec.  11.108. See Rhodes v. Buechel, 685 N.Y.S.2d 65, 1999 N.Y. App. 
Div. LEXIS 904 (1999), appeal denied, 711 N.E.2d 984, 689 N.Y.S.2d 708, 
1999 N.Y. LEXIS 1206 (NY 1999).
    An agreement would not be made whose terms might induce the 
practitioner improperly to curtail services for the client or perform 
them in a way contrary to the client's interest. For example, a 
practitioner should not enter into an agreement or arrangement with an 
invention promoter to provide limited services, such as only up to a 
stated amount, only for a particular type of patent application, such 
as a design application, only so long as a promoter pays the 
practitioner, or only for one application or one type of application 
when it is foreseeable that more extensive services or the continuation 
of services may be required, unless the situation is fully disclosed to 
and consent is obtained from the client. Otherwise, the client might 
have to bargain for further assistance in the midst of a proceeding 
before the Office. However, it is proper to define the extent of 
services in light of the client's ability to pay. A practitioner should 
not, by using wasteful procedures, exploit a fee arrangement based 
primarily on an hourly charge.
    Paragraph (c) of Sec.  11.105 would continue the current practice 
regarding contingent fees. Generally, contingent fees are permissible 
in all civil cases, including patent and trademark registration 
applications.
    Under paragraph (c) of Sec.  11.105, the contingent fee arrangement 
would be required to be in writing. This writing must explain the 
method by which the fee is to be computed. The practitioner must also 
provide the client with a written statement at the conclusion of a 
contingent fee matter, stating the outcome of the matter and explaining 
the computation of any remittance made to the client. Consistent with 
paragraph (a) of Sec.  11.105, the contingent fee must be reasonable.
    Paragraph (d) of Sec.  11.105 would permit the practice of dividing 
a fee with another practitioner. A division of fee would be a single 
billing to a client covering the fee of two or more practitioners who 
are not in the same firm. A division of fee facilitates association of 
more than one practitioner in a matter in which neither alone could 
serve the client as well, and most often is used when the fee is 
contingent and the division is between a referring practitioner and a 
trial specialist.
    Under paragraph (d) of Sec.  11.105, the practitioners would be 
permitted to divide a fee either on the basis of the proportion of 
services they render or by agreement between the participating 
practitioners if all assume responsibility for the representation as a 
whole. Attorneys who are not registered as patent attorneys or agents 
are not authorized to render services in patent matters before the 
Office. Accordingly, before assuming responsibility for the 
representation as a whole, the attorneys would be advised to inquire of 
their insurance carrier regarding malpractice coverage in patent 
matters, and seek expert legal advice regarding whether the rendition 
of services in patent application matters involves unauthorized 
practice of law. Joint responsibility for the representation would 
entail the obligations stated in proposed rule 11.105 for purposes of 
the matter involved. Permitting a division on the basis of joint 
responsibility, rather than on the basis of services performed, would 
represent a change from the basis for fee divisions allowed under the 
prior Office Code of Professional Responsibility. The change is 
intended to encourage practitioners to affiliate other registered 
patent counsel, who are better equipped by reason of experience or 
specialized (scientific or technical) background, to serve the client's 
needs, rather than to retain sole responsibility for the representation 
in order to avoid losing the right to a fee.
    The concept of joint responsibility would not, however, be merely a 
technicality or incantation. For example, the registered practitioner 
who refers the client to another registered practitioner, or affiliates 
another registered practitioner in the representation, would remain 
fully responsible to the client, and is accountable to the client for 
deficiencies in the discharge of the representation by the registered 
practitioner who has been brought into the representation. If a 
practitioner wishes to avoid such responsibility for the potential 
deficiencies of another practitioner, the matter must be referred to 
the other practitioner without retaining a right to participate in fees 
beyond those fees justified by services actually rendered.
    The concept of joint responsibility would not require the referring 
practitioner to perform any minimum portion of the total legal services 
rendered. The referring practitioner may agree that the practitioner to 
whom the referral is made will perform substantially all of the 
services to be rendered in connection with the representation, without 
review by the referring practitioner. Thus, the referring practitioner 
would not be required to review replies to Office actions, appeal 
briefs, or other documents, attend hearings or depositions, or 
otherwise participate in a significant and continuing manner. The 
referring practitioner would not, however, by avoiding direct 
participation, escape the implications of joint responsibility.
    When fee divisions are based on assumed joint responsibility, the 
requirement of paragraph (a) that the fee be reasonable would apply to 
the total fee charged for the representation by all participating 
practitioners.
    Paragraph (d) of Sec.  11.105 would require that the client be 
advised, in writing, of the fee division and states that the client 
must affirmatively consent to the proposed fee arrangement. This 
provision would not require disclosure to the client of the share that 
each practitioner is to receive but would require that the client be 
informed of the identity of the practitioners sharing the fee, their 
respective responsibilities in the representation, and the effect of 
the association of practitioners outside the firm on the fee charged.
    Paragraph (e) of Sec.  11.105 would provide a new policy for 
determining unreasonableness of a fee. If a state bar has established a 
procedure for resolution of fee disputes, such as an arbitration or 
mediation, the practitioner who is an attorney should conscientiously 
consider submitting to it. Law may prescribe a procedure for 
determining a practitioner's fee, for example, in representation of an 
executor or administrator of the estate of a deceased registered 
practitioner. The practitioner entitled to such a fee and a 
practitioner representing another party concerned with the fee should 
comply with the prescribed procedure. The Office does not provide 
facilities or proceedings for fee dispute resolution.
    Section 11.106 would address a practitioner's responsibilities 
regarding information provided by a client. A practitioner practicing 
before the Office is a participant in a quasi-judicial and 
administration system, and as such is responsible for upholding the 
law. One of the practitioner's functions is to advise clients so that 
they avoid any violation of the law in the proper exercise of their 
rights.
    Paragraph (a)(1) of Sec.  11.106 would require that a practitioner 
not reveal information relating to representation of a client unless 
the client consents after consultation. There would be exceptions for 
disclosures that are

[[Page 69471]]

impliedly authorized in order to carry out the representation, and 
exceptions as stated in paragraph (b).
    Under paragraph (a)(1) of Sec.  11.106, practitioner-client 
confidentiality obtains upon commencement of the practitioner-client 
relationship. Principles of substantive law external to these proposed 
rules determining when an attorney-client or agent-client relationship 
exists also determines whether a client-practitioner relationship 
exists. Although most of the duties flowing from the practitioner-
client relationship attach only after the client has requested the 
practitioner to render legal services and the practitioner has agreed 
to do so, the duty of confidentiality imposed by this section attaches 
when the practitioner agrees to consider whether an attorney-client or 
agent-client relationship shall be established. Thus, a practitioner 
may be subject to a duty of confidentiality with respect to information 
disclosed by a client to enable the practitioner to determine whether 
representation of the potential client would involve a prohibited 
conflict of interest under proposed rules 11.107, 11.108, or 11.109.
    The observance of the ethical obligation of a practitioner to hold 
inviolate confidential information of the client not only facilitates 
the full development of facts essential to proper representation of the 
client but also encourages people to seek early legal assistance. 
Almost without exception, clients come to practitioners in order to 
determine what their rights are and what is, in the maze of laws and 
regulations, deemed to be legal and correct. The common law recognizes 
the client's confidences must be protected from disclosure. Based upon 
experience, practitioners know that almost all clients follow the 
advice given, and the law is upheld.
    There would be a difference between Sec.  11.106 and attorney-
client evidentiary privilege and the work product doctrine. The 
principle of confidentiality is given effect in two related bodies of 
law: the attorney-client privilege and the work product doctrine in the 
law of evidence and the rule of confidentiality established in 
professional ethics. The attorney-client privilege and the work product 
doctrine apply in judicial and administrative proceedings in which a 
practitioner may be called as a witness or otherwise required to 
produce evidence concerning a client. Section 11.106 would not be 
intended to govern or affect judicial or administrative application of 
the attorney-client privilege or work product doctrine. The privilege 
and doctrine were developed to promote compliance with law and fairness 
in litigation. In reliance on the attorney-client privilege, clients 
are entitled to expect that communications within the scope of the 
privilege will be protected against compelled disclosure. The attorney-
client privilege is that of the client and not of the practitioner. The 
fact that in exceptional situations the practitioner under Sec.  11.106 
would have limited discretion, and pursuant to Sec.  1.56, a 
requirement, to disclose a client confidence does not vitiate the 
proposition that, as a general matter, the client has a reasonable 
expectation that information relating to the client will not be 
voluntarily disclosed and that disclosure of such information may be 
judicially compelled only in accordance with recognized exceptions to 
the attorney-client privilege and work product doctrine. The privilege 
is applicable in certain cases to communications between registered 
patent agents and their clients. See, e.g., In re Ampicillin Antitrust 
Litigation, 81 F.R.D. 377, 392-394 (D.D.C. 1978).
    A fundamental principle in the client-lawyer or client-agent 
relationship is that the practitioner maintain confidentiality of 
information relating to the representation. The client is thereby 
encouraged to communicate fully and frankly with the lawyer even as to 
embarrassing or legally damaging subject matter. The principle of 
confidentiality is given effect in two related bodies of law, the 
attorney-client privilege in the law of evidence and the rule of 
confidentiality established in professional ethics. The attorney-client 
privilege applies in judicial and other proceedings in which a lawyer 
may be called as a witness or otherwise required to produce evidence 
concerning a client. The rule of client-lawyer confidentiality applies 
in situations other than those where evidence is sought from the lawyer 
through compulsion of law. The confidentiality rule applies not merely 
to matters communicated in confidence by the client but also to all 
information relating to the representation, whatever its source. A 
practitioner would not be permitted to disclose such information except 
as authorized or required by the Rules of Professional Conduct or other 
law.
    In addition to prohibiting the disclosure of a client's confidences 
and secrets, paragraph (a)(2) provides that a practitioner may not use 
the client's confidences and secrets to the disadvantage of the client. 
For example, a practitioner who has learned of the abandonment or 
allowance of a client's patent application may not file a patent 
application in the practitioner's own name on a variation or an 
improvement of the client's invention if doing so may adversely affect 
the client's ability to market the invention or patent rights. 
Similarly, information acquired by the practitioner in the course of 
representing a client may not be used to the disadvantage of that 
client even after the termination of the practitioner's representation 
of the client. However, the fact that a practitioner has once served a 
client does not preclude the practitioner from using generally known 
information about the former client when later representing another 
client. Under proposed rules (a)(3) and (d)(2), a practitioner may use 
a client's confidences and secrets for the practitioner's own benefit 
or that of a third party only after the practitioner has made full 
disclosure to the client regarding the proposed use of the information 
and obtained the client's affirmative consent to the use in question.
    Implied authorized disclosure. A practitioner is impliedly 
authorized to make disclosures about a client when appropriate in 
carrying out the representation, except to the extent that the client's 
instructions or special circumstances limit that authority. In patent 
prosecution, for example, a practitioner and applicant must disclose 
information material to the patentability of the pending claims. In 
another example, in litigation a practitioner may disclose information 
by admitting a fact that cannot properly be disputed, or in negotiation 
by making a disclosure that facilitates a satisfactory conclusion.
    Practitioners in a firm may, in the course of the firm's practice, 
disclose to each other information relating to a client of the firm, 
unless the client has instructed that particular information be 
confined to specified practitioners.
    Paragraph (b) of Sec.  11.106 would provide for disclosures adverse 
to the client. The confidentiality rule is subject to limited 
exceptions. In becoming privy to information about a client, a 
practitioner may foresee that the client intends serious harm to 
another person.
    However, to the extent a lawyer is required or permitted to 
disclose a client's purposes, the client will be inhibited from 
revealing facts which would enable the practitioner to counsel against 
a wrongful course of action. The public is better protected if full and 
open communication by the client is encouraged than if it is inhibited.
    Several situations must be distinguished. First, the practitioner 
may not counsel or assist a client in conduct that is criminal or 
fraudulent. See proposed Sec.  11.102(d). See also Kingsland v. Dorsey, 
338 U.S. 318

[[Page 69472]]

(1949) (sustaining disbarment of attorney for deceiving Office as to 
real author of article presented in support of pending application, and 
misrepresenting that the article was the work of a ``reluctant 
witness''). Similarly, a practitioner has a duty under proposed Sec.  
11.303(a)(4) not to use false evidence. See proposed Sec. Sec.  
11.303(a)(4) and (b). This duty is essentially a special instance of 
the duty prescribed in proposed Sec.  11.102(d) to avoid assisting a 
client in criminal or fraudulent conduct.
    Further, the practitioner may have been innocently involved in past 
conduct by the client that was criminal or fraudulent. In such a 
situation the practitioner has not violated proposed Sec.  11.102(d), 
because to ``counsel or assist'' criminal or fraudulent conduct 
requires knowing that the conduct is of that character.
    Still further, the practitioner may learn that a client intends 
prospective conduct that is criminal and likely to result in imminent 
death or substantial bodily harm. As stated in paragraph (b)(1), the 
practitioner has professional discretion to reveal information in order 
to prevent such consequences. The practitioner may make a disclosure in 
order to prevent homicide or serious bodily injury, which the 
practitioner reasonably believes is intended by a client.
    It is very difficult for a practitioner to be certain when such a 
heinous purpose will actually be carried out, for the client may have a 
change of mind. The practitioner's exercise of discretion requires 
consideration of such factors as the nature of the practitioner's 
relationship with the client and with those who might be injured by the 
client, the practitioner's own involvement in the transaction and 
factors that may extenuate the conduct in question. Where practical, 
the practitioner should seek to persuade the client to take suitable 
action. In any case, a disclosure adverse to the client's interest 
should be no greater than the practitioner reasonably believes 
necessary to the purpose. A practitioner's decision not to take 
preventive action permitted by paragraph (b)(1) would not violate this 
Rule.
    Withdrawal. If the practitioner's services will be used by a client 
in materially furthering a course of criminal or fraudulent conduct, 
the practitioner must withdraw, as stated in proposed Sec.  
11.116(a)(1).
    After withdrawal the lawyer is required to refrain from disclosing 
the client's confidences, except as otherwise provided in Sec. Sec.  
11.106(c) and (d). Neither Sec. Sec.  11.106(c) and (d), nor Sec.  
11.108(b), nor Sec.  11.116(d) prevent the practitioner from giving 
notice of the fact of withdrawal, and the practitioner may also 
withdraw or disaffirm any opinion, document, affirmation, or the like. 
Giving notice of withdrawal, without elaboration, is not a disclosure 
of a client's confidences. Furthermore, a practitioner's statement to 
the Office that withdrawal is based upon ``irreconcilable differences 
between the practitioner and the client'' is not elaboration. 
Similarly, after withdrawal under either proposed Sec.  11.116(a)(1) or 
proposed Sec. Sec.  11.116(b)(1) or (2), the practitioner may retract 
or disaffirm any opinion, document, affirmation, or the like that 
contains a material misrepresentation by the practitioner that the 
practitioner reasonably believes will be relied upon by others to their 
detriment.
    Where the client is an organization, the practitioner may be in 
doubt whether contemplated conduct will actually be carried out by the 
organization. Where necessary to guide conduct in connection with Sec.  
11.106, the practitioner may make inquiry within the organization as 
indicated in proposed Sec.  11.113(b).
    Dispute Concerning Lawyer's Conduct. Where a legal claim or 
disciplinary charge alleges complicity of the practitioner in a 
client's conduct or other misconduct of the practitioner involving 
representation of the client, the practitioner may respond to the 
extent the practitioner reasonably believes necessary to establish a 
defense. The same is true with respect to a claim involving the conduct 
or representation of a former client. The practitioner's right to 
respond arises when an assertion of such complicity has been made. 
Paragraph (b)(2) of Sec.  11.106 does not require the practitioner to 
await the commencement of an action or proceeding that charges such 
complicity, so that the defense may be established by responding 
directly to a third party who has made such an assertion. The right to 
defend, of course, applies where a proceeding has been commenced. Where 
practicable and not prejudicial to the practitioner's ability to 
establish the defense, the practitioner should advise the client of the 
third party's assertion and request that the client respond 
appropriately. In any event, disclosure should be no greater than the 
practitioner reasonably believes is necessary to vindicate innocence, 
the disclosure should be made in a manner which limits access to the 
information to the tribunal or other persons having a need to know it, 
and appropriate protective orders or other arrangements should be 
sought by the practitioner to the fullest extent practicable.
    If the practitioner is charged with wrongdoing in which the 
client's conduct is implicated, the rule of confidentiality should not 
prevent the practitioner from defending against the charge. Such a 
charge can arise in a civil, criminal or professional disciplinary 
proceeding, and can be based on a wrong allegedly committed by the 
practitioner against the client, or on a wrong alleged by a third 
person; for example, a person claiming to have been defrauded by the 
practitioner and client acting together. A practitioner entitled to a 
fee is permitted by paragraph (b)(2) of Sec.  11.106 to prove the 
services rendered in an action to collect it. This aspect of the rule 
expresses the principle that the beneficiary of a fiduciary 
relationship may not exploit it to the detriment of the fiduciary. As 
stated above, the practitioner must make every effort practicable to 
avoid unnecessary disclosure of information relating to a 
representation, to limit disclosure to those having the need to know 
it, and to obtain protective orders or make other arrangements 
minimizing the risk of disclosure.
    Paragraphs (c) and (d) of Sec.  11.106--Disclosures otherwise 
required or authorized. The attorney-client or agent-client privilege 
is differently defined in various jurisdictions. If a practitioner is 
called as a witness to give testimony concerning a client, absent 
waiver by the client, paragraph (a) of Sec.  11.106 requires the 
practitioner to invoke the privilege when it is applicable. The 
practitioner must comply with the final orders of a court or other 
tribunal of competent jurisdiction requiring the practitioner to give 
information about the client.
    The proposed Office Rules of Professional Conduct in various 
circumstances permit or require a practitioner to disclose information 
relating to the representation. See proposed Sec. Sec.  11.202, 11.203, 
11.303, and 11.401.
    In addition to these provisions, a practitioner may be obligated or 
permitted by other provisions of law to give information provided in 
confidence by the client. Paragraph (c) of Sec.  11.106 would require 
disclosure necessary to comply with 37 CFR 1.56 requiring a 
practitioner to disclose information material to patentability of 
pending claims. The practitioner may learn that a client intends to 
engage in conduct or is involved in conduct constituting fraud on the 
Office. As stated in proposed Sec.  11.106(d), the practitioner has 
professional duty to comply with

[[Page 69473]]

Sec.  1.56 by submitting all information known to be material to the 
patentability of any existing claim. The USPTO has disciplined 
practitioners for failing to reveal evidence required by law to be 
disclosed. See In re Milmore, 196 USPQ 628 (Comm'r Pat. 1977) 
(suspending practitioner for not calling a reference to the examiner's 
attention). To address situations wherein practitioners are found by a 
court of record to have engaged in inequitable conduct, the proposed 
rules would provide that such a finding is cause for concluding that 
the practitioner violated the Rules of Professional Conduct. See Sec.  
11.804(h)(7).
    The obligation to protect confidences and secrets obviously does 
not preclude a practitioner from revealing information when the client 
consents after full disclosure, when necessary to perform the 
professional employment, when permitted or required by these proposed 
rules (e.g., to comply with Sec.  1.56), or when required by law. 
Unless the client otherwise directs, a practitioner may disclose the 
affairs of the client to partners or associates of the practitioner's 
firm.
    It is a matter of common knowledge that the normal operation of a 
law office exposes confidential professional information to non-
practitioner employees of the office, particularly secretaries and 
those having access to the files; and this obligates a practitioner to 
exercise care in selecting and training employees so that the sanctity 
of all confidences and secrets of clients may be preserved. If the 
obligation extends to two or more clients as to the same information, a 
practitioner should obtain the permission of all before revealing the 
information. A practitioner must always be sensitive to the rights and 
wishes of the client and act scrupulously in the making of decisions 
that may involve the disclosure of information obtained in the course 
of the professional relationship. Thus, in the absence of consent of 
the client after full disclosure, a practitioner should not associate 
another practitioner in the handling of a matter; nor should the 
practitioner, in the absence of consent, seek counsel from another 
practitioner if there is a reasonable possibility that the identity of 
the client or the client's confidences or secrets would be revealed to 
such practitioner. Proper concern for professional duty should cause a 
practitioner to shun indiscreet conversations concerning clients.
    Invention promoter--Full Disclosure--Informed Consent. Likewise, a 
practitioner should not communicate a confidence from the inventor-
client to an invention promoter without first obtaining the inventor-
client's consent to disclose the confidences after full disclosure. 
Full disclosure is defined in Sec.  11.1(n). Confidence can include 
patentability opinions, patent applications, Office actions, 
amendments, appeal briefs, and notices or allowance or abandonment. 
Information communicated between the practitioner and inventor-client 
through an invention promoter may not be privileged. Denver Tramway Co. 
v. Owens, 36 P. 848 (Colo. 1894) (information gathered from client in 
presence of third party is not privileged). Consent of an inventor-
client would necessitate full disclosure that the client would be 
waiving any attorney-client or agent-client privilege attached to the 
confidence by permitting the confidence to be communicated to the 
promoter, as well as waiving confidential status for the information.
    Paragraph (c)(3)(B) and paragraph (d) of Sec.  11.106 would address 
the unique circumstances raised by attorney-client relationships within 
the Government.
    Paragraph (c)(3)(B) of proposed Sec.  11.106 would apply only to 
practitioners employed by the Government who are representing 
Government interests when appearing before the USPTO. It is designed to 
permit disclosures that are not required by law or court order under 
proposed Sec.  11.106(c)(3)(A), but which the Government authorizes its 
attorneys to make in connection with their professional services on 
behalf of the Government. Such disclosures may be authorized or 
required by statute, executive order, or regulation, depending on the 
constitutional or statutory powers of the authorizing entity. If so 
authorized or required, paragraph (c)(3)(B) of proposed Sec.  11.106 
governs.
    The term ``agency'' in paragraph (d) includes, inter alia, 
executive and independent departments and agencies, special 
commissions, committees of the legislature, agencies of the legislative 
branch such as the Office, General Accounting Office, and the courts to 
the extent that they employ practitioners (e.g., staff counsel) to 
counsel them. The employing agency has been designated the client under 
this rule to provide a commonly understood and easily determinable 
point for identifying the Government client.
    Government practitioners may also be assigned to provide an 
individual with counsel or representation in circumstances that make 
clear that an obligation of confidentiality runs directly to that 
individual and that paragraph (d)(2)(A), not (d)(2)(B), of proposed 
Sec.  11.106 applies. It is, of course, acceptable in this circumstance 
for a Government practitioner to make disclosures about the individual 
representation to supervisors or others within the employing 
governmental agency so long as such disclosures are made in the context 
of, and consistent with, the agency's representation program. See, 
e.g., 28 CFR 50.15 and 50.16. The relevant circumstances, including the 
agreement to represent the individual, may also indicate the extent to 
which the individual client to whom the Government practitioner is 
assigned will be deemed to have granted or denied consent to 
disclosures to the practitioner's employing agency. Examples of such 
representation include representation by a public defender, a 
Government practitioner representing a defendant sued for damages 
arising out of the performance of the defendant's Government 
employment, and a military practitioner representing a court-martial 
defendant.
    Paragraph (g) of Sec.  11.106 --Former client. The duty of 
confidentiality would continue after the client-lawyer or client-agent 
relationship has terminated.
    Paragraph (h) of Sec.  11.106. There are circumstances in which a 
person who ultimately becomes a practitioner provides assistance to a 
practitioner while serving in a nonpractitioner capacity. The typical 
situation is that of the law clerk or summer associate in a law firm or 
Government agency. Paragraph (h) of proposed Sec.  11.106 would address 
the confidentiality obligations of such a person after becoming a 
member of a Bar or becoming registered; the same confidentiality 
obligations are imposed as would apply if the person had been a member 
of a Bar at the time confidences or secrets were received. For a 
related provision dealing with the imputation of disqualifications 
arising from prior participation as a law clerk, summer associate, or 
in a similar position, see proposed Sec.  11.110(b).
    Section 11.107 is intended to provide clear notice of circumstances 
that may constitute a conflict of interest. Loyalty to a client is an 
essential element in the practitioner's relationship to a client. An 
impermissible conflict of interest may exist before representation is 
undertaken, in which event the representation should be declined. The 
practitioner should adopt reasonable procedures, appropriate for the 
size and type of firm and practice, to determine in both litigation and 
non-litigation matters, including patent and trademark matters before 
the Office, the parties and issues involved and to determine

[[Page 69474]]

whether there are actual or potential conflicts of interest.
    If such a conflict arises after representation has been undertaken, 
the practitioner should withdraw from the representation. See proposed 
Sec.  11.116. Where more than one client is involved and the 
practitioner withdraws because a conflict arises after representation, 
whether the practitioner may continue to represent any of the clients 
is determined by proposed Sec.  11.109. See also proposed Sec.  
11.202(c). As to whether a client-lawyer or client-agent relationship 
exists or, having once been established, is continuing, see the 
comments to proposed Sec.  11.103
    Paragraph (a) of Sec.  11.107 would express the general rule that 
loyalty to a client prohibits undertaking representation directly 
adverse to that client without that client's consent. Thus, a 
practitioner ordinarily may not act as advocate against a person the 
practitioner represents in some other matter, even if it is wholly 
unrelated. On the other hand, simultaneous representation in unrelated 
matters of clients whose interests are only generally adverse, such as 
competing economic enterprises, does not require consent of the 
respective clients. Paragraph (a) applies only when the representation 
of one client would be directly adverse to the other.
    The prohibition of paragraph (a) of Sec.  11.107 would relate only 
to actual conflicts of positions, not to mere formalities. For example, 
a practitioner would not be absolutely forbidden to provide joint or 
simultaneous representation if the clients' positions are only 
nominally but not actually adverse. Joint representation is commonly 
provided to joint inventors, to incorporators of a business, to parties 
to a contract, in formulating estate plans for family members, and in 
other circumstances where the clients might be nominally adverse in 
some respect but have retained a practitioner to accomplish a common 
purpose. If no actual conflict of positions exists with respect to a 
matter, the absolute prohibition of paragraph (a) does not come into 
play.
    Paragraph (b) of 11.107 would address situations where loyalty to a 
client can be impaired when a practitioner cannot consider, recommend 
or carry out an appropriate course of action for the client because of 
the practitioner's other responsibilities or interests. The conflict in 
effect forecloses alternatives that would otherwise be available to the 
client. Paragraph (b) addresses such situations. A possible conflict 
does not itself preclude the representation. The critical questions are 
the likelihood that a conflict will eventuate and, if it does, whether 
it will materially interfere with the practitioner's independent 
professional judgment in considering alternatives or foreclose courses 
of action that reasonably should be pursued on behalf of the client. 
Consideration should be given as to whether the client wishes to 
accommodate the other interest involved.
    Full disclosure and consent. A client may consent to representation 
notwithstanding a conflict. However, as indicated in paragraph (a)(1) 
with respect to representation directly adverse to a client, and 
paragraph (b)(1) with respect to material limitations on representation 
of a client, when a disinterested practitioner would conclude that the 
client should not agree to the representation under the circumstances, 
the practitioner involved cannot properly ask for such agreement or 
provide representation on the basis of the client's consent. When more 
than one client is involved, the question of conflict would have to be 
resolved as to each client. Moreover, there may be circumstances where 
it is impossible to make the disclosure necessary to obtain consent. 
For example, when the practitioner represents different clients in 
related matters and one of the clients refuses to consent to the 
disclosure necessary to permit the other client to make an informed 
decision, the practitioner cannot properly ask the latter to consent.
    Full Disclosure. Disclosure and consent are not mere formalities. 
Full disclosure is defined in Sec.  11.1(n). As defined therein, full 
disclosure requires a clear explanation of the differing interests 
involved in a transaction, the advantages of seeking independent legal 
advice, and a detailed explanation of the risks and disadvantages to 
the client entailed in any agreement or arrangement, including not only 
any financial losses that will or may foreseeably occur to the client, 
but also any liabilities that will or may foreseeably accrue to the 
client.
    Proposed Sec.  11.107 would not require that disclosure be in 
writing or in any other particular form in all cases. Nevertheless, it 
should be recognized that the form of disclosure sufficient for more 
sophisticated business clients may not be sufficient to permit less 
sophisticated clients to provide fully informed consent. Moreover, it 
would be prudent for the practitioner to provide potential joint 
clients with at least a written summary of the considerations 
disclosed, and to request and receive a written consent. This can 
reduce the opportunity for dispute regarding the scope and content of 
the disclosure.
    Consent. The term ``consent'' is defined in Sec.  11.1(e). As 
indicated there, a client's consent must not be coerced either by the 
practitioner or by any other person. In particular, the practitioner 
should not use the client's investment in previous representation by 
the practitioner as leverage to obtain or maintain representation that 
may be contrary to the client's best interests. If a practitioner has 
reason to believe that undue influence has been used by anyone to 
obtain agreement to the representation, the practitioner should not 
undertake the representation.
    When a practitioner has two clients, the clients might have 
potential conflicts. In circumstances having potential conflicts, the 
circumstances would trigger Sec.  11.107(a) and (b). Potential 
conflicts between an inventor and invention promoter may arise from a 
contract between them providing for the promoter to obtain a 
practitioner to represent the inventor in obtaining a patent. The 
practitioner engaged by the promoter may have a lawyer-client or agent-
client relationship with both the inventor and promoter. For example, 
if the contract provides for the promoter to pay the practitioner, the 
practitioner may regard the promoter as a client, while the 
practitioner obtains a power of attorney from the inventor to prosecute 
the latter's patent application. Another potential conflict may arise 
regarding funds advanced by the inventor for the practitioner's legal 
services. Normally, when a client advances legal fees, the funds are 
received by a practitioner, who places the funds in an escrow account. 
See Sec.  11.115(a). In such circumstances, the client is entitled to a 
refund of unearned fees. See proposed Sec. Sec.  11.115(d)(4), and 
11.116(d). If, however, in accordance with the contract between the 
promoter and inventor, the inventor delivers the funds to the promoter, 
the promoter may place the funds in its own account(s). The funds are 
then subject to the promoter's control. The inventor may expect the 
practitioner to deliver legal services inasmuch as the funds have been 
advanced. There is a potential for the promoter going out of business, 
or the inventor being dissatisfied with the services from the promoter 
and practitioner. The client may desire to discharge the practitioner. 
In such circumstances, the inventor might be unable to recover the 
unearned advanced legal fees held by the promoter, and there is a 
potential conflict between the inventor and promoter regarding the 
advanced legal

[[Page 69475]]

fees. In a variation on the same example, a potential conflict exists 
if the inventor, although permitted to discharge the practitioner, may 
view the situation as compelling him or her to remain with the 
practitioner selected by the promoter inasmuch as the promoter holds 
the inventor's funds. The circumstances and differing interests of an 
inventor-client and a promoter-client may create at least potential 
conflicts requiring consent under Sec.  11.107(a). Accord, Formal 
Opinion 1997-148, Standing Committee on Professional Responsibility and 
Conduct (California).
    Further, to the extent the practitioner's relationship with one 
client affects the practitioner's loyalty and independent judgment on 
behalf of the other client, an actual conflict of interest exists. This 
can occur when the practitioner receives conflicting instructions from 
the clients, or is called upon to advance inconsistent objectives of 
two clients. For example, if an inventor-client insists that the 
practitioner pursue a utility patent application, and the promoter 
client will pay for only a design patent application, the practitioner 
is receiving conflicting instructions and is being called upon to 
advance inconsistent objectives. Such circumstances require a 
practitioner to obtain further consent under Sec.  11.107(b). Accord, 
Formal Opinion 1997-148, Standing Committee on Professional 
Responsibility and Conduct (California).
    If joint representation of inventor and an invention promoter 
involves potential conflicts, it is necessary to obtain consent of both 
clients after full disclosure. This obtains if the clients have 
different objectives that are implicated by a decision made by the 
practitioner. For example, differing interests are implicated if an 
inventor-client expects the several thousand dollars paid to the 
promoter to be used to obtain the broadest patent protection available, 
and the invention promoter would be satisfied with any patent 
protection, including narrowest patent protection. A practitioner, 
receiving numerous referrals from the promoter and being paid a 
relatively low fee for each application, knowingly provides only 
narrow, even ``picture'' claims. The practitioner's action accommodates 
processing of the referrals, and facilitates continued receipt of 
referrals, whereas broader patent protection was available. The 
practitioner's action may be satisfactory for the promoter-client, 
whereas the inventor-client expects broad patent protection. There is 
at least a potential conflict of interest.
    Also, where an inventor-client delivers to an invention promoter-
client all funds advanced for legal fees to pay the practitioner, full 
disclosure of all risks and consent from both clients would be required 
by Sec.  11.107(b). For example, the inventor must be fully informed of 
the consequences if the invention promoter goes out of business or 
declares bankruptcy, and does not pay the practitioner. The inventor 
may be unable to obtain from the promoter a refund of the unearned 
funds advanced for legal services, whereas the practitioner, if he or 
she had received the funds and declined to provide legal services, 
would be required to refund the unearned advanced funds. Moreover, 
there may be circumstances where it is impossible to make the 
disclosure necessary to obtain consent. For example, when the 
practitioner represents different clients in related matters and one of 
the clients refuses to consent to the disclosure necessary to permit 
the other client to make an informed decision, the practitioner cannot 
properly ask the latter to consent.
    Practitioner's interests. The practitioner's own interests should 
not be permitted to have an adverse effect on representation of a 
client. For example, a practitioner's need for income should not lead 
the practitioner to undertake matters that cannot be handled 
competently and at a reasonable fee. See proposed Sec. Sec.  11.101 and 
11.105. If the probity of a practitioner's own conduct in a transaction 
is in serious question, it may be difficult or impossible for the 
practitioner to give a client detached advice. A practitioner may not 
allow related business interests to affect representation, for example, 
by referring clients to an enterprise in which the practitioner has an 
undisclosed interest.
    There can be circumstances where an invention promoter refers 
inventors to a practitioner, and the practitioner has an attorney-
client or agent-client relationship with the inventor-client, and a 
business or financial relationship exists between the practitioner and 
an invention promoter. When the promoter compensates the practitioner, 
they may have a business and financial relationship like a third-party 
payor relationship between an attorney and insurer. The practitioner 
and invention promoter also may have a business and financial 
relationship because the practitioner obtains employment (e.g., 
referrals) through the promoter. For example, this can occur where the 
practitioner provides legal services at reduced fees, paid by the 
promoter, in expectation of receiving numerous referrals from the 
promoter. The volume of referrals and rapid production of patent 
applications may make up for the reduction in the fees. The inventor-
client may expect the practitioner to provide extensive attentiveness 
to his or her needs, and zealous efforts to obtain the broadest patent 
protection at the least cost. If the practitioner regards the invention 
promoter as his or her client, the full disclosure requirements of 
Sec.  11.107(b) are triggered. Even in the absence of any attorney-
client or agent-client relationship between the practitioner and 
promoter, the existence of the business or financial relationship 
between them requires disclosure obligations by the practitioner under 
Sec.  11.108(f). Accord, Formal Opinion 1997-148, Standing Committee on 
Professional Responsibility and Conduct (California). The business 
dealings between a lawyer and an invention promoter have been 
recognized as giving rise to conflicts between the lawyer's duty to 
furnish independent legal counsel to another client, and the business 
interests of the lawyer acting in the capacity of representing the 
invention promoter. See Informal Opinion 1482, American Bar Association 
(1982).
    In another example, if a practitioner depends on receiving 
referrals from an organization the practitioner regards as the client, 
and not the individuals purchasing legal services (trusts, patent 
applications) offered by the organization and referred to the 
practitioner, representation of the individual implicates at least 
potential conflicts of interest in violation of Sec.  11.107(b). See In 
re R.W. Hodgson, 721 Off. Gaz. 414 (Aug. 20, 1957) (rejecting patent 
agent's argument that invention promoter holding 10% interest in each 
application of numerous applications, as opposed to the patent 
applicant, was his client, and pointing out that Rule 32 (37 CFR 1.32) 
does not confer on an assignee of partial interest in an application 
the right to conduct the prosecution of an application); People v. 
Volk, 805 P.2d 1116, 1117 (Colo. 1991) (holding attorney suffered from 
conflict of interest for ``consider[ing] the corporation to be her 
client, not the individual purchasers of the trusts''). Consent, after 
full disclosure, must be obtained to provide representation.
    The foregoing situations are to be distinguished from those 
commonly experienced when an inventor, employed by a corporation to 
invent, is represented by a practitioner who is employed by the 
corporation. For example, the inventor has signed an employment 
contract that contains a provision whereby the inventor agrees to 
assign to the corporation all inventions conceived during

[[Page 69476]]

employment. The attorney is employed either in-house by the 
corporation, or is a member of a firm and is retained to represent the 
corporation. Following the inventor's discovery and disclosure to the 
corporation of a new and useful invention, the attorney prepares a 
patent application. The attorney's actual client is the corporation, 
and the attorney has not made any representations to the inventor that 
he or she represents the inventor or the inventor's interests. It would 
be prudent, before filing the application, to secure from the inventor, 
the inventor's signature on a combined declaration and power of 
attorney, as well as on assignment of the patent rights to the 
corporation. The attorney also would be acting prudently to clearly 
inform the inventor before signing the documents that the attorney 
represents only the corporation. Upon obtaining the signed combined 
declaration and power of attorney, and the assignment, these documents 
can be filed in the USPTO, and the assignment recorded. The corporation 
may then revoke all previous powers of attorney, and give its own power 
of attorney in favor of the attorney.
    Conflicts in litigation and administrative proceedings. Paragraph 
(a) of Sec.  11.107 would prohibit representation of opposing parties 
in litigation and administrative proceedings. Simultaneous 
representation of parties whose interests in litigation or an 
interference in the Office may conflict, such as coplaintiffs or 
codefendants, or opposing parties in an interference is governed by 
paragraph (b). An impermissible conflict may exist by reason of 
substantial discrepancy in the parties' testimony, or incompatibility 
in positions in relation to an opposing party in an interference. On 
the other hand, common representation of persons having similar 
interests, such as joint applicants, is proper if the risk of adverse 
effect is minimal and the requirements of paragraph (b) are met. 
Compare proposed Sec.  11.202 involving intermediation between clients.
    Ordinarily, a practitioner may not act as advocate against a client 
the practitioner represents in some other matter, even if the other 
matter is wholly unrelated. However, there are circumstances in which a 
practitioner may act as an advocate against a client. For example, a 
practitioner representing an enterprise with diverse operations may 
accept employment as an advocate against the enterprise in an unrelated 
matter if doing so will not adversely affect the practitioner's 
relationship with the enterprise or conduct of the suit and if both 
clients consent upon full disclosure. The propriety of concurrent 
representation can depend on the nature of the litigation. For example, 
a suit charging fraud entails conflict to a degree not involved in a 
suit for a declaratory judgment concerning statutory interpretation.
    Interest of third person paying for a practitioner's service. A 
practitioner may be paid from a source other than the client, if the 
client consents after full disclosure and the arrangement does not 
compromise the practitioner's duty of loyalty to the client. See 
proposed Sec.  11.108(f). Full disclosure is defined in Sec.  11.1(n), 
and consent is defined in Sec.  11.1(e). For example, when an invention 
promoter and inventor have conflicting interests in a matter arising 
from an invention marketing agreement, and the promoter is required to 
provide a patent practitioner to file and prosecute a patent 
application for the inventor, the arrangement should assure the 
practitioner professional independence. Thus, the arrangement should 
assure that the practitioner's professional independence permits him or 
her to zealously pursue the inventor's patent rights, including any 
necessary appeal or covering an interference.
    Other Conflict Situations. Conflicts of interest in contexts other 
than litigation sometimes may be difficult to assess. Relevant factors 
in determining whether there is potential for adverse effect include 
the duration and intimacy of the practitioner's relationship with the 
client or clients involved, the functions being performed by the 
practitioner, the likelihood that actual conflict will arise and the 
likely prejudice to the client from the conflict if it does arise. The 
question is often one of proximity and degree.
    For example, a practitioner may not represent multiple parties to a 
negotiation whose interests are fundamentally antagonistic to each 
other, but common representation is permissible where the clients are 
generally aligned in interest even though there is some difference of 
interest among them.
    A practitioner for a corporation or other organization who is also 
a member of its board of directors should determine whether the 
responsibilities of the two roles may conflict. The lawyer may be 
called on to advise the corporation in matters involving actions of the 
directors. Consideration should be given to the frequency with which 
such situations may arise, the potential intensity of the conflict, the 
effect of the practitioner's resignation from the board and the 
possibility of the corporation's obtaining legal advice from another 
practitioner in such situations. If there is material risk that the 
dual role will compromise the practitioner's independence of 
professional judgment, the practitioner should not serve as a director.
    Conflict charged by an opposing party. Resolving questions of 
conflict of interest is primarily the responsibility of the 
practitioner undertaking the representation. As in litigation, where a 
court may raise the question of conflicting interests when there is 
reason to infer that the practitioner has neglected the responsibility, 
the same may obtain in inter parte practice before the Office. Where 
the conflict is such as clearly to call in question the fair or 
efficient administration of justice, opposing counsel may properly 
raise the question. Such an objection should be viewed with caution, 
however, for it can be misused as a technique of harassment.
    Withdrawal. It is much preferred that a representation that is 
likely to lead to a conflict be avoided before the representation 
begins, and a practitioner should bear this fact in mind in considering 
whether disclosure should be made and consent obtained at the outset. 
If, however, a conflict only arises after a representation has been 
undertaken, and the conflict falls within Sec.  11.107(a), or if a 
conflict arises under Sec.  11.107(b), then the practitioner should 
withdraw from the representation, complying with Sec.  11.106. Where a 
conflict is not foreseeable at the outset of representation and arises 
only under Sec.  11.107, a practitioner would have to seek consent to 
the conflict at the time that the actual conflict becomes evident. 
Where the conflict is such as clearly to call in question the fair or 
efficient administration of justice, opposing counsel may properly 
raise the question. Such an objection should be viewed with caution, 
however, because it can be misused as a technique of harassment. In 
determining whether a conflict is reasonably foreseeable, the test is 
an objective one, i.e., that which a lawyer of reasonable prudence and 
competence would ascertain in regard to the matter in question. In 
determining the reasonableness of a practitioner's conduct, such 
factors as whether the practitioner (or practitioner's firm) has an 
adequate conflict-checking system in place, must be considered. Where 
more than one client is involved and the practitioner must withdraw 
because a conflict arises after representation has been undertaken, the 
question of whether the practitioner may continue to represent any of 
the clients would be determined by Sec.  11.109.
    Imputed Disqualification. All of the references in Sec.  11.107 and 
this

[[Page 69477]]

accompanying comment to the limitation upon a ``practitioner'' must be 
read in light of the imputed disqualification provisions of Sec.  
11.110, which affect practitioners practicing in a firm.
    In the Government-practitioner context, Sec.  11.107(b) is not 
intended to apply to conflicts between agencies or components of 
Government (Federal, state, or local) where the resolution of such 
conflicts has been entrusted by law, order, or regulation to a specific 
individual or entity.
    Businesses Affiliated with a Practitioner or Firm. Practitioners, 
either alone or through firms, may have interests in enterprises that 
do not or would not be authorized to practice law but that, in some or 
all of their work, become involved with practitioners or their clients 
either by assisting the practitioner in providing legal services or by 
providing related services to the client. Examples of such enterprises 
are accounting firms, consultants, invention promoters, and the like. 
The existence of such interests would raise several questions under 
Sec.  11.107. First, a practitioner's recommendation, as part of legal 
advice, that the client obtain the services of an enterprise with which 
the practitioner is affiliated implicates Sec.  11.107(b)(4). The 
practitioner should not make such a recommendation unless able to 
conclude that the practitioner's professional judgment on behalf of the 
client will not be adversely affected. Even then, the practitioner 
should not make such a recommendation without full disclosure to the 
client so that the client can make a fully informed choice. Such 
disclosure should include the nature and substance of the 
practitioner's or the firm's interest in or relation with the 
enterprise, alternative sources for the non-legal services in question, 
and sufficient information so that the client understands that the 
related enterprise's services are not legal services, and the client's 
relationship to the enterprise will not be that of client to attorney. 
Second, such an affiliated enterprise may refer a potential client to 
the practitioner; the practitioner should take steps to assure that the 
related enterprise will inform the practitioner of all such referrals. 
The practitioner should not accept such a referral without full 
disclosure of the nature and substance of the practitioner's interest 
in the related enterprise, including the number of clients annually 
referred. See also Sec.  11.701(b). Third, the practitioner should be 
aware that the relationship of the enterprise to its own customer may 
create a significant interest in the practitioner in the continuation 
of that relationship. The substantiality of such an interest may be 
enough to require the practitioner to decline a proffered client 
representation that would conflict with that interest; at least 
Sec. Sec.  11.107(b)(4) and (c) may require the prospective client to 
be informed and to consent before the representation could be 
undertaken. Fourth, a practitioner's interest in an affiliated 
enterprise that may also serve the practitioner's clients would create 
a situation in which the practitioner must take unusual care to fashion 
the relationship among practitioner, client, and enterprise to assure 
that confidences and secrets are properly preserved pursuant to Sec.  
11.106 to the maximum extent possible. See Sec.  11.503.
    Section 11.108--Transactions Between Client and Practitioner. As a 
general principle, all transactions between client and practitioner 
should be fair and reasonable to the client. In such transactions a 
review by independent counsel on behalf of the client is often 
advisable. Section 11.108(a) does not, however, apply to standard 
commercial transactions between the practitioner and the client for 
products or services that the client generally markets to others; for 
example, banking or brokerage services, medical services, products 
manufactured or distributed by the client, and utility services. In 
such transactions, the practitioner has no advantage in dealing with 
the client, and the restrictions in Sec.  11.108(a) are unnecessary and 
impracticable.
    A practitioner may accept a gift from a client, if the transaction 
meets general standards of fairness. For example, a simple gift such as 
a present given at a holiday or as a token of appreciation is 
permitted. If effectuation of a substantial gift requires preparing a 
legal instrument such as a will or conveyance, however, the client 
should be advised by the practitioner to obtain the detached advice 
that another practitioner can provide. Section 11.108(c) recognizes an 
exception where the client is a relative of the donee or the gift is 
not substantial.
    Proposed Sec.  11.108 does not prevent a practitioner from entering 
into a contingent fee arrangement with a client in a civil case, if the 
arrangement satisfies all the requirements of Sec.  11.105(c).
    Literary Rights. An agreement by which a practitioner acquires 
literary or media rights concerning the conduct of the representation 
creates a conflict between the interests of the client and the personal 
interests of the practitioner. Measures that might otherwise be taken 
in the representation of the client may detract from the publication 
value of an account of the representation. Section 11.108(d) would not 
prohibit a practitioner representing a client in a transaction 
concerning literary property from agreeing that the practitioner's fee 
shall consist of a share in ownership in the property, if the 
arrangement conforms to Sec.  11.105.
    Patent Rights. An agreement whereby a practitioner acquires patent 
rights or an inventor assigns patent rights to an enterprise funded by 
the practitioner, but equally owned by the practitioner and the 
inventor, also creates a conflict between the interests of the client 
and the personal interests of the practitioner. A practitioner must do 
more than advise the client to seek the advice of independent counsel 
in the transaction. Full disclosure requires the practitioner to advise 
the client of all options or alternatives, including advising the 
client to consult with independent counsel, and potential conflicts 
between the practitioner and client. See Monco v. Janus, 583 N.E.2d 575 
(Ill. 1991); Rhodes v. Buechel, 685 N.Y.S.2d 65, 1999 N.Y.App. Div. 
LEXIS 904 (1999), appeal denied, 711 N.E.2d 984, 689 N.Y.S.2d 708, 1999 
N.Y. LEXIS 1206 (NY 1999). A practitioner should advise a client, 
before entering into an agreement, of the alternatives to assigning all 
patent rights to the enterprise. For example, one alternative is to 
lease the rights to the company. The conflict is evident when following 
a lack of success, the practitioner seeks to dissolve the enterprise 
due to a deadlock with client, and the client expects the practitioner 
to exercise professional judgment on the client's behalf.
    Paying Certain Administrative Proceeding or Litigation Costs and 
Client Expenses. Historically, under the Code of Professional 
Responsibility, practitioners could only advance the costs of 
litigation. The client remained ultimately responsible, and was 
required to pay such costs even if the client lost the case. That rule 
was modified by the USPTO in 1985 by adoption of 37 CFR 10.64(b), that 
eliminated the requirement for the client to remain ultimately liable 
for all costs of patent prosecution by permitting the practitioner to 
advance any fee required to prevent or remedy abandonment by reason of 
an act or omission attributable to the practitioner. The provisions of 
Sec.  11.108(e) would continue the provisions of current Sec.  
10.64(b), but go further by providing that a practitioner may also pay 
certain expenses of a client that are not patent prosecution or 
litigation expenses. Thus, under Sec.  11.108(e), a practitioner may 
pay medical or living expenses of

[[Page 69478]]

a client to the extent necessary to permit the client to continue 
patent or trademark prosecution, or litigation. The payment of these 
additional expenses is limited to those strictly necessary to sustain 
the client during patent prosecution or the litigation, such as medical 
expenses and minimum living expenses. Permitting such payments would 
bring the proposed rules in conformity with the Rules of Professional 
Conduct adopted for many state bars. The purpose of permitting such 
payments is to avoid situations in which a client is compelled by 
exigent financial circumstances to continue patent prosecution, or 
settle a claim on unfavorable terms in order to receive the immediate 
proceeds of settlement. This provision does not permit practitioners to 
``bid'' for clients by offering financial payments beyond those minimum 
payments necessary to sustain the client until the patent prosecution 
or litigation is completed. Regardless of the types of payments 
involved, assuming such payments are proper under Sec.  11.108(e), 
client reimbursement of the practitioner is not required. However, no 
practitioner is required to pay litigation or other patent costs to a 
client. Section 11.108 would merely permit such payments to be made 
without requiring reimbursement by the client.
    Paragraph (e)(3) of Sec.  11.108 would continue the present 
practice of permitting a practitioner to advance any fee required to 
prevent or remedy an abandonment of a client's application by reason of 
an act or omission attributable to the practitioner and not to the 
client, whether or not the client is ultimately liable.
    Paragraph (f) of Sec.  11.108--Person Paying for Practitioner's 
Services. Section 11.108(f) would require full disclosure and client 
consent before the practitioner's services can be paid for by a third 
party. Such an arrangement would also have to conform to the 
requirements of Sec.  11.106 concerning confidentiality and Sec.  
11.107 concerning conflict of interest and risks. Where the client is a 
class, consent may be obtained on behalf of the class by court-
supervised procedure. The disclosure and consent must be in writing.
    The only interest of some of third parties that offer a 
practitioner's legal service may be a financial one: closing the sale 
of a legal service, such as a living trust or patent application, to 
the individual. Such a party, e.g., an invention promoter, facilitates 
the practitioner's access to such individuals. The practitioner may 
depend upon the promoter for employment, and even compensation in these 
circumstances. In such situations, the promoter can control the 
engagement of the practitioner. Potential conflicts may arise where the 
practitioner permits the third party, with whom the practitioner has a 
business or financial relationship, to perform the essential planning 
tasks, including fact-finding without supervision. The practitioner 
should be exercising independent professional judgment.
    In order to create an appropriate patent application, relevant 
information must be ascertained from the inventor. The practitioner 
must, with the inventor's input, determine the proper type of patent 
application to prepare, the facts to be included, and the scope of 
protection to be sought. The practitioner must counsel an inventor 
regarding all of the options that are appropriate and the pros and cons 
of each option. After such counseling, the participant (e.g., an 
inventor) must decide if a patent application, or some other 
arrangement should be the cornerstone of the intellectual property 
plan. If a practitioner permits an invention promoter to assume this 
function, the practitioner allows a third party to interfere with the 
practitioner's independence of professional judgment. See Sec.  
11.107(b). Accord, Formal Opinion No. 1997-148, Standing Committee on 
Professional Responsibility and Conduct (California).
    Accordingly, in matters involving an invention promoter paying the 
practitioner, proposed paragraph (f) would require practitioners to 
fully disclose all involved conflicts of interest and risks. The duty 
of full disclosure includes informing the inventor of reasonably 
foreseeable adverse consequences if the inventor advances or has 
advanced legal fees or expenses to the promoter. Thus, the practitioner 
would have to inform the client of the full extent to which the 
advanced funds are or would be at risk of being lost by being placed 
with the promoter, as opposed to being delivered directly to the 
practitioner. The risks could include, but are not limited to, the loss 
of the funds if the promoter ceases doing business, declares 
bankruptcy, or is otherwise unable to obtain a refund of unearned 
advanced legal fees. In contrast, the client could obtain the refund if 
the funds are delivered to the practitioner. For example, if delivered 
to the practitioner, the advanced legal fees should be deposited in the 
practitioner's escrow account. See Sec.  11.115. Unearned funds would 
be refundable to the client, even if the practitioner ceases to 
continue practicing, and may not be subject to bankruptcy. Another risk 
in the event the promoter ceases to do business, or declares bankruptcy 
is the possibility that the practitioner will refuse to provide legal 
services for the client unless the client again provides funds to pay 
for legal services for which the client previously paid.
    Paragraph (f)(1)(ii) of Sec.  11.108 would provide if the client is 
an inventor who advances legal fees and costs to an invention promoter, 
and the promoter compensates the practitioner, the practitioner has a 
duty to disclose to the client all conflicting interests and risks in 
writing.
    Paragraph (2) of Sec.  11.108(f) would require a practitioner to 
avoid interference with his or her independence of professional 
judgment if a third party is paying for the practitioner's services. 
Thus, a practitioner must avoid relying on a contract or other 
agreement between a client/inventor and an invention promoter as 
limiting his or her professional services rendered to a particular 
number of applications, e.g., a provisional application, or to a 
particular type of invention for which an application will be filed, 
e.g., a design patent application.
    An invention promoter can interfere with the attorney-client or 
agent-client relationship between the practitioner and inventor-client 
in several ways. First, the promoter can interfere with the attorney-
client or agent-client relationship between the practitioner and 
inventor. For example, this can occur if the promoter determines the 
legal protection that the practitioner will seek for the inventor. 
These situations obtain where a promoter enters into a contract with 
its patron, the inventor, using its standard contract form to provide 
only design patent protection, or only utility patent protection. If 
the practitioner permits the promoter's contract to control the extent 
to which legal services are provided for the fee paid by the inventor, 
the practitioner permits the promoter to direct or regulate the 
practitioner's professional judgment.
    The invention promoter also may interfere with the relationship by 
collecting the legal fees to be paid for the practitioner's legal 
services. For example, if the promoter deposits the funds in its own 
bank account, and does not pay the practitioner, the promoter 
interferes with the relationship to the extent the practitioner refuses 
to provide legal services unless or until paid. A practitioner may be 
willing to continue representation only if the inventor-client again 
pays for the legal services, but only if legal fees are now paid 
directly to the practitioner. Inasmuch as the practitioner undertook

[[Page 69479]]

to represent the client under the circumstances where the company 
collects the legal fees, it is believed that the practitioner should 
provide the legal services, and pursue his or her legal recourse 
against the company for recovery of the fees.
    Similarly, invention promoters may interfere with the relationship 
if they go out of business. Practitioners employed by such promoters 
may leave the inventor-client's files behind the promoter's closed 
doors, and abandon the inventors to their own resources. Section 
11.108(f)(2) would require a practitioner to avoid interference with 
his or her independence of professional judgment if third party payment 
for a practitioner's services is to be permitted.
    Sections 11.108(f)(2) and 11.504(c) would proscribe a practitioner 
from permitting an invention promoter to direct or regulate the 
practitioner's professional judgment in rendering legal services.
    Family Relationships Between Practitioners. Paragraph (i) of Sec.  
11.108 would apply to related practitioners who are in different firms. 
Related practitioners in the same firm would be governed by Sec. Sec.  
11.107, 11.109, and 11.110. Pursuant to the provisions of Sec.  11.110, 
the disqualification stated in paragraph (i) is personal and is not 
imputed to members of firms with whom the practitioners are associated. 
Since each of the related practitioners is subject to Sec.  11.110(i), 
the effect is to require the consent of all materially affected 
clients.
    Practitioner's Liens. Paragraph (j) of Sec.  11.108 would be 
substantially the same as the provisions of current Sec.  10.64(a). The 
substantive law of each state and territory differs regarding whether 
practitioners are permitted to assert and enforce liens against the 
property of clients. In the District of Columbia, an attorney's lien is 
permitted. See, e.g., Redevelopment Land Agency v. Dowdey, 618 A.2d 
153, 159-60 (D.C. 1992), and cases cited therein. See also Beardsley v. 
Cockerell, 240 F.Supp 845 (D.D.C. 1965) (attorney retaining lien 
applied to legal patent work, legal non-patent work, and other property 
for payment for services). Whether a practitioner may legally have a 
lien on money or property belonging to a client is generally a matter 
of substantive law. Exceptions to which the common law might otherwise 
permit are made with respect to contingent fees and retaining liens. 
See, respectively, Sec.  11.105(c) and Sec.  11.108(i). Exceptions 
regarding retention of papers relating to a client are addressed in 
Sec.  11.116(d).
    Paragraph (d) of Sec.  11.116 would require a practitioner to 
surrender papers and property to which the client is entitled when 
representation of the client terminates. Section 11.108(j) would state 
a narrow exception to Sec.  11.116(d): a practitioner may retain 
anything the law permits--including property--except for files. As to 
files, a practitioner may retain only the practitioner's own work 
product, and then only if the client has not paid for the work. 
However, if the client has paid for the work product, the client is 
entitled to receive it, even if the client has not previously seen or 
received a copy of the work product. Furthermore, the practitioner may 
not retain the work product for which the client has not paid, if the 
client has become unable to pay or if withholding the work product 
might irreparably harm the client's interest.
    Under paragraph (d) of Sec.  11.116, for example, it would require 
a practitioner to return all papers received from a client, such as 
birth certificates, invention disclosures, or invention prototypes. 
Section 11.116(d) would prohibit retention of such papers to secure 
payment of any fee due. Only the practitioner's own work product--
results of factual investigations, legal research and analysis, and 
similar materials generated by the practitioner's own effort--could be 
retained (the term ``work product'' as used herein is limited to 
materials falling within the ``work product doctrine,'' but includes 
any material generated by the practitioner that would be protected 
under that doctrine whether or not created in connection with pending 
or anticipated litigation). Office actions would not be considered work 
product. A practitioner could not, however, withhold all work product 
merely because a portion of the practitioner's fees had not been paid. 
See Sec.  11.116(d).
    There are situations in which withholding work product would not be 
permissible because of irreparable harm to the client. The possibility 
of involuntary incarceration or criminal conviction constitutes one 
category of irreparable harm. See Formal Opinion 1690, Legal Ethics 
Committee of the Virginia State Bar (1997). The realistic possibility 
that a client might irretrievably lose a significant right, e.g., 
patent rights, or become subject to a significant liability because of 
the withholding of the work product constitutes another category of 
irreparable harm. On the other hand, the mere fact that the client who 
can afford to might have to pay another practitioner to replicate the 
work product does not, standing alone, constitute irreparable harm. 
These examples are merely indicative of the meaning of the term 
``irreparable harm,'' and are not exhaustive.
    Taking an interest in a client's patent. Paragraph (j)(3) of Sec.  
11.108 would be substantially the same as the provisions of current 
Sec.  10.64(a)(3), in permitting a practitioner to take an interest in 
a patent or in the proceeds from a patent as part of his or her fee. 
However, consistent with Sec.  11.105(a), the fee obtained by the 
interest may not exceed an amount that is reasonable. The paragraph 
adds information that a practitioner who is or has been an officer or 
employee of the Office has an additional legal issue to consider. The 
latter practitioner is ineligible during the period of the 
practitioner's appointment and for one year thereafter from acquiring, 
directly or indirectly, except by inheritance or bequest, any right or 
interest in any patent, issued or to be issued by the Office. See 35 
U.S.C. 4. In the year following separation from the Office, a 
practitioner who has been an officer or employee of the Office may 
acquire an interest in a client's patent only at such time and insofar 
as is permitted by Sec.  4.
    Paragraph (k) of 11.108 would address situations wherein a 
practitioner acquires access to inventor-clients through an invention 
promoter. A promoter's interests may be served merely if the inventor 
accepts a marketing plan. The plan often includes protection of the 
inventor-client's invention with a patent. However, the best interests 
of the inventor may mean that no patent is necessary, or both utility 
and design patents should be considered an integral part of the plan. 
The practitioner's duty to the participant includes educating the 
inventor as to the available options and not simply following the sole 
patent plan format offered by the promoter which all must use. The 
practitioner in these situations is attempting to serve two masters, 
the inventor and the invention promoter.
    A lawyer-client or agent-client relationship can exist between the 
practitioner and the inventor at least when representation before the 
Office occurs. A business and professional relationship can exist 
between the practitioner and the invention promoter whereby the 
practitioner acquires inventor-clients through the promoter. The 
practitioner and the promoter have a business and financial 
relationship because the practitioner obtains employment or 
compensation through the promoter.
    Paragraph (k) of Sec.  11.108 would address situations in which a

[[Page 69480]]

practitioner's relationship with another party could interfere with a 
practitioner's loyalty and independent professional judgment on an 
inventor-client's behalf. The practitioner's relationship with the 
invention promoter here creates the possibility of a conflict of 
interest that warrants disclosure under the rule. The inventor-client 
and the promoter may have differing interests in the engagement. The 
best interests of the inventor may mean that a patent should not be an 
integral part of the marketing plan. The best interest of the promoter, 
however, is most often served only if the inventor's plan includes a 
patent. The practitioner's duty to the inventor-client includes 
educating the inventor as to the available options to protect the 
invention, including patent rights, and not simply presenting one 
patent format offered by the promoter which all must use. The 
practitioner's duty of loyalty flows from his other client.
    Here, the practitioner's judgment may be influenced by the 
practitioner's relationship with the promoter, who is a ``party'' as 
the facilitator of the transaction, or perhaps as a partial assignee of 
the invention. This relationship would trigger Sec.  11.108(k)(1). 
Additionally, the promoter profits from the sale of the marketing plan, 
and receives the opportunity to market other products or services to 
the inventor and this would trigger Sec.  11.108(k)(2). Accordingly, 
under either paragraph (1) or (2) of Sec.  11.108(k), the practitioner 
would be barred from representing the inventor unless the practitioner 
makes the required full written disclosure and receives the consent of 
the inventor. Section 11.1(n) defines ``full disclosure'' as a ``clear 
explanation of the differing interests involved in a transaction, * * * 
and detailed explanation of the risks and disadvantages to the client 
entailed in any agreement or arrangement, including not only any 
financial loses that will or may foreseeably occur to the client, but 
also any liabilities that will or may foreseeably accrue to the 
client.''
    In this situation, a practitioner has a duty to inform the 
inventor-client in writing of the full extent of the practitioner's and 
client's differing interests. For example, the duty would require full 
disclosure of the practitioner's business and financial relationship 
with the promoter, and the differing interests of the practitioner, the 
promoter, and inventor in the transaction. The practitioner's duty of 
``full disclosure'' includes informing the inventor-client of 
reasonably foreseeable adverse consequences and includes informing the 
inventor in writing about how these relationships could cause the 
practitioner to favor the interests of the promoter and influence the 
practitioner's advice to the client. See Opinion No. 1997-148, Standing 
Committee on Professional Responsibility and Conduct (California).
    Section 11.109. After termination of a client-practitioner 
relationship, a practitioner may not represent another client except in 
conformity with proposed Sec.  11.109. The principles in Sec.  11.107 
would determine whether the interests of the present and former client 
are adverse. Thus, a practitioner could not properly seek to rescind on 
behalf of a new client a contract drafted on behalf of the former 
client. So also a practitioner who prosecutes a patent application for 
joint inventors, and has an attorney-client relationship with each 
joint inventor could not properly represent one joint inventor in 
breach of contract suit against the other joint inventor while the 
patent application was pending where each joint inventor agreed to pay 
half of the legal fees, and the practitioner is aware that each 
applicant would benefit directly from successful prosecution of the 
application. See Henry Filters, Inc. v. Peabody Barnes, Inc., 611 
N.E.2d 873 (Ohio 1992).
    The scope of a ``matter'' for purposes of Sec.  11.109 may depend 
on the facts of a particular situation or transaction. The 
practitioner's involvement in a matter can also be a question of 
degree. For example, a practitioner previously and currently served as 
local counsel in several patent applications for a Czechoslovakian 
agency that acted as an inventor's foreign attorney in prosecution of 
U.S. patent applications and that serves as Czechoslovakian 
representative for all Czechoslovakian patent applicants. The 
practitioner represented a client from Japan in an interference with 
another client of the Czechoslovakian agency. The practitioner was 
found not to be disqualified from representing a client adverse to the 
Czechoslovakian agency's other client. No evidence was adduced showing 
that the practitioner represented the agency's other client, or that 
the subject matter in the patents of the agency's client or any other 
Czechoslovakian application handled by the practitioner was 
substantially related to the subject matter of the practitioner's 
client. See Strojirenstvi v. Toyada, 2 USPQ2d 1222 (Comm'r Pat. 1986). 
In another example, attorneys in a firm representing an accused patent 
infringer, as well as the firm, were disqualified where one of the 
firm's partners worked directly for the patent owner in a substantially 
related case, and the other firm partner, designated as the lead 
counsel for the accused infringer, was an associate in the firm that 
represented the patent owner in the prior related case. The two suits 
involved the same adversaries. In both suits, the accused infringer 
filed antitrust counterclaims alleging the same improper marketing 
practices. Both suits involve the same technology, and were found to be 
``substantially related'' actions. See W.L. Gore & Associates, Inc. v. 
International Medical Prosthetics Research Associates, Inc., 223 USPQ 
884 (Fed. Cir. 1984). When a practitioner has been directly involved in 
a specific transaction, subsequent representation of other clients with 
materially adverse interests clearly is prohibited. On the other hand, 
a practitioner who recurrently handled a type of problem for a former 
client is not precluded from later representing another client in a 
wholly distinct problem of that type even though the subsequent 
representation involves a position adverse to the prior client. Similar 
considerations can apply to the reassignment of Government 
practitioners between defense and prosecution functions. The underlying 
question is whether the practitioner was so involved in the matter that 
the subsequent representation can be justly regarded as a changing of 
sides in the matter in question. Section 11.109 is intended to 
incorporate Federal case law defining the ``substantial relationship'' 
test. See, e.g., T.C. Theatre Corp. v. Warner Brothers Pictures, 113 
F.Supp. 265 (S.D.N.Y. 1953), and its progeny; see also Conflicts of 
Interest in the Legal Profession, 94 Harv. L. Rev.1244, 1315-34 (1981).
    Disqualification from subsequent representation is for the 
protection of clients and can be waived by them. A waiver is effective 
only if there is full disclosure of the circumstances, including the 
practitioner's intended role in behalf of the new client. The question 
of whether a practitioner is personally disqualified from 
representation in any matter on account of successive Government and 
private employment would be governed by proposed Sec.  11.111 rather 
than by Sec.  11.109.
    With regard to an opposing party's raising a question of conflict 
of interest, see the comment to Sec.  11.107. With regard to 
disqualification of a firm with which a practitioner is associated, see 
Sec. Sec.  11.110 and 11.111.
    Practitioners moving between firms. When practitioners have been 
associated within a firm but then end their association, the question 
of

[[Page 69481]]

whether a practitioner should undertake representation is more 
complicated. There are several competing considerations. The client 
previously represented by the former firm must be reasonably assured 
that the principle of loyalty to the client is not compromised. The 
rule should not be so broadly cast as to preclude other persons from 
having reasonable choice of legal counsel. The rule also should not 
unreasonably hamper practitioners from forming new associations and 
taking on new clients after having left a previous association. In this 
connection, it should be recognized that today many practitioners 
practice in firms, that many practitioners to some degree limit their 
practice to one field or another, and that many move from one 
association to another several times in their careers. If the concept 
of imputation were applied with unqualified rigor, the result would be 
radical curtailment of the opportunity of practitioners to move from 
one practice setting to another and of the opportunity of clients to 
change counsel.
    Reconciliation of these competing principles in the past has been 
attempted under two rubrics. One approach has been to seek per se rules 
of disqualification. For example, it has been held that a partner in a 
law firm is conclusively presumed to have access to all confidences 
concerning all clients of the firm. Under this analysis, if a 
practitioner has been a partner in one law firm and then becomes a 
partner in another law firm, there may be a presumption that all 
confidences known by the partner in the first firm are known to all 
partners in the second firm. This presumption might properly be applied 
in some circumstances, especially where the client has been extensively 
represented, but may be unrealistic where the client was represented 
only for limited purposes. Furthermore, such a rigid rule exaggerates 
the difference between a partner and an associate in modern law firms.
    The other rubric formerly used for dealing with disqualification is 
the appearance of impropriety proscribed in Canon 9 of the ABA Model 
Code of Professional Responsibility. This rubric has a two-fold 
problem. First, the appearance of impropriety can be taken to include 
any new client-lawyer or agent-client relationship that might make a 
former client feel anxious. If that meaning were adopted, 
disqualification would become little more than a question of subjective 
judgment by the former client. Second, since ``impropriety'' is 
undefined, the term ``appearance of impropriety'' is question-begging. 
It therefore has to be recognized that the problem of disqualification 
cannot be properly resolved either by simple analogy to a practitioner 
practicing alone or by the very general concept of appearance of 
impropriety.
    The standard that would be followed by the Office is addressed in 
the following paragraphs styled Confidentiality and Adverse positions.
    Confidentiality. Preserving confidentiality is a question of access 
to information. Access to information, in turn, is essentially a 
question of fact in particular circumstances, aided by inferences, 
deductions or working presumptions that reasonably may be made about 
the way in which practitioners work together. A practitioner may have 
general access to files of all clients of a law firm and may regularly 
participate in discussions of their affairs; it should be inferred that 
such a practitioner in fact is privy to all information about all the 
firm's clients. In contrast, another practitioner may have access to 
the files of only a limited number of clients and participate in 
discussions of the affairs of no other clients; in the absence of 
information to the contrary, it should be inferred that such a 
practitioner in fact is privy to information about the clients actually 
served but not confidences of other clients.
    Paragraph (b) of Sec.  11.109. Application of paragraph (b) of 
Sec.  11.109 would depend on a situation's particular facts. In such an 
inquiry the burden of proof should rest upon the firm whose 
disqualification is sought.
    Paragraph (b) of Sec.  11.109 would operate to disqualify the 
practitioner only when the practitioner involved has actual knowledge 
of information protected by Sec. Sec.  11.106 and 11.109(b). Thus, if a 
practitioner while with one firm acquired no confidential knowledge or 
information relating to a particular client of the firm, and that 
practitioner later joined another firm, neither the practitioner 
individually nor the second firm is disqualified from representing 
another client in the same or a related matter even though the 
interests of the two clients conflict. See Sec.  11.110(b) for the 
restrictions on a firm once a practitioner has terminated association 
with the firm.
    Independent of the question of disqualification of a firm, a 
practitioner changing professional association has a continuing duty to 
preserve confidentiality of information about a client formerly 
represented. See Sec. Sec.  11.106 and 11.109.
    Adverse positions. The second aspect of loyalty to a client is the 
practitioner's obligation to decline subsequent representations 
involving positions adverse to a former client arising in substantially 
related matters. This obligation requires abstention from adverse 
representation by the individual practitioner involved, but does not 
properly entail abstention of other practitioners through imputed 
disqualification. Hence, this aspect of the problem is governed by 
Sec.  11.109(a). Thus, if a practitioner left one firm for another, the 
new affiliation would not preclude the firms involved from continuing 
to represent clients with adverse interests in the same or related 
matters, so long as the conditions of paragraphs (b) and (c) concerning 
confidentiality have been met.
    Confidential information acquired by the practitioner in the course 
of representing a client may not subsequently be used or revealed by 
the practitioner to the disadvantage of the client. However, the fact 
that a practitioner has once served a client does not preclude the 
practitioner from using generally known information about that client 
when later representing another client.
    Disqualification from subsequent representation is for the 
protection of former clients and can be waived by them. A waiver is 
effective only if there is full disclosure of the circumstances, 
including the practitioner's intended role in behalf of the new client.
    With regard to an opposing party's raising a question of conflict 
of interest, see comment to Sec.  11.107. With regard to 
disqualification of a firm with which a practitioner is or was formerly 
associated, see Sec.  11.110.
    Section 11.110 would provide a general rule for disqualification. 
For purposes of the USPTO Rules of Professional Conduct, the term 
``firm'' includes practitioners in a private firm, and practitioners 
employed in the legal department of a corporation or other 
organization, or in a legal services organization, but does not include 
a Government agency or other Government entity. Whether two or more 
practitioners constitute a firm within this definition can depend on 
the specific facts. For example, two practitioners who share office 
space and occasionally consult or assist each other ordinarily would 
not be regarded as constituting a firm. However, if they present 
themselves to the public in a way suggesting that they are a firm or 
conduct themselves as a firm, they should be regarded as a firm for 
purposes of the Rules. The terms of any formal agreement between 
associated practitioners are relevant in determining whether they are a 
firm, as is the fact

[[Page 69482]]

that they have mutual access to confidential information concerning the 
clients they serve. Furthermore, it is relevant in doubtful cases to 
consider the underlying purpose of the Rule that is involved. A group 
of practitioners could be regarded as a firm for purposes of the Rule 
that the same practitioner should not represent opposing parties in 
litigation, while it might not be so regarded for purposes of the Rule 
that information acquired by one practitioner is attributed to another.
    With respect to the law department of an organization, there 
ordinarily would be no question that the members of the department 
constitute a firm within the meaning of the Rules of Professional 
Conduct. However, there can be uncertainty as to the identity of the 
client. For example, it may not be clear whether the law department of 
a corporation represents a subsidiary or an affiliated corporation, as 
well as the corporation by which the members of the department are 
directly employed. A similar question can arise concerning an 
unincorporated association and its local affiliates.
    Similar questions can also arise with respect to practitioners in 
legal aid organizations. Practitioners employed in the same unit of a 
legal service organization constitute a firm, but not necessarily those 
employed in separate units. As in the case of independent 
practitioners, whether the practitioners should be treated as 
associated with each other can depend on the particular Rule that is 
involved, and on the specific facts of the situation.
    Where a practitioner has joined a private firm after having 
represented the Government, the situation would be governed by Sec.  
11.111. The individual practitioner involved is bound by these rules 
generally, including Sec. Sec.  11.106, 11.107, and 11.109.
    Different provisions are thus made for movement of a practitioner 
from one private firm to another and for movement of a practitioner 
from the Government to a private firm. The Government is entitled to 
protection of its client confidences, and therefore to the protections 
provided in Sec. Sec.  11.106 and 11.111. However, if the more 
extensive disqualification in Sec.  11.110 were applied to former 
Government practitioners, e.g., patent examiners, the potential effect 
on the Government would be unduly burdensome. The Government deals with 
all private citizens and organizations, and thus has a much wider 
circle of adverse legal interests than does any private law firm. In 
these circumstances, the Government's recruitment of practitioners 
would be seriously impaired if Sec.  11.110 were applied to the 
Government. On balance, therefore, the Government, including the USPTO, 
is better served in the long run by the protections stated in Sec.  
11.111.
    Paragraph (a) of Sec.  11.110 would address principles of imputed 
disqualification. The rule of imputed disqualification stated in Sec.  
11.110(a) gives effect to the principle of loyalty to the client as it 
applies to practitioners who practice in a law firm. Such situations 
can be considered from the premise that a firm of practitioners is 
essentially one practitioner for purposes of the rules governing 
loyalty to the client, or from the premise that each practitioner is 
vicariously bound by the obligation of loyalty owed by each 
practitioner with whom the practitioner is associated. Section 
11.110(a) would govern only among the practitioners currently 
associated in a firm. When a practitioner moves from one firm to 
another, the situation would be governed by Sec. Sec.  11.109 and 
11.110(b).
    Paragraph (b) of Sec.  11.110 would operate to permit a law firm, 
under certain circumstances, to represent a person with interests 
directly adverse to those of a client represented by a practitioner who 
formerly was associated with the firm. This section would apply 
regardless of when the formerly associated practitioner represented the 
client. However, the law firm may not represent a person with interests 
adverse to those of a present client of the firm, which would violate 
Sec.  11.107. Moreover, the firm may not represent the person where the 
matter is the same or substantially related to that in which the 
formerly associated practitioner represented the client and any other 
practitioner currently in the firm has material information protected 
by Sec. Sec.  11.106 and 11.109(c).
    Section 11.111 would address practitioners who leave public office, 
such as resigning or retiring from the USPTO as a patent examiner, and 
enter other employment, e.g., becoming a patent searcher, or registered 
practitioner. It applies to judges and their law clerks as well as to 
practitioners who have acted in other public capacities. It is a 
counterpart of Sec.  11.110(b), which applies to practitioners moving 
from one firm to another.
    This section would prohibit a practitioner from exploiting his or 
her former association with a public office for the advantage of a 
private client. It is a counterpart of Sec.  11.110(b), which applies 
to practitioners moving from one firm to another.
    A practitioner representing a Government agency or section within 
the agency, whether employed or specially retained by the Government, 
is subject to the Rules of Professional Conduct, including the 
prohibition against representing adverse interests stated in Sec.  
11.107 and the protections afforded former clients in Sec.  11.109. In 
addition, such a practitioner is subject to this Sec.  11.111 and to 
statutes and Government regulations concerning conflict of interest. In 
the metropolitan Washington, DC area, where there are so many 
practitioners for the Federal Government agencies, a number of whom are 
leaving Government and accepting other employment, particular heed must 
be paid to the Federal conflict-of-interest statutes. See, e.g., 18 
U.S.C. Chapter 11 and regulations and opinions thereunder. In applying 
Sec.  11.111, the Office would continue to follow the principles 
announced in AH JU Steel Co., Ltd. v. Armco, Inc., 680 F.2d 751 (CCPA 
1982); Sierra Vista Hospital, Inc., v. United States, 639 F.2d 749 
(Ct.Cla.1981); Armstrong v. McAlpin, 625 F.2d 433 (2nd Cir. 1980) (en 
banc) vacated, 449 U.S. 1106 (1981); General Electric Co. v. United 
States, 215 Ct.Cl. 928 (1977); and Kesselhaut v. United States, 555 
F.2d 791 (Ct.Cl. 1977).
    Where the successive employment is a private client and a public 
agency, the risk exists that power or discretion vested in public 
authority might be used for the special benefit of a private client. A 
practitioner should not be in a position where benefit to a private 
client might affect performance of the lawyer's professional functions 
on behalf of public authority. Thus, a registered practitioner should 
not be in a position as a patent examiner to be influenced by any 
loyalty to a former client. Also, unfair advantage could accrue to the 
private client by reason of access to confidential Government 
information about the client's adversary obtainable only through the 
practitioner's Government service. However, the rules governing 
practitioners presently or formerly employed by a Government agency 
should not be so restrictive as to inhibit transfer of employment to 
and from the Government. The Government has a legitimate need to 
attract qualified practitioners as well as to maintain high ethical 
standards. The provisions for screening and waiver are necessary to 
prevent the disqualification rule from imposing too severe a deterrent 
against entering public service.
    When the client is an agency of one Government, that agency should 
be treated as a private client for purposes of this section if the 
practitioner thereafter represents an agency of another Government, as 
when a lawyer

[[Page 69483]]

represents a city and subsequently is employed by a Federal agency.
    Paragraph (a) of Sec.  11.111, like current Sec.  10.111(b), flatly 
forbids a practitioner to accept other employment in a matter in which 
the practitioner participated personally and substantially as a public 
officer or employee; participation specifically includes acting on a 
matter in a judicial capacity. There is no provision for waiver of the 
individual practitioner's disqualification. The USPTO has disciplined a 
practitioner for accepting private employment in a matter in which he 
had personal responsibility while a public employee. See Friedman v. 
Lehman, 40 USPQ2d 1206 (D.D.C. 1996) (reprimanding attorney who, as an 
examiner signed a restriction requirement in a patent application, and 
in retirement gave expert testimony by deposition about the patent that 
issued on a continuation application of application wherein he signed 
the restriction requirement).
    ``Matter'' is defined in Sec.  11.1(w) so as to encompass only 
matters that are particular to a specific party or parties. The making 
of rules of general applicability and the establishment of general 
policy will ordinarily not be a ``matter'' within the meaning of Sec.  
11.111. When a practitioner is forbidden by paragraph (a) to accept 
private employment in a matter, the partners and associates of that 
practitioner are likewise forbidden, by paragraph (b), to accept the 
employment unless the screening and disclosure procedures described in 
paragraphs (c) through (f) are followed.
    Section 11.111 forbids practitioners to accept other employment in 
connection with matters that are the same as or ``substantially 
related'' to matters in which they participated personally and 
substantially while serving as public officers or employees. The 
leading case defining ``substantially related'' matters in the context 
of former Government employment is Brown v. District of Columbia Board 
of Zoning Adjustment, 486 A.2d 37 (D.C. 1984) (en banc). There the D.C. 
Court of Appeals, en banc, held that in the ``revolving door'' context, 
a showing that a reasonable person could infer that, through 
participation in one matter as a public officer or employee, the former 
Government practitioner ``may have had access to information legally 
relevant to, or otherwise useful in'' a subsequent representation, is 
prima facie evidence that the two matters are substantially related. If 
this prima facie showing is made, the former Government practitioner 
must disprove any ethical impropriety by showing that the practitioner 
``could not have gained access to information during the first 
representation that might be useful in the later representation.'' Id. 
at 49-50. In Brown, the Court of Appeals announced the ``substantially 
related'' test after concluding that, under former DR 9-101(B), see 
``Revolving Door,'' 445 A.2d 615 (D.C. 1982) (en banc) (per curiam), 
the term ``matter'' was intended to embrace all matters ``substantially 
related'' to one another--a test that originated in ``side-switching'' 
litigation between private parties. See Sec.  11.109; Brown, 486 A.2d 
at 39-40 n.1, 41-42 & n.4. Accordingly, the words ``or substantially 
related to'' in paragraph (a) are an express statement of the judicial 
gloss in Brown interpreting ``matter.''
    Paragraph (a)'s absolute disqualification of a practitioner from 
matters in which the practitioner participated personally and 
substantially carries forward a policy of avoiding both actual 
impropriety and the appearance of impropriety that is expressed in the 
Federal conflict-of-interest statutes and was expressed in the former 
Code of Professional Responsibility.
    Paragraph (c) requires the screening of a disqualified practitioner 
from such a matter as a condition to allowing any practitioners in the 
disqualified practitioner's firm to participate in it. This procedure 
is permitted in order to avoid imposing a serious deterrent to 
practitioners' entering public service. Governments have found that 
they benefit from having in their service younger persons who do not 
intend to devote their entire careers to public service, as well as 
more experienced practitioners. Some practitioners might not enter into 
short-term public service if they thought that, as a result of their 
active governmental practice, a firm would hesitate to hire them 
because of a concern that the entire firm would be disqualified from 
matters as a result.
    There is no imputed disqualification and consequently no screening 
requirement in the case of a judicial law clerk. But such clerks are 
subject to a personal obligation not to participate in matters falling 
within paragraph (a) of Sec.  11.111, since participation by a law 
clerk is within the term ``judicial or other adjudicative capacity.''
    ``Other employment,'' as used in paragraph (a) of Sec.  11.111, 
would include the representation of a governmental body other than an 
agency of the Government by which the practitioner was employed as a 
public officer or employee. In the case of a move from one Government 
agency to another, however, the prohibition provided in paragraph (a) 
might be waived by the Government agency with which the practitioner 
was previously employed. As used in paragraph (a), it would not be 
``other employment'' for a practitioner who has left the employment of 
a particular Government agency and taken employment with another 
Government agency (e.g., the Department of Justice) or with a private 
law firm to continue or accept representation of the same Government 
agency with which the practitioner was previously employed.
    Paragraph (c) of Sec.  11.111 would permit a practitioner to 
receive a salary or partnership share established by prior independent 
agreement, while prohibiting the attorney's compensation from being 
directly related in any way to the fee in the matter in which the 
practitioner is disqualified.
    Section 11.112 would extend the basic requirements of Sec.  
11.111(a) to privately employed arbitrators. Section 11.112(a) is 
substantially similar to Sec.  11.111(a), except that it allows an 
arbitrator to represent someone in connection with a matter with which 
the practitioner was substantially involved while serving as an 
arbitrator if the parties to the arbitration consent. Section 11.112(b) 
makes it clear that the prohibition set forth in Sec.  11.112(a) does 
not apply to partisan arbitrators serving on a multimember arbitration 
panel.
    Section 11.113 would address situations where the client is an 
entity, as opposed to a person. An organizational client is a legal 
entity, which cannot act except through its officers, directors, 
employees, shareholders, and other constituents. The duties defined 
herein apply equally to corporations and unincorporated associations. 
``Other constituents'' as used herein means the positions equivalent to 
officers, directors, employees, and shareholders held by persons acting 
for organizational clients that are not corporations. Customers of an 
organizational client are not constituents.
    When one of the constituents of an organizational client 
communicates with the organization's practitioner in that person's 
organizational capacity, the communication is protected by Sec.  
11.106. Thus, by way of example, if an organizational client requests 
its attorney to investigate allegations of wrongdoing, interviews made 
in the course of that investigation between the attorney and the 
client's employees or other constituents are covered by Sec.  11.106. 
This does not mean, however, that constituents of an organizational 
client are the clients of the practitioner. The practitioner may not 
disclose to such constituents information relating to the 
representation except for

[[Page 69484]]

disclosures explicitly or impliedly authorized by the organizational 
client in order to carry out the representation or as otherwise 
permitted by Sec.  11.106.
    When constituents of the organization make decisions for it, the 
practitioner ordinarily must accept the decisions even if their utility 
or prudence is doubtful. The organization's constituents make decisions 
concerning policy and operations, including ones entailing serious 
risk. However, different considerations arise when the practitioner 
knows that the organization may be substantially injured by tortuous or 
illegal conduct by a constituent member of an organization that 
reasonably might be imputed to the organization or that might result in 
substantial injury to the organization. In such a circumstance, it may 
be reasonably necessary for the practitioner to ask the constituent to 
reconsider the matter. If that fails, or if the matter is of sufficient 
seriousness and importance to the organization, it may be reasonably 
necessary for the practitioner to take steps to have the matter 
reviewed by a higher authority in the organization. Clear justification 
should exist for seeking review over the head of the constituent 
normally responsible for it. The stated policy of the organization may 
define circumstances and prescribe channels for such review, and a 
practitioner should encourage the formulation of such a policy. Even in 
the absence of organization policy, however, the practitioner may have 
an obligation to refer a matter to a higher authority, depending on the 
seriousness of the matter and whether the constituent in question has 
apparent motives to act at variance with the organization's interest. 
Review by the chief executive officer or by the board of directors may 
be required when the matter is of importance commensurate with their 
authority. At some point it may be useful or essential to obtain an 
independent legal opinion.
    In an extreme case, it may be reasonably necessary for the 
practitioner to refer the matter to the organization's highest 
authority. Ordinarily, that is the board of directors or similar 
governing body. However, applicable law may prescribe that under 
certain conditions highest authority reposes elsewhere; for example, in 
the independent directors of a corporation.
    Relation to Other Rules. Section 11.113 would not limit or expand 
the practitioner's responsibility under Sec. Sec.  11.106, 11.108, 
11.116, 11.303, and 11.401. If the practitioner's services are being 
used by an organization to further a crime or fraud by the 
organization, Sec.  11.102(d) can be applicable.
    Government Agency. Because the Government agency that employs the 
Government practitioner is the practitioner's client, the practitioner 
represents the agency or section within the agency acting through its 
duly authorized constituents. Any application of proposed Sec.  11.113 
to Government practitioners must, however, take into account the 
differences between Government agencies and other organizations. For 
example, statutes and regulation may define duties of lawyers employed 
by the Government or lawyers in military service. Therefore, defining 
precisely the identity of the client and prescribing the resulting 
obligations of such lawyers may be more difficult in the Government 
context. Although in some circumstances the client may be a specific 
agency, it is generally the Government as a whole. For example, if the 
action or failure to act involves the head of a bureau, either the 
department of which the bureau is a part or the Government as a whole 
may be the client for the purpose of this Rule. Moreover, in a matter 
involving the conduct of Government officials, a Government lawyer may 
have authority to question such conduct more extensively than that of a 
lawyer for a private organization in similar circumstances. This Rule 
does not limit that authority.
    Clarifying the Practitioner's Role. There are times when the 
organization's interest may differ from those of one or more of its 
constituents. This can occur, for example, where a constituent 
believes, incorrectly, that a practitioner is representing the 
constituent's interests, whereas the practitioner represents the 
interests of the organization. In such circumstances the practitioner 
should advise any constituent whose interest the practitioner finds 
differs from that of the organization, of the conflict or potential 
conflict of interest, that the practitioner's representation is limited 
to the client cannot permit the practitioner to represent such 
constituent, and that the constituent may wish to obtain independent 
representation. Care must be taken to assure that the individual 
understands that, when there is such divergent interest, the 
practitioner for the organization cannot provide legal representation 
for that constituent individual, and that discussions between the 
practitioner for the organization and the individual may not be 
privileged.
    Whether the practitioner for the organization prudently should give 
such a warning to any constituent individual will turn on the facts of 
each case.
    Dual Representation. Paragraph (c) of Sec.  11.113 recognizes that 
a practitioner for an organization may also represent a principal 
officer or major shareholder.
    Derivative Actions. Under generally prevailing law, the 
shareholders or members of a corporation may bring suit to compel the 
directors to perform their legal obligations in the supervision of the 
organization. Members of unincorporated associations have essentially 
the same right. Such an action may be brought nominally by the 
organization, but usually is, in fact, a legal controversy over 
management of the organization.
    The question can arise whether counsel for the organization may 
defend such an action. The proposition that the organization is the 
practitioner's client does not alone resolve the issue. Most derivative 
actions are a normal incident of an organization's affairs, to be 
defended by the organization's practitioner like any other suit. 
However, if the claim involves serious charges of wrongdoing by those 
in control of the organization, a conflict may arise between the 
practitioner's duty to the organization and the practitioner's 
relationship with the board. In those circumstances, Sec.  11.107 
governs whether practitioners who normally serve as counsel to the 
corporation can properly represent both the directors and the 
organization.
    Section 11.114 would introduce rules to address circumstances when 
a client is under a disability. The normal client-practitioner 
relationship is based on the assumption that the client, when properly 
advised and assisted, is capable of making decisions about important 
matters. When the client is a minor or suffers from a mental disorder 
or disability, however, maintaining the ordinary client-practitioner 
relationship may not be possible in all respects. In particular, an 
incapacitated person may have no power to make legally binding 
decisions. Nevertheless, a client lacking legal competence often has 
the ability to understand, deliberate upon, and reach conclusions about 
matters affecting the client's own well-being. Furthermore, to an 
increasing extent the law recognizes intermediate degrees of 
competence. For example, the Patent Statute draws no distinction based 
on age as to entitlement to a patent. Also, children as young as five 
or six years of age, and certainly those of ten or twelve, have been 
regarded as having opinions that are entitled to weight in legal 
proceedings concerning their custody. Conversely, it is recognized that 
some persons of advanced age can be quite

[[Page 69485]]

capable of handling routine financial matters while needing special 
legal protection concerning major transactions.
    The fact that a client suffers a disability does not diminish the 
practitioner's obligation to treat the client with attention and 
respect. If the person has no guardian or legal representative, the 
practitioner may need to act as de facto guardian. Even if the person 
does have a legal representative, the practitioner should as far as 
possible accord the represented person the status of client, 
particularly in maintaining communication.
    If a legal representative has already been appointed for the 
client, the practitioner should ordinarily look to the representative 
for decisions on behalf of the client. If a legal representative has 
not been appointed, the practitioner should see to such an appointment 
where it would serve the client's best interests. Thus, if a disabled 
client has substantial property that should be sold for the client's 
benefit, effective completion of the transaction ordinarily requires 
appointment of a legal representative. In many circumstances, however, 
appointment of a legal representative may be expensive or traumatic for 
the client. Evaluation of these considerations is a matter of 
professional judgment on the practitioner's part.
    Disclosure of the Client's Condition. Rules of procedure in 
litigation generally provide that a guardian or next friend shall 
represent minors or persons suffering mental disability if they do not 
have a general guardian. Practitioners occasionally file patent 
applications for child inventors whose parents act as general 
guardians. However, disclosure of a client's disability can adversely 
affect the client's interests. For example, raising the question of 
disability could, in some circumstances, lead to proceedings for 
involuntary commitment. The practitioner's position in such cases is an 
unavoidably difficult one. The practitioner may seek guidance from an 
appropriate diagnostician.
    Section 11.115 would continue the policies regarding the 
safeguarding of a client's property. A practitioner should hold 
property of others with the care required of a professional fiduciary. 
Securities should be kept in a safe deposit box, except when some other 
form of safekeeping is warranted by special circumstances. All property 
that is the property of clients or third persons should be kept 
separate from the practitioner's business and personal property and, if 
monies, in one or more trust accounts. Separate trust accounts may be 
warranted when administering estate monies or acting in similar 
fiduciary capacities.
    Paragraph (a) of Sec.  11.115 would be substantially the same as 
current Sec.  10.112(a). Separation of the funds of a client from those 
of the practitioner not only serves to protect the client but also 
avoids even the appearance of impropriety, and therefore commingling of 
such funds should be avoided.
    Paragraph (b) of Sec.  11.115 would address situations wherein a 
practitioner has an arrangement with an invention promoter to be paid 
for legal services, and the promoter collects advanced legal fees from 
a client. In these situations, the practitioner would be responsible 
for safeguarding the funds advanced by inventor-clients to the 
promoter. The practitioner's involvement might provide the arrangement 
between the promoter and inventor-client with a genre of legitimacy and 
security for the funds. Thus, the arrangement enables the promoter to 
receive and have the funds for the practitioner's legal services. It 
would be appropriate for the practitioner to be expected to safeguard 
the client's funds advanced for the practitioner's legal services. 
Thus, if the promoter kept the funds advanced by the client and ceases 
doing business, the practitioner would be responsible for continuing to 
provide the legal services, even if he or she did not safeguard the 
advanced funds.
    Some invention promoters eventually cease doing business. The 
Federal Trade Commission acted to freeze the assets of two invention 
promoters, and a District Court froze the assets. See Federal Trade 
Commission v. American Inventors Corporation, 37 USPQ2d 1154, 1995 U.S. 
Dist. LEXIS 18854 (D.Mass. 1995). The companies ceased doing business, 
and unsuccessfully sought protection in bankruptcy. See Federal Trade 
Commission v. American Institute for Research and Development, 219 B.R. 
639, 1998 U.S. Dist. LEXIS 4391 (D.Mass. 1998) (dismissing involuntary 
bankruptcy proceedings by company to avoid risk of abuse of bankruptcy 
system and in support of the court's interest in vindicating its 
remedial orders). The matter remains pending, and what the clients will 
recover, if anything, is uncertain. Under Sec.  11.115(b), a 
practitioner would be responsible for safeguarding the funds advanced 
by the client. For example, a practitioner could arrange to have the 
promoter return the funds to the client, who might then advance the 
funds to the practitioner.
    Paragraph (c) of Sec.  11.115 would be substantially the same as 
current Sec.  10.112(b)(2). In a variety of circumstances, 
practitioners receive funds from third parties from which the 
practitioner's fee will be paid. If there is risk that the client may 
divert the funds without paying the fee, the lawyer is not required to 
remit the portion from which the fee is to be paid. A practitioner is 
not required to remit the portion from which the fee is to be paid. 
However, a practitioner may not hold funds to coerce a client into 
accepting the practitioner's contention. The disputed portion of the 
funds should be kept in trust and the practitioner should suggest means 
for prompt resolution of the dispute, such as arbitration. The 
undisputed portion of the funds shall be promptly distributed.
    Third parties, such as a client's creditors, may have just claims 
against funds or other property in a practitioner's custody. A 
practitioner may have a duty under applicable law to protect such 
third-party claims against wrongful interference by the client, and 
accordingly may refuse to surrender the property to the client. 
However, a practitioner should not unilaterally assume to arbitrate a 
dispute between the client and the third party.
    The obligations of a practitioner under this section are 
independent of those arising from activity other than rendering legal 
services. For example, the applicable law relating to fiduciaries 
governs a practitioner who serves as an escrow agent even though the 
practitioner does not render legal services in the transaction.
    Paragraph (d) of Sec.  11.115 would be substantially identical to 
current Sec.  10.112(c).
    Paragraph (e) of Sec.  11.115 would require funds, securities or 
other properties held by a practitioner as a fiduciary to be maintained 
in separate fiduciary accounts, and the practitioner would not be 
permitted to commingle the assets of such fiduciary accounts except as 
provided by state bar ethics rules.
    Paragraph (f) of Sec.  11.115 would require a practitioner to 
maintain books and records that establish compliance with paragraphs 
(a) and (d) of Sec.  11.115 for a period of five years after 
termination of the representation. A member of the bar in the District 
of Columbia is required to maintain records for a five-year period. 
Further, the five-year period is consistent with the statute of 
limitation period within which formal action must be taken to 
discipline a practitioner. See Johnson v. SEC, 87 F.3d, 484 (D.C.Cir. 
1996); 3M Company v. Browner, 17 F.3d 1453 (D.C.Cir. 1994).

[[Page 69486]]

    Paragraph (g) of Sec.  11.115 would require a minimum accounting 
procedure that would be applicable to all escrow accounts subject to 
Sec. Sec.  11.115(a) and (d).
    The records Sec. Sec.  11.115(f) and (g) would require a 
practitioner to keep are the same records the practitioner must 
currently maintain to comply with 37 CFR 10.112(c)(3). Section 
10.112(c)(3) requires a practitioner to ``maintain complete records of 
all funds, securities and other properties of a client coming into the 
possession of the practitioner.'' Section 10.112(c)(3) is substantially 
the same as DR 9-102(b)(3) of the Code of Professional Responsibility 
of the American Bar Association, which was adopted by numerous states. 
It has been long recognized that compliance with the Code's rule 
requires maintenance of, inter alia, a cash receipts journal, a cash 
disbursements journal, and a subsidiary ledger, as well as period trial 
balances, and insufficient fund check reporting. See Wright v. Virginia 
State Bar, 357 S.E.2d 518, 519 (Va. 1987); In re Librizzi, 569 A.2d 
257, 258-259 (N.J. 1990); In re Heffernan, 351 N.W.2d 13, 14 (Minn. 
1984); In re Austin, 333 N.W.2d 633, 634 (Minn. 1983); and In re 
Kennedy, 442 A.2d 79, 84-85 (Del. 1982). Thus, Sec. Sec.  11.115(f) and 
(g) articulate recordkeeping requirements that currently obtain for all 
practitioners.
    With respect to property that constitutes evidence, such as the 
instruments or proceeds of crime, see Sec.  11.304(a).
    Paragraph (h) of Sec.  11.115 would provide for accepting, as 
complying with Sec. Sec.  11.115(f) and (g), financial records 
maintained by an attorney that comply with his or her state bar's 
financial recordkeeping requirements if the attorney is a member in 
good standing of the bar of the highest court of that state, and the 
attorney's principal place of business is in that state. For patent 
agents employed by a law firm, substantial compliance with the USPTO 
recordkeeping requirements will be met if the law firm in a state 
employing the agent complies with the financial recordkeeping 
requirements of that state. Attorneys and patent agents outside United 
States, all attorneys not maintaining a financial account records in 
compliance with his or her state bar's recordkeeping requirements, and 
all other patent agents must comply with USPTO recordkeeping 
requirements detailed in Sec.  11.115. The USPTO presumes that patent 
agents employed by law firms do not have control over how records are 
to be maintained and may not have a choice of what guidelines with 
which they must comply. Patent agents who are hired as contractors, on 
the other hand, and self-employed patent agents are presumed to have 
control and, thus, must comply with the provisions of Sec. Sec.  
11.115(f) and (g).
    Section 11.116 would continue the current practice regarding 
withdrawal. A practitioner should not accept representation in a matter 
unless it can be performed competently, promptly, without improper 
conflict of interest, and to completion.
    Paragraph (a) of Sec.  11.116 would address mandatory withdrawal. A 
practitioner ordinarily must decline or withdraw from representation if 
the client demands that the practitioner engage in conduct that is 
illegal or violates the Rules of Professional Conduct or other law. The 
practitioner is not obliged to decline or withdraw simply because the 
client suggests such a course of conduct; a client may make such a 
suggestion in the hope that a practitioner will not be constrained by a 
professional obligation.
    Difficulty may be encountered if withdrawal is based on the 
client's demand that the practitioner engage in unprofessional conduct, 
or failure to pay agreed-upon fees. The Office or court may wish an 
explanation for the withdrawal, while the practitioner may be bound to 
keep confidential the facts that would constitute such an explanation. 
The practitioner's statement that irreconcilable differences between 
the practitioner and client require termination of the representation 
ordinarily should be accepted as sufficient.
    Paragraph (a) of Sec.  11.116 would also address discharge of a 
practitioner. A client has a right to discharge a practitioner at any 
time, with or without cause, subject to liability for payment for the 
practitioner's services. Where future dispute about the withdrawal may 
be anticipated, it may be advisable to prepare a written statement 
reciting the circumstances. Whether an inventor, who is employed by a 
company and has signed a power of attorney to a practitioner retained 
by the company, can discharge the practitioner may depend on the facts 
and applicable law. In the absence of evidence that the company is the 
assignee of record of the entire interest, and that as assignee, the 
company has given a power of attorney to the practitioner, the inventor 
at least technically may revoke the power of attorney. Upon recording 
an assignment of the entire interest, the company may elect to revoke 
all previous powers of attorney and appoint the practitioner. 37 CFR 
1.36. If an employee-inventor refuses to execute an assignment, and 
there is an agreement between the employee and employer for assignment 
of patent rights, the employer may be entitled under state law to 
specific performance of the agreement. See In re RCA Corporation, 209 
USPQ 1114 (Comm'r Pat. 1981).
    If a client is mentally incompetent, the client may lack the legal 
capacity to discharge the practitioner. The practitioner should make a 
special effort to help the client consider the consequences and, in an 
extreme case, may initiate proceedings for a conservatorship or similar 
protection of the client. See Sec.  11.114.
    Paragraph (b) of Sec.  11.116 would address optional withdrawal. A 
practitioner may withdraw from representation in some circumstances. 
The practitioner has the option to withdraw if the withdrawal can be 
accomplished without material adverse effect on the client's interests. 
Withdrawal is also justified if the client persists in a course of 
action that the practitioner reasonably believes is criminal or 
fraudulent, for a practitioner is not required to be associated with 
such conduct even if the practitioner does not further it. See Sec.  
11.102(d) and (e). Withdrawal is also permitted if the practitioner's 
services were misused in the past even if that would materially 
prejudice the client.
    A practitioner may withdraw if the client refuses to abide by the 
terms of an agreement relating to the representation, such as an 
agreement concerning the timely payment of the practitioner's fees, 
court costs or other out-of-pocket expenses of the representation, or 
an agreement limiting the objectives of the representation.
    If the matter is not pending in court or before the Office, a 
practitioner will not have ``other good cause for withdrawal'' unless 
the practitioner is acting in good faith and the circumstances are 
exceptional enough to outweigh the material adverse effect on the 
interests of the client that withdrawal will cause.
    Paragraph (b) of Sec.  11.116 would address assisting the client 
upon withdrawal. Even if the client has unfairly discharged the 
practitioner, a practitioner would be required to take all reasonable 
steps to mitigate the consequences to the client. The practitioner may 
retain papers as security for a fee only to the extent permitted by 
Sec.  11.108(i).
    Paragraph (c) of Sec.  11.116 would address compliance with 
requirements of a tribunal, e.g., the Office. This paragraph would 
reflect that a practitioner may, by appearing before a tribunal, become 
subject to the

[[Page 69487]]

tribunal's power in some circumstances to prevent a withdrawal that 
would otherwise be proper. Section 11.116(c) would require the 
practitioner who is ordered to continue a representation before a 
tribunal to do so. However, Sec.  11.116(c) is not intended to prevent 
the practitioner from challenging the tribunal's order as beyond its 
jurisdiction, arbitrary, or otherwise improper while, in the interim, 
continuing the representation.
    Paragraph (d) of Sec.  11.116 would address return of a client's 
property or money. This paragraph would require a practitioner to make 
timely return to the client of any property or money ``to which the 
client is entitled.'' Where a practitioner holds property or money of a 
client at the termination of a representation and there is a dispute 
concerning the distribution of such property or money--whether such 
dispute is between the practitioner and a client, the practitioner and 
another practitioner who is owed a fee in the matter, or between either 
the practitioner or the client and a third party--the practitioner 
would have to segregate the disputed portion of such property or money, 
hold that property or money in trust as required by Sec.  11.115, and 
promptly distribute any undisputed property and amounts. See Sec.  
11.115(c).
    Notwithstanding the foregoing, where a practitioner has a valid 
lien covering undisputed amounts of property or money, the practitioner 
might continue to hold such property or money to the extent permitted 
by the substantive law governing the lien asserted. See generally 
Sec. Sec.  11.108, and 11.115(c).
    The ethical mandate ``to protect a client's interests'' is 
recognized as displacing the common law retaining lien. See Formal 
Opinion 1690, Legal Ethics Committee of the Virginia State Bar (1997). 
Therefore, the proposed rule would provide an exception regarding 
retention of any part of a client's patent and trademark application 
files that had been filed with the Office. For example, this would 
include application itself, as well as any amendment, or reply filed in 
the Office. Documents filed in the Office are not within the attorney 
work product exception. Once the documents are filed with the Office, 
they no longer constitute work product. See Formal Opinion 250, Legal 
Ethics Committee of the District of Columbia (1994) (Files containing 
copies of applications filed with the FCC and amendments and 
correspondence relating to those applications, also filed with the FCC, 
are not within the work product exception). Also excepted from 
retention is any patent or trademark application prosecution work 
product for which a practitioner has been paid. Further excepted is any 
prosecution-related paper whenever assertion of a retaining lien on the 
paper would prejudice or imperil the protection of the client's 
interests. See Formal Opinion 1690, Legal Ethics Committee of the 
Virginia State Bar (1997).
    It is recognized that more is required to establish material 
prejudice with regard to attorney work product than to client-provided 
papers. In situations wherein a client is represented by a new 
practitioner, material prejudice does not occur simply because a new 
practitioner must create work product, such as research, drafting, and 
memoranda, that are contained in the original practitioner's file. 
Creating work product may be inconvenient and an expense to the client, 
but it does not rise to the level of material prejudice to a client's 
interest in subsequent representation. Accord, Formal Opinion 1690, 
Legal Ethics Committee of the Virginia State Bar (1997).
    Section 11.117 would introduce rules regarding the sale of a 
practice before the Office involving patent matters. The practice of 
law is a profession, not merely a business. Clients are not commodities 
that can be purchased and sold at will. Pursuant to Sec.  11.117, when 
a registered practitioner ceases to practice and another registered 
practitioner or firm of registered practitioners takes over the 
representation, the selling practitioner could obtain compensation for 
the reasonable value of the practice, as could withdrawing partners of 
law firms. See Sec. Sec.  11.504 and 11.506.
    Termination of practice by the seller. The requirement of Sec.  
11.117(b) that all of the private practice be sold would be satisfied 
if the seller in good faith makes the entire practice available for 
sale to the purchaser. The fact that a number of the seller's clients 
decide not to be represented by the purchaser but take their matters 
elsewhere, therefore, does not result in a violation. Neither does a 
return to private practice as a result of an unanticipated change in 
circumstances result in a violation. For example, a registered 
practitioner who has sold the practice to accept an appointment to 
judicial office would not violate the requirement that the sale be 
attendant to cessation of practice if the practitioner later resumes 
private practice upon being defeated in a contested or a retention 
election for the office.
    The requirement that the seller cease to engage in the private 
practice of law, including practice before the Office in patent 
matters, does not prohibit employment of a registered patent attorney 
as a lawyer on the staff of a public agency or a legal services entity 
which provides legal services to the poor, or as in-house counsel to a 
business.
    Section 11.117 would permit a sale attendant upon retirement from 
the private practice of law within the jurisdiction. Its provisions, 
therefore, would accommodate the registered practitioner who sells the 
practice upon the occasion of moving to another state. Some states are 
so large that a move from one locale therein to another is tantamount 
to leaving the jurisdiction in which the practitioner has engaged in 
the practice of law. To also accommodate registered practitioners so 
situated, the sale of the practice would be permitted when the 
registered practitioner leaves the geographic area rather than the 
entire state.
    Single purchaser. Section 11.117 would require a single purchaser. 
A prohibition against piecemeal sale of a practice protects those 
clients whose matters are less lucrative and who might find it 
difficult to secure other counsel if a sale could be limited to 
substantial fee-generating matters. Inasmuch as the practice being sold 
involves patent applications pending before the Office, the purchaser 
would be required to be practitioner(s) which include registered 
practitioners willing to undertake all client pending patent matters in 
the practice, subject to client consent. If, however, the purchaser is 
unable to undertake all client matters because of a conflict of 
interest in a specific matter respecting which the purchaser is not 
permitted by Sec.  11.107 or another rule to represent the client, the 
requirement that there be a single purchaser would be nevertheless 
satisfied.
    Client confidences, consent, and notice. Negotiations between 
seller and prospective purchaser prior to disclosure of information 
relating to a specific representation of an identifiable client would 
no more violate the confidentiality provisions of proposed Sec.  11.106 
than do preliminary discussions concerning the possible association of 
another practitioner or mergers between firms, with respect to which 
client consent is not required. Providing the purchaser access to 
client-specific information relating to the representation and to the 
file, however, requires client consent. Section 11.117 would provide 
that before such information can be disclosed by the seller to the 
purchaser, the client must be given actual written notice of the 
contemplated sale, including the identity of the purchaser and any 
proposed change in the terms of future

[[Page 69488]]

representation, and must be told that the decision to consent or make 
other arrangements must be made within 90 days. If nothing is heard 
from the client within that time, consent to the sale is presumed.
    A registered practitioner ceasing to practice cannot be required to 
remain in practice because some clients cannot be given actual notice 
of the proposed purchase. Since these clients cannot themselves consent 
to the purchase or direct any other disposition of their files, Sec.  
11.117 would permit an order from a court having jurisdiction 
authorizing their transfer or other disposition. The court can be 
expected to determine whether reasonable efforts to locate the client 
have been exhausted, and whether the absent client's legitimate 
interests will be served by authorizing the transfer of the file so 
that the purchaser may continue the representation. Preservation of 
client confidences requires that the petition for a court order be 
considered in camera.
    All the elements of client autonomy, including the client's 
absolute right to discharge a practitioner and transfer the 
representation to another, survive the sale of the practice.
    Fee arrangements between client and purchaser. A sale of a practice 
could not be financed by increases in fees charged the clients of the 
practice. The purchaser must honor existing agreements between the 
seller and the client as to fees and the scope of the work, unless the 
client consents after full disclosure. The purchaser would, however, 
advise the client that the purchaser will not undertake the 
representation unless the client consents to pay the higher fees the 
purchaser usually charges. To prevent client financing of the sale, the 
higher fee the purchaser may charge would not exceed the fees charged 
by the purchaser for substantially similar service rendered prior to 
the initiation of the purchase negotiations.
    The purchaser could not intentionally fragment a practice that is 
the subject of the sale by charging significantly different fees in 
substantially similar matters. Doing so would make it possible for the 
purchaser to avoid the obligation to take over the entire practice by 
charging arbitrarily higher fees for less lucrative matters, thereby 
increasing the likelihood that those clients would not consent to the 
new representation.
    Registered practitioners participating in the sale of a law 
practice are subject to the ethical standards applicable to involving 
another practitioner in the representation of a client. These include, 
for example, the seller's obligation to exercise competence in 
identifying a purchaser qualified to assume the practice and the 
purchaser's obligation to undertake the representation competently (see 
Sec.  11.101); the obligation to avoid disqualifying conflicts, and to 
secure client consent after consultation for those conflicts which can 
be agreed to (see Sec.  11.107); and the obligation to protect 
information relating to the representation (see Sec. Sec.  11.106 and 
11.109).
    Applicability of Sec.  11.117. Section 11.117 applies to the sale 
of a law practice by representatives of a deceased, disabled or 
disappeared registered practitioner. Thus, the seller may be 
represented by a non-lawyer representative not subject to these Rules. 
Since, however, no registered practitioner may participate in a sale of 
a law practice, which does not conform to the requirements of this 
Rule, the representatives of the seller as well as the purchasing 
practitioner can be expected to see to it that they are met.
    Admission to or retirement from a law partnership or professional 
association, retirement plans and similar arrangements, and a sale of 
tangible assets of a law practice, would not constitute a sale or 
purchase governed by proposed Sec.  11.117. Section 11.117 also would 
not apply to the transfers of legal representation between registered 
practitioners when such transfers are unrelated to the sale of a 
practice.
    Section 11.201 would introduce a rule addressing the practitioner's 
role in providing advice to a client.
    Section 11.201--Scope of Advice. A client is entitled to 
straightforward advice expressing the practitioner's honest assessment. 
Legal advice often involves unpleasant facts and alternatives that a 
client may be disinclined to confront. In presenting advice, a 
practitioner endeavors to sustain the client's morale and may put 
advice in as acceptable a form as honesty permits. However, a 
registered practitioner should not be deterred from giving candid 
advice, including advice as to patentability or unpatentability, by the 
prospect that the advice will be unpalatable to the client.
    Advice couched in narrow legal terms may be of little value to a 
client, especially where practical considerations, such as cost or 
effects on other people, are predominant. Purely technical legal 
advice, therefore, can sometimes be inadequate. It is proper for a 
practitioner to refer to relevant moral and ethical considerations in 
giving advice. Although a practitioner is not a moral advisor per se, 
moral and ethical considerations impinge upon most legal questions and 
may decisively influence how the law will be applied.
    A client may expressly or impliedly ask the practitioner for purely 
technical advice. When such a request is made by a client experienced 
in legal matters, the practitioner may accept it at face value. When 
such a request is made by a client inexperienced in legal matters, 
however, the practitioner's responsibility as advisor may include 
indicating that more may be involved than strictly legal 
considerations.
    Matters that go beyond strictly legal questions may also be in the 
domain of another profession. Family matters can involve problems 
within the professional competence of psychiatry, clinical psychology, 
or social work; business matters can involve problems within the 
competence of the accounting profession or of financial specialists. 
Where consultation with a professional in another field is itself 
something a competent practitioner would recommend, the practitioner 
should make such a recommendation. At the same time, a practitioner's 
advice at its best often consists of recommending a course of action in 
the face of conflicting recommendations of experts.
    Paragraph (a) of Sec.  11.201--Offering Advice. Under paragraph (a) 
of Sec.  11.201, in general, a practitioner would not be expected to 
give advice until asked by the client. However, when a practitioner 
knows that a client proposes a course of action that is likely to 
result in substantial adverse legal consequences to the client, duty to 
the client under Sec.  11.104 could require that the practitioner act 
as if the client's course of action is related to the representation. A 
practitioner ordinarily has no duty to initiate investigation of a 
client's affairs or to give advice that the client has indicated is 
unwanted, but a practitioner might initiate advice to a client when 
doing so appears to be in the client's interest.
    Paragraph (b) of Sec.  11.201 would address a practitioner 
providing patentability opinions to clients referred by an invention 
promoter.
    Section 11.202 would provide rules for a practitioner acting as 
intermediary between clients. A practitioner acts as intermediary when 
the practitioner represents two or more parties with potentially 
conflicting interests. For instance, representation of a client 
referred by an invention promoter may result in the practitioner having 
two clients, the inventor and invention promoter. A key factor in 
defining the relationship is whether the parties share responsibility 
for the practitioner's fee,

[[Page 69489]]

but the common representation may be inferred from other circumstances. 
Because confusion can arise as to the practitioner's role where each 
party is not separately represented, it is important that the 
practitioner make clear the relationship. In addition, the existence of 
a document purporting to establish an agency relationship between the 
inventor and invention promoter would not vitiate the possibility that 
the practitioner might have two clients.
    Because the potential for confusion is so great, Sec.  11.202(c) 
would impose the requirement that an explanation of the risks of the 
common representation be furnished, in writing. The process of 
preparing the writing would cause the practitioner involved to focus 
specifically on those risks, a process that might suggest to the 
practitioner that the particular situation is not suited to the use of 
the practitioner as an intermediary. In any event, a written 
explanation would perform a valuable role in educating the client to 
such risks as may exist--risks that many clients may not otherwise 
comprehend. A client might not agree to waive the requirement for a 
written analysis of the risks. The ``unusual circumstances'' 
requirement might be met in rare situations where an assessment of 
risks is not feasible at the beginning of the intermediary role. In 
such circumstances, the writing would have to be provided as soon as it 
becomes feasible to assess the risks with reasonable clarity. The 
consent required by Sec.  11.202(c) would have to be in writing, and 
would refer to the disclosure upon which it is based.
    Section 11.202 would not apply to a practitioner acting as 
arbitrator or mediator between or among parties who are not clients of 
that practitioner, even where the practitioner has been appointed with 
the concurrence of the parties. In performing such a role, the 
practitioner may be subject to applicable codes of ethics, such as the 
Code of Ethics for Arbitration in Commercial Disputes prepared by the 
Joint Committee of the American Bar Association and the American 
Arbitration Association.
    A practitioner acts as intermediary in seeking to establish or 
adjust a relationship between clients on an amicable and mutually 
advantageous basis; for example, in helping to organize a business in 
which two or more clients are entrepreneurs, working out the financial 
reorganization of an enterprise in which two or more clients have an 
interest, arranging a property distribution in settlement of an estate, 
or mediating a dispute between clients. The practitioner seeks to 
resolve potentially conflicting interests by developing the parties' 
mutual interests. The alternative can be that each party may have to 
obtain separate representation, with the possibility in some situations 
of incurring additional cost, complication, or even litigation. Given 
these and other relevant factors, all the clients may prefer that the 
practitioner act as intermediary.
    In considering whether to act as intermediary between clients, a 
practitioner should be mindful that if the intermediation fails, the 
result can be additional cost, embarrassment, and recrimination. In 
some situations the risk of failure is so great that intermediation is 
plainly impossible. For example, a practitioner cannot undertake common 
representation of clients between whom contentious litigation is 
imminent or who contemplate contentious negotiations. More generally, 
if the relationship between the parties has already assumed definite 
antagonism, the possibility that the clients' interests can be adjusted 
by intermediation ordinarily is not very good.
    The appropriateness of intermediation can depend on its form. Forms 
of intermediation range from informal arbitration where each client's 
case is presented by the respective client and the practitioner decides 
the outcome, to mediation, to common representation where the clients' 
interests are substantially though not entirely compatible. One form 
may be appropriate in circumstances where another would not. Other 
relevant factors include whether the practitioner subsequently will 
represent both parties on a continuing basis and whether the situation 
involves creating a relationship between the parties or terminating 
one.
    Because the practitioner is required to be impartial between 
commonly represented clients, intermediation would be improper when 
that impartiality cannot be maintained. For example, a practitioner who 
has represented one of the clients for a long period of time and in a 
variety of matters could have difficulty being impartial between that 
client and one to whom the practitioner has only recently been 
introduced. Another example would be a practitioner who represents a 
client, such as an invention promoter, that refers a number of its 
clients to the practitioner to prepare and prosecute patent 
applications for the clients, and the practitioner could have 
difficulty being impartial between the referring invention promoter and 
the referred clients.
    Section 11.202 and Confidentiality and Privilege. A particularly 
important factor in determining the appropriateness of intermediation 
would be the effect on client-practitioner confidentiality and the 
attorney-client or patent agent-client privilege. In a common 
representation, the practitioner would still be required both to keep 
each client adequately informed and to maintain confidentiality of 
information relating to each of the representations. See Sec. Sec.  
11.104 and 11.106. Complying with both requirements while acting as 
intermediary requires a delicate balance. If the balance cannot be 
maintained, the common representation would be improper. With regard to 
the attorney-client or patent agent-client privilege, the prevailing 
rule is that as between commonly represented clients the privilege does 
not attach. Hence, it must be assumed that if litigation eventuates 
between the clients, the privilege will not protect any such 
communications, and the clients should be so advised.
    For example, a practitioner, hired by A and B to prepare a patent 
application for A's invention, acts as an intermediary under Sec.  
11.202 when, upon instructions from A and B, the practitioner prepares 
an assignment transferring a one-half undivided interest in A's 
invention and any resulting patent to A and B, even if only B is to pay 
the legal fees. If A and B later dispute the validity of the assignment 
and each retains counsel of their own choice, the practitioner may 
communicate the information regarding the terms of the assignment to 
both counsel. The attorney-client or patent agent-client privilege does 
not attach. The practitioner may submit his legal bills to B for past 
services in accordance with the retainer agreement. See Opinion 93-76 
(1993) of the Ethics Advisory Panel of the Rhode Island Supreme Court.
    Section 11.202 and Full Disclosure. In acting as intermediary 
between clients, the practitioner would be required to make full 
disclosure to the clients on the implications of doing so, and proceed 
only upon consent based on such full disclosure. The practitioner would 
have to make clear that the practitioner's role is not that of 
partisanship normally expected in other circumstances.
    Paragraph (d) of Sec.  11.202 would apply the principle expressed 
in Sec.  11.104. Where the practitioner is intermediary, the clients 
ordinarily would have to assume greater responsibility for decisions 
than when each client is independently represented.

[[Page 69490]]

    Section 11.202 and Withdrawal. Common representation does not 
diminish the rights of each client in the client-practitioner 
relationship. Each has the right to loyal and diligent representation, 
the right to discharge the practitioner as stated in Sec.  11.116, and 
the protection of Sec.  11.109 concerning obligations to a former 
client.
    Section 11.203 would articulate ethical standards for circumstances 
where a practitioner provides an evaluation of a matter affecting a 
client for the use of someone other than the client. An evaluation may 
be performed at the client's direction but for the primary purpose of 
establishing information for the benefit of third parties; for example, 
an opinion concerning the title of property rendered at the behest of a 
vendor for the information of a prospective purchaser, or at the behest 
of a borrower for the information of a prospective lender. Section 
11.203 would not authorize conduct that otherwise would constitute 
aiding the unauthorized practice of law. Thus, providing a nonlawyer, 
who offers legal services to potential customers, with legal advice to 
pass on to the nonlawyer's customer(s) would continue to be viewed as 
aiding the unauthorized practice of law. See Formal Opinion 87, Ethics 
Committee of the Colorado Bar Association (1991).
    A legal evaluation should be distinguished from an investigation of 
a person with whom the practitioner does not have a client-practitioner 
relationship. For example, a practitioner retained by a purchaser to 
analyze a vendor's title to property does not have a client-
practitioner relationship with the vendor. Likewise, an investigation 
into a person's affairs by a Government practitioner, or by special 
counsel employed by the Government, is not an evaluation as that term 
is used in this section. The question is whether the practitioner is 
retained by the person whose affairs are being examined. When the 
practitioner is retained by that person, the general Rule of 
Professional Conduct concerning loyalty to client and preservation of 
confidences would apply, which is not the case if the practitioner is 
retained by someone else. For this reason, it is essential to identify 
the person by whom the practitioner is retained. This should be made 
clear not only to the person under examination, but also to others to 
whom the results are to be made available.
    Section 11.203 and Duty to Third Person. When the evaluation is 
intended for the information or use of a third person, a legal duty to 
that person may or may not arise. That legal question is beyond the 
scope of Sec.  11.203. However, because such an evaluation involves a 
departure from the normal client-practitioner relationship, careful 
analysis of the situation is required. The practitioner must be 
satisfied as a matter of professional judgment that making the 
evaluation is compatible with other functions undertaken in behalf of 
the client. For example, if the practitioner is acting as advocate in 
defending the client against charges of fraud, it would normally be 
incompatible with that responsibility for the practitioner to perform 
an evaluation for others concerning the same or a related transaction. 
Assuming no such impediment is apparent, however, the practitioner 
should advise the client of the implications of the evaluation, 
particularly the practitioner's responsibilities to third persons and 
the duty to disseminate the findings.
    Section 11.203 and Access to and Disclosure of Information. The 
quality of an evaluation depends on the freedom and extent of the 
investigation upon which it is based. Ordinarily a practitioner should 
have whatever latitude of investigation seems necessary as a matter of 
professional judgment. Under some circumstances, however, the terms of 
the evaluation may be limited. For example, certain issues or sources 
may be categorically excluded, or the scope of search may be limited by 
time constraints or the non-cooperation of persons having relevant 
information. Any such limitations that are material to the evaluation 
should be described in a report giving the results of the 
investigation. If, after a practitioner has commenced an evaluation, 
the client refuses to comply with the terms upon which it was 
understood the evaluation was to have been made, the practitioner's 
obligations are determined by law, having reference to the terms of the 
client's agreement and the surrounding circumstances.
    Section 11.203 and Financial Auditors' Requests for Information. 
When a question concerning the legal situation of a client arises at 
the instance of the client's financial auditor and the question is 
referred to the practitioner, the practitioner's response prudently 
might be made in accordance with procedures recognized in the legal 
profession. Such a procedure is set forth in the American Bar 
Association Statement of Policy Regarding Practitioners' Responses to 
Auditors' Requests for Information, adopted in 1975.
    Section 11.301 would continue the requirement that a practitioner 
present well-grounded claims. The advocate has a duty to use legal 
procedure for the fullest benefit of the client's cause, but also a 
duty not to abuse legal procedure. The law, both procedurally and 
substantively, establishes the limits within which an advocate may 
proceed. However, the law is not always clear and never is static. 
Accordingly, in determining the proper scope of advocacy, account must 
be taken of the law's ambiguities and potential for change.
    The filing of an action or defense or similar action taken for a 
client is not frivolous merely because the facts have not first been 
fully substantiated or because the practitioner expects to develop 
vital evidence only by discovery. Such action is not frivolous even 
though the practitioner believes that the client's position ultimately 
will not prevail. The action is frivolous if the practitioner is unable 
either to make a good-faith argument on the merits of the action taken 
or to support the action taken by a good-faith argument for an 
extension, modification, or reversal of existing law.
    Section 11.302 would continue the requirement that practitioners 
diligently pursue litigation and Office proceedings. Dilatory practices 
bring the administration of justice into disrepute and may be contrary 
to the client's interest in patent prosecution. Delay should not be 
indulged merely for the convenience of the advocates, or for the 
purpose of frustrating an opposing party's attempt to obtain rightful 
redress or repose. It is not a justification that similar conduct is 
often tolerated by the bench and bar. The question is whether a 
competent practitioner acting in good faith would regard the course of 
action as having some substantial purpose other than delay. Realizing 
financial or other benefit from otherwise improper delay in litigation 
is not a legitimate interest of the client.
    Section 11.303 would continue the duty of candor to a tribunal 
while specifying its application under different situations. Section 
11.303 would define the duty of candor to the tribunal. In dealing with 
a tribunal, including the Office, the practitioner is also required to 
comply with the general requirements of Sec.  11.102 (e) and (f). The 
advocate's responsibility is to endeavor to present the client's case 
with persuasive force. Performance of that duty, while maintaining 
confidences of the client, is qualified by the advocate's duty of 
candor to the tribunal. See Lipman v. Dickinson, 174 F.3d 1363, 50 
USPQ2d 1490 (Fed. Cir. 1999).
    While an advocate normally does not vouch for the evidence 
submitted in a cause--the tribunal is responsible for assessing its 
probative value--the same may not apply in practice before the

[[Page 69491]]

Office. See Kingsland v. Dorsey, 338 U.S. 318 (1949) (sustaining 
attorney's exclusion where attorney authored the article that attorney 
introduced into evidence as an article written by another).
    Paragraph (a) of Sec.  11.303, like current Sec.  10.89(b)(1), 
would require that a practitioner reveal to the Office known authority 
directly adverse to the position of the client unless the authority is 
cited by an opponent or employee of the Office. All decisions made by 
the Office in patent and trademark matters affect the public interest. 
See Lear v. Adkins, 395 U.S. 653 (1969). Many of the decisions made by 
the Office are made ex parte. Accordingly, practitioners must cite to 
the Office known authority that is contrary, i.e., directly adverse, to 
the position being taken by the practitioner in good faith. The 
practitioner could argue that the cited authority should not be 
followed, or should be overruled or modified.
    Section 11.303 and Representations by a Practitioner. An advocate 
is responsible for pleadings and other documents prepared for 
litigation or prosecution of patent and trademark applications. 
However, an advocate is usually not required to have personal knowledge 
of factual matters that are based on information furnished by a client 
asserted therein, because litigation or prosecution documents 
ordinarily present assertions by the client, or by someone on the 
client's behalf, and not assertions by the practitioner. Compare Sec.  
11.301. However, an assertion purporting to be based on the 
practitioner's own knowledge, such as an assertion made by the 
practitioner in an affidavit, petition, or reply to an Office action, 
like a statement in open court, may properly be made only when the 
practitioner knows the assertion is true or believes it to be true on 
the basis of a reasonably diligent inquiry. The Office has disciplined 
practitioners for making false statements of fact in an affidavit or 
declaration. See In re Dubno, 1959 Off. Gaz. 25 (June 21, 1977). There 
may be circumstances where failure to make a disclosure is the 
equivalent of an affirmative misrepresentation. See Lipman v. 
Dickinson, 174 F.3d 1363, 50 USPQ2d 1490 (Fed. Cir. 1999). The 
obligation prescribed in Sec.  11.102(e) not to counsel a client to 
commit or assist the client in committing a fraud applies in litigation 
and proceedings before the Office, but would be subject to Sec. Sec.  
11.303(a)(4), (b) and (d). Regarding compliance with Sec.  11.102(e), 
see the comment to that proposed section. See also the comment to 
proposed Sec.  11.804(b).
    Section 11.303 and Misleading Legal Argument. Legal argument based 
on a knowingly false representation of law constitutes dishonesty 
toward the tribunal. A practitioner is not required to make a 
disinterested exposition of the law, but must recognize the existence 
of pertinent legal authorities. Furthermore, as stated in Sec.  
11.303(a)(3), an advocate has a duty to disclose directly adverse 
authority in the controlling jurisdiction that has not been disclosed 
by the opposing party and that is dispositive of a question at issue. 
The underlying concept is that a legal argument is a discussion seeking 
to determine the legal premises properly applicable to the case.
    Section 11.303 and False Evidence. When evidence that a 
practitioner knows to be false is provided by a person who is not the 
client, the practitioner must refuse to offer it regardless of the 
client's wishes.
    When false evidence is offered by the client, however, a conflict 
may arise between the practitioner's duty to keep the client's 
disclosure confidential and the duty of candor to the tribunal. Upon 
ascertaining that material evidence is false, the practitioner should 
seek to persuade the client that the evidence should not be offered. If 
the material evidence has already been offered before the practitioner 
learns that it is false, its false character should immediately be 
disclosed to the tribunal. If the persuasion is ineffective, the 
practitioner must take reasonable remedial measures. In patent matters 
pending before the Office, if a practitioner comes to realize that 
evidence material to patentability offered before the Office in a 
patent case is false, the practitioner has a duty to disclose 
information regarding the falsity with respect to each pending claim 
until the claim is cancelled or withdrawn from consideration, or the 
application becomes abandoned. This is consistent with current Sec.  
1.56.
    Except in the defense of a criminally accused, the rule generally 
recognized is that, if necessary to rectify the situation, an advocate 
must disclose the existence of the client's deception to the tribunal, 
Office, and/or to the other party. Such a disclosure can result in 
grave consequences to the client, including not only a sense of 
betrayal but also loss of the case and perhaps a prosecution for 
perjury. But the alternative is that the practitioner, contrary to 
current Sec.  1.56 or proposed Sec. Sec.  11.303 and 11.804(c), 
cooperate in deceiving the tribunal or Office, thereby subverting the 
truth-finding process, which the adversary system is designed to 
implement. See Sec.  11.102(d). Furthermore, unless it is clearly 
understood that the practitioner will act upon the duty to disclose the 
existence of false evidence, the client can simply reject the 
practitioner's advice to reveal the false evidence and insist that the 
practitioner keep silent. Thus the client could in effect coerce the 
practitioner into being a party to fraud on the tribunal or Office.
    Paragraph (d) of Sec.  11.303 would provide that if a practitioner 
learns that a fraud or inequitable conduct has been perpetrated on the 
Office, the practitioner must reveal the same to the Office. Where 
notification would require disclosure to the Office of information not 
protected under Sec. Sec.  1.56, or 11.106(a), the practitioner has a 
duty of disclosure to prevent the occurrence or furtherance of the 
fraud or inequitable conduct by commission or omission.
    Paragraph (b) of Sec.  11.303--Duration of obligation. A practical 
time limit on the obligation to rectify the presentation of false 
evidence has to be established. In the Model Code of Professional 
Responsibility, the American Bar Association has suggested that the 
conclusion of the proceeding, through all appeals, is a reasonably 
definite point for the termination of the obligation.
    Patent matters are not necessarily concluded in a single proceeding 
before the Office with the issuance of a patent. The patent may be 
subject to examination again in a reissue application, as well as 
reexamination and interference proceedings. The procedures are 
available throughout the period for which the patent is granted. 
Accordingly, in patent matters before the Office, the duty of 
disclosure continues for the duration of the pendency of the patent 
application and the period for which the patent is granted.
    Paragraph (c) of Sec.  11.303--Refusing to offer proof believed to 
be false. Generally speaking, a practitioner has all authority to 
refuse to offer testimony or other proof that the practitioner believes 
is untrustworthy. Offering such proof may reflect adversely on the 
practitioner's ability to discriminate in the quality of evidence and 
thus impair the practitioner's effectiveness as an advocate.
    Paragraph (d) of Sec.  11.303--Ex parte proceedings. Ordinarily, an 
advocate has the limited responsibility of presenting one side of the 
matters that a tribunal should consider in reaching a decision; the 
conflicting position is

[[Page 69492]]

expected to be presented by the opposing party.
    However, in any ex parte proceeding, such as prosecution of a 
patent application, or an application for a temporary restraining 
order, there is no balance of presentation by opposing advocates. The 
object of an ex parte proceeding is nevertheless to yield a 
substantially just result. The patent examiner or judge has an 
affirmative responsibility to accord the absent party just 
consideration. The practitioner for the represented party has the 
correlative duty to make disclosures of material facts known to the 
practitioner and that the practitioner reasonably believes are 
necessary to an informed decision. In an ex parte proceeding before the 
Office in a patent case, a practitioner's duty of disclosure would 
remain the same as in Sec.  1.56. The practitioner would be required to 
inform the Office of all information material to patentability known to 
the practitioner in accordance with Sec.  1.56, whether or not the 
facts are adverse.
    Paragraph (e) of Sec.  11.303 would define some, but not all, acts 
that would constitute violations of paragraphs (a) through (d) of this 
section. The USPTO believes that it would be helpful to practitioners 
if some specific prohibitions were set out in the rules. The 
prohibitions set out in paragraphs (1) through (5) of Sec.  11.303(e) 
represent violations that have occurred in the past or that the Office 
specifically seeks to prevent. The specific acts set out in paragraph 
(e) would not constitute a complete description of all acts in 
violation of paragraphs (a) through (d).
    Paragraph (1) of Sec.  11.303(e) would put practitioners on notice 
that misconduct includes knowingly misusing a ``Certificate of Mailing 
or Transmission'' under Sec.  1.8 of this subchapter. See In re Dula, 
1030 Off. Gaz. 20 (May 17 1983); In re Klein, 6 USPQ2d 1547 (Comm'r 
Pat. 1987), aff'd sub nom., Klein v. Peterson, 696 F. Supp. 695, 8 
USPQ2d 1434 (D.D.C. 1988), aff'd, 866 F.2d 412, 9 USPQ 2d 1558 (Fed. 
Cir. 1989); Small v. Weiffenbach, 10 USPQ 2d 1898 (Comm'r Pat. 1989).
    Paragraph (2) of Sec.  11.303(e) would include as misconduct 
knowingly violating or causing to be violated the duty of candor 
requirements of Sec. Sec.  1.56 or 1.555. See In re Milmore, 196 USPQ 
628 (Comm'r Pat. 1977); Kingsland v. Dorsey, 338 U.S. 318 (1949); Hatch 
v. Ooms, 72 USPQ 406 (D.D.C. 1947).
    Paragraph (4) of Sec.  11.303(e) would include as misconduct 
knowingly signing a paper filed in the Office in violation of the 
provisions of Sec.  11.18 or making a scandalous or indecent statement 
in a paper filed in the Office. The provision is based on Rule 11 of 
the Federal Rules of Civil Procedure. See Weiffenbach v. Gilden, 1160 
Off. Gaz. 39 (Mar. 8, 1994).
    Section 11.304 would contemplate that the evidence in a case be 
marshaled fairly in ex parte and inter partes proceedings. Prohibitions 
against destruction or concealment of evidence, improperly influencing 
witnesses, obstructive tactics in discovery procedure, and the like 
secure fair competition in adversary and ex parte systems.
    Paragraph (a) of Sec.  11.304, like current Sec.  10.85(a)(7), 
would prohibit a practitioner from obstructing another party's access 
to evidence, and from altering, destroying, or concealing evidence. 
Documents and other items of evidence are often essential to establish 
a claim or defense. Subject to evidentiary privileges, the right of an 
opposing party, including the Government, to obtain evidence through 
discovery or subpoena is an important procedural right. The exercise of 
that right can be frustrated if relevant material is altered, 
concealed, or destroyed. To the extent clients are involved in the 
effort to comply with discovery requests, the practitioner's 
obligations are to pursue reasonable efforts to assure that documents 
and other information subject to proper discovery requests are 
produced. Applicable law in many jurisdictions makes it an offense to 
destroy material for the purpose of impairing its availability in a 
pending proceeding or a proceeding whose commencement can be foreseen. 
Falsifying evidence is also generally a criminal offense. Section 
11.304(a) applies to evidentiary material generally, including 
computerized information.
    A practitioner should ascertain that the practitioner's handling of 
documents or other physical objects does not violate any other law. 
Federal criminal law may forbid the destruction of documents or other 
physical objects in circumstances not covered by the ethical rule set 
forth in Sec.  11.304(a). See, e.g., 18 U.S.C. 1503 (obstruction of 
justice); 18 U.S.C. 1505 (obstruction of proceedings before 
departments, agencies, and committees); 18 U.S.C. 1510 (obstruction of 
criminal investigations). Finally, some discovery rules having the 
force of law may prohibit the destruction of documents and other 
material even if litigation is not pending or imminent. Section 11.304 
would not set forth the scope of a practitioner's responsibilities 
under all applicable laws. It would merely impose on the practitioner 
an ethical duty to make reasonable efforts to comply fully with those 
laws. The prohibitions of Sec.  11.304(a) may overlap with criminal 
obstruction provisions and civil discovery rules, but they apply 
whether or not the prohibited conduct violates criminal provisions or 
court rules. Thus, the alteration of evidence by a practitioner, 
whether or not such conduct violates criminal law or court rules, 
constitutes a violation of Sec.  11.304(a). See Weiffenbach v. Logan, 
27 USPQ 2d 1870 (Comm'r Pat. 1993), aff'd. sub nom., Logan v. Comer, 
No. 93-0335 (D.D.C. 1994), aff'd. sub nom., Logan v. Lehman, No. 95-
1216 (Fed. Cir. 1995).
    Because of the duty of confidentiality under Sec.  11.106, the 
practitioner would be generally forbidden to volunteer information 
about physical evidence received from a client without the client's 
consent after consultation. An exception would arise in the case of 
volunteering information required under Sec.  1.56 to be disclosed.
    If the evidence, not required to be disclosed under Sec.  1.56, is 
received from the client and is subpoenaed or otherwise requested 
through the discovery process while held by the practitioner, the 
practitioner will be obligated to deliver the evidence directly to the 
appropriate persons, unless there is a basis for objecting to the 
discovery request or moving to quash the subpoena. A practitioner 
should, therefore, advise the client of the risk that evidence may be 
subject to subpoena or discovery, and of the practitioner's duty to 
turn the evidence over in that event, before accepting it from the 
client.
    If the practitioner has received physical evidence belonging to the 
client and the evidence is not required to be disclosed under Sec.  
1.56, for purposes of examination or testing, the practitioner may 
later return the property to the client pursuant to Sec.  11.115, 
provided that the evidence has not been requested by discovery or 
subpoenaed. The practitioner may not be justified in returning to a 
client physical evidence, the possession of which by the client would 
be per se illegal, such as certain drugs and weapons. And, if it is 
reasonably apparent that the evidence is not the client's property, the 
practitioner may not retain the evidence or return it to the client. 
Instead, the practitioner would, under Sec.  11.304(a), have to make a 
good-faith effort to return the evidence to its owner.
    Paragraph (b) of Sec.  11.304 would provide that it is not improper 
to pay a witness's expenses or to compensate a witness for time taken 
in preparing to

[[Page 69493]]

testify, in attending a proceeding, or in testifying in that 
proceeding.
    Section 11.305 would proscribe forms of improper influence upon a 
tribunal. Such forms of improper influence are proscribed by criminal 
law. Others are specified in the ABA Model Code of Judicial Conduct, 
with which an advocate should be familiar. A practitioner is required 
to avoid contributing to a violation of such provisions. The advocate's 
function is to present evidence and argument so that the cause may be 
decided according to law. Refraining from abusive or obstreperous 
conduct is a corollary of the advocate's right to speak on behalf of 
litigants. A practitioner may stand firm against abuse by a judge but 
should avoid reciprocation; the judge's default is no justification for 
similar dereliction by an advocate. An advocate can present the cause, 
protect the record for subsequent review, and preserve professional 
integrity by patient firmness no less effectively than by belligerence 
or theatrics.
    Section 11.306 is reserved. Rule 3.6 of the Model Rules of 
Professional Conduct contain ``[g]uidance on trial publicity.'' It 
would be a conflict of interest for the Office to attempt to control 
communications to the public by attorneys representing a party in a 
suit against the Office. Accordingly, the provisions of Rule 3.6 are 
not being proposed. Nevertheless, an attorney in a civil action brought 
against the Office would be subject to the professional conduct rules 
of the state where the attorney is licensed to practice law. If, in the 
course of the trial, the attorney violates the state's professional 
conduct rules and is disciplined by the state authorities, the attorney 
could be subject to discipline under the proposed rules. See Sec. Sec.  
11.24 and 11.803(f)(5).
    Section 11.307 would generally proscribe a practitioner from acting 
as advocate in a proceeding before the Office in which the practitioner 
is likely to be a necessary witness. Combining the roles of advocate 
and witness can prejudice the opposing party and can involve a conflict 
of interest between the practitioner and client. The opposing party has 
a right to object where the combination of roles may prejudice that 
party's rights in the litigation. A witness is required to testify on 
the basis of personal knowledge, while an advocate is expected to 
explain and comment on evidence given by others. It may not be clear 
whether a statement by an advocate-witness should be taken as proof or 
as an analysis of the proof.
    A registered practitioner could normally testify in an interference 
proceeding when his or her diligence is an issue in the interference. 
The Office would continue to assess on a case-by-case basis the weight 
to be given testimony by a registered practitioner who also represents 
a party in the proceeding in which the registered practitioner gives 
testimony. See Wilder v. Snyder, 201 USPQ 927, 934 (Bd. Pat. Int. 
1979).
    Paragraph (a)(1) of Sec.  11.307 would recognize that if the 
testimony will be uncontested, the ambiguities in the dual role are 
purely theoretical.
    Paragraph (a)(2) of Sec.  11.307 would recognize that permitting 
the practitioners to testify concerning the extent and value of legal 
services rendered in the action in which the testimony is offered on 
the subject, avoids the need for a second trial with new counsel to 
resolve that issue. Moreover, in such a situation, the judge has first-
hand knowledge of the matter in issue; hence, there is less dependence 
on the adversary process to test the credibility of the testimony.
    Paragraph (a)(3) of Sec.  11.307 would recognize that a balancing 
is required between the interests of the client and those of the 
opposing party. Whether the opposing party is likely to suffer 
prejudice depends on the nature of the case, the importance and 
probable tenor of the practitioner's testimony, and the probability 
that the practitioner's testimony will conflict with that of other 
witnesses. Even if there is risk of such prejudice, in determining 
whether the practitioner should be disqualified, due regard must be 
given to the effect of disqualification on the practitioner's client. 
It is relevant that one or both parties could reasonably foresee that 
the practitioner would probably be a witness.
    If the only reason for not permitting a practitioner to combine the 
roles of advocate and witness is possible prejudice to the opposing 
party, there is no reason to disqualify other practitioners in the 
testifying practitioner's firm from acting as advocates in that trial. 
In short, there is no general rule of imputed disqualification 
applicable to Sec.  11.307. However, the combination of roles of 
advocate and witness might involve an improper conflict of interest 
between the practitioner and the client in addition to or apart from 
possible prejudice to the opposing party. Whether there is such a 
client conflict is determined by Sec. Sec.  11.107 or 11.109. For 
example, if there is likely to be a significant conflict between the 
testimony of the client and that of the practitioner, the 
representation would be improper under the standard set forth in Sec.  
11.107(b) without regard to Sec.  11.307(a). The problem could arise 
whether the practitioner is called as a witness on behalf of the 
client, or is called by the opposing party. Determining whether such a 
conflict exists is, in the first instance, the responsibility of the 
practitioner involved. See Comment to Sec.  11.107. Section 11.307(b) 
would state that other practitioners in the testifying practitioner's 
firm are disqualified only when there is such a client conflict and the 
testifying practitioner therefore could not represent the client under 
Sec. Sec.  11.107 or 11.109. The principles of client consent, embodied 
in Sec. Sec.  11.107 and 11.109, also would apply to Sec.  11.307(b). 
Thus, the reference to Sec. Sec.  11.107 and 11.109 incorporates the 
client consent aspects of those Rules. Section 11.307(b) as proposed 
would provide the protection for the client, not rights of 
disqualification to the adversary. Subject to the disclosure and 
consultation requirements of Sec. Sec.  11.107 and 11.109, the client 
may consent to the firm's continuing representation, despite the 
potential problems created by the nature of the testimony to be 
provided by a practitioner in the firm.
    Even where a practitioner's testimony would not involve a conflict 
with the client's interests under Sec. Sec.  11.107 or 11.109 and would 
not be precluded under Sec.  11.307, the client's interests might 
nevertheless be harmed by the appearance as a witness of a practitioner 
in the firm that represents the client. For example, the practitioner's 
testimony would be vulnerable to impeachment on the grounds that the 
practitioner-witness is testifying to support the position of the 
practitioner's own firm. Similarly, a practitioner whose firm's 
colleague is testifying in the case should recognize the possibility 
that the practitioner might not scrutinize the testimony of the 
colleague carefully enough and that this could prejudice the client's 
interests, whether the colleague is testifying for or against the 
client. In such instances, the practitioner should inform the client of 
any possible adverse effects on the client's interests that might 
result from the practitioner's relationship with the colleague-witness, 
so that the client may make a meaningful choice whether to retain the 
practitioner for the representation in question.
    Section 11.308 is reserved. Rule 3.8 of the Model Rules of 
Professional Conduct addresses the ``Special Responsibilities of a 
Prosecutor'' in the context of criminal proceedings. Inasmuch as 
practice before the Office does not involve criminal proceedings, the 
content of Model Rule 3.8 is not

[[Page 69494]]

being proposed. Nevertheless, an attorney who is both a practitioner 
before the Office and a criminal prosecutor would be subject to both 
the Office and State professional conduct rules. If, in the course of a 
criminal proceeding, the attorney violates the state's professional 
conduct rules and is disciplined by the state authorities, the attorney 
could be subject to discipline under the proposed rules. See Sec. Sec.  
11.24 and 11.803(f)(5).
    Section 11.309 would introduce a practitioner's responsibility in a 
non-adjudicative role before an administrative agency, such as the 
Office. The proposed rule would provide conformity with Rule 3.9 of the 
Rules of Professional Conduct adopted by state bars. In representation 
before bodies such as legislatures, municipal councils, and executive 
and administrative agencies acting in a rule-making or policy-making 
capacity (including the USPTO), practitioners present facts, formulate 
issues, and advance argument in the matters under consideration. The 
decision-making body, like a court, should be able to rely on the 
integrity of the submissions made to it. A practitioner appearing 
before such a body should deal with it honestly and in conformity with 
applicable rules of procedure.
    Practitioners have no exclusive right to appear before non-
adjudicative bodies, as they do before a court. The requirements of 
Sec.  11.309, therefore, may subject practitioners to regulations 
inapplicable to advocates, such as non-practitioner lobbyists. However, 
legislatures and administrative agencies have a right to expect 
practitioners to deal with them as they deal with courts.
    Section 11.309 does not apply to representation of a client in a 
negotiation or other bilateral transaction with a Government agency, 
such as the Office; representation in such a transaction is governed by 
Sec. Sec.  11.401 through 11.404.
    Section 11.309 is closely related to Sec. Sec.  11.303 through 
11.305, which deal with conduct regarding tribunals. The term 
``tribunal,'' as defined in the terminology section of the proposed 
Rules, refers to adjudicative or quasi-adjudicative bodies, including 
the Office.
    Section 11.401 would require a practitioner to be truthful when 
dealing with others on a client's behalf where the client has immediate 
or prospective business before the Office. However, the practitioner 
generally has no affirmative duty to inform an opposing party of 
relevant facts. A misrepresentation can occur if the practitioner 
incorporates or affirms a statement of another person that the 
practitioner knows is false. Misrepresentations can also occur by 
failure to act. The term ``third person'' as used in Sec. Sec.  
11.401(a) and (b) refers to any person or entity other than the 
practitioner's client.
    Section 11.401(a)--Statements of Material Fact or Law. This Rule 
would refer to material statements of fact. Whether a particular 
statement should be regarded as material, and as one of fact, can 
depend on the circumstances. Under generally accepted conventions in 
negotiation, certain types of statements ordinarily are not taken as 
statements of material fact. Estimates of price or value placed on the 
subject of a transaction and a party's intentions as to an acceptable 
settlement of a claim are in this category, and so is the existence of 
an undisclosed principal except where nondisclosure of the principal 
would constitute fraud. There may be other analogous situations. In 
other circumstances, a particular factual statement may be material; 
for example, a statement to a client's potential licensor of an 
invention that an application for a patent on the invention is pending, 
when the practitioner knows the application has been abandoned for some 
time, and the client is unaware of its status.
    Section 11.401(b) would recognize that substantive law may require 
a practitioner to disclose certain information to avoid being deemed to 
have assisted the client's crime or fraud. The requirement of 
disclosure created by this section is, however, subject to the 
obligations created by Sec.  11.106.
    Section 11.402 would provide a standard for communicating with a 
party represented by counsel in connection with representing a client 
having immediate or prospective business before the Office. This rule 
would not prohibit communication with a party, or an employee or agent 
of a party, concerning matters outside the representation. For example, 
the existence of a controversy between two organizations does not 
prohibit a practitioner for either organization from communicating with 
nonpractitioner representatives of the other organization regarding a 
separate matter. Also, parties to a matter may communicate directly 
with each other and a practitioner having independent justification for 
communicating with the other party is permitted to do so.
    Section 11.402(b) would address the case of communicating with 
agents or employees of an organization that is a represented party 
concerning the subject of representation. Section 11.402(b) would 
prohibit communication by a practitioner for one party concerning the 
subject of the representation with persons having the power to bind the 
organization as to the particular representation to which the 
communication relates. If an agent or employee of the organization with 
authority to make binding decisions regarding the representation is 
represented in the matter by separate counsel, the consent by that 
agent's or employee's counsel to a communication will be sufficient for 
purposes of this section.
    Section 11.402(a) would cover any person, whether or not a party to 
a formal proceeding, who is represented by counsel concerning the 
matter in question.
    Section 11.402(a) would not apply to the situation in which a 
practitioner contacts employees of an organization for the purpose of 
obtaining information generally available to the public, or obtainable 
under the Freedom of Information Act, even if the information in 
question is related to the representation. For example, a practitioner 
for a plaintiff who has filed suit against an organization represented 
by a practitioner may telephone the organization to request a copy of a 
press release regarding the representation, without disclosing the 
practitioner's identity, obtaining the consent of the organization's 
practitioner, or otherwise acting as paragraphs (a) and (b) of this 
Rule would require.
    Section 11.402(c) would recognize that special considerations come 
into play when a practitioner is seeking to redress grievances 
involving the Government, including the Office. It would permit 
communications with those in Government having the authority to redress 
such grievances (but not with any other Government personnel) without 
the prior consent of the practitioner representing the Government in 
such cases. However, a practitioner making such a communication without 
the prior consent of the practitioner representing the Government must 
make the kinds of disclosures that are required by Sec.  11.402(b) in 
the case of communications with non-party employees.
    Section 11.402(d) would not prohibit a practitioner from bypassing 
counsel representing the Government on every issue that may arise in 
the course of disputes with the Government. It is intended to provide 
practitioners access to decision makers in Government with respect to 
genuine grievances, such as to present the view that the Government's 
basic policy position with respect to a dispute is faulty, or that 
Government personnel are conducting themselves

[[Page 69495]]

improperly with respect to aspects of the dispute. It is not intended 
to provide direct access on routine disputes such as ordinary discovery 
disputes, extensions of time or other scheduling matters, or similar 
routine aspects of the resolution of disputes.
    Section 11.402 is not intended to enlarge or restrict the law 
enforcement activities of the United States or the Office of Enrollment 
and Discipline, which are authorized and permissible under the 
Constitution and the law of the United States. The ``authorized by 
law'' proviso to Sec.  11.402(a) is intended to permit Government 
conduct that is valid under this law. The proviso is not intended to 
freeze any particular substantive law, but is meant to accommodate 
substantive law as it may develop over time.
    Section 11.403 would provide a standard for communicating with an 
unrepresented person, particularly one not experienced in dealing with 
legal matters. Such a person might assume that a practitioner will 
provide disinterested advice concerning the law even when the 
practitioner represents a client. In dealing personally with any 
unrepresented third party on behalf of the practitioner's client, a 
practitioner should not give advice to the unrepresented party other 
than the advice to obtain counsel.
    Section 11.404 would require a practitioner to respect the rights 
of third parties. Responsibility to a client requires a practitioner to 
subordinate the interests of others to those of the client, but that 
responsibility does not imply that a practitioner may disregard the 
rights of third persons. It is impractical to catalogue all such 
rights, but they include legal restrictions on methods of obtaining 
evidence from third persons.
    Section 11.501 would set forth the responsibilities of a partner or 
supervisory practitioner. Paragraphs (a) and (b) of Sec.  11.501 would 
refer to practitioners having supervisory authority over the 
professional work of a firm, or unit of a Government agency. This 
includes members of a partnership and the shareholders in a law firm 
organized as a professional corporation; practitioners having 
supervisory authority in the law department of an enterprise or 
Government agency; and practitioners who have intermediate managerial 
responsibilities in a firm.
    Under Sec.  11.501(a), a partner or supervisory practitioner in a 
firm would be responsible for ensuring that the firm has in effect 
measures giving reasonable assurance that all practitioners in the firm 
conform to the Rules of Professional Conduct. Under Sec.  11.501(b), a 
supervisory practitioner in a Government unit would be responsible for 
making reasonable efforts to ensure that any practitioner subject to 
supervision conforms to the Rules of Professional Conduct.
    The measures required to fulfill the responsibility prescribed in 
Sec. Sec.  11.501(a) and (b) would depend on the firm's or unit's 
structure and the nature of its practice. In a small firm, informal 
supervision and occasional admonition ordinarily might be sufficient. 
In a large firm, or in practice situations in which intensely difficult 
ethical problems frequently arise, more elaborate procedures may be 
necessary. Some firms, for example, have a procedure whereby junior 
practitioners can make confidential referral of ethical problems 
directly to a designated senior partner or special committee. See Sec.  
11.502. Firms, whether large or small, may also encourage their members 
to participate in continuing legal education in professional ethics if 
such education is not required. In any event, the ethical atmosphere of 
a firm can influence the conduct of all its members and a practitioner 
having authority over the work of another may not assume that the 
subordinate practitioner will inevitably conform to the Rules.
    Paragraph (c) of Sec.  11.501 would set forth general principles of 
imputed responsibility for the misconduct of others. Section 
11.501(c)(1) would make any practitioner who orders or, with knowledge, 
ratifies misconduct responsible for that misconduct. See also Sec.  
11.804(a). Section 11.501(c)(2) would extend that responsibility to any 
practitioner who is a partner in the firm in which the misconduct takes 
place, or who has direct supervisory authority over the practitioner 
who engages in misconduct, when the practitioner knows or should 
reasonably know of the conduct and could intervene to ameliorate its 
consequences. Whether a practitioner has such supervisory authority in 
particular circumstances would be a question of fact. A practitioner 
with direct supervisory authority is a practitioner who has an actual 
supervisory role with respect to directing the conduct of other 
practitioners in a particular representation. A practitioner who is 
technically a ``supervisor'' in organizational terms, but is not 
involved in directing the effort of other practitioners in a particular 
representation, is not a supervising practitioner with respect to that 
representation.
    The existence of actual knowledge is also a question of fact. 
Whether a practitioner should reasonably have known of misconduct by 
another practitioner in the same firm would be an objective standard 
based on evaluation of all the facts, including the size and 
organizational structure of the firm, the practitioner's position and 
responsibilities within the firm, the type and frequency of contacts 
between the various practitioners involved, the nature of the 
misconduct at issue, and the nature of the supervision or other direct 
responsibility (if any) actually exercised. The mere fact of 
partnership or a position as a principal in a firm would not be 
sufficient, without more, to satisfy this standard. Similarly, the fact 
that a practitioner holds a position on the management committee of a 
firm, or heads a department of the firm, would not be sufficient, 
standing alone, to satisfy this standard.
    Appropriate remedial action would depend on the immediacy of the 
involvement and the seriousness of the misconduct. The supervisor would 
be required to intervene to prevent avoidable consequences of 
misconduct if the supervisor knows that the misconduct occurred. Thus, 
if a supervising practitioner knows that a subordinate misrepresented a 
matter to an opposing party in a negotiation, the supervisor as well as 
the subordinate would have a duty to correct the resulting 
misapprehension.
    Professional misconduct by a practitioner under supervision could 
reveal a violation of Sec.  11.501(b) on the part of the supervisory 
practitioner even though it would not entail a violation of Sec.  
11.501(c) because there was no direction, ratification, or knowledge of 
the violation.
    Apart from Sec. Sec.  11.501 and 11.804(a), a practitioner would 
not have disciplinary liability for the conduct of a partner, 
associate, or subordinate. Whether a practitioner may be liable civilly 
or criminally for another practitioner's conduct is a question of law 
beyond the scope of these Rules.
    Section 11.502 would set forth the ethical responsibilities of a 
subordinate practitioner. Although a practitioner would not be relieved 
of responsibility for a violation by the fact that the practitioner 
acted at the direction of a supervisor, that fact may be relevant in 
determining whether a practitioner had the knowledge required to render 
conduct a violation of the Rules. For example, if a subordinate filed a 
frivolous pleading at the direction of a supervisor, the subordinate 
would not be guilty of a professional violation unless the subordinate 
knew of the document's frivolous character.
    When practitioners in a supervisor-subordinate relationship 
encounter a

[[Page 69496]]

matter involving professional judgment as to ethical duty, the 
supervisor may assume responsibility for making the judgment. Otherwise 
a consistent course of action or position could not be taken. If the 
question can reasonably be answered only one way, the duty of both 
practitioners is clear and they would be equally responsible for 
fulfilling it. However, if the question is reasonably arguable, someone 
has to decide upon the course of action. That authority ordinarily 
reposes in the supervisor, and a subordinate may be guided accordingly. 
For example, if a question arises whether the interests of two clients 
conflict under Sec.  11.107, the supervisor's reasonable resolution of 
the question should protect the subordinate professionally if the 
resolution is subsequently challenged.
    Section 11.503 would set forth a practitioner's responsibilities 
regarding nonpractitioner assistants. Practitioners generally employ 
assistants in their practice, including secretaries, investigators, law 
student interns, and paraprofessionals. Such assistants, whether 
employees or independent contractors, act for the practitioner in 
rendition of the practitioner's professional services. A practitioner 
should give such assistants appropriate instruction and supervision 
concerning the ethical aspects of their employment, particularly 
regarding the obligation not to disclose information relating to 
representation of the client, and should be responsible for their work 
product. The measures employed in supervising nonpractitioners should 
take account of the fact that they do not have legal training and are 
not subject to professional discipline.
    Just as practitioners in private practice may direct the conduct of 
investigators who may be independent contractors, prosecutors and other 
Government practitioners may effectively direct the conduct of police 
or other governmental investigative personnel, even though they may not 
have, strictly speaking, formal authority to order actions by such 
personnel, who report to the chief of police or the head of another 
enforcement agency. Such prosecutors or other Government practitioners 
have a responsibility for police or investigative personnel, whose 
conduct they effectively direct, equivalent to that of private 
practitioners with respect to investigators hired by private 
practitioners. See also the comments to Sec.  11.501, in particular, 
the concept of what constitutes direct supervisory authority, and the 
significance of holding certain positions in a firm. Comments to Sec.  
11.501 apply as well to Sec.  11.503.
    Section 11.504 would provide for the professional independence of a 
practitioner. The provisions of Sec.  11.504 would express traditional 
limitations on sharing fees with nonpractitioners. (On sharing fees 
among practitioners not in the same firm, see Sec.  11.105(e).) These 
limitations would be to protect the practitioner's professional 
independence of judgment. Where someone other than the client pays the 
practitioner's fee or salary, or recommends employment of the 
practitioner, that arrangement does not modify the practitioner's 
obligation to the client. As stated in Sec.  11.504(d), such 
arrangements should not interfere with the practitioner's professional 
judgment.
    Giving anything of value in exchange for recommending or securing 
employment for the practitioner would be specifically barred. Thus, for 
example, under proposed Sec.  11.504(a), a practitioner would not be 
able to receive payment from an inventor for legal services and then 
pay an invention promoter a share for finding the inventor-client and 
referring the inventor-client to the practitioner. Likewise, the 
prohibition against a practitioner splitting fees with a non-
practitioner is directed at the risk posed by the possibility of 
control of legal matters by a non-practitioner interested more in 
personal profit than the client's welfare. See In the Matter of Jones, 
2 Cal. State Bar Ct.Rptr. 411 (Review Dept. 1993). To the extent this 
policy is implicated, a practitioner should not be able to ``sanitize'' 
such impermissible fee-splitting by the simple expedient of having an 
invention promoter receive the funds, make the division, and distribute 
them to the practitioner. Accord Formal Opinion 1997-148, Standing 
Committee on Professional Responsibility and Conduct (California); 
Formal Opinion 87, Ethics Committee of the Colorado State Bar (1991). 
Under proposed Sec.  11.504(b), such practices would be specifically 
proscribed in cases involving an invention promoter. Ethics opinions 
and court decisions in those jurisdictions finding violations of rules 
barring fee-splitting between lawyers and non-lawyers in the estate 
planning and living trust contexts do not turn upon whether the lawyer 
receives payment for the trust and divides it with the marketer, or 
vice versa.
    Section 11.505 would proscribe engaging in or aiding the 
unauthorized practice of law. The definition of the practice of law is 
established by law and might vary from one jurisdiction to another. 
Whatever the definition, limiting the practice of patent law before the 
Office to those recognized to practice protects the public against 
rendition of legal services by unqualified persons or organizations. A 
patent application is recognized as being a legal document. See Sperry 
v. Florida, 373 U.S. 379, 137 USPQ 578 (1963). Thus, a corporation that 
is not authorized to practice law renders legal services, as opposed to 
clerical services where, upon request from a general practice attorney 
and for a fee, it causes a patent application to be prepared by a 
registered practitioner. See Lefkowitz v. Napatco, 415 N.E.2d 916, 212 
USPQ 617 (NY 1980). There are numerous cases and ethics opinions 
wherein attorneys have been found to have aided lay organizations in 
the unauthorized practice of law by agreeing to accept referrals from a 
non-lawyer engaged in unauthorized practice of law. Some involve non-
lawyers marketing estate planning packages. A registered practitioner 
accepting referrals from a non-lawyer engaged in unauthorized practice 
of law paralleling such marketing packages might be aiding the 
unauthorized practice of law. An attorney was found to have aided the 
unauthorized practice of law by permitting a non-attorney operating as 
a business to gather data from estate planning clients for preparation 
of legal documents, and forward the data to the attorney who thereafter 
prepared the documents (including a will, living trust, living will, 
and powers of attorney). The attorney, without having personally met or 
corresponded with the client, forwarded the documents to the non-
attorney for the client to execute. See Wayne County Bar Ass'n. v. 
Naumoff, 660 N.E.2d 1177 (Ohio 1996). In another case, an attorney 
agreed to accept referrals from non-attorneys who marketed, through 
free seminars, living trusts as estate planning devices to avoid 
probate. At the conclusion of the seminars, the marketers gathered 
personal and asset information on a form from clients desiring 
consultations with the marketers. The marketers then discussed the 
living trust with the clients, and what could and could not be done. 
The marketers recommended the attorney, who accepted 100 referrals in a 
two year period. The information gathered by the marketers would then 
be forwarded to the attorney, either by the marketers or the clients, 
and the attorney then spoke with the clients by telephone to answer 
their questions. The attorney then prepared trust documents for the 
clients' review, and later met with the clients in person,

[[Page 69497]]

went over the information and documents, and the clients signed the 
documents at the meeting. The attorney was found to have aided the 
unauthorized practice of law. See Comm. on Professional Ethics & 
Conduct v. Baker, 492 N.W.2d 695,597 (Iowa 1992). See also People v. 
Laden, 893 P.2d 771 (Colo. 1995), People v. Macy, 789 P.2d 188 (Colo. 
1990), People v. Boyles, 591 P.2d 1315 (Colo. 1979); In re Discipio, 
645 N.E.2d 906 (Ill. 1994); In re Komar, 532 N.E.2d 801 (Ill. 1988); 
Formal Opinion 705, Committee on Professional Ethics of the Illinois 
State Bar Association (1982); Formal Opinion 1977-148, Standing 
Committee on Professional Responsibility and Conduct; Formal Opinion 
87, Ethics Committee of the Colorado State Bar (1991).
    Paragraphs (b), (c), and (d) of Sec.  11.505 would permit a 
practitioner to employ the services of paraprofessionals and delegate 
functions to them, so long as the practitioner supervises the delegated 
work and retains responsibility for their work. See Sec.  11.503. 
Likewise, it would permit practitioners to provide professional advice 
and instruction to nonpractitioners whose employment requires knowledge 
of law; for example, claims adjusters, employees of financial or 
commercial institutions, social workers, accountants and persons 
employed in Government agencies. In addition, a practitioner may 
counsel nonpractitioners who wish to proceed pro se. Paragraph (d) of 
Sec.  11.505, like Sec.  10.47(b), makes it clear that a practitioner 
is prohibited from aiding a suspended or excluded practitioner in the 
practice of law before the Office.
    Section 11.506, like current Sec.  10.38, would prohibit agreements 
restricting rights to practice. An agreement restricting the right of 
partners or associates to practice after leaving a firm not only limits 
their professional autonomy, but also limits the freedom of clients to 
choose a practitioner. Section 11.506(a) would prohibit such agreements 
except for restrictions incident to provisions concerning retirement 
benefits for service with the firm.
    Paragraph (b) of Sec.  11.506 would prohibit a practitioner from 
agreeing not to represent other persons in connection with settling a 
claim on behalf of a client.
    Section 11.507 would provide for a practitioner being subject to 
the Rules of Professional Conduct if the practitioner provides law-
related services.
    Section 11.601 would encourage a practitioner to provide pro bono 
publico service. This Rule would reflect the long-standing ethical 
principle underlying Canon 2 of the Code of Professional Responsibility 
that ``A practitioner should assist the legal profession in fulfilling 
its duty to make legal counsel available.'' The Rule would incorporate 
the legal profession's historical commitment to the principle that all 
persons in our society should be able to obtain necessary legal 
services. The Rule would also recognize that the rights and 
responsibilities of individuals and groups in the United States are 
increasingly defined in legal terms and that, as a consequence, legal 
assistance in coping with the web of statutes, rules, and regulations 
is imperative for persons of modest and limited means, as well as for 
the relatively well-to-do. The Rule would also recognize that a 
practitioner's pro bono services are sometimes needed to assert or 
defend public rights belonging to the public generally where no 
individual or group can afford to pay for the services.
    This Rule would carry forward the ethical precepts set forth in the 
Code. Specifically, the Rule would recognize that the basic 
responsibility for providing legal services for those unable to pay 
ultimately rests upon the individual practitioner, and that every 
practitioner, regardless of professional prominence or professional 
workload, should find time to participate in or otherwise support the 
provision of legal services to the disadvantaged.
    The Rule also would acknowledge that while the provision of free 
legal services to those unable to pay reasonable fees continues to be 
an obligation of each practitioner as well as the profession generally, 
the efforts of individual practitioners are often not enough to meet 
the need. Thus, it has been necessary for the profession and Government 
to institute additional programs to provide legal services. 
Accordingly, legal aid offices, practitioner referral services, and 
other related programs have been developed, and others will be 
developed by the profession and Government. Every practitioner should 
support all proper efforts to meet this need for legal services. A 
practitioner also should not refuse a request from a court or bar 
association to undertake representation of a person unable to obtain 
counsel except for compelling reasons such as those listed in Sec.  
11.602.
    Section 11.601 also would express the profession's traditional 
commitment to make legal counsel available, but it is not intended that 
the Rule be enforced through disciplinary process. Neither is it 
intended to place any obligation on a Government practitioner that is 
inconsistent with laws, such as 18 U.S.C. 203 and 205, limiting the 
scope of permissible employment or representational activities.
    Section 11.602 would provide for a practitioner's accepting a 
tribunal's appointment to represent a client. The practitioner would 
not be obligated to accept appointment if the practitioner regards the 
client's character or cause as repugnant. All practitioners have a 
responsibility to assist in providing pro bono publico service. See 
section 11.601. An individual practitioner fulfills this responsibility 
by accepting a fair share of unpopular matters or indigent or unpopular 
clients. A practitioner may also be subject to appointment by a court 
to serve unpopular clients or persons unable to afford legal services. 
This rule should not be construed as empowering the Office, and the 
Office does not intend to use this rule, as a means to appoint a 
practitioner to represent any person or party before the Office in any 
matter.
    Section 11.602 and Appointed Counsel. For good cause a practitioner 
may seek to decline an appointment to represent a person who cannot 
afford to retain counsel or whose cause is unpopular. Good cause exists 
if the practitioner could not handle the matter competently, see Sec.  
11.101, or if undertaking the representation would result in an 
improper conflict of interest; for example, when the client or the 
cause is so repugnant to the practitioner as to be likely to impair the 
client-practitioner relationship or the practitioner's ability to 
represent the client. A practitioner may also seek to decline an 
appointment if acceptance would be substantially and unreasonably 
burdensome, such as when it would impose a financial sacrifice so great 
as to be unjust.
    An appointed practitioner would have the same obligations to the 
client as retained counsel, including the obligations of loyalty and 
confidentiality, and is subject to the same limitations on the client-
practitioner relationship, such as the obligation to refrain from 
assisting the client in violation of the Rules.
    Section 11.603 would provide for practitioners supporting and 
participating in legal service organizations. A practitioner who is an 
officer or a member of such an organization does not thereby have a 
client-practitioner relationship with persons served by the 
organization. However, there is potential conflict between the 
interests of such persons and the interests of the practitioner's 
clients. If the possibility of such conflict disqualified a 
practitioner from serving on the board of a legal services 
organization, the profession's

[[Page 69498]]

involvement in such organizations would be severely curtailed. It may 
be necessary in appropriate cases to reassure a client of the 
organization that the representation will not be affected by 
conflicting loyalties of a member of the board. Established, written 
policies in this respect can enhance the credibility of such 
assurances.
    Section 11.604 would encourage the efforts of practitioners to 
maintain and improve our legal system. This system should function in a 
manner that commands public respect and fosters the use of legal 
remedies to achieve redress of grievances. By reason of education and 
experience, practitioners are especially qualified to recognize 
deficiencies in the legal system and to initiate corrective measures 
therein. Thus, they should participate in proposing and supporting 
legislation and programs to improve the system, without regard to the 
general interests or desires of clients or former clients. Rules of law 
are deficient if they are not just, understandable, and responsive to 
the needs of society. If a practitioner believes that the existence or 
absence of a rule of law, substantive or procedural, causes or 
contributes to an unjust result, the practitioner should endeavor by 
lawful means to obtain appropriate changes in the law. This Rule 
expresses the policy underlying Canon 8 of the Code of Professional 
Responsibility of the American Bar Association that ``A practitioner 
should assist in improving the legal system'' through legislation. 
Practitioners employed by the Government may be subject to limits on 
their personal ability to propose legislation regarding the department 
or agency where they are employed. Accordingly, it is not intended that 
this Rule be enforced through disciplinary process.
    Practitioners involved in organizations seeking law reform 
generally do not have a client-practitioner relationship with the 
organization. Otherwise, it might follow that a practitioner could not 
be involved in a bar association law reform program that might 
indirectly affect a client. See also Sec.  11.102(b). For example, a 
practitioner specializing in patent law prosecution or litigation might 
be regarded as disqualified from participating in drafting revisions of 
rules governing that subject. In determining the nature and scope of 
participation in such activities, a practitioner should be mindful of 
obligations to clients under other Rules, particularly Sec.  11.107. A 
practitioner is professionally obligated to protect the integrity of 
the program by making an appropriate disclosure within the organization 
when the practitioner knows a private client might be materially 
benefited.
    Section 11.701 would govern all communications about a 
practitioner's services, including advertising. It is especially 
important that statements about a practitioner or the practitioner's 
services be accurate, since many members of the public lack detailed 
knowledge of legal matters. Certain advertisements such as those that 
describe the amount of a damage award, the practitioner's record in 
obtaining favorable verdicts, or those containing client endorsements, 
unless suitably qualified, have a capacity to mislead by creating an 
unjustified expectation that similar results can be obtained for 
others. Advertisements comparing the practitioner's services with those 
of other practitioners are false or misleading if the claims made 
cannot be substantiated.
    Section 11.701 and Advertising. To assist the public in obtaining 
legal services, practitioners should be allowed to make known their 
services not only through reputation but also through organized 
information campaigns in the form of advertising. Advertising involves 
an active quest for clients, contrary to the tradition that a 
practitioner should not seek clientele. However, the public's need to 
know about legal services can be fulfilled in part through advertising. 
This need is particularly acute in the case of persons of moderate 
means who have not made extensive use of legal services. The interest 
in expanding public information about legal services ought to prevail 
over considerations of tradition.
    Section 11.701 would permit public dissemination of information 
concerning a practitioner's name or firm name, address, and telephone 
number; the kinds of services the practitioner will undertake; the 
basis on which the practitioner's fees are determined, including prices 
for specific services and payment and credit arrangements; a 
practitioner's foreign language ability; names of references and, with 
their consent, names of clients regularly represented; and other 
information that might invite the attention of those seeking legal 
assistance.
    Questions of effectiveness and taste in advertising are matters of 
speculation and subjective judgment. Some state jurisdictions have had 
extensive prohibitions against television advertising, against 
advertising going beyond specific facts about a practitioner, or 
against ``undignified'' advertising. Television is now one of the most 
powerful media for getting information to the public, particularly 
persons of low and moderate income; prohibiting television advertising, 
therefore, would impede the flow of information about legal services to 
many sectors of the public. Limiting the information that may be 
advertised has a similar effect.
    This proposal is based on the premise that there might be no 
significant distinction between disseminating information and 
soliciting clients through mass media or through individual personal 
contact. In-person solicitation can, however, create additional 
problems because of the particular circumstances in which the 
solicitation takes place. Section 11.701 prohibits in-person 
solicitation in circumstances or through means that are not conducive 
to intelligent, rational decisions.
    Sections 11.701 and 11.702, and paying others to recommend a 
practitioner. A practitioner would be allowed to pay for advertising 
permitted by this section. See Sec.  11.702(c). Section 11.702 also 
would permit a practitioner to pay a not-for-profit lawyer referral 
service or legal service organization for channeling professional work 
to the practitioner. Thus, such a service or organization, other than 
the practitioner may advertise or recommend the practitioner's 
services. Likewise, a practitioner may participate in practitioner 
referral programs and pay the usual fees charged by such programs. 
However, special concerns arise when a practitioner is making payments 
to intermediaries, such as invention promoters, to recommend the 
practitioner's services to others. These concerns are particularly 
significant when the payments are not being made to a recognized or 
established agency or organization, such as a bar-organized 
practitioner referral program. In employing intermediaries, such as 
invention promoters, the practitioner is bound by all of the provisions 
of Sec.  11.701. However, paragraphs (b)(4), and (b)(5) of Sec.  11.701 
contain provisions specifically relating to the use of intermediaries.
    Paragraph (b)(4) of Sec.  11.701 imposes specific obligations on 
the practitioner who uses an intermediary to ensure that the potential 
client, who is the target of the solicitation, is informed of the 
consideration paid or to be paid by the practitioner to the 
intermediary, and any effect of the payment of such consideration on 
the total fee to be charged. The concept of payment, as incorporated in 
Sec.  11.701(b)(4), includes giving anything of value to the recipient 
and is not limited to payments of money alone. For example, if an 
intermediary

[[Page 69499]]

were provided the free use of an automobile or free clerical services 
in return for soliciting clients on behalf of the practitioner, the 
obligations imposed by Sec.  11.701(b)(4) would apply and impose the 
specified disclosure requirements.
    Statements by an invention promoter in connection with the 
marketing of the patent applications and inventions, whether on the 
telephone, at a seminar, or oral or in writing, regarding a 
practitioner preparing the patent applications and the availability of 
that practitioner to respond to questions relating to the application, 
would be communications under Sec.  11.701 since they concern the 
availability of a practitioner for professional employment, and are 
therefore subject to the requirements of Sec.  11.701. Like the 
communications found violative in Leoni v. State Bar, supra, 39 Cal.3d 
609 (Cal. 1985) and People v. Morse, 21 Cal.App.4th 259, fn. 13 (1993), 
affd. In re Morse, 11 Cal. A4th 184 (Cal. 1995) they have potential to 
mislead members of the public. In Leoni v. State Bar, the letters and 
brochures inaccurately suggested or intimated that all recipients 
needed a lawyer, that their property was subject to immediate 
attachment, that bankruptcy was appropriate for them, and the like. In 
People v. Morse, the advertisements made inaccurate suggestions and 
statements regarding the protections afforded recipients by the 
homestead laws. Statements which, by their generic, ``one-size-fits-
all'' recommendation of patents for everyone, may similarly contain 
untrue statements, and omit facts--such as that patents may not be 
worth the cost or in the client's best interest in every case--
necessary to make the communications not misleading.
    Further, an invention promoter's statements on the telephone or at 
a meeting regarding the professional employment of the practitioner in 
connection with obtaining patent protection would constitute a 
prohibited in-person solicitation under Sec. Sec.  11.703(a) and 
11.703(b). Section 11.703(a) and (b) would proscribe a practitioner 
from seeking employment through an intermediary under circumstances 
involving false or misleading statements, undue influence, a potential 
client who is physically or mentally unable to exercise reasonable 
judgment, and the practitioner has not taken reasonable steps to ensure 
that the potential client is informed of the consideration paid to the 
intermediary as well as any possible effect the payment has on the 
total fee charged. These rules would apply because a significant 
motivation for the promotion of the practitioner's services for the 
inventor is pecuniary gain (rather than communication of general 
information regarding patents). See FTC v. AIRD, 219 B.R. 639 (D Mass. 
1998). For purposes of Sec.  11.703, it makes no difference whether the 
invention promoter or the practitioner seeks or receives payment from 
the participant, since the rule regulates employment motivated by 
pecuniary gain, without regard to whether a practitioner or one acting 
on his behalf seeks or obtains that gain. Since the solicitation is 
directed at obtaining prospective clients with whom the practitioner 
has no prior professional relationship, it would be prohibited by Sec.  
11.703(a). The use of the invention promoter to communicate with the 
inventor would not insulate the practitioner from Sec.  11.703, which 
prohibits improper solicitations made by ``an intermediary for the 
practitioner.'' In both the advertising and the solicitations, the 
invention promoter cannot do on the practitioner's behalf what the 
practitioner cannot do. The invention promoter simply becomes the agent 
of the practitioner. A practitioner cannot avoid the prohibition 
against in-person solicitation by associating with a non-practitioner 
who engages in such prohibited conduct on the lawyer's behalf. Accord 
Formal Opinion 1997-148, Standing Committee on Professional 
Responsibility and Conduct (California).
    Paragraph (b)(5) of Sec.  11.701 would impose specific obligations 
on the practitioner who uses an invention promoter as an intermediary 
to ensure that the potential client who is the target of the 
solicitation is accurately informed in every contract between the 
client and intermediary of all legal fees and expenses included in the 
funds the client delivers to the intermediary. The practitioner would 
also have to ensure that every communication to the client by the 
intermediary requesting funds accurately reflect all legal fees and 
expenses included in the funds sought, and that the potential client is 
informed of the discount in legal fees the practitioner gives or will 
give in consideration for the promoter referring a client.
    Paragraph (d) of Sec.  11.701 is based on 35 U.S.C. 32, and 
prohibits advertising that is specifically precluded by statute.
    Paragraph (e) of Sec.  11.701 is based on 5 U.S.C. 501, which 
prohibits the use of the name of a Member of Congress or of an 
individual in the service of the United States in advertising the 
practitioner's practice before the Office.
    Section 11.702 would provide for advertising by practitioners. 
Paragraph (a) of Sec.  11.702 would continue the requirements of 
current Sec.  10.32(a) that provide for practitioners advertising their 
services through public media. Paragraph (b) of Sec.  11.702 would 
introduce a requirement of keeping a copy of advertisements or 
communications (whether in printed or electronic media) for a period 
for two years. Paragraph (e) of Sec.  11.702, like current Sec.  
10.32(c), would require any communication made pursuant to this rule to 
include the name of at least one practitioner responsible for its 
content.
    Section 11.703 would address the potential for abuse inherent in 
direct in-person or live telephone contact by a practitioner with a 
prospective client known to need legal services. These forms of contact 
between a practitioner and a prospective client subject the layperson 
to the private importuning of the trained advocate in a direct 
interpersonal encounter. The prospective client, who may already feel 
overwhelmed by the circumstances giving rise to the need for legal 
services, may find it difficult fully to evaluate all available 
alternatives with reasoned judgment and appropriate self-interest in 
the face of the practitioner's presence and insistence upon being 
retained immediately. The situation is filled with the possibility of 
undue influence, intimidation, and overreaching, as was recognized in 
Ohralik v. Ohio State Bar Ass'n., 436 U.S. 447 (1978) (disciplining 
attorney for soliciting clients for pecuniary gain under circumstances 
evidencing undue influence, intimidation, or overreaching).
    Paragraph (a) of Sec.  11.703, like current Sec.  10.33, would 
provide a general prohibition against in-person or live telephone 
contact to solicit professional employment from a prospective client 
with whom the practitioner has no family or prior professional 
relationship when a significant motive for the practitioner's doing so 
is the practitioner's pecuniary gain and the solicitation occurs under 
circumstances evidencing undue influence, intimidation, or 
overreaching. This potential for abuse inherent in direct in-person or 
live telephone solicitation of prospective clients justifies its 
prohibition, particularly since practitioner advertising and written 
and recorded communication permitted under Sec.  11.702 offer 
alternative means of conveying necessary information to those who may 
be in need of legal services. Advertising and written and recorded 
communications which may be mailed or autodialed make it possible for a 
prospective client to be informed

[[Page 69500]]

about the need for legal services, and about the qualifications of 
available practitioners, without subjecting the prospective client to 
direct in-person or telephone persuasion that may overwhelm the 
client's judgment.
    A practitioner may not circumvent the Rules of Professional Conduct 
through the acts of another. See Sec.  11.804(a). Accordingly, the 
provisions of Sec.  11.804(a) may be violated by any solicitation by an 
intermediary invention promoter involving in-person or live telephone 
contact to solicit professional employment for a practitioner from a 
prospective client with whom the practitioner has no family or prior 
professional relationship when a significant motive is the pecuniary.
    Paragraph (c) of Sec.  11.703 would require the words ``Advertising 
Material'' on the outside of the envelope, and at the beginning and end 
of any electronic or recorded communication. The use of general 
advertising and written and recorded communications to transmit 
information from practitioner to prospective client, including patent 
and trademark clients, rather than direct in-person or live telephone 
contact, will help to assure that the information flows clearly as well 
as freely. The contents of advertisements and communications permitted 
under Sec.  11.702 are permanently recorded so that they cannot be 
disputed and may be shared with others who know the practitioner. This 
potential for informal review is itself likely to help guard against 
statements and claims that might constitute false and misleading 
communications, in violation of Sec.  11.701. The contents of direct 
in-person or live telephone conversations between a practitioner to a 
prospective client can be disputed and are not subject to third-party 
scrutiny. Consequently, they are much more likely to approach (and 
occasionally cross) the dividing line between accurate representations 
and those that are false and misleading.
    There is far less likelihood that a practitioner would engage in 
abusive practices against an individual with whom the practitioner has 
a prior personal or professional relationship or where the practitioner 
is motivated by considerations other than the practitioner's pecuniary 
gain. Consequently, the general prohibition in Sec.  11.703(a) and the 
requirements of Sec.  11.703(c) would not be applicable in those 
situations.
    But even permitted forms of solicitation can be abused. Thus, any 
solicitation which contains information which is false or misleading 
within the meaning of Sec.  11.701, which involves coercion, duress or 
harassment within the meaning of Sec.  11.703(b)(2), or which involves 
contact with a prospective client who has made known to the 
practitioner a desire not to be solicited by the practitioner within 
the meaning of Sec.  11.703(b)(1) would be prohibited. Further, if 
after sending a letter or other communication to a client as permitted 
by Sec.  11.702 the practitioner receives no response, any further 
effort to communicate with the prospective client may violate the 
provisions of Sec.  11.703(b). Likewise, if a solicitation on a 
practitioner's behalf by an intermediary contains false or misleading 
information within the meaning of Sec.  11.701, the solicitation may 
violate the provisions of Sec.  11.804(a). Similarly, any solicitation 
by an intermediary invention promoter involving follow-up telephone 
calls to prospective clients who have not responded to an initial 
solicitation may violate the provisions of Sec.  11.804(a).
    Section 11.703 is not intended to prohibit a practitioner from 
contacting representatives of inventor-run organizations or groups that 
may be interested in establishing a group or prepaid legal plan for 
their members, or insureds for the purpose of informing such entities 
of the availability of and details concerning the plan or arrangement 
which the practitioner or the practitioner's firm is willing to offer. 
This form of communication is not directed to a prospective client. 
Rather, it is usually addressed to an individual acting in a fiduciary 
capacity seeking a supplier of legal services for others who may, if 
they choose, become prospective clients of the practitioner. Under 
these circumstances, the activity which the practitioner undertakes in 
communicating with such representatives and the type of information 
transmitted to the individual are functionally similar to and serve the 
same purpose as advertising permitted under Sec.  11.702.
    The requirement in Sec.  11.703(c) that certain communications be 
marked ``Advertising Material'' does not apply to communications sent 
in response to requests of potential clients or their spokespersons or 
sponsors. General announcements by practitioners, including changes in 
personnel or office location, do not constitute communications 
soliciting professional employment from a client known to be in need of 
legal services within the meaning of this section.
    Paragraph (d) of Sec.  11.703 would permit, in conformity with 
Rules of Professional Conduct adopted by state bars, a lawyer to 
participate with an organization which uses personal contact to solicit 
members for its group or prepaid legal service plan, provided that the 
personal contact is not undertaken by any practitioner who would be a 
provider of legal services through the plan. The organization referred 
to in paragraph (d) must not be owned by or directed (whether as 
manager or otherwise) by any practitioner or law firm that participates 
in the plan. For example, paragraph (d) would not permit a lawyer to 
create an organization controlled directly or indirectly by the 
practitioner and use the organization for the in-person or telephone 
solicitation of legal employment of the practitioner through 
memberships in the plan or otherwise. The communication permitted by 
these organizations also must not be directed to a person known to need 
legal services in a particular matter, but is to be designed to inform 
potential plan members generally of another means of affordable legal 
services. Practitioners who participate in a legal service plan must 
reasonably assure that the plan sponsors are in compliance with 
Sec. Sec.  11.701, 11.702, and 11.703(b). See Sec.  11.804(a).
    Section 11.704 would permit a practitioner to indicate areas of 
practice in communications about the practitioner's services. If a 
practitioner practices only in certain fields, or will not accept 
matters except in a specified field or fields, the practitioner is 
permitted to so indicate. A practitioner is generally permitted to 
state that the practitioner is a ``specialist,'' practices a 
``specialty,'' or ``specializes in'' particular fields, but such 
communications are subject to the ``false and misleading'' standard 
applied in Sec.  11.701 to communications concerning a practitioner's 
services.
    However, a practitioner may not communicate that the practitioner 
has been recognized or certified as a specialist in a particular field 
of law, except as provided by this section.
    Paragraph (a) of Sec.  11.704 would continue the provisions of 
current Sec.  10.31(c) proscribing a non-lawyer, e.g., a patent agent, 
from holding himself/herself out as an attorney, lawyer, or member of a 
bar; or as authorized to practice before the Office in trademark 
matters unless authorized by Sec.  11.14(b).
    Paragraph (b) of Sec.  11.704 would continue the provisions of 
current Sec.  10.34(b) permitting a registered practitioner who is an 
attorney to use the designation ``Patents,'' ``Patent Attorney,'' 
``Patent Lawyer,'' ``Registered Patent Attorney,'' or a substantially 
similar designation.

[[Page 69501]]

    Paragraph (c) of Sec.  11.704 would continue the procedure of 
current Sec.  10.34(c) permitting a registered patent agent who is not 
an attorney to use the designation ``Patents,'' ``Patent Agent,'' 
``Registered Patent Agent,'' or a substantially similar designation.
    Section 11.705 would provide for firm names and letterheads. A firm 
may be designated by the names of all or some of its members, by the 
names of deceased members where there has been a continuing succession 
in the firm's identity, or by a trade name such as the ABC Legal 
Clinic. Although the United States Supreme Court has held that 
legislation may prohibit the use of trade names in professional 
practice, use of such names in law practice is acceptable so long as it 
is not misleading. For example, if a private firm uses a trade name 
that includes a geographical name such as Springfield Legal Clinic, an 
express disclaimer that it is a public legal aid agency may be required 
to avoid a misleading implication. It may be observed that any firm 
name including the name of a deceased partner is, strictly speaking, a 
trade name. The use of such names to designate law firms has proven a 
useful means of identification. However, it is misleading to use the 
name of a practitioner not associated with the firm or a predecessor of 
the firm.
    Paragraph (d) of Sec.  11.705 would provide that practitioners 
sharing office facilities, but who are not in fact partners, may not 
denominate themselves as, for example, Smith and Jones, for that title 
suggests partnership in the practice of law.
    Section 11.801 would impose the same duty to persons seeking 
admission to a bar as well as to practitioners. Hence, if a person 
makes a material false statement in connection with an application for 
registration, it may be the basis for subsequent disciplinary action if 
the person is admitted, and in any event may be relevant in a 
subsequent admission application. The duty imposed by Sec.  11.801 
applies to a practitioner's own admission or discipline as well as that 
of others. Thus, it is a separate professional offense for a 
practitioner knowingly to make a misrepresentation or omission in 
connection with a disciplinary investigation of the practitioner's own 
conduct. Section 11.801 also requires affirmative clarification of any 
misunderstanding on the part of the admissions or disciplinary 
authority of which the person involved becomes aware.
    Section 11.801 is subject to the provisions of the Fifth Amendment 
of the United States Constitution and corresponding provisions of state 
constitutions. A person relying on such a provision in response to a 
question, however, should do so openly and not use the right of 
nondisclosure as a justification for failure to comply with this rule.
    A practitioner representing an applicant for registration, or 
representing another practitioner who is the subject of a disciplinary 
inquiry or proceeding, is governed by the Rules applicable to the 
client-practitioner relationship. For example, Sec.  11.106 may 
prohibit disclosures, which would otherwise be required by a 
practitioner serving in such representative capacity. Practitioners 
representing an applicant or another practitioner must take steps to 
reasonably assure compliance with Sec. Sec.  11.303(a)(1) and (2), and 
11.804(c). See Lipman v. Dickinson, 174 F.3d 1363, 50 USPQ 2d 1490 
(Fed. Cir. 1999).
    Section 11.803 would require reporting a violation of the Rules of 
Professional Conduct. Self-regulation of the legal profession requires 
that members of the profession seek a disciplinary investigation when 
they know of a violation of the Rules of Professional Conduct. 
Practitioners have a similar obligation with respect to judicial 
misconduct. An apparently isolated violation may indicate a pattern of 
misconduct that only a disciplinary investigation can uncover. 
Reporting a violation is especially important where the victim is 
unlikely to discover the offense.
    Consistent with the current rule, Sec.  10.24(a), a report about 
misconduct is not required where it would involve violation of Sec.  
11.106. However, a practitioner should encourage a client to consent to 
disclosure where prosecution would not substantially prejudice the 
client's interests.
    If a practitioner were obliged to report every violation of the 
Rules, the failure to report any violation would itself be a 
professional offense. Such a requirement existed in many jurisdictions 
but proved to be unenforceable. Section 11.803 would limit the 
reporting obligation to those offenses that a self-regulating 
profession must vigorously endeavor to prevent. A measure of judgment 
is, therefore, required in complying with the provisions of this 
section. The term ``substantial'' refers to the seriousness of the 
possible offense and not the quantum of evidence of which the 
practitioner is aware. A written communication describing the 
substantial misconduct should be made to the OED Director where the 
conduct is in connection with practice before the Office. Criminal 
convictions in state or Federal courts, and disciplinary actions other 
jurisdictions also should be communicated to the OED Director. A 
practitioner who believes that another practitioner has a significant 
problem of alcohol or other substance abuse affecting the latter 
practitioner's practice before the Office, in addition to reporting the 
matter to the OED Director, should also report the perceived situation 
to a counseling committee, operated by the state bar, which assists 
practitioners having such problems.
    The duty to report professional misconduct does not apply to a 
practitioner retained to represent a practitioner whose professional 
conduct is in question. Such a situation is governed by the Rules 
applicable to the client-practitioner relationship.
    Paragraph (b) of Sec.  11.803 would provide for reporting knowledge 
that an employee of the Office has committed a violation of applicable 
Federal statute and rules adopted by the Office of Government Ethics 
(OGE). However, not all such violations are reportable to the Office of 
Enrollment and Discipline. For example, an Office employee who is not a 
practitioner could not be subject to the imperative USPTO Rules of 
Professional Conduct. Accordingly, violations of a Federal statute or 
OGE-adopted rules should be reported to the appropriate authorities, 
which do not include OED.
    Paragraph (e) of Sec.  11.803 would provide for disciplining a 
practitioner suspended or disbarred from practice as an attorney or 
agent on ethical grounds by any duly constituted authority of the 
United States (e.g., a Federal court or another agency), a State (e.g., 
a state supreme court), or a foreign authority in the case of a 
practitioner residing in a foreign country (e.g., a foreign patent 
office). Practitioners have been suspended or excluded from practice 
before the Office following disbarment or suspension in a state. See In 
re Davis, 982 Off. Gaz. 2 (May 1, 1979), aff'd sub nom., Davis v. 
Commissioner, No. 80-1036 (D.C. Cir. Mar. 31, 1981), cert. denied, 454 
U.S. 1090 (1981) (attorney excluded by USPTO following disbarment in 
Minnesota for misconduct involving both patent and non-patent matters); 
In re Hodgson, 1023 Off. Gaz. 13 (Oct. 12, 1982) (attorney excluded by 
USPTO after disbarment in Virginia following criminal conviction); In 
re Pattison, 1023 Off. Gaz. 13 (Oct. 12, 1982) (attorney excluded by 
USPTO after disbarment in Maryland for misconduct involving patent and 
non-patent matters); Attorney Grievance Commission (Maryland) v. 
Pattison, 441 A.2d 328 (Md. 1982); Nakamura v.

[[Page 69502]]

Harper, 1062 Off. Gaz. 433 (Jan. 28, 1986) (attorney excluded by USPTO 
after disbarment in Maryland for misconduct in patent and non-patent 
matters addressed in Attorney Grievance Commission (Maryland) v. 
Harper, 477 A.2d 756 (Md. 1984)); and In re Kraft, 954 Off. Gaz. 550 
(Jan. 11, 1977), aff'd. sub nom., Kraft v. Commissioner, No. 77-0087 
(D.D.C. Nov. 3, 1977) (attorney excluded by USPTO following suspension 
in Idaho).
    Paragraph (f) of Sec.  11.803 would define some, but not all, acts 
that would constitute violations of paragraphs (a) through (e) of this 
section. The USPTO believes that it would be helpful to practitioners 
if some specific prohibitions were set out in the rules. The 
prohibitions set out in paragraphs (1) through (4) of Sec.  11.803 
represent violations that have occurred in the past or that the USPTO 
specifically seeks to prevent. The specific acts set out in paragraph 
(f) would not constitute a complete description of all acts in 
violation of paragraphs (a) through (e).
    Section 11.804 would continue the practice of providing for 
discipline involving a variety of acts constituting misconduct.
    Paragraph (b) of Sec.  11.804 would address many kinds of illegal 
conduct reflecting adversely on fitness to practice law, such as 
offenses involving fraud and the offense of willful failure to file an 
income tax return. See In re Milmore, 196 USPQ 628 (Comm'r Pat. 1977) 
(fraud on the Office); In re Donal E. McCarthy, 922 Off. Gaz. 2 (May 
17, 1974) (income tax evasion); In re Edwin Crabtree, 1023 Trademark 
Off. Gaz. 44 (Oct. 27 1987) (income tax evasion). However, some kinds 
of offenses carry no such implication. Traditionally, the distinction 
was drawn in terms of offenses involving ``moral turpitude.'' A current 
regulation, 37 CFR 10.23(b)(3), proscribes ``illegal conduct involving 
moral turpitude.'' That concept can be construed to include offenses 
concerning some matters of personal morality, such as adultery and 
comparable offenses, that have no specific connection to fitness for 
the practice of law. Although a practitioner is personally answerable 
to the entire criminal law, a practitioner should be professionally 
answerable only for offenses that indicate lack of those 
characteristics relevant to law practice. Offenses involving violence, 
dishonesty, breach of trust, or serious interference with the 
administration of justice are in that category. See, e.g., In re 
Bernard Miller, 688 Off. Gaz. 1 (Nov. 2, 1954) (excluding attorney from 
USPTO following conviction and incarceration, Miller v. State 
(Oklahoma), 281 P.2d 441 (Crim. App. Okla. 1955)). A pattern of 
repeated offenses, even ones of minor significance when considered 
separately, can indicate indifference to legal obligation.
    Paragraph (d) of Sec.  11.804, like Sec.  10.23(b)(5), would 
prohibit conduct that ``is prejudicial to the administration of 
justice.'' There is extensive case law on this standard, as set forth 
below. Examples of these cases involve a practitioner's failure to 
cooperate with the OED Director or Bar Counsel during an investigation. 
A practitioner's failure to respond to investigative inquiries or Bar 
Counsel's subpoenas may constitute misconduct. See Bovard v. Gould, 
D96-02 http://www.uspto.gov/web/offices/com/sol/foia/oed/disc/D02.pdf 
(Comm'r Pat 1997); In re Cope, 455 A.2d 1357 (D.C. 1983); In re Haupt, 
444 A.2d 317 (D.C. 1982); In re Lieber, 442 A.2d 153 (D.C. 1982); In re 
Whitlock, 441 A.2d 989 (D.C. 1982); In re Russell, 424 A.2d 1087 (D.C. 
1980); In re Willcher, 404 A.2d 185 (D.C. 1979). Misconduct also may 
arise from the failure to abide by agreements made with Bar Counsel. 
See In re Harmon, M-79-81 (D.C. Dec. 14, 1981) (breaking promise to Bar 
Counsel to offer complainant refund of fee or vigorous representation 
constitutes conduct prejudicial to the administration of justice).
    In the Office, a variety of conduct by practitioners has been found 
to constitute conduct prejudicial to the administration of justice. For 
example, such conduct includes a practitioner's destruction of a 
maintenance fee reminder, payment of Office fees with checks drawn on 
an overdrawn account, and settling a dispute with a former client by 
precluding disclosure of a grievance to the Office. See Bovard v. Cole, 
D95-01 (Comm'r Pat. 1995); Weiffenbach v. Maxon, D89-11 (Comm'r Pat. 
1990); and In re Johnson, D2001-09, http://www.uspto.gov/web/offices/com/sol/foia/oed/discD25.pdf (Comm'r Pat. 2001). In other 
jurisdictions, a practitioner's failure to appear in court for a 
scheduled hearing is another common form of conduct deemed prejudicial 
to the administration of justice. See In re Evans, No. M-126-82 (D.C. 
Dec. 18, 1982); In re Doud, Bar Docket No. 442-80 (Sept. 23, 1982); In 
re Bush (Bush III), No. S-58-79/D/39/80 (D.C. Apr. 30, 1980); In re 
Molovinsky, No. M-31-79 (D.C. Aug. 23, 1979). Similarly, failure to 
obey court orders has been found to constitute misconduct under Sec.  
11.804(d). See In re Whitlock, 441 A.2d 989-91 (D.C. 1982); In re 
Brown, Bar Docket No. 222-78 (Aug. 4, 1978); and In re Bush (Bush I), 
No. DP-22-75 (D.C. July 26, 1977).
    While the above categories--failure to cooperate with Bar Counsel 
and failure to obey court orders--encompass the major forms of 
misconduct proscribed by Sec.  11.804(d), that provision would be 
interpreted flexibly and includes any improper behavior of an analogous 
nature. For example, the failure to turn over the assets of a 
conservatorship to the court or to the successor conservator has been 
held to be conduct ``prejudicial to the administration of justice.'' In 
re Burka, 423 A.2d 181 (D.C. 1980). In Russell, 424 A.2d 1087 (D.C. 
1980), the court found that failure to keep the Bar advised of 
respondent's changes of address, after being warned to do so, was also 
misconduct under that standard. And in In re Schattman, No. M-63-81 
(D.C. June 2, 1981), it was held that a practitioner's giving a 
worthless check in settlement of a claim against the practitioner by a 
client was improper.
    Paragraph (g) of Sec.  11.804 is based on 35 U.S.C. 32, and would 
prohibit disreputable or gross misconduct. An example of a practitioner 
being excluded for gross misconduct is found in In re Wedderburn, 1897 
Dec. Comm'r. Pat. 77 (Comm'r Pat. 1897), mandamus denied sub nom., 
United States ex rel. Wedderburn v. Bliss, 1897 Dec. Comm'r. Pat. 750 
(Sup.Ct. D.C. 1897), aff'd. 12 App. D.C. 485, 1898 Dec. Comm'r Pat. 413 
(D.C. Cir. 1898).
    Paragraph (h) of Sec.  11.804 would define some, but not all, acts 
that would constitute violations of paragraphs (a) through (g) of this 
section. The USPTO believes that it would be helpful to practitioners 
if some specific prohibitions were set out in the rules. The 
prohibitions set out in paragraphs (1) through (10) of Sec.  11.804 
represent conduct that has occurred in the past or which the USPTO 
specifically seeks to prevent. The specific acts set out in paragraph 
(h) would not constitute a complete description of all acts in 
violation of paragraphs (a) through (g).
    Paragraph (h)(1) of Sec.  11.804, for example, would proscribe 
knowingly giving false or misleading information or knowingly 
participating in a material way in giving false or misleading 
information, to a client in connection with any immediate, prospective, 
or pending business before the Office.
    Paragraph (h)(2) of Sec.  11.804 would include as misconduct 
representing before the Office in a patent case either a joint venture 
comprising an inventor and an invention promoter or an inventor 
referred to the registered practitioner by an invention promoter. One 
requirement for the misconduct to obtain is that the registered 
practitioner know, or be advised by the Office, that

[[Page 69503]]

a formal complaint has been filed by a Federal or state agency, that 
the complaint is based on any violation of any law relating to 
securities, unfair methods of competition, unfair or deceptive acts or 
practices, mail fraud, or other civil or criminal conduct, and the 
complaint is pending before a Federal or state court or Federal or 
state agency, or has been resolved unfavorably by such court or agency, 
against the invention promoter in connection with invention development 
services. Another requirement is that the informed or advised 
registered practitioner fails to fully advise the inventor of the 
existence of the pending complaint or unfavorable resolution thereof 
prior to undertaking or continuing representation of the joint venture 
or inventor. The Federal Trade Commission, Securities and Exchange 
Commission, and the U.S. Department of Justice are Federal agencies 
empowered to investigate and file charges included within the scope of 
the proposed rule. See Securities and Exchange Commission v. Lawrence 
Peska Associates, Inc., Civil Action 77-2436 (S.D. Fla., Filed: Aug. 8, 
1977); United States v. Beecroft, 608 F.2d 753 (9th Cir. 1979) 
(upholding mail fraud convictions of defendant officers of a company 
which helped inventors promote and market their ideas).
    Attorneys General in state agencies also can file charges arising 
from actions that may also constitute violations of consumer protection 
laws within the scope of the proposed rules. See, e.g., Thomas, 
Invention Development Service and Inventors: Recent Inroads on Caveat 
Inventors, 60 J. Pat. Off. Soc'y. 355, 376 n. 75 (1978); Shemin, Idea 
Promoter Control: The Time Has Come, 60 J. Pat. Off. Soc'y. 261, 262 
n.7 (1978); and Illinois v. Lawrence Peska Associates, Inc., Civil 
Action No. 77CH 3771 (Cir.Ct. Cook Cty June 8, 1977). Similarly, a 
practitioner who represented an inventor referred by an invention 
promoter, and knew or should have known that the invention promoter was 
charged by the FTC with engaging in unfair or deceptive acts or 
practices, could be subject to disciplinary action under the proposed 
rule if the practitioner does not advise the inventor of the existence 
of the charges.
    In using ``invention promoter'' and ``invention marketing and 
promotion services,'' the proposed rule applies the definitions used in 
Sec.  11.1.
    Paragraph (h)(7) of Sec.  11.804 would provide that a practitioner 
may not accept or use the assistance from an Office employee in the 
presentation or prosecution of an application except to the extent that 
the employee may lawfully participate in an official capacity. The 
proposed rule would cover not only situations where an Office employee, 
such as a patent examiner or other person, is paid for their 
assistance, but also where the employee is not paid for their 
assistance. Thus, where claims in an application are rejected over a 
reference that is in a foreign language, a practitioner may not engage 
a person, employed by the Office, to translate the reference and use 
the translation to traverse the rejection. Moreover, the proposed rule 
would not be limited to situations involving bribery, and would not 
require a conviction for bribery.
    Paragraph (i) of Sec.  11.804 would provide that a practitioner who 
acts with reckless indifference to whether a representation is true or 
false would be chargeable with knowledge of its falsity. Likewise, 
deceitful statements of half-truths or concealment of material facts 
shall be deemed actual fraud within the meaning of this part. See, 
e.g., United States v. Beecroft, 608 F.2d 753 (9th Cir. 1979).
    Section 11.805 would provide a practitioner and other persons 
practicing before the Office with guidance that he or she would be 
subject to the disciplinary authority and rules of the USPTO. Paragraph 
(a) of Sec.  11.805 restate long-standing law. The USPTO Director has 
statutory, 35 U.S.C. 2(b)(2)(D), and inherent authority to adopt rules 
regulating the practice of attorneys and other persons before the USPTO 
in patent, trademark, and non-patent law. The USPTO, like other 
Government agencies, has inherent authority to regulate who may 
practice before it as attorneys, including the authority to discipline 
attorneys. See Goldsmith v. U.S. Board of Tax Appeals, 270 U.S. 117 
(1926); Herman v. Dulles, 205 F.2d 715 (D.C. Cir. 1953), and Koden v. 
U.S. Department of Justice, 564 F.2d 228 (7th Cir. 1977). Courts have 
affirmed that Congress, through the Administrative Procedure Act, 5 
U.S.C. 500, did not limit the inherent power of agencies to discipline 
professionals who appear or practice before them. See Polydoroff v. 
ICC, 773 F.2d 372 (D.C. Cir. 1985); Touche Ross & Co. v. SEC, 609 F.2d 
570 (2d Cir. 1979).
    A practitioner may be potentially subject to more than one set of 
rules of professional conduct which impose different obligations. The 
registered patent attorney would be licensed to practice in more than 
one jurisdiction, i.e., the Office and at least one state. The rules of 
professional conduct may differ between these jurisdictions. A 
practitioner may be admitted to practice before a particular court with 
rules that differ from those of the Office or other jurisdictions in 
which the practitioner is licensed to practice. In the past, decisions 
have not developed clear or consistent guidance as to which rules apply 
in such circumstances.
    Paragraph (b) of Sec.  11.805 seeks to resolve such potential 
conflicts. Its premise would be that minimizing conflicts between 
rules, as well as uncertainty about which rules are applicable, is in 
the best interest of both clients and the profession (as well as the 
bodies having authority to regulate the profession). Accordingly, it 
takes the approach of (i) providing that any particular conduct of a 
practitioner shall be subject to only one set of rules of professional 
conduct, and (ii) making the determination of which set of rules 
applies to particular conduct as straightforward as possible, 
consistent with recognition of appropriate regulatory interests of 
relevant jurisdictions.
    Paragraph (b)(1) of Sec.  11.805 would provide that as to a 
practitioner's conduct relating to practice before the Office, where 
the practitioner is registered or recognized to practice (either 
generally or granted limited recognition), the practitioner would be 
subject to the rules of the Office Rules of Professional Conduct.
    Paragraph (b)(2) of Sec.  11.805 would provide that as to a 
practitioner's conduct relating to a proceeding in or before a court 
before which the practitioner is admitted to practice (either generally 
or pro hac vice), the practitioner would be subject only to the rules 
of professional conduct of that court. As to all other conduct, Sec.  
11.805(b) would provide that a practitioner recognized to practice 
before the Office would be subject to the rules of the Office in regard 
to conduct occurring in connection with practice before the Office. The 
rule also would provide that a practitioner recognized to practice 
before the Office practicing in multiple jurisdictions would be subject 
only to the rules of the jurisdiction where he or she (as an 
individual, not his or her firm) principally practices, but with one 
exception: if particular conduct clearly has its predominant effect in 
another admitting jurisdiction, then only the rules of that 
jurisdiction shall apply. The intention is for the latter exception to 
be a narrow one. It would be appropriately applied, for example, to a 
situation in which a practitioner admitted in, and principally 
practicing in, State A, but also admitted in State B, handled an 
acquisition by a company whose headquarters and operations were in 
State B of another,

[[Page 69504]]

similar to such company. The exception would not appropriately be 
applied, on the other hand, if the practitioner handled an acquisition 
by a company whose headquarters and operations were in State A of a 
company whose headquarters and main operations were in State A, but 
which also had some operations in State B.
    If two admitting jurisdictions were to proceed against a 
practitioner for the same conduct, they should, applying this rule, 
identify the same governing ethics rules. They should take all 
appropriate steps to see that they do apply the same rule to the same 
conduct, and in all events should avoid proceeding against a 
practitioner on the basis of two inconsistent rules.
    If an attorney admitted in State A also is a registered 
practitioner, the practitioner may view that he or she is subject to 
possibly different ethical obligations under State and Office rules 
regarding disclosure of prior art references. Typically, this obtains 
in patent matters where the practitioner is informed by the client of 
the existence of a prior reference that appears to the practitioner to 
be material to the patentability of the client's patent application, 
but the client believes the reference is not directly relevant to the 
invention, and does not want to disclose the reference to the Office. 
The practitioner is engaged in practicing before the Office. It would 
be appropriate to apply Sec.  11.805(b) and follow the Office rules, 
Sec. Sec.  1.56 and 11.106(c), requiring disclosure of information 
material to the patentability of a claimed invention. See Formal 
Opinion 96-12, Professional Guidance Committee of the Philadelphia Bar 
Association (1996).
    The choice of law provision is not intended to apply to practice 
abroad.
    Section 11.806 would address sexual relations with clients, 
employees, and third persons.
    Paragraph (a) of Sec.  11.806 would define ``sexual relations'' as 
intercourse or touching another person for the purpose of sexual 
arousal, sexual gratification, or sexual abuse. Paragraph (b)(1) of 
Sec.  11.806 would proscribe a practitioner from requiring sexual 
relations with a client or third party incident to or as a condition of 
any professional representation. Paragraph (b)(2) of Sec.  11.806 would 
proscribe sexual relations with an employee incident to or as a 
condition of employment. Under paragraph (b)(3) of Sec.  11.806, use of 
coercion, intimidation, or undue influence in entering into sexual 
relations with a client, or employee is proscribed.
    Paragraph (c) of Sec.  11.806. Under paragraph (c) of Sec.  11.806, 
the regulation would not apply to sexual relations between 
practitioners and their spouses or to ongoing consensual sexual 
relationships predating the practitioner-client relationship or 
practitioner-employee relationship.
    Paragraph (d) of Sec.  11.806. Under paragraph (d) of Sec.  11.806, 
practitioners in the firm would not be subject to discipline solely 
because a practitioner in the firm has sexual relations with a client 
but the practitioner does not participate in the representation of that 
client.

                            Table 1.--Principal Source of Sections 11.1 Through 11.18
----------------------------------------------------------------------------------------------------------------
               Section                          Source                         Part 10 concordance
----------------------------------------------------------------------------------------------------------------
Sec.   11.1..........................  37 CFR 10.1.............  Sec.   10.1
                                       MRPR
Sec.   11.2..........................  37 CFR 10.2.............  Sec.   10.2
                                       DC RULE XI, Sec.   6
Sec.   11.3..........................  37 CFR 10.170...........  Sec.   10.170
Sec.   11.4..........................  37 CFR 10.3.............  Sec.   10.3
Sec.   11.5..........................  37 CFR 10.5.............  Sec.   10.5
Sec.   11.6..........................  37 CFR 10.6.............  Sec.   10.6
Sec.   11.7(a)(b)....................  37 CFR 10.7(a)..........  Sec.   10.7(a)
Sec.   11.7(b)(1)....................  37 CFR 10.7(b)..........  Sec.   10.7(b)
Sec.   11.7(b)(2)....................  New.....................  None
                                       37 CFR 1.8 and 1.10.....  None
Sec.   11.7(c).......................  Case law................  None
                                       RDCCA 46(12)(ii), third
                                        sentence
Sec.   11.7(d).......................  New.....................  Sec.   10.7(b)
Sec.   11.7(e).......................  New.....................  None
Sec.   11.7(f).......................  37 CFR 10.6(c)..........  Sec.   10.6(c)
                                       37 CFR 10.7(b)..........  Sec.   10.7(b)
Sec.   11.7(g).......................  37 CFR 10.7(a)..........  Sec.   10.7(a)
Sec.   11.7(h).......................  Case law................  None
                                       California State Bar      None
                                        Policy.
                                       FlaRSC 2-13.............  None
                                       GaSCR Part A, Sec.   11.  None
                                       MoSCR 8.05..............  None
Sec.   11.7(i).......................  California State Bar      None
                                        Policy.
Sec.   11.7(j).......................  RDCCA 46(f)-(g).........  None
                                       Willner v. Comm. on
                                        Character & Fitness,
                                        373 U.S. 96 (1963)
Sec.   11.7(k).......................  Colo. Rule 201.12.......  None
Sec.   11.8(a).......................  RDCCA 46(b)(10).........  None
Sec.   11.8(b)-(c)...................  RDCCA 46(h)(2), (3).....  None
Sec.   11.8(d).......................  OGVSB Rule 11...........  None
Sec.   11.9(a)-(c)...................  37 CFR 10.9(a)-(c)......  Sec.   10.9
Sec.   11.10(a)......................  37 CFR 10.10(a).........  Sec.   10.10
Sec.   11.10(b)......................  5 CFR 2637.201..........  Sec.   10.10(b)
                                       5 CFR 2637.202..........  Sec.   10.10(b)
Sec.   11.10(c)......................  5 CFR 2637.201..........  None
                                       5 CFR 2637.202..........  None
Sec.   11.10(d)-(e)..................  37 CFR 10.10(c)-(d).....  Sec.   10.10(c)-(d)
Sec.   11.11(a)......................  37 CFR 10.11(a).........  Sec.   10.11(a)

[[Page 69505]]

 
Sec.   11.11(b)......................  OGVSB Rule 19...........  None
Sec.   11.11(c)......................  New.....................  None
Sec.   11.11(d)......................  New.....................  None
Sec.   11.11(e)-(f)..................  1064 Off.Gaz.12.........  None
Sec.   11.12(a)-(d)..................  OGVSB Rule 17...........  None
Sec.   11.12(e)......................  OGVSB Rule 19...........  None
Sec.   11.13.........................  OGVSB Rule 17...........  None
Sec.   11.14.........................  37 CFR 10.14............  Sec.   10.14
Sec.   11.15.........................  37 CFR 10.15............  Sec.   10.15
Sec.   11.16.........................  New.....................  None
Sec.   11.17 [Reserved]
Sec.   11.18.........................  37 CFR 10.18............  Sec.   10.18
                                       FRCP 11
----------------------------------------------------------------------------------------------------------------
Abbreviations:
Colo. Rule means Rules Governing Admission to the Bar of the State of Colorado (March 23, 2000).
DC RULE XI means Rule XI of the Rules Governing the District of Columbia Bar.
FlaLRSC 2-13 means Rule 2-13 of the Florida Rules of the Supreme Court Relating to Admissions to the Bar.
GaSCR Part A, Sec.   11 means Part A, Rule 11 of the Georgia Supreme Court Rules Governing Admission to the
  Practice of Law.
MoSCR 8.05 means Rule 8.05 of the Missouri Supreme Court Rules Governing Admission to the Bar in Missouri.
RDCCA means Rules of the District of Columbia Court of Appeals.
OGVSB means Organization & Government of the Virginia State Bar.


                           Table 2.--Principal Source of Sections 11.19 Through 11.62
----------------------------------------------------------------------------------------------------------------
               Section                          Source                         Part 10 concordance
----------------------------------------------------------------------------------------------------------------
Sec.   11.19.........................  DC RULE XI..............  Sec.   10.1, 10.2
                                       37 CFR 10.130...........  Sec.   10.130
Sec.   11.20.........................  DC RULE XI, Sec.   3....  None
Sec.   11.21.........................  DC BPR Chap. 6..........  None
Sec.   11.22.........................  DC BPR Chap. 2..........  None
Sec.   11.23.........................  37 CFR 10.4.............  Sec.   10.4
Sec.   11.24.........................  DC BPR Chap. 10.........  None
Sec.   11.25.........................  DC BPR Chap. 8..........  None
                                       Calif. Sec.   6102(d)...  None
Sec.   11.26.........................  DC BPR Chap.............  None
Sec.   11.27.........................  37 CFR 10.133...........  Sec.   10.133
                                       DC BPR Chap.15
Sec.   11.28.........................  DC BPR Chap. 14.........  None
                                       DC RULE XI, Sec.   13
Sec.  Sec.   11.29-11.31 [Reserved]
Sec.   11.32.........................  37 CFR 10.132...........  Sec.   10.132
Sec.   11.33 [Reserved]
Sec.   11.34.........................  37 CFR 10.134...........  Sec.   10.134
Sec.   11.35.........................  37 CFR 10.135...........  Sec.   10.135
Sec.   11.36.........................  37 CFR 10.136...........  Sec.   10.136
Sec.   11.37.........................  37 CFR 10.137...........  Sec.   10.137
Sec.   11.38.........................  37 CFR 10.138...........  Sec.   10.138
Sec.   11.39.........................  37 CFR 10.139...........  Sec.   10.139
Sec.   11.40.........................  37 CFR 10.140...........  Sec.   10.140
Sec.   11.41.........................  37 CFR 10.141...........  Sec.   10.141
Sec.   11.42.........................  37 CFR 10.142...........  Sec.   10.142
Sec.   11.43.........................  37 CFR 10.143...........  Sec.   10.143
Sec.   11.44.........................  37 CFR 10.144...........  Sec.   10.144
Sec.   11.45.........................  37 CFR 10.145...........  Sec.   10.145
Sec.  Sec.   11.46-11.48 [Reserved]
Sec.   11.49.........................  37 CFR 10.149...........  Sec.   10.149
Sec.   11.50.........................  37 CFR 10.150...........  Sec.   10.150
Sec.   11.51.........................  37 CFR 10.151...........  Sec.   10.151
Sec.   11.52.........................  37 CFR 10.152...........  Sec.   10.152
Sec.   11.53.........................  37 CFR 10.153...........  Sec.   10.153
Sec.   11.54.........................  37 CFR 10.154...........  Sec.   10.154
Sec.   11.55(a)......................  37 CFR 10.155(a)........  Sec.   10.155(a)
                                       FRAP Rule 28
Sec.   11.55(b)......................  FRAP Rule 28............  None
                                       FRAP Rule 32(a)(4), and
                                        (7)
                                       FRAP Rule 32(a)(4), (5)
                                        and (6)
Sec.   11.55(c)-(e)..................  37 CFR 10.155(b)-(d)....  Sec.   10.155(b)-(d)
Sec.   11.56.........................  37 CFR 10.157...........  Sec.   10.157
Sec.   11.58.........................  37 CFR 10.158...........  Sec.   10.158
                                       DC Rule XI, Sec.   14
                                       Calif. Rule 955

[[Page 69506]]

 
Sec.   11.59.........................  37 CFR 10.159...........  Sec.   10.159
Sec.   11.60.........................  37 CFR 10.160...........  Sec.   10.160
                                       DC RULE XI, Sec.   16
                                       DC BPR Chap. 9
Sec.   11.61.........................  37 CFR 10.161...........  Sec.   10.161
Sec.   11.62.........................  New
----------------------------------------------------------------------------------------------------------------
Abbreviations:
DC RULE XI means Rule XI of the Rules Governing the District of Columbia Bar (1999).
DC BPR means Rules of the District of Columbia Court of Appeals Board of Professional Conduct (1999).
Calif. Rule means California Bar Rule.
Calif Sec.   6102(d) means Article 6, Sec.   6102(d) of the California State Bar Act.
FRAP means Federal Rules of Appellate Procedure.


                          Table 3.--Principal Source of Sections 11.100 Through 11.806
----------------------------------------------------------------------------------------------------------------
               Section                          Source                         Part 10 concordance
----------------------------------------------------------------------------------------------------------------
Competence:
    Sec.   11.101(a).................  MRPR 1.1................  Sec.   10.77(a)
    Sec.   11.101(b).................  DCRPR 1.1b..............  None
    Sec.   11.101(c)(1)..............  Sec.   10.23(c)(7)......  Sec.   10.23(c)(7)
    Sec.   11.101(c)(2)..............  Sec.   10.23(c)(13).....  Sec.   10.23(c)(13)
    Sec.   11.101(c)(3)..............  Sec.   10.23(c)(19).....  Sec.   10.23(c)(19)
    Sec.   11.101(c)(4)..............  Sec.   10.23(c)(20).....  Sec.   10.23(c)(20)
Scope of Representation:
    Sec.   11.102(a).................  MRPR 1.2(a).............  Sec.   10.84(a)(1)
    Sec.   11.102(b).................  MRPR 1.2(b).............  None
    Sec.   11.102(c).................  MRPR 1.2(c).............  Sec.   10.84(b)
    Sec.   11.102(d).................  MRPR 1.2(d).............  Sec.   10.85(a)(6)(7)(8)
                                                                 Sec.   10.89
    Sec.   11.102(e).................  MRPR 1.2(e).............  Sec.   10.40(c)(1)(iii)
                                                                 Sec.   10.111(c)
    Sec.   11.102(f).................  DCRPR 1.2(d)............  None
Diligence:
    Sec.   11.103(a).................  MRPR 1.3................  Sec.   10.77(c)
                                                                 Sec.   10.84(a)(1), (3)
    Sec.   11.103(b)-(c).............  New.....................  Sec.   10.77(c)
                                                                 Sec.   10.84(a)(1), (3)
Communication:
    Sec.   11.104(a).................  MRPR 1.4(a).............  Sec.   10.77(c)
                                                                 Sec.   10.84(a)(1)(3)
    Sec.   11.104(b).................  MRPR 1.4(b).............  None
    Sec.   11.104(c).................  DCRPR 1.4(c)............  None
    Sec.   11.104(d)(1)..............  10.23(c)(8).............  Sec.   10.23(c)(8)
Fees:
    Sec.   11.105(a).................  MRPR 1.5(a).............  Sec.   10.36(a)(b)
    Sec.   11.105(b)-(c).............  MRPR 1.5(b)-(c).........  None
    Sec.   11.105(e)(1)..............  MRPR 1.5(e)(1)..........  Sec.   10.37(a)
    Sec.   11.105(e)(2)-(4)..........  DCRPR 1.5(e)(2)-(4).....  Sec.   10.37(a)
    Sec.   11.105(f).................  MRPR 1.5(f).............  None
Confidentiality:
    Sec.   11.106(a)(1)..............  MRPR 1.6(a).............  Sec.   10.57(a)(b)(c)
    Sec.   11.106(a)(2)-(3)..........  DCRPR 1.6...............  Sec.   10.57(a)(b)(c)
    Sec.   11.106(b)(1)..............  MRPR 1.6(b)(2)..........  Sec.   10.57(c)(4)
    Sec.   11.106(b)(2)..............  MRPR 1.6(b)(2)..........  None
    Sec.   11.106(c).................  37 CFR 1.56.............  None
    Sec.   11.106(d)-(h).............  DCRPR 1.6...............  None
Conflicts of Interest:
    Sec.   11.107(a).................  MRPR 1.7................  Sec.   10.62(a)
                                                                 Sec.   10.66(a)(b)
                                                                 Sec.   10.68(b)
    Sec.   11.107(b)&(b)(1)..........  MRPR 1.7................  Sec.   10.62(a)(b)
                                                                 Sec.   10.63
                                                                 Sec.   10.65(a)
                                                                 Sec.   10.66(a)(b)(c)
                                                                 Sec.   10.68(a)
    Sec.   11.107(b)(2)..............  MRPR 1.7................  None
Prohibited Transactions:
    Sec.   11.108(a).................  MRPR 1.8(a).............  Sec.   10.65(a)
    Sec.   11.108(b).................  MRPR 1.8(b).............  Sec.   10.57(b)
    Sec.   11.108(c).................  MRPR 1.8(c).............  None
    Sec.   11.108(d).................  MRPR 1.8(d).............  None

[[Page 69507]]

 
    Sec.   11.108(e).................  MRPR 1.8(e).............  Sec.   10.64(b)
    Sec.   11.108(f).................  MRPR 1.8(f).............  Sec.   10.68(a)(b)
    Sec.   11.108(f)(1)(ii)..........  New.....................  None
    Sec.   11.108(g).................  MRPR 1.8(g).............  Sec.   10.67(a)
    Sec.   11.108(h).................  MRPR 1.8(h).............  Sec.   10.63(a)
    Sec.   11.108(i).................  MRPR 1.8(i).............  None
    Sec.   11.108(j).................  MRPR 1.8(j).............  Sec.   10.62(a)
                                                                 Sec.   10.64(a)
                                                                 35 U.S.C. 4
    Sec.   11.108(k).................  New.....................  None
Former Client:
    Sec.   11.109(a).................  MRPR 1.9(a).............  Sec.   10.66(c)
    Sec.   11.109 (b)................  MRPR 1.9(b).............  None
    Sec.   11.109 (c)................  MRPR 1.9(c).............  None
Imputed Disqualification:
    Sec.   11.110(a).................  MRPR 1.10(a)............  Sec.   10.66(d)
    Sec.   11.110(b).................  MRPR 1.10(b)............  Sec.   10.66(d)
    Sec.   11.110(c).................  MRPR 1.10(c)............  Sec.   10.66(a)
Government/Private:
    Sec.   11.111(a).................  MRPR 1.11(a)............  Sec.   10.111(b)
    Sec.   11.111(b).................  MRPR 1.11(b)............  None
    Sec.   11.111(c).................  MRPR 1.11(c)............  None
    Sec.   11.111(d).................  MRPR 1.11(d)............  None
    Sec.   11.111(e).................  MRPR 1.11(e)............  None
Former Judge:
    Sec.   11.112(a)(b)..............  MRPR 1.12(a)(b).........  Sec.   10.111(a)(b)
    Sec.   11.112(c).................  MRPR 1.12(c)............  Sec.   10.66(d)
    Sec.   11.112(d).................  MRPR 1.12(d)............  None
Organization as Client:
    Sec.   11.113(a).................  MRPR 1.13(a)............  None
    Sec.   11.113(b).................  MRPR 13(b)..............  Sec.   10.68(b)
    Sec.   11.113(c).................  MRPR 1.13(c)............  Sec.   10.66(d)
                                                                 Sec.   10.68(b)
    Sec.   11.113(d).................  MRPR 1.13(d)............  None
    Sec.   11.113(e).................  MRPR 13(e)..............  Sec.   10.66(b)(c)
Disabled Client:
    Sec.   11.114....................  MRPR 1.14...............  None
Safekeeping of Property:
    Sec.   11.115(a).................  VRPC 1.15(a)............  Sec.   10.112(a)
    Sec.   11.115(b).................  New.....................  None
    Sec.   11.115(c).................  VRPC 1.15(b)............  Sec.   10.112(b)(2)
    Sec.   11.115(d).................  VRPC 1.15(c)............  Sec.   10.112(c)
    Sec.   11.115(e)-(f).............  VRPC 1.15(d)-(e)........  Sec.   10.112(c)(3)
    Sec.   11.115(g).................  VRCP 1.15(f)............  None
    Sec.   11.115(h)-(i).............  Sec.   10.23(c)(3)......  Sec.   10.23(c)(3)
Declining/Terminating Representation:
    Sec.   11.116(a)(1)..............  MRPR 1.16(a)(1).........  Sec.   10.39
                                                                 Sec.   10.40(b)(1)(2)
    Sec.   11.116(a)(2)..............  MRPR 1.16(a)(2).........  Sec.   10.40(b)(3)
                                                                 Sec.   10.40(c)(4)
    Sec.   11.116(a)(3)..............  MRPR 1.16(a)(3).........  Sec.   10.40(b)(4)
    Sec.   11.116(b)(1)..............  MRPR 1.16(b)(1).........  Sec.   10.40(c)(1)(ii)(iii)
                                                                 Sec.   10.40(c)(2)
    Sec.   11.116(b)(2)..............  MRPR 1.16(b)(2).........  Sec.   10.40(c)(1)(iv)
    Sec.   11.116(b)(3)..............  MRPR 1.16(b)(3).........  Sec.   10.40(c)(1)(vi)(ix)(x)
    Sec.   11.116(b)(5)..............  MRPR 1.16(b)(5).........  Sec.   10.40(c)(1)(iv)(v)
    Sec.   11.116(b)(6)..............  MRPR 1.16(b)(6).........  Sec.   10.40(c)(6)
    Sec.   11.116(c).................  MRPR 1.16(c)............  Sec.   10.40(a)
    Sec.   11.116(d).................  MRPR 1.16(d)............  Sec.   10.40(a)
Sale of Practice:
    Sec.   11.117....................  MRPR 1.17...............  None
    Sec.  Sec.   11.118-11.200
     [Reserved]
Advisor:
    Sec.   11.201(a).................  MRPR 2.1(a).............  Sec.   10.68(b)
    Sec.   11.201(b).................  New.....................  None
Intermediary:
    Sec.   11.202(a)(1)..............  MRPR 2.2(a)(1)..........  Sec.   10.66(a)(c)
    Sec.   11.202(a)(2)..............  MRPR 2.2(a)(2)..........  Sec.   10.66(a)(c)
    Sec.   11.202(a)(3)..............  MRPR 2.2(a)(3)..........  Sec.   10.66(a)(c)
    Sec.   11.202(b).................  New.....................  None
    Sec.   11.202(c).................  MRPR 2.2(b).............  None
    Sec.   11.202(c).................  MRPR 2.2(c).............  Sec.   10.66(b)(c)

[[Page 69508]]

 
Evaluation for Third Party:
    Sec.   11.203....................  MRPR 2.3................  None
    Sec.  Sec.   11.204-11.300
     [Reserved]
Meritorious Claim:
    Sec.   11.301....................  MRPR 3.1................  Sec.   10.63(a)(b)
                                                                 Sec.   10.39(a)(b)
                                                                 Sec.   10.85(a)(1)(2)
Expediting Litigation:
    Sec.   11.302(a).................  MRPR 3.2................  Sec.   10.23(b)(5)
                                                                 Sec.   10.84(a)(1)(2)
    Sec.   11.302(b).................  DCRPR 3.2(a)............  None
Candor:
    Sec.   11.303(a)(1)..............  MRPR 3.3(a)(1)..........  Sec.   10.23(b)(4)(5)
                                                                 Sec.   10.85(a)(4)(5)
    Sec.   11.303(a)(2)..............  MRPR 3.3(a)(2)..........  Sec.   10.23(b)(4)(5)
                                                                 Sec.   10.85(a)(3)
                                                                 Sec.   10.85(b)(1)
                                                                 Sec.   10.92(a)
    Sec.   11.303(a)(3)..............  MRPR 3.3(a)(3)..........  Sec.   10.85(a)(5)
                                                                 Sec.   10.89(b)(1)
    Sec.   11.303(a)(4)..............  MRPR 3.3(a)(4)..........  Sec.   10.23(b)(4)(5)
                                                                 Sec.   10.85(a)(7)
                                                                 Sec.   10.85(b)(1)
    Sec.   11.303(b).................  MRPR 3.3(b).............  Sec.   10.85(b)
    Sec.   11.303(c)(d)..............  MRPR 3.3(c)(d)..........  None
    Sec.   11.303(e)(1)..............  Sec.   10.23(c)(9)......  Sec.   10.23(c)(9)
    Sec.   11.303(e)(2)..............  Sec.   10.23(c)(10).....  Sec.   10.23(c)(10)
    Sec.   11.303(e)(3)..............  Sec.   10.23(c)(11).....  Sec.   10.23(c)(11)
    Sec.   11.303(e)(4)..............  Sec.   10.23(c)(15).....  Sec.   10.23(c)(15)
    Sec.   11.303(c)(5)..............  Sec.   10.23(c)(2)(ii)..  Sec.   10.23(c)(2)(ii)
Fairness:
    Sec.   11.304(a).................  MRPR 3.4(a).............  Sec.   10.23(b)(4)(5)
                                                                 Sec.   10.89(c)(6)
                                       MRPR 3.4(b).............  Sec.   10.23(b)(4)(5)(6)
                                                                 Sec.   10.85(a)(6)
                                                                 Sec.   10.92(c)
    Sec.   11.304(c).................  MRPR 3.4(c).............  Sec.   10.23(b)(5)
                                                                 Sec.   10.89(a)
                                                                 Sec.   10.89(c)(5)(7)
    Sec.   11.304(d).................  MRPR 3.4(d).............  Sec.   10.23(b)(5)
                                                                 Sec.   10.89(a)
                                                                 Sec.   10.89(c)(6)
    Sec.   11.304(e).................  MRPR 3.4(e).............  Sec.   10.23(b)(5)
                                                                 Sec.   10.89(c)(1)(2)(3)(4)
Impartiality:
    Sec.   11.305(a).................  MRPR 3.5(a).............  Sec.   10.89
                                                                 Sec.   10.92
                                                                 Sec.   10.101(a)
    Sec.   11.305(b).................  MRPR 3.5(b).............  None
    Sec.   11.305(c).................  MRPR 3.5(c).............  Sec.   10.84(a)
                                                                 Sec.   10.89(c)(5)
    Sec.   11.305(d)(1)..............  Sec.   10.23(c)(4)......  Sec.   10.23(c)(4)
Trial Publicity:
    Sec.   11.306 [Reserved]
Practitioner as Witness:
    Sec.   11.307(a).................  MRPR 3.7(a).............  Sec.   10.62(b)(1)(2)
                                                                 Sec.   10.63
    Sec.   11.307(b).................  MRPR 3.7(b).............  Sec.   10.62(b)
                                                                 Sec.   10.63
    Sec.   11.308 [Reserved]
Advocate on Nonjudicial Proceeding:
    Sec.   11.309....................  MRPR 3.9................  Sec.   10.89(b)(2)
                                                                 Sec.   10.111(c)
    Sec.  Sec.   11.310-11.400
     [Reserved]
Truthfulness to Others:
    Sec.   11.401....................  MRPR 4.1................  Sec.   10.85(a)(3)(4)(5)(7)
                                                                 Sec.   10.85(b)
Communication between practitioner
 and opposing parties:
    Sec.   11.402(a).................  MRPR 4.2(a).............  Sec.   10.87(a)
    Sec.   11.402(b)-(d).............  DCRPR 4.2(b)-(d)........  None
Dealing with unrepresented person:

[[Page 69509]]

 
    Sec.   11.403....................  MRPR 4.3................  Sec.   10.87(a)
Respect for rights of third persons:
    Sec.   11.404....................  MRPR 4.4................  Sec.   10.84(a)(1)
                                                                 Sec.   10.85(a)(1)
                                                                 Sec.   10.89(c)(2)
    Sec.  Sec.   11.405-11.500
     [Reserved]
Responsibilities of a partner or
 supervisory practitioner:
    Sec.   11.501(a)-(b).............  MRPR 5.1(a)-(b).........  Sec.   10.57(d)
    Sec.   11.501(c).................  MRPR 5.1(c).............  Sec.   10.23(b)(2)
Responsibilities of a subordinate
 practitioner:
    Sec.   11.502....................  MRPR 5.2................  None
Responsibilities regarding
 nonpractitioner assistants:
    Sec.   11.503(a).................  MRPR 5.3(a).............  Sec.   10.57(d)
    Sec.   11.503(b).................  MRPR 5.3(b).............  Sec.   10.23(b)
    Sec.   11.503(c).................  MRPR 5.3(c).............  None
Professional independence of a
 practitioner:
    Sec.   11.504(a).................  MRPR 5.4(a).............  Sec.   10.48(a)
    Sec.   11.504(b).................  MRPR 5.4(c).............  Sec.   10.68(b)
    Sec.   11.504(d).................  MRPR 5.4(d).............  Sec.   10.68(c)
Unauthorized practice of law:
    Sec.   11.505(a).................  MRPR 5.5(a).............  Sec.   10.47(a)
                                                                 Sec.   10.14(d)
    Sec.   11.505(b).................  MRPR 5.5(b).............  Sec.   10.47(a)
    Sec.   11.505(c).................  Sec.   10.47(a).........  Sec.   10.47(a)
    Sec.   11.505(d).................  Sec.   10.47(b).........  Sec.   10.47(b)
                                                                 Sec.   10.23(c)(6)
    Sec.   11.505(e).................  New.....................  Sec.   10.14(b)
    Sec.   11.505(f).................  Sec.   10.47(b).........  Sec.   10.47(b)
Restrictions on right to practice:
    Sec.   11.506(a)-(b).............  MRPR 5.6................  Sec.   10.38
Responsibilities regarding law-
 related services:
    Sec.   11.507(a)(1)(2)...........  MRPR 5.7(a)(1)(2).......  None
    Sec.   11.507(a)(3)..............  New.....................  None
    Sec.   11.507(b).................  MRPR 5.7(b).............  None
    Sec.  Sec.   11.508-11.600
     [Reserved]
Pro Bono Publico service:
    Sec.   11.601....................  DCRPR 6.1...............  None
Accepting appointments:
    Sec.   11.602....................  MRPR 6.2................  None
Membership in legal services
 organization:
    Sec.   11.603....................  MRPR 6.3................  None
    Sec.   11.604....................  ........................  Sec.   10.32(a)
    Sec.  Sec.   11.605-11.700
     [Reserved]
Law reform activities:
    Sec.   11.701(b)(1)-(4)..........  DCRPR 7.1(b)............  Sec.   10.111(c)
    Sec.   11.701(b)(5)..............  New.....................  None
    Sec.   11.701(c).................  DCRPR 7.1(c)............  Sec.   10.33
    Sec.   11.701(d)-(e).............  New.....................  Sec.   10.31(a)-(b)
Advertising:
    Sec.   11.702(a).................  MRPR 7.2(a).............  Sec.   10.32(a)
    Sec.   11.702(b).................  MRPR 7.2(b).............  None
    Sec.   11.702(c).................  MRPR 7.2(c).............  Sec.   10.32(b)
    Sec.   11.702(d).................  MRPR 7.2(d).............  None
    Sec.   11.702(e).................  New.....................  Sec.   10.32(c)
Direct contact with prospective
 clients:
    Sec.   11.703(a).................  MRPR 7.3(a).............  Sec.   10.33
    Sec.   11.703(b)-(d).............  MRPR 7.3(b)-(d).........  None
Communication of fields of practice
 and certification:
    Sec.   11.704....................  MRPR 7.4................  None
    Sec.   11.704(a)-(c).............  Sec.   10.32(c)-(d).....  Sec.   10.31(c)-(d)
                                       Sec.   10.34(a)-(b).....  Sec.   10.34(a)-(b)
    Sec.   11.704(d).................  New.....................  None
    Sec.   11.704(e).................  MRPR 7.4(b).............  None
Firm names and letterheads:
    Sec.   11.705(a).................  MRPR 7.5(a).............  Sec.   10.35(a)
    Sec.   11.705(b).................  MRPR 7.5(b).............  None
    Sec.   11.705(c).................  MRPR 7.5(c).............  Sec.   10.31(b)
    Sec.   11.705(d).................  MRPR 7.5(d).............  Sec.   10.35(b)
    Sec.  Sec.   11.706-11.800
     [Reserved]
Bar admission and disciplinary
 matters:
    Sec.   11.801(a).................  MRPR 8.1(a).............  Sec.   10.22(a)(b)

[[Page 69510]]

 
    Sec.   11.801(b).................  MRPR 8.1(b).............  Sec.   10.23(b)(5)
                                                                 Sec.   10.24(b)
    Sec.   11.801(c).................  Sec.   10.23(c)(16).....  Sec.   10.23(c)(16)
Judicial and legal officials:
    Sec.   11.802(a).................  MRPR 8.2(a).............  Sec.   10.102
    Sec.   11.802(b).................  MRPR 8.2(b).............  Sec.   10.103
Reporting professional misconduct:
    Sec.   11.803(a).................  MRPR 8.3(a).............  Sec.   10.24(a)
    Sec.   11.803(b).................  MRPR 8.3(b).............  Sec.   10.24(a)
    Sec.   11.803(c).................  MRPR 8.3(c).............  None
    Sec.   11.803(d).................  New.....................  None
    Sec.   11.803(f)(1)..............  Sec.   10.23(c)(5)......  Sec.   10.23(c)(5)
    Sec.   11.803(f)(2)..............  Sec.   10.23(c)(14).....  Sec.   10.23(c)(14)
    Sec.   11.803(f)(3)..............  Sec.   10.23(c)(12).....  Sec.   10.23(c)(12)
    Sec.   11.803(f)(4)..............  Sec.   10.23(c)(18).....  Sec.   10.23(c)(18)
Misconduct:
    Sec.   11.804(a).................  MRPR 8.4(a).............  Sec.   10.23(b)(1)(2)
    Sec.   11.804(b).................  MRPR 8.4(b).............  Sec.   10.23(c)(1)
    Sec.   11.804(d).................  MRPR 8.4(d).............  Sec.   10.23(b)(5)
    Sec.   11.804(e).................  MRPR 8.4(e).............  Sec.   10.23(c)(5)
    Sec.   11.804(f).................  MRPR 8.4(f).............  None
    Sec.   11.804(g).................  MRPR 8.4(g).............  35 U.S.C. 32
                                                                 Sec.   10.23(a)
    Sec.   11.804(h)(1)..............  Sec.   10.23(c)(2)......  Sec.   10.23(c)(2)
    Sec.   11.804(h)(2)..............  Sec.   10.23(c)(17).....  Sec.   10.23(c)(17)
    Sec.   11.804(h)(3)..............  Sec.   10.23(c)(17).....  Sec.   10.23(c)(17)
    Sec.   11.804(h)(4)..............  31 CFR 8.35(c)..........  None
    Sec.   11.804(h)(5)..............  New.....................  None
    Sec.   11.804(h)(6)..............  31 CFR 8.36.............  None
    Sec.   11.804(h)(7)..............  18 U.S.C. 205(a) and (b)  None
                                       18 U.S.C. 209(a)
    Sec.   11.804(h)(8)..............  18 U.S.C. 205...........  None
    Sec.   11.804(h)(9)..............  New.....................  None
    Sec.   11.804(h)(10).............  Sec.   10.23(c)(16).....  Sec.   10.23(c)(16)
    Sec.   11.804(i).................  Sec.   10.23(d).........  Sec.   10.23(d)
Disciplinary authority: Choice of
 law:
    Sec.   11.805....................  MRPR 8.5................  None
Sexual relations with clients and
 third persons:
    Sec.   11.806....................  NYADSD 200.29-a.........  None
    Sec.  Sec.   11.807-900
     [Reserved]
----------------------------------------------------------------------------------------------------------------
Abbreviations:
DCRPR means the District of Columbia Court of Appeals Rules of Professional Conduct (1999).
MRPR means the Model Rules of Professional Conduct of the American Bar Association (1999).
NYADSD means the Official Court Rules of the New York Appellate Division, Second Department (2000).
VRPC means Virginia Rules of Professional Conduct (1999).

Classification

Regulatory Flexibility Act

    The Deputy General Counsel, United States Patent and Trademark 
Office certified to the Chief Counsel for Advocacy, Small Business 
Administration, that the changes in this notice of proposed rule making 
will not have a significant impact on a substantial number of small 
entities (Regulatory Flexibility Act, 5 U.S.C. 605(b)). The provisions 
of the Regulatory Flexibility Act relating to the preparation of an 
initial flexibility analysis are not applicable to this rulemaking 
because the rules will not have a significant economic impact on a 
substantial number of small entities. The primary purpose of the rule 
is to codify enrollment procedures and bring the USPTO's disciplinary 
rules for practitioners into line with the American Bar Association 
Model Rules, which have been adopted by most states. This will ease 
both the procedures for processing registration applications and 
practitioners' burden in learning and complying with USPTO regulations.
    The rule establishes a new annual registration fee of $100 per year 
for practitioners. The average salary of a practitioner is over 
$100,000, and an annual fee of less than one tenth of one percent of 
that amount will not have a significant economic impact on a 
substantial number of practitioners. The rule also establishes a fee of 
$130 for petitions to the Director of the Office of Enrollment and 
Discipline. As with the annual fee, this fee is insignificant.
    Further, the rule requires registered practitioners to complete a 
computer-based continuing legal education (CLE) program once every one 
to three years. The program, which will consist primarily of a review 
of recent changes to patent statutes, regulations and policies, will 
take one to two hours to complete. This dedication of a small amount of 
time for CLE every one to three years will not have a significant 
impact on practitioners. Further, the CLE will substitute for or 
reinforce practitioners' independent efforts to keep their knowledge of 
relevant provisions current and avoid time-consuming and costly errors.
    The rule imposes a $1600 fee for a petition for reinstatement for a 
suspended or excluded practitioner and removes the $1500 cap on 
disciplinary proceeding costs that can be assessed against such a 
practitioner as a condition of reinstatement.

[[Page 69511]]

Approximately 5 of the 28,000 practitioners petition for reinstatement 
each year, and approximately 2 of these petitions occur under 
circumstances where disciplinary proceeding costs may be assessed. 
These changes therefore will not affect a substantial number of 
practitioners.

Executive Order 13132

    This notice of proposed rule making does not contain policies with 
federalism implications sufficient to warrant preparation of a 
Federalism Assessment under Executive Order 13132 (August 4, 1999).

Executive Order 12866

    This notice of proposed rule making has been determined to be not 
significant for purposes of Executive Order 12866 (September 30, 1993).

Paperwork Reduction Act

    This notice of proposed rule making involves information collection 
requirements which are subject to review by the Office of Management 
and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501 et seq.). This proposed rule introduces new information 
requirements and fees into collection 0651-0012. The United States 
Patent and Trademark Office is currently seeking renewal for 
information collection 0651-0012. Additional collection of information 
activities involved in this notice of proposed rule making have been 
reviewed and previously approved by OMB under OMB control number 0651-
0017.
    The title, description, and respondent description of the currently 
approved information collection 0651-0017 and the renewal of 0651-0012 
are shown below with an estimate of the annual reporting burdens. 
Included in this estimate is the time for reviewing instructions, 
gathering and maintaining the data needed, and completing and reviewing 
the collection of information. The principal impact of the changes in 
this notice of proposed rule making is to registered practitioners.
    OMB Number: 0651-0012.
    Title: Admittance to Practice and Roster of Registered Patent 
Attorneys and Agents Admitted to Practice Before the Patent and 
Trademark Office.
    Form Numbers: PTO-158, PTO158A, PTO-275, PTO-107A, PTO 1209, PTO 
2126.
    Affected Public: Individuals or households, business or other for-
profit, Federal Government, and state, local or tribal government.
    Estimated Number of Respondents: 64,142.
    Estimated Time Per Response: The USPTO estimates that it takes the 
public 30 minutes to complete either an application for registration to 
practice before the USPTO, or an application for a foreign resident to 
practice before the USPTO and, depending upon the complexity of the 
situation, to gather, prepare and submit the application. It is 
estimated to take 20 minutes to complete undertakings under 37 CFR 
10.10(b); 10 minutes to complete data sheets; 5 minutes to complete the 
oath or affirmation, and the request for a paper copy of the continuing 
training program and to furnish narrative; 45 minutes to complete the 
petition for waiver of regulations; and 90 minutes to complete the 
written request for reconsideration of disapproval notice of 
application and the petition for reinstatement to practice. It is 
estimated to take 2 hours and 10 minutes for the annual practitioner 
registration/continuing training program--ten minutes to fill out the 
form and an average of 2 hours to complete the continuing training 
program on-line. It is estimated to take 2 hours and 5 minutes for the 
paper-based version of the annual practitioner registration/continuing 
training program--five minutes to request the materials and 2 hours to 
complete the continuing training program on paper. These times include 
time to gather the necessary information, prepare and submit the forms 
and requirements in this collection.
    Estimated Total Annual Burden Hours: 58,745.
    Needs and Uses: The public uses the forms in this collection to 
apply for the examination for registration, to ensure that all of the 
necessary information is provided to the USPTO and to request inclusion 
on the Register of Patent Attorneys and Agents.

    OMB Number: 0651-0017.
    Title: Practitioner Records Maintenance and Disclosure Before the 
Patent and Trademark Office.
    Form Numbers: None.
    Affected Public: Individuals or households, businesses or other 
for-profit, not-for-profit institutions, Federal Government, and state, 
local, or tribal governments.
    Estimated Number of Respondents: 330.
    Estimated Time Per Response: 9 hours annually for practitioners to 
maintain client files; two hours to gather, prepare and submit a 
response to one violation report.
    Estimated Total Annual Burden Hours: 2,270.
    Needs and Uses: The information in this collection is necessary for 
the United States Patent and Trademark Office to comply with Federal 
regulations, 35 U.S.C. 6(a) and 35 U.S.C. 31. The Office of Enrollment 
and Discipline collects this information to insure compliance with the 
USPTO Code of Professional Responsibility, 37 CFR 10.20-10.112. This 
Code requires that registered practitioners maintain complete records 
of clients, including all funds, securities and other properties of 
clients coming into his/her possession, and render appropriate accounts 
to the client regarding such records, as well as report violations of 
the Code to the USPTO. The registered practitioners are mandated by the 
Code to maintain proper documentation so that they can fully cooperate 
with an investigation in the event of a report of an alleged violation 
and that violations are prosecuted as appropriate.
    Comments are invited on: (1) Whether the collection of information 
is necessary for proper performance of the functions of the agency; (2) 
the accuracy of the agency's estimate of the burden; (3) ways to 
enhance the quality, utility, and clarity of the information to be 
collected; and (4) ways to minimize the burden of the collection of 
information to respondents.
    Interested persons are requested to send comments regarding these 
information collections, including suggestions for reducing this 
burden, to Harry I. Moatz, Director of Enrollment and Discipline, 
United States Patent and Trademark Office, PO Box 1450, Alexandria, 
Virginia 22313-1450, or to the Office of Information and Regulatory 
Affairs of OMB, New Executive Office Building, 725 17th Street, NW., 
Room 10235, Washington, DC 20503, Attention: Desk Officer for the 
United States Patent and Trademark Office.
    Notwithstanding any other provision of law, no person is required 
to respond to nor shall a person be subject to a penalty for failure to 
comply with a collection of information subject to the requirements of 
the Paperwork Reduction Act unless that collection of information 
displays a currently valid OMB control number.

List of Subjects

37 CFR Part 1

    Administrative practice and procedure, Courts, Freedom of 
information, Inventions and patents, Reporting and recordkeeping 
requirements, Small businesses.

37 CFR Part 2

    Administrative practice and procedure, Trademarks.

[[Page 69512]]

37 CFR Part 10

    Administrative practice and procedure, Inventions and patents, 
Lawyers, Reporting and recordkeeping requirements.

37 CFR Part 11

    Administrative practice and procedure, Inventions and patents, 
Lawyers, Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, the United States Patent 
and Trademark Office proposes to amend 37 CFR Parts 1, 2, 10, and 11 as 
follows:

PART 1--RULES OF PRACTICE IN PATENT CASES

    1. The authority citation for 37 CFR Part 1 continues to read as 
follows:

    Authority: 35 U.S.C. 2(b)(2), unless otherwise noted.

    2. Section 1.1 is amended by revising paragraph (a) introductory 
text and by adding paragraph (a)(4) to read as follows:


Sec.  1.1  Addresses for correspondence with the United States Patent 
and Trademark Office.

    (a) In general. Except for paragraphs (a)(3)(i), (a)(3)(ii), and 
(d)(1) of this section, all correspondence intended for the United 
States Patent and Trademark Office must be addressed to either 
``Director of the United States Patent and Trademark Office, P.O. Box 
1450, Alexandria, Virginia 22313-1450'' or to specific areas within the 
Office as set out in paragraphs (a)(1), (a)(2), and (a)(3)(iii) of this 
section. When appropriate, correspondence should also be marked for the 
attention of a particular office or individual.
* * * * *
    (4) Office of Enrollment and Discipline correspondence. All 
correspondence concerning enrollment, registration, and investigations 
should be addressed to the Mail Stop OED, Director of the United States 
Patent and Trademark Office, P.O. Box 1450, Alexandria, Virginia 22313-
1450.
* * * * *
    3. Section 1.4 is amended by revising paragraph (d)(2) to read as 
follows:


Sec.  1.4  Nature of correspondence and signature requirements.

* * * * *
    (d) * * *
    (2) The presentation to the Office (whether by signing, filing, 
submitting, or later advocating) of any paper by a party, whether a 
practitioner or non-practitioner, constitutes a certification under 
Sec.  11.18(b) of this subchapter. Violations of Sec.  11.18(b)(2) of 
this subchapter by a party, whether a practitioner or non-practitioner, 
may result in the imposition of sanctions under Sec.  11.18(c) of this 
subchapter. Any practitioner violating Sec.  11.18(b) of this 
subchapter may also be subject to disciplinary action. See Sec. Sec.  
11.18(d) and 11.804(i)(15) of this subchapter.
* * * * *
    4. Section 1.8 is amended by revising paragraph (a)(2)(iii)(A) to 
read as follows:


Sec.  1.8  Certificate of mailing or transmission.

    (a) * * *
    (2) * * *
    (iii) * * *
    (A) Correspondence filed in connection with a disciplinary 
proceeding under part 11 of this chapter.
* * * * *
    5. Section 1.21 is amended by revising paragraph (a) to read as 
follows:


Sec.  1.21  Miscellaneous fees and charges.

* * * * *
    (a) Registration of attorneys and agents:

(1) For admission to examination for registration to
 practice:
    (i) Application Fee (non-refundable)................          $40.00
    (ii) Registration examination fee
    (A) For test administration by private sector entity          200.00
    (B) For test administration by the USPTO............          450.00
(2) On registration to practice or grant of limited               100.00
 recognition under Sec.  Sec.   11.9(b) or (c)..........
(3) [Reserved]
(4) For certificate of good standing as an attorney or             10.00
 agent..................................................
    Suitable for framing................................           20.00
(5) For review of decision:
    (i) by the Director of Enrollment and Discipline              130.00
     under Sec.   11.2(c)...............................
    (ii) of the Director of Enrollment and Discipline             130.00
     under Sec.   11.2(d)...............................
(6) For requesting regrading of an examination under
 Sec.   10.7(c):
    (i) Regrading of seven or fewer questions...........          230.00
    (ii) Regrading of eight or more questions...........          460.00
(7) Annual fee for registered attorney or agent:
    (i) Active Status...................................          100.00
    (ii) Voluntary Inactive Status......................           25.00
    (iii) Fee for requesting restoration to active                 50.00
     status from voluntary inactive status..............
    (iv) Balance due upon restoration to active status             75.00
     from voluntary inactive status.....................
(8) Annual fee for individual granted limited                     100.00
 recognition............................................
(9)(i) Delinquency fee..................................           50.00
    (ii) Reinstatement fee..............................          100.00
(10) On application by a person for recognition or              1,600.00
 registration after disbarment, suspension, or
 resignation pending disciplinary proceedings in any
 other jurisdiction; on petition for reinstatement by a
 person excluded, suspended, or excluded on consent from
 practice before the Office; on application by a person
 for recognition or registration who is asserting
 rehabilitation from prior conduct that resulted in an
 adverse decision in the Office regarding the person's
 moral character; and on application by a person for
 recognition or registration after being convicted of a
 felony or crime involving moral turpitude or breach of
 fiduciary duty.........................................
(11) Paper version of continuing training program and              75.00
 furnished narrative....................................
(12) Application by Sponsor for Pre-approval of a                  60.00
 Continuing Education Program...........................
 

* * * * *
    6. Section 1.31 is revised to read as follows:


Sec.  1.31  Applicants may be represented by a registered attorney or 
agent.

    An applicant for patent may file and prosecute his or her own case, 
or he or she may be represented by a registered attorney, registered 
agent, or other individual authorized to practice before the United 
States Patent and Trademark

[[Page 69513]]

Office in patent matters. See Sec. Sec.  11.6 and 11.9 of this 
subchapter. The United States Patent and Trademark Office cannot aid in 
the selection of a registered attorney or agent.
    7. In Sec.  1.33, paragraph (c) is revised to read as follows:


Sec.  1.33  Correspondence respecting patent applications, 
reexamination proceedings, and other proceedings.

* * * * *
    (c) All notices, official letters, and other communications for the 
patent owner or owners in a reexamination proceeding will be directed 
to the attorney or agent of record (See Sec.  1.34(b)) in the patent 
file at the address listed on the register of patent attorneys and 
agents maintained pursuant to Sec. Sec.  11.5 and 11.11 of this 
subchapter or, if no attorney or agent is of record, to the patent 
owner or owners at the address or addresses of record.
* * * * *
    8. Section 1.455 is amended by revising the first sentence of 
paragraph (a) to read as follows:


Sec.  1.455  Representation in international applications.

    (a) Applicants of international applications may be represented by 
attorneys or agents registered to practice before the Patent and 
Trademark Office or by an applicant appointed as a common 
representative (PCT Art. 49, Rules 4.8 and 90 and Sec.  11.10). * * *
* * * * *

PART 2--RULES OF PRACTICE IN TRADEMARK CASES

    9. The authority citation for 37 CFR Part 2 continues to read as 
follows:

    Authority: 15 U.S.C. 1123, 35 U.S.C. 2(b)(2), unless otherwise 
noted.

    10. Section 2.11 is revised to read as follows:


Sec.  2.11  Applicants may be represented by an attorney.

    The owner of a trademark may file and prosecute his or her own 
application for registration of such trademark, or he or she may be 
represented by an attorney or other individual authorized to practice 
in trademark matters under Sec.  11.14 of this subchapter. The United 
States Patent and Trademark Office cannot aid in the selection of an 
attorney or other representative.
    11. Section 2.17 is amended by revising paragraphs (a) and (c) to 
read as follows:


Sec.  2.17  Recognition for representation.

    (a) When an attorney as defined in Sec.  11.1(c) of this subchapter 
acting in a representative capacity appears in person or signs a paper 
in practice before the United States Patent and Trademark Office in a 
trademark case, his or her personal appearance or signature shall 
constitute a representation to the United States Patent and Trademark 
Office that, under the provisions of Sec.  11.14 of this subchapter and 
the law, he or she is authorized to represent the particular party in 
whose behalf he or she acts. Further proof of authority to act in a 
representative capacity may be required.
* * * * *
    (c) To be recognized as a representative, an attorney as defined in 
Sec.  11.1(c) of this subchapter may file a power of attorney, appear 
in person, or sign a paper on behalf of an applicant or registrant that 
is filed with the Office in a trademark case.
* * * * *
    12. Section 2.24 is revised to read as follows:


Sec.  2.24  Designation of representative by foreign applicant.

    If an applicant is not domiciled in the United States, the 
applicant must designate by a written document filed in the United 
States Patent and Trademark Office the name and address of some person 
resident in the United States on whom may be served notices or process 
in proceedings affecting the mark. If this document does not accompany 
or form part of the application, it will be required and registration 
refused unless it is supplied. Official communications of the United 
States Patent and Trademark Office will be addressed to the domestic 
representative unless the application is being prosecuted by an 
attorney at law or other qualified person duly authorized, in which 
event Official communications will be sent to the attorney at law or 
other qualified person duly authorized. The mere designation of a 
domestic representative does not authorize the person designated to 
prosecute the application unless qualified under paragraph (a), (b) or 
(c) of Sec.  11.14 of this subchapter and authorized under Sec.  
2.17(b).
    13. Section 2.33 is amended by revising paragraph (a)(3) to read as 
follows:


Sec.  2.33  Verified statement.

    (a) * * *
    (3) An attorney as defined in Sec.  11.1(c) of this subchapter who 
has an actual or implied written or verbal power of attorney from the 
applicant.
* * * * *
    14. Section 2.161 is amended by revising paragraph (b)(3) to read 
as follows:


Sec.  2.161  Requirements for a complete affidavit or declaration of 
continued use or excusable nonuse.

    (b) * * *
    (3) An attorney as defined in Sec.  11.1(c) of this subchapter who 
has an actual or implied written or verbal power of attorney from the 
owner.
* * * * *

PART 10--[REMOVED]

    15. Part 10 is removed.
    16. Part 11 is added as follows:

PART 11--REPRESENTATION OF OTHERS BEFORE THE UNITED STATES PATENT 
AND TRADEMARK OFFICE

Subpart A--General Provisions

General Information

Sec.
11.1 Definitions.
11.2 Director of the Office of Enrollment and Discipline.
11.3 Suspension of rules, immunity.
Subpart B--Recognition To Practice Before the USPTO

Patents, Trademarks, and Other Non-Patent Law

11.4 Committee on Enrollment.
11.5 Register of attorneys and agents in patent matters; practice 
before the Office.
11.6 Registration of attorneys and agents.
11.7 Requirements for registration.
11.8 Oath and registration fee.
11.9 Limited recognition in patent matters.
11.10 Restrictions on practice in patent matters.
11.11 Removing names from the register.
11.12 Mandatory continuing training for licensed practitioners.
11.13 Eligible mandatory continuing education programs.
11.14 Individuals who may practice before the Office in trademark 
and other non-patent matters.
11.15 Refusal to recognize a practitioner.
11.16 Financial books and records.
11.17 [Reserved]
11.18 Signature and certificate for correspondence filed in the 
United States Trademark Office.
Subpart C--Investigations and Disciplinary Proceedings

Jurisdiction, Sanctions, Investigations, and Proceedings

11.19 Disciplinary jurisdiction.
11.20 Disciplinary sanctions.
11.21 Warnings.
11.22 Investigations.
11.23 Committee on Discipline.
11.24 Interim suspension and discipline based upon reciprocal 
discipline.
11.25 Interim suspension and discipline based upon conviction of 
committing a serious crime or other crime coupled with confinement 
or commitment to imprisonment.
11.26 Diversion.

[[Page 69514]]

11.27 Exclusion by consent.
11.28 Incompetent and incapacitated practitioners.
11.29-11.31 [Reserved]
11.32 Initiating a disciplinary proceeding; reference to a hearing 
officer.
11.34 Complaint.
11.35 Service of complaint.
11.36 Answer to complaint.
11.37 Supplemental complaint.
11.38 Contested case.
11.39 Hearing officer; appointment; responsibilities; review of 
interlocutory orders; stays.
11.40 Representative for OED Director or respondent.
11.41 Filing of papers.
11.42 Service of papers.
11.43 Motions.
11.44 Hearings.
11.45 Proof; variance; amendment of pleadings.
11.46-11.48 [Reserved]
11.49 Burden of proof.
11.50 Evidence.
11.51 Depositions.
11.52 Discovery.
11.53 Proposed findings and conclusions; post-hearing memorandum.
11.54 Initial decision of hearing officer.
11.55 Appeal to the USPTO Director.
11.56 Decision of the USPTO Director.
11.57 Review of final decision of the USPTO Director.
11.58 Suspended or excluded practitioner.
11.59 Notice of suspension or exclusion.
11.60 Petition for reinstatement.
11.61 Savings clause.
11.62 Protection of clients interests when practitioner becomes 
unavailable.
Subpart D--United States Patent and Trademark Office Rules of 
Professional Conduct

Rules of Professional Conduct

11.100 Interpretation of the USPTO Rules of Professional Conduct.

Client-Practitioner Relationship

11.101 Competence.
11.102 Scope of representation.
11.103 Diligence and zeal.
11.104 Communication.
11.105 Fees.
11.106 Confidentiality of information.
11.107 Conflict of interest: General rule.
11.108 Conflict of interest: Prohibited transactions.
11.109 Conflict of interest: Former client.
11.110 Imputed disqualification: General rule.
11.111 Successive Government and private employment.
11.112 Former arbitrator.
11.113 Organization as client.
11.114 Client under a disability.
11.115 Safekeeping property.
11.116 Declining or terminating representation.
11.117 Sale of practice.
11.118-11.200 [Reserved]

Counselor

11.201 Advisor.
11.202 Intermediary.
11.203 Evaluation for use by third persons.
11.204-11.300 [Reserved]

Advocate

11.301 Meritorious claims and contentions.
11.302 Expediting litigation and Office proceedings.
11.303 Candor toward the tribunal.
11.304 Fairness to opposing party and counsel.
11.305 Impartiality and decorum of the tribunal.
11.307 Practitioner as witness.
11.308 [Reserved]
11.309 Advocate in nonadjudicative proceedings.
11.310-11.400 [Reserved]

Transactions with Persons Other than Clients

11.401 Truthfulness in statements to others.
11.402 Communication between practitioner and opposing parties.
11.403 Dealing with unrepresented person.
11.404 Respect for rights of third persons.
11.405-11.500 [Reserved]

Law Firms and Associations

11.501 Responsibilities of a partner or supervisory practitioner.
11.502 Responsibilities of a subordinate practitioner.
11.503 Responsibilities regarding nonpractitioner assistants.
11.504 Professional independence of a practitioner.
11.505 Unauthorized practice of law.
11.506 Restrictions on right to practice.
11.507 Responsibilities regarding law-related services.
11.508-11.600 [Reserved]

Public Service

11.601 Pro Bono Publico service.
11.602 Accepting appointments.
11.603 Membership in legal services organization.
11.604 Law reform activities.
11.605-11.700 [Reserved]

Information about Legal Services

11.701 Communications concerning a practitioner's services.
11.702 Advertising.
11.703 Direct contact with prospective clients
11.704 Communication of fields of practice and certification.
11.705 Firm names and letterheads.
11.706-11.800 [Reserved]

Maintaining the Integrity of the Profession

11.801 Bar admission and disciplinary matters.
11.802 Judicial and legal officials.
11.803 Reporting professional misconduct.
11.804 Misconduct.
11.805 Disciplinary authority: Choice of law.
11.806 Sexual relations with clients and third persons.
11.807-11.900 [Reserved]

    Authority: 5 U.S.C. 500, 15 U.S.C. 1123, 35 U.S.C. 2(b)(2)(D), 
32.

Subpart A--General Provisions

General Information


Sec.  11.1  Definitions.

    This part governs solely the practice of patent, trademark, and 
other law before the United States Patent and Trademark Office. Nothing 
in this part shall be construed to preempt the authority of each State 
to regulate the practice of law, except to the extent necessary for the 
United States Patent and Trademark Office to accomplish its Federal 
objectives. Unless otherwise clear from the context, the following 
definitions apply to this part:
    Addiction means any chemical or psychological dependency upon 
intoxicants or drugs.
    Affidavit means affidavit, declaration under 35 U.S.C. 25 (see 
Sec. Sec.  1.68 and 2.20 of this subchapter), or statutory declaration 
under 28 U.S.C. 1746.
    Appearing means an individual's attendance to a matter before the 
Office, and includes physical presence before the Office in a formal or 
informal setting, or conveyance of a communication, either 
electronically or in any other manner, with intent to influence an 
Office employee in any patent, trademark or other non-patent law 
matter.
    Application means an application for a design, plant, or utility 
patent; a provisional application; a request for reexamination; an 
application to reissue any patent; a protest; an application to 
register a trademark; an appeal to the Board of Patent Appeals and 
Interferences or to the Trademark Trial and Appeal Board; an 
opposition, cancellation, or concurrent use in a trademark matter; and 
all written communications submitted to the Office in connection with 
the foregoing.
    Attorney or lawyer means an individual who is a member in good 
standing of the highest court of any State, including an individual who 
is in good standing of the highest court of one State and under an 
order of any court or Federal agency suspending, enjoining, 
restraining, disbarring or otherwise restricting the attorney from 
practice before the bar of another State or Federal agency. A non-
lawyer means a person who is not an attorney or lawyer.
    Belief or believes means that the person involved actually supposed 
the fact in question to be true. A person's belief may be inferred from 
circumstances.
    Consent means a client's uncoerced assent to a proposed course of 
action after consulting with the practitioner about the matter in 
question.

[[Page 69515]]

    Consult or consultation means communication of information 
reasonably sufficient to permit the client to appreciate the 
significance of the matter in question.
    Conviction or convicted means any confession to a crime; a verdict 
or judgment finding a person guilty of a crime; any entered plea, 
including nolo contendre or Alford plea, to a crime; or receipt of 
deferred adjudication (whether judgment or sentence has been entered or 
not) for an accused or pled crime.
    Crime means any offense declared to be a felony by Federal or State 
law, or an attempt, solicitation or conspiracy to commit the same.
    Data Sheet means a form used to collect name, address, and 
telephone information from individuals recognized to practice before 
the Office in patent matters.
    Differing interests means every interest that may adversely affect 
either the judgment or the loyalty of a practitioner to a client, 
whether it be a conflicting, inconsistent, diverse, or other interest.
    Disability means any mental or physical infirmity or illness.
    Disability matter means any issue, question, proceeding or 
determination within the scope of this section.
    Disciplinary Court means any court of record and any other agency 
or tribunal with authority to disbar, exclude, or suspend an attorney 
from the practice of law in said agency or tribunal.
    Diversion means turning aside or altering a practitioner's 
practices or procedures through rehabilitation to achieve conformity 
with the USPTO Rules of Professional Conduct.
    Employee of a tribunal means an employee of a court, the Office, or 
another adjudicatory body.
    Exclusion means barred and not admitted to practice before the 
Office in patent, trademark and other non-patent law.
    Firm or law firm means each and every practitioner in a private 
firm, each and every practitioner employed in the legal department of a 
corporation or other organization, and each and every practitioner 
employed in a legal services organization.
    Fiscal year means the period of time from October 1st through the 
ensuing September 30th.
    Fraud or fraudulent means conduct having a purpose to deceive and 
not merely negligent misrepresentation or failure to apprise another of 
relevant information.
    Full disclosure means a clear explanation of the differing 
interests involved in a transaction, the advantages of seeking 
independent legal advice, and a detailed explanation of the risks and 
disadvantages to the client entailed in any agreement or arrangement, 
including not only any financial losses that will or may foreseeably 
occur to the client, but also any liabilities that will or may 
foreseeably accure to the client.
    Giving information within the meaning of Sec.  11.804(h)(1) means 
making a written statement or representation or an oral statement or 
representation.
    Hearing officer means an attorney who is an officer or employee of 
the Office designated by the USPTO Director to conduct a hearing 
required by 35 U.S.C. 32 or a person appointed under 5 U.S.C. 3105.
    Incapacitated means the state of suffering from a disability or 
addiction of such nature as to cause a practitioner to be unfit to be 
entrusted with professional matters, or to aid in the administration of 
justice as a practitioner.
    Invention promoter means any person, or corporation and any of its 
agents, employees, officers, partners, or independent contractors 
thereof, who is neither a registered practitioner nor law firm, who (1) 
advertises in media of general circulation offering assistance to 
market and patent an invention, or (2) enters into a contract or other 
agreement with a customer to assist the customer in marketing and 
patenting an invention.
    Knowingly, known, or knows means actual knowledge of the fact in 
question. A person's knowledge may be inferred from circumstances.
    Law clerk means a person, typically a recent law school graduate, 
who acts, typically for a limited period, as a confidential assistant 
to a judge or judges of a court; to a hearing officer or a similar 
administrative hearing officer; or to the head of a governmental agency 
or to a member of a governmental commission, either of which has 
authority to adjudicate or to promulgate rules or regulations of 
general application.
    Legal profession means those individuals who are lawfully engaged 
in practice of patent, trademark, and other law before the Office.
    Legal service means any service that may lawfully be performed by a 
practitioner for any person having immediate, prospective, or pending 
business before the Office.
    Matter means any litigation, administrative proceeding, lobbying 
activity, application, claim, investigation, controversy, arrest, 
charge, accusation, contract, a negotiation, estate or family relations 
practice issue, request for a ruling or other determination, or any 
other matter covered by the conflict of interest rules of the 
appropriate Government entity, except as expressly limited in a 
particular rule.
    Mentally incompetent or involuntarily committed to a mental 
hospital means a judicial determination in a final order that declares 
a practitioner to be mentally incompetent or that commits a 
practitioner involuntarily to a mental hospital or similar institution 
as an inpatient.
    OED Director means the Director of the Office of Enrollment and 
Discipline.
    Office means the United States Patent and Trademark Office.
    Partner means a member of a law partnership or a shareholder in a 
law firm organized as a professional corporation.
    Person means an individual, a corporation, an association, a trust, 
a partnership, and any other organization or legal entity.
    Practitioner means (1) an attorney or agent registered to practice 
before the Office in patent matters, (2) an individual authorized under 
5 U.S.C. 500(b) or otherwise as provided by Sec. Sec.  11.14(b), (c), 
and (e), to practice before the Office in trademark matters or other 
non-patent matters, or (3) an individual authorized to practice before 
the Office in a patent case or matters under Sec. Sec.  11.9(a) or (b). 
A ``suspended or excluded practitioner'' means a practitioner who is 
suspended or excluded under Sec.  11.47. A ``non-practitioner'' means 
an individual who is not a practitioner.
    Proceeding before the Office means an application for patent, an 
application to register a trademark, an appeal, a petition, a 
reexamination, a protest, a public use matter, a patent interference, 
an inter partes trademark matter, correction of a patent, correction of 
inventorship, and any other matter that is pending before the Office.
    Professional disciplinary action means public reprimand, 
suspension, disbarment, resignation from the bar of any State or 
Federal court while under investigation, and any other event resulting 
in the loss of a license to practice law on ethical grounds.
    Professional legal corporation means a corporation authorized by 
state law to practice law for profit.
    Reasonable or reasonably when used in relation to conduct by a 
practitioner means the conduct of a reasonably prudent and competent 
practitioner.
    Reasonably should know when used in reference to a practitioner 
means that a practitioner of reasonable prudence

[[Page 69516]]

and competence would ascertain the matter in question.
    Registration means registration to practice before the Office in 
patent proceedings.
    Roster means a list of individuals who have been registered as 
either a patent attorney or patent agent.
    Serious crime means (1) any criminal offense classified as a felony 
under the laws of the United States, or of any state, district, or 
territory of the United States, or of a foreign country where the crime 
occurred, and (2) any crime a necessary element of which, as determined 
by the statutory or common law definition of such crime in the 
jurisdiction where the crime occurred, that includes interference with 
the administration of justice, false swearing, misrepresentation, 
fraud, willful failure to file income tax returns, deceit, bribery, 
extortion, misappropriation, theft, or an attempt or a conspiracy or 
solicitation of another to commit a ``serious crime.''
    Significant evidence of rehabilitation means clear and convincing 
evidence that is significantly more probable than not that there will 
be no reoccurrence in the foreseeable future of the practitioner's 
prior disability or addiction.
    State means any of the 50 states of the United States of America, 
the District of Columbia, and other territories and possessions of the 
United States of America.
    Substantial when used in reference to degree or extent means a 
material matter of clear and weighty importance.
    Suspend or suspension means a temporary debarring from practice 
before the Office.
    Tribunal means a court, the Office, a regulatory agency, 
commission, hearing officer, and any other body authorized by law to 
render decisions of a judicial or quasi-judicial nature, based on 
information presented before it, regardless of the degree of formality 
or informality of the proceedings.
    United States means the United States of America, and the 
territories and possessions the United States of America.
    USPTO Director means the Director of the United States Patent and 
Trademark Office, or an employee of the Office delegated authority to 
act for the Director of the United States Patent and Trademark Office 
in matters arising under this Part.


Sec.  11.2  Director of the Office of Enrollment and Discipline.

    (a) Appointment. The USPTO Director shall appoint a Director of the 
Office of Enrollment and Discipline (OED Director). In the event of the 
absence of the OED Director or a vacancy in the office of the OED 
Director, the USPTO Director may designate an employee of the Office to 
serve as acting OED Director. The OED Director and any acting OED 
Director shall be an active member in good standing of the bar of a 
State.
    (b) Duties. The OED Director shall:
    (1) Supervise such staff as may be necessary for the performance of 
the OED Director's duties.
    (2) Receive and act upon applications for registration, prepare and 
grade the examination provided for in Sec.  10.7(b), maintain the 
register provided for in Sec.  10.5, and perform such other duties in 
connection with enrollment and recognition of attorneys and agents as 
may be necessary.
    (3) Conduct investigations into the moral character and reputation 
of any individual seeking to be registered as an attorney and agent, or 
of any individual seeking limited recognition, deny registration or 
recognition of individuals failing to demonstrate present possession of 
good moral character, and perform such other duties in connection with 
investigations and enrollment proceedings as may be necessary.
    (4) Conduct investigations of all matters involving possible 
violations by practitioners and persons granted limited recognition of 
an imperative Rule of Professional Conduct coming to the attention of 
the OED Director as information or a complaint, whether from within or 
from outside the USPTO, where the apparent facts, if true, may warrant 
discipline. Conduct investigations of all matters involving possible 
violations of Sec. Sec.  11.303(a)(1), 11.304, 11.305(a), or 11.804 by 
other individuals identified in Sec.  11.19(a)(2) coming to the 
attention of the OED Director as information or a complaint, whether 
from within or from outside the USPTO, where the apparent facts, if 
true, may warrant discipline. Except in matters meriting summary 
dismissal because the complaint is clearly unfounded on its face or 
falls outside the disciplinary jurisdiction of the USPTO, no 
disposition shall be recommended or undertaken by the OED Director 
until the accused practitioner shall have been afforded an opportunity 
to respond to the information or complaint received by the OED 
Director.
    (5) With the consent of three members of the Committee on 
Discipline, initiate disciplinary proceedings under Sec.  11.32, and 
perform such other duties in connection with investigations and 
disciplinary proceedings as may be necessary.
    (6) Without the prior approval of a member of the Committee on 
Discipline, dismiss a complaint or close an investigation without 
issuing a warning; and otherwise conclude an investigation as provided 
for in Sec. Sec.  11.22(e) or (m)
    (7) File with the USPTO Director certificates of convictions of 
practitioners or other individual practicing before the Office who have 
been convicted of crimes, and certified copies of disciplinary orders 
concerning attorneys issued in other jurisdictions.
    (c) Petition to OED Director. Any petition from any action or 
requirement of the staff of OED reporting to the OED Director shall be 
taken to the OED Director. Any such petition not filed within 30 days 
from the action complained of may be dismissed as untimely. The filing 
of a petition will not stay the period for taking other action, 
including the timely filing of an application for registration, which 
may be running, or act as a stay of other proceedings. Any request for 
reconsideration waives a right to appeal by petition to the USPTO 
Director under paragraph (d) of this section, and if not filed within 
30 days after the final decision of the OED Director may be dismissed 
as untimely.
    (d) Review of OED Director's decision. An individual dissatisfied 
with a final decision of the OED Director, except for a decision 
dismissing a complaint pursuant to Sec.  11.22(f) or closing an 
investigation under Sec.  11.22(m)(1), may seek review of the decision 
upon petition to the USPTO Director accompanied by payment of the fee 
set forth in Sec.  1.21(a)(5). A decision dismissing a complaint or 
closing an investigation is not subject to review by petition. Any such 
petition to the USPTO Director waives a right to seek reconsideration. 
Any petition not filed within 30 days after the final decision of the 
OED Director may be dismissed as untimely. Any petition shall be 
limited to the facts of record. Briefs or memoranda, if any, in support 
of the petition shall accompany or be embodied therein. The petition 
will be decided on the basis of the record made before the OED 
Director. The USPTO Director in deciding the petition will consider no 
new evidence. Copies of documents already of record before the OED 
Director shall not be submitted with the petition. No oral hearing on 
the petition will be held except when considered necessary by the USPTO 
Director. Any request for reconsideration of the decision of the USPTO 
Director may be dismissed as untimely if not filed within 30 days after 
the date of said decision.

[[Page 69517]]

    (e) Reconsideration of matters decided by a former OED Director or 
USPTO Director. Matters which have been decided by one OED Director or 
USPTO Director will not be reconsidered by his or her successor except 
if a request for reconsideration of the decision is filed within the 
30-day period permitted to request reconsideration of said decision 
provided for in paragraphs (c) and (d) of this section.


Sec.  11.3  Suspension of rules, qualified immunity.

    (a) Except as provided in paragraph (b) of this section, in an 
extraordinary situation, when justice requires, any requirement of the 
regulations of this Part which is not a requirement of statute may be 
suspended or waived by the USPTO Director or the designee of the USPTO 
Director, sua sponte or on petition of any party, including the OED 
Director or the OED Director's representative, subject to such other 
requirements as may be imposed.
    (b) No petition to waive any provision of Sec. Sec.  11.19, 11.24, 
11.100 through 11.901, or to waive the provision in this paragraph 
shall be granted for any reason.
    (c) No petition under this section shall stay a disciplinary 
proceeding unless ordered by the USPTO Director or a hearing officer.
    (d) Complaints submitted to the OED Director or any other official 
of the Office shall be qualifiedly privileged for the purpose that no 
claim or action in tort predicated thereon may be instituted or 
maintained. The OED Director, and all staff, assistants and employees 
of the Office of General Counsel, Solicitor's Office, the Office of 
Enrollment and Discipline, and the members of the Committee on 
Discipline, the Committee on Enrollment, the employees of the Office 
providing regrades of examinations, and employees of the Office 
developing questions for the registration examination shall be immune 
from disciplinary complaint under this Part for any conduct in the 
course of their official duties.

Subpart B--Recognition To Practice Before the USPTO

Patents, Trademarks, and Other Non-Patent Law


Sec.  11.4  Committee on Enrollment.

    (a) The USPTO Director shall establish a Committee on Enrollment 
composed of one or more employees of the Office.
    (b) The Committee on Enrollment shall, as necessary:
    (1) Advise the OED Director in connection with the OED Director's 
duties under Sec.  11.2(b)(1), and
    (2) In circumstances provided for in Sec.  11.7(j)(2), determine 
the moral character and reputation of an individual whom the OED 
Director does not accept as having good moral character and reputation.


Sec.  11.5  Register of attorneys and agents in patent matters; 
practice before the Office.

    (a) Register of attorneys and agents. A register of attorneys and 
agents is kept in the Office on which are entered the names of all 
individuals recognized as entitled to represent applicants having 
prospective or immediate business before the Office in the preparation 
and prosecution of patent applications. Registration in the Office 
under the provisions of this Part shall entitle the individuals so 
registered to practice before the Office only in patent matters.
    (b) Practice before the Office. Practice before the Office includes 
law-related service that comprehends all matters connected with the 
presentation to the Office or any of its officers or employees relating 
to a client's rights, privileges, duties, or responsibilities under the 
laws or regulations administered by the Office for the grant of a 
patent, registration of a trademark, or conduct of other non-patent 
law. Such presentations include preparing necessary documents, 
corresponding and communicating with the Office, and representing a 
client through documents or at interviews, hearings, and meetings, as 
well as communicating with and advising a client concerning matters 
pending or contemplated to be presented before the Office. Practice 
before the Office:
    (1) In patent matters includes, but is not limited to, preparing 
and prosecuting any patent application, considering and advising a 
client as to the patentability of an invention under statutory 
criteria; considering the advisability of relying upon alternative 
forms of protection that may be available under State law; 
participating in drafting the specification or claims of a patent 
application; participation in drafting an amendment or reply to a 
communication from the Office that may require written argument to 
establish the patentability of a claimed invention; participating in 
drafting a reply to a communication from the Office regarding a patent 
application, and participating in the drafting of a communication for a 
public use, interference, or reexamination proceeding;
    (2) In trademark matters includes, but is not limited to, preparing 
and prosecuting an application for trademark registration; preparing an 
amendment which may require written argument to establish the 
registrability of the mark; conducting an opposition, cancellation, or 
concurrent use proceeding; or an appeal to the Trademark Trial and 
Appeal Board; and
    (3) In private as well as other professional matters includes 
conduct reflecting adversely on a person's fitness to practice law, 
such as, but not limited to, the good character and integrity essential 
for a practitioner in patent, trademark, or other non-patent law 
matters.


Sec.  11.6  Registration of attorneys and agents.

    (a) Attorneys. Any citizen of the United States who is an attorney 
and who fulfills the requirements of this Part may be registered as a 
patent attorney to practice before the Office. When appropriate, any 
alien who is an attorney, who lawfully resides in the United States, 
and who fulfills the requirements of this Part may be registered as a 
patent attorney to practice before the Office, provided that such 
registration is not inconsistent with the terms upon which the alien 
was admitted to, and resides in, the United States and further provided 
that the alien may remain registered only:
    (1) If the alien continues to lawfully reside in the United States 
and registration does not become inconsistent with the terms upon which 
the alien continues to lawfully reside in the United States, or
    (2) If the alien ceases to reside in the United States, the alien 
is qualified to be registered under paragraph (c) of this section. See 
also Sec.  11.9(b).
    (b) Agents. Any citizen of the United States who is not an attorney 
and who fulfills the requirements of this Part may be registered as a 
patent agent to practice before the Office. When appropriate, any alien 
who is not an attorney, who lawfully resides in the United States, and 
who fulfills the requirements of this Part may be registered as a 
patent agent to practice before the Office, provided that such 
registration is not inconsistent with the terms upon which the alien 
was admitted to, and resides in, the United States, and further 
provided that the alien may remain registered only:
    (1) If the alien continues to lawfully reside in the United States 
and registration does not become inconsistent with the terms upon which 
the alien continues to lawfully reside in the United States or
    (2) If the alien ceases to reside in the United States, the alien 
is qualified to be

[[Page 69518]]

registered under paragraph (c) of this section. See also Sec.  11.9(b).
    (c) Foreigners. Any foreigner not a resident of the United States 
who shall file proof to the satisfaction of the OED Director that he or 
she is registered and in good standing before the patent office of the 
country in which he or she resides and practices, and who is possessed 
of the qualifications stated in Sec.  11.7, may be registered as a 
patent agent to practice before the Office for the limited purpose of 
presenting and prosecuting patent applications of applicants located in 
such country, provided that the patent office of such country allows 
substantially reciprocal privileges to those admitted to practice 
before the Office. Registration as a patent agent under this paragraph 
shall continue only during the period that the conditions specified in 
this paragraph obtain. Upon notice by the patent office of such country 
that a patent agent registered under this section is no longer 
registered or no longer in good standing before the patent office of 
such country, and absent a showing of cause why his or her name should 
not be removed from the register, the OED Director shall promptly 
remove the name of the patent agent from the register and publish the 
fact of removal. Upon ceasing to reside in such country, the patent 
agent registered under this section is no longer qualified to be 
registered under this section, and the OED Director shall promptly 
remove the name of the patent agent from the register and publish the 
fact of removal.
    (d) Interference matters. The Chief Administrative Patent Judge or 
Deputy Chief Administrative Patent Judge of the Board of Patent Appeals 
and Interferences shall determine whether and the circumstances under 
which an attorney who is not registered may take testimony for an 
interference under 35 U.S.C. 24, or under Sec.  1.672 of this 
subchapter.


Sec.  11.7  Requirements for registration.

    (a) No individual will be registered to practice before the Office 
unless he or she has:
    (1) Applied to the USPTO Director in writing on a form supplied by 
the OED Director and furnished all requested information and material; 
and
    (2) Established to the satisfaction of the OED Director that he or 
she is:
    (i) Presently possessed of good moral character and reputation;
    (ii) Possessed of the legal, scientific, and technical 
qualifications necessary to enable him or her to render applicants 
valuable service; and
    (iii) Otherwise competent to advise and assist applicants for 
patents in the presentation and prosecution of their applications 
before the Office; and
    (b)(1) In order that the OED Director may determine whether an 
individual seeking to have his or her name placed on the register has 
the qualifications specified in paragraph (a)(2) of this section, the 
individual shall:
    (i) File a complete application for admission to each 
administration of the registration examination. A complete registration 
application includes:
    (A) A form supplied by the OED Director wherein all requested 
information and supporting documents are furnished,
    (B) Payment of the fees required by Sec.  1.21(a)(1) of this 
subchapter,
    (C) Satisfactory proof of sufficient basic training in scientific 
and technical matters, and
    (D) For aliens, proof that recognition is not inconsistent with the 
terms of their visa or entry into the United States.
    (2) An individual failing to file a complete application will not 
be admitted to the examination. Applications that are incomplete as 
originally submitted will be considered as filed only when they have 
been completed and received by OED within 60 days of notice of 
incompleteness. Thereafter, a new and complete application must be 
filed. Until an individual has been registered, that individual is 
under a continuing obligation to keep his or her application current 
and must update responses whenever there is an addition to or a change 
to information previously furnished the OED Director;
    (3) Submit to the OED Director satisfactory proof of the 
individual's scientific and technical training;
    (4) Pass the registration examination, unless the taking and 
passing of the examination is waived as provided in paragraph (d) of 
this section. Unless waived pursuant to paragraph (d) of this section, 
each individual seeking registration must take and pass the 
registration examination that is held from time-to-time to enable the 
OED Director to determine whether the individual possesses the legal 
and competence qualifications specified in paragraphs (a)(2)(ii) and 
(a)(2)(iii) of this section. The examination will not be administered 
as a mere academic exercise. An individual failing the examination may 
reapply no sooner than 30 days after the date of notice of failure is 
sent to the individual and may again take the examination no sooner 
than 60 days after the date of said notice. An individual reapplying 
shall:
    (A) File the application form supplied by the OED Director wherein 
all requested information and supporting documents are furnished,
    (B) Pay the fees required by Sec.  1.21(a)(1) of this subchapter, 
and
    (C) For aliens, proof that recognition continues to be not 
inconsistent with the terms of their visa or entry into the United 
States;
    (5) If an individual first reapplies more than one year after said 
notice, that individual must again comply with paragraphs (b)(1)(i) and 
(b)(3) of this section; and
    (6) Provide satisfactory proof of present possession of good moral 
character and reputation.
    (c) Petition to the OED Director. An individual dissatisfied with 
any action by a member of the staff of OED refusing to register an 
individual, refusing to recognize an individual, refusing to admit an 
individual to the registration examination, refusing to reinstate an 
administratively suspended practitioner, refusing to refund or defer 
any fee, or any other action may seek review of the action upon 
petition to the OED Director and payment of the fee set forth in Sec.  
1.21(a)(5) of this subchapter. Any petition, even if accompanied by the 
required fee, but not filed within thirty days after the date of the 
action complained of may be dismissed as untimely. Any request for 
reconsideration of a decision by the OED Director on a petition not 
filed within thirty days after the decision may be dismissed as 
untimely.
    (d)(1) Former patent examiners who by [INSERT DATE 60 DAYS 
FOLLOWING PUBLICATION OF FINAL RULE] had not actively served four years 
in the patent examining corps, and were serving in the corps at the 
time of their separation. The OED Director would waive the taking of a 
registration examination in the case of any individual meeting the 
requirements of paragraph (b)(3) of this section who is a former patent 
examiner who by [INSERT DATE 60 DAYS FOLLOWING PUBLICATION OF FINAL 
RULE] had not served four years in the patent examining corps, if the 
individual demonstrates that he or she:
    (i) Actively served in the patent examining corps of the Office;
    (ii) Received a certificate of legal competency and negotiation 
authority;
    (iii) After receiving the certificate of legal competency and 
negotiation authority, was rated at least fully successful in each 
quality performance element of his or her performance plan for the last 
two complete fiscal years as a patent examiner; and
    (iv) Was not under an oral or written warning regarding the quality 
performance elements at the time of

[[Page 69519]]

separation from the patent examining corps.
    (v) The OED Director may waive the taking of the examination for 
registration in the case of said individual who does not meet all the 
criteria of paragraphs (d)(1)(i), (d)(1)(ii), (d)(1)(iii) and 
(d)(1)(iv) of this section upon a showing of good cause.
    (2) Former patent examiners who [INSERT DATE 60 DAYS FOLLOWING 
PUBLICATION OF FINAL RULE] had actively served four years in the patent 
examining corps, and were serving in the corps at the time of their 
separation. The OED Director would waive the taking of a registration 
examination in the case of any individual meeting the requirements of 
paragraph (b)(3) of this section who is a former patent examiner who by 
[INSERT DATE 60 DAYS FOLLOWING PUBLICATION OF FINAL RULE] had served 
four years in the patent examining corps, if the individual 
demonstrates that he or she:
    (i) Actively served for at least four years in the patent examining 
corps of the Office by [INSERT DATE 60 DAYS FOLLOWING PUBLICATION OF 
FINAL RULE];
    (ii) Was rated at least fully successful in each quality 
performance element of his or her performance plan for the last two 
complete fiscal years as a patent examiner in the Office; and
    (iii) Was not under an oral or written warning regarding the 
quality performance elements at the time of separation from the patent 
examining corps.
    (vi) The OED Director may waive the taking of the examination for 
registration in the case of said individual who does not meet all the 
criteria of paragraphs (d)(2)(i), (d)(2)(ii), and (d)(2)(iii) of this 
section upon a showing of good cause.
    (3) Certain former Office employees who were not serving in the 
patent examining corps upon their separation from the Office. The OED 
Director would waive the taking of a registration examination in the 
case of a former Office employee meeting the requirements of paragraph 
(b)(3) of this section who by petition demonstrates possession of the 
necessary legal qualifications to render to patent applicants and 
others valuable service and assistance in the preparation and 
prosecution of their applications or other business before the Office 
by showing that:
    (i) He or she has exhibited comprehensive knowledge of patent law 
equivalent to that shown by passing the registration examination as a 
result of having been in a position of responsibility in the Office in 
which he or she:
    (A) Provided substantial guidance on patent examination policy, 
including the development of rule or procedure changes, patent 
examination guidelines, changes to the Manual of Patent Examining 
Procedure, or development of training or testing materials for the 
patent examining corps; or
    (B) Represented the Office in patent cases before Federal courts; 
and
    (ii) Was rated at least fully successful in each quality 
performance element of his or her performance plan for said position 
for the last two complete rating periods in the Office, and was not 
under an oral warning regarding performance elements relating to such 
activities at the time of separation from the Office.
    (4) To be eligible for consideration for waiver, an individual 
within the scope of one of paragraphs (d)(1) through (d)(3) of this 
section must file a complete application and the fee required by Sec.  
1.21(a)(1)(i) of this subchapter within two years of the individual's 
separation from the Office. All other individuals, including former 
examiners, filing an application or fee more than two years after 
separation from the Office, are required to take and pass the 
examination to demonstrate competence to represent applicants before 
the Office. If the examination is not waived, the individual or former 
examiner must pay the examination fee required by Sec.  1.21(a)(1)(ii) 
of this subchapter within 30 days after notice. Individuals employed by 
the Office but not meeting the requirements of any one of paragraphs 
(d)(1) through (d)(3) of this section must file a complete application, 
pay the fees required by Sec.  1.21(a)(1) of this subchapter, and take 
and pass the registration examination to be registered.
    (e) Examination results. Notification to an individual of passing 
or failing an examination is final. Within two months from the date an 
individual is notified that he or she failed an examination specified 
in paragraph (b) of this section, an unsuccessful individual is 
entitled to inspect, but not copy, the questions and answers he or she 
incorrectly answered under supervision and without taking notes. 
Substantive review of the answers or questions may not be pursued. An 
unsuccessful individual has the right to retake the examination an 
unlimited number of times upon payment of the fees required by 
Sec. Sec.  1.21(a)(1)(i) and (ii) of this subchapter, and a fee charged 
by a private sector entity administering the examination.
    (f) Application for reciprocal recognition. An individual seeking 
reciprocal recognition under Sec.  11.6(c), in addition to satisfying 
the provisions of paragraphs (a) and (b) of this section, and the 
provisions of Sec.  11.8(c), shall pay the application fee required by 
Sec.  1.21(a)(1)(i) upon filing an application.
    (g) Investigation of moral character. (1) Every individual seeking 
recognition shall answer all questions; disclose all relevant facts, 
dates and information; and provide verified copies of documents 
relevant to their good moral character and reputation. The facts, 
information and documents include expunged or sealed records necessary 
for determining whether the individual presently possesses the good 
moral character and reputation required for registration.
    (2) The OED Director shall cause names and business addresses of 
all individuals seeking registration or recognition who pass the 
examination or for whom the examination has been waived to be published 
on the Internet and in the Official Gazette to solicit relevant 
information bearing on their moral character and reputation.
    (3) If the OED Director receives information from any source 
tending to reflect adversely on the moral character or reputation of an 
individual seeking registration or recognition, the OED Director shall 
conduct an investigation into the moral character and reputation of the 
individual. The investigation will be conducted after the individual 
has passed the registration examination, or after the registration 
examination has been waived for the individual, whichever is later. If 
the individual seeking registration or recognition is an attorney, the 
individual is not entitled to a disciplinary proceeding under 
Sec. Sec.  11.32-11.57 in lieu of moral character proceedings under 
paragraphs (j) through (m) of this section. An individual failing to 
timely answer questions or respond to an inquiry by the OED Director 
shall be deemed to have withdrawn his or her application, and shall be 
required to reapply, pass the examination, and otherwise satisfy all 
the requirements of this section. No individual shall be certified for 
registration or recognition by the OED Director until the individual 
demonstrates present possession of good moral character and reputation. 
The OED Director shall refer to the Committee on Enrollment the 
application and all records of individuals not certified for 
registration or recognition following investigation whose applications 
have not been withdrawn.
    (h) Moral character and good reputation. Moral character is the 
possession of honesty and truthfulness,

[[Page 69520]]

trustworthiness and reliability, and a professional commitment to the 
legal process and the administration of justice. Lack of moral 
character exists when evidence shows acts and conduct which would cause 
a reasonable person to have substantial doubts about an individual's 
honesty, fairness, and respect for the rights of others and the laws of 
states and nation. Evidence showing lack of moral character may 
include, but is not limited to, conviction of a violent felony, a crime 
involving moral turpitude, and a crime involving breach of fiduciary 
duty; drug and alcohol abuse and dependency problems; lack of candor; 
suspension or disbarment on ethical grounds from a State bar; and 
resignation from a State bar while under investigation. An individual 
for registration who has been convicted of a crime involving moral 
turpitude or which would clearly necessitate suspension or disbarment 
must have served his or her sentence, and must have been released from 
parole supervision or probation for the offense before an application 
for will be considered.
    (1) Conviction of felony or misdemeanor. An individual who has been 
convicted in a court of record of a felony, or a crime involving moral 
turpitude or breach of trust, including, but not limited to, a 
misdemeanor involving interference with the administration of justice, 
false swearing, misrepresentation, fraud, deceit, bribery, extortion, 
misappropriation, or theft, or any misdemeanor involving an attempt, 
conspiracy or solicitation of another to commit any misdemeanor, is 
presumed not to be of good moral character in the absence of a pardon 
or a compelling showing of reform and rehabilitation. Any individual 
convicted in a court of record of a felony, or a crime involving moral 
turpitude or breach of trust shall file with an application for 
registration the fees required by Sec. Sec.  1.21(a)(1)(ii) and (10) of 
this subchapter. The OED Director shall determine whether individuals 
convicted for said felony, or crime involving moral turpitude or breach 
of trust have produced compelling proof of reform and rehabilitation, 
including at a minimum a lengthy period of exemplary conduct.
    (i) An individual who has been convicted in a court of record of a 
felony or any misdemeanor identified in paragraph (h)(1) of this 
section shall not be eligible for registration or to apply for 
registration during the time of any sentence (including confinement or 
commitment to imprisonment), deferred adjudication, and period of 
probation or parole as a result of the conviction and for a period of 
two years after the date of successful completion of said sentence, 
deferred adjudication, and probation or parole.
    (ii) The following provisions apply to the determination of present 
good moral character of an individual convicted of said felony or 
misdemeanor:
    (A) The court record or docket entry of conviction is conclusive 
evidence of guilt;
    (B) An individual convicted of a felony or misdemeanor identified 
in paragraph (h)(l) of this section is conclusively deemed not to have 
present good moral character and shall not be eligible to apply for or 
be registered for a period of two years after completion of the 
sentence, deferred adjudication, and period of probation or parole, 
whichever is later; and
    (C) The individual, upon applying for registration, shall prove by 
clear and convincing evidence that he or she is of present good moral 
character.
    (iii) Upon proof that a conviction has been set aside or reversed, 
the individual shall be eligible to file an application and, upon 
passing the registration examination, have the OED Director determine, 
in accordance with paragraph (h)(1) of this section, whether, absent 
the conviction, the individual possesses present good moral character 
and reputation.
    (2) Moral character involving drug or alcohol abuse or dependency. 
An individual's record is reviewed as a whole to see if there is a drug 
or alcohol abuse or dependency issue. An individual appearing to abuse 
drugs or alcohol, or being dependent on a drug or alcohol may be asked 
to undergo an evaluation, at the individual's expense, by a qualified 
professional selected by the OED Director. In instances where there is 
evidence of a present dependency or an individual has not established a 
record of recovery, the OED Director, in lieu of registration, may 
offer the individual the opportunity to place his or her application in 
abeyance for a specified period of time while agreed to conditions 
regarding treatment and recovery are initiated and confirmed.
    (3) Moral character involving lack of candor. An individual's lack 
of candor in disclosing facts bearing on or relevant to issues 
concerning moral character when completing the application or any time 
thereafter may be found to be cause to deny registration on moral 
character grounds.
    (4) Moral character involving suspension, disbarment, or 
resignation from a State bar. An individual who has been disbarred by a 
disciplinary court from practice of law or has resigned in lieu of a 
disciplinary proceeding (excluded or disbarred on consent) shall not be 
eligible to apply for registration for a period of five years from the 
date of disbarment or resignation. An individual who has been suspended 
by a disciplinary court on ethical grounds from the practice of law 
shall not be eligible to apply for registration until expiration of the 
period of suspension. An individual who was not only disbarred, 
suspended or resigned, but also convicted in a court of record of a 
felony, or a crime involving moral turpitude or breach of trust, shall 
be ineligible to apply for registration until the conditions both in 
paragraph (h)(1) of this section and this paragraph (h)(4) are fully 
satisfied. The OED Director may waive the two-year ineligibility period 
provided for in paragraph (h)(1)(A) of this section following 
conviction of a felony or crime only if the individual demonstrates 
that he or she has been reinstated to practice law in the State where 
he or she had been disbarred or suspended, or had resigned. An 
individual who has been disbarred or suspended, or who resigned in lieu 
of a disciplinary proceeding shall file with an application for 
registration the fees required by Sec. Sec.  1.21(a)(1)(ii) and (10) of 
this subchapter; a full and complete copy of the proceedings in the 
disciplinary court that led to the disbarment, suspension, or 
resignation; and written proof that he or she has filed an application 
for reinstatement in the disciplining jurisdiction and obtained a final 
determination on that application. The following provisions shall 
govern the determination of present good moral character of an 
individual who has been licensed to practice law in any jurisdiction 
and has been disbarred or suspended on ethical grounds, or allowed to 
resign in lieu of discipline, in that jurisdiction.
    (i) A copy of the record resulting in disbarment, suspension or 
resignation is prima facie evidence of the matters contained in said 
record, and the imposition of disbarment or suspension, or the 
acceptance of the resignation of the individual in question shall be 
deemed conclusive that the individual has committed professional 
misconduct.
    (ii) An individual who has been disbarred or suspended, or who 
resigned in lieu of disciplinary action is ineligible for registration 
and is deemed not to have present good moral character during the 
period of such discipline imposed by the disciplinary court.
    (iii) The individual who has been disbarred or suspended, or who 
resigned in lieu of disciplinary action,

[[Page 69521]]

shall submit proof that he or she has filed an application for 
reinstatement in the disciplining jurisdiction and obtained a final 
determination on that application.
    (iv) The only defenses available to the individual in question are 
set out below, and must be proven by the individual by clear and 
convincing evidence:
    (A) The procedure in the disciplinary court was so lacking in 
notice or opportunity to be heard as to constitute a deprivation of due 
process;
    (B) There was such infirmity of proof establishing the misconduct 
as to give rise to the clear conviction that the Office could not, 
consistently with its duty, accept as final the conclusion on that 
subject; or
    (C) The finding of lack of present good moral character by the 
Office would result in grave injustice.
    (v) The individual, upon applying for registration, shall prove by 
clear and convincing evidence that he or she is of present good moral 
character.
    (i) Factors that may be taken into consideration when evaluating 
rehabilitation of an applicant seeking a moral character determination. 
When considering whether an applicant has the good moral character 
required for registration, the OED Director evaluates whether an 
applicant possesses the qualities of honesty, fairness, candor, 
trustworthiness, observance of fiduciary responsibility, respect for 
and obedience to the laws of the States and the nation, and respect for 
the rights of others and for the judicial process. Involvement in 
activity that constitutes an act of misconduct or an act of moral 
turpitude does not necessarily preclude an applicant from registration; 
however, an applicant who has committed such acts must demonstrate 
rehabilitation prior to registration. An act of misconduct may include, 
but is not limited to, behavior that results in a criminal conviction, 
a sustained accusation of fraud, or a sustained allegation of 
unauthorized practice of law, violation of a school's honor code that 
involves moral turpitude or results in expulsion, professional 
discipline, license revocation or disbarment, as well as material 
omissions from a moral character application, or misstatements in the 
registration application and misrepresentations during the application 
process.
    (1) Individuals convicted of violent felonies, felonies involving 
moral turpitude and crimes involving a breach of fiduciary duty are 
presumed not to be of good moral character in the absence of a pardon 
or a showing of complete reform and rehabilitation. The OED Director 
shall exercise discretion to determine whether applicants convicted of 
violent felonies, felonies involving moral turpitude, and crimes 
involving a breach of fiduciary duty have produced overwhelming proof 
of reform and rehabilitation, including at a minimum, a lengthy period 
of not only unblemished, but exemplary conduct.
    (2) The factors enumerated below are guidelines that may be taken 
into consideration when evaluating whether an applicant has 
demonstrated rehabilitation. Not all factors listed below will be 
applicable to every single case nor will each factor necessarily be 
given equal weight in evaluating the rehabilitation of an applicant. 
The factors, taken as a whole although not exclusive, assist the OED 
Director in determining whether an applicant has demonstrated 
rehabilitation from an act of misconduct or moral turpitude. The 
factors include:
    (i) The nature of the act of misconduct, including whether it 
involved moral turpitude, whether there were aggravating or mitigating 
circumstances, and whether the activity was an isolated event or part 
of a pattern;
    (ii) The age and education of the applicant at the time of the act 
of misconduct and the age and education of the applicant at the present 
time;
    (iii) The length of time that has passed between the act of 
misconduct and the present, absent any involvement in any further acts 
of moral turpitude, the amount of time and the extent of rehabilitation 
being dependent upon the nature and seriousness of the act of 
misconduct under consideration;
    (iv) Restitution by the applicant to any person who has suffered 
monetary losses through acts or omissions of the applicant;
    (v) Expungement of a conviction;
    (vi) Successful completion or early discharge from probation or 
parole;
    (vii) Abstinence from the use of controlled substances or alcohol 
for not less than two years if the specific act of misconduct was 
attributable in part to the use of a controlled substance or alcohol, 
where abstinence may be demonstrated by, but is not necessarily limited 
to, enrolling in and complying with a self-help or professional 
treatment program;
    (viii) Evidence of remission for not less than two years if the 
specific act of misconduct was attributable in part to a medically 
recognized mental disease, disorder or illness, where evidence of 
remission may include, but is not limited to, seeking professional 
assistance and complying with the treatment program prescribed by the 
professional and submission of letters from the psychiatrist/
psychologist verifying that the medically recognized mental disease, 
disorder or illness is in remission;
    (ix) Payment of the fine imposed in connection with any criminal 
conviction;
    (x) Correction of behavior responsible in some degree for the act 
of misconduct;
    (xi) Completion of, or sustained enrollment in, formal education or 
vocational training courses for economic self-improvement and thereby 
eliminating economics as a cause for unethical conduct;
    (xii) Significant and conscientious involvement in community, 
church or privately sponsored programs designed to provide social 
benefits or to ameliorate social problems; and
    (xiii) Change in attitude from that which existed at the time of 
the act of misconduct in question as evidenced by any or all of the 
following:
    (A) Statements of the applicant;
    (B) Statements from family members, friends or other persons 
familiar with the applicant's previous conduct and with subsequent 
attitudes and behavioral patterns;
    (C) Statements from probation or parole officers or law enforcement 
officials as to the applicant's social adjustments; and
    (D) Statements from persons competent to testify with regard to 
neuropsychiatry or emotional disturbances.
    (j) Hearing. If, following investigation of moral character, the 
OED Director believes any evidence suggests lack of good moral 
character and reputation, the OED Director shall give the individual 
notice to show cause fairly apprising the individual of the OED 
Director's reasons for failing to be convinced of the individual's good 
character and reputation, and an opportunity to be heard before a final 
decision is issued. The notice shall also give the individual the 
choice of withdrawing the application. The individual shall be given no 
less than 10 days to reply. The notice shall be given by certified mail 
at the address appearing on the application if the address is in the 
United States, and by any other reasonable means if the address is 
outside the United States.
    (1) Evidence supplied or confirmed by individual. When the evidence 
suggesting lack of good moral character and reputation is information 
supplied or confirmed by the individual, or the evidence is of an 
undisputed documentary character disclosed to the individual, the OED 
Director, with the concurrence of a majority of the

[[Page 69522]]

Committee on Enrollment, shall enter a decision based solely upon said 
information or documentary evidence. In determining an individual's 
moral character and reputation, the OED Director and Committee may act 
without requiring the individual to appear before it to be sworn and 
interrogated. If the OED Director and a majority of the Committee are 
of the opinion that an adverse decision should be made, the procedure 
set forth in paragraphs (j)(3) through (j)(5) of this section shall be 
followed.
    (2) Evidence supplied by person or source whose reliability or 
veracity is questioned. When the evidence suggesting lack of good moral 
character and reputation depends on information supplied by a 
particular person whose reliability or veracity is brought into 
question by the individual, the individual shall be informed in the 
notice to show cause of the opportunity to confront and cross-examine 
the person in an oral hearing. If the individual does not request an 
oral hearing within the time fixed by the notice, the OED Director, 
with the concurrence of a majority of the Committee on Enrollment, 
shall enter a recommendation. If, within the fixed time, the individual 
requests an oral hearing, the Committee on Enrollment shall conduct the 
hearing under the following rules of procedure:
    (i) The Committee shall give the individual no less than 10 days 
notice of:
    (A) The date, time and place of an oral hearing;
    (B) The individual's right to be represented by counsel;
    (C) The individual's right at an oral hearing to examine and cross-
examine witnesses;
    (D) The individual's right at an oral hearing to adduce evidence 
bearing on the individual's moral character and fitness to practice 
before the Office. Testimony at an oral hearing shall be under oath and 
a complete stenographic record of the hearing shall be kept; and
    (E) The OED Director and Committee may act without the individual 
agreeing to be sworn and interrogated.
    (ii) A hearing shall be conducted in a formal manner according to 
the rights listed in paragraph (j)(2)(A) of this section; however, the 
Committee shall not be bound by formal rules of evidence. It may, in 
its discretion, take evidence in other than testimonial form and 
determine whether evidence to be taken in testimonial form shall be 
taken in person at the hearing or by deposition. The proceedings shall 
be recorded and the individual may order a transcript at the 
individual's expense. If the OED Director and a majority of the 
Committee are of the opinion that an adverse decision should be made, 
the procedure set forth in paragraphs (j)(3) through (j)(5) of this 
section shall be followed.
    (3) The recommendation shall include the findings and conclusions 
of the OED Director and Committee, and shall be served on the 
individual, or his or her attorney, a copy of the decision containing 
their findings and conclusions. The recommendation shall permit the 
individual, within 15 days of the date of the recommendation, to 
withdraw the application, or to appeal the recommendation. If the 
individual elects to withdraw the application, written notice thereof 
shall be given to the OED Director within the time fixed, and no 
further action will be necessary to close the matter.
    (4) If the individual elects to appeal the recommendation, written 
notice thereof shall be given to the OED Director within the time 
fixed, and an appeal brief shall be filed within 30 days of the date of 
the recommendation. The individual's appeal brief shall show cause why 
registration should not be denied. The OED Director and Committee shall 
deliver to the USPTO Director their recommendation, together with the 
record in either paragraphs (j)(1) or (j)(2) of this section.
    (5) The USPTO Director on the basis of the record shall determine 
whether the individual should be denied registration for lack of good 
moral character and reputation. The USPTO Director shall issue a 
decision on the basis of the record made in accordance with paragraphs 
(j)(1) or (j)(2) of this section. The USPTO Director will consider no 
new evidence. The individual shall not submit copies of documents 
already of record before the OED Director and Committee with any appeal 
to the USPTO Director.
    (k) Reapplication for admission. An individual who has been refused 
registration for lack of present good moral character in a USPTO 
Director's decision, or in the absence of a USPTO Director's decision, 
in a recommendation of the OED Director and Committee on Enrollment, 
the individual may reapply for registration five years after the date 
of the decision, unless a shorter period is otherwise ordered by the 
USPTO Director. An individual under investigation for moral character 
may elect to withdraw his or her application, and may reapply for 
registration five years after the date of withdrawal. Upon 
reapplication, the individual shall pay the fees required by Sec. Sec.  
1.21(a)(1)(ii) and (10) of this subchapter, and have the burden of 
showing by clear and convincing evidence the individual's fitness to 
practice as prescribed in paragraph (b) of this section. Upon 
reapplication, the individual also shall complete successfully the 
examination prescribed in paragraph (b) of this section, even though 
the individual has previously passed a registration examination.


Sec.  11.8  Oath, registration fee, and annual fee.

    (a) A passing grade on the registration examination may be a basis 
for registration for a period of no more than two years from the date 
notice thereof is sent to the individual. After an individual passes 
the examination, or the examination is waived for an individual, the 
OED Director shall promptly publish a solicitation for information 
concerning the individual's moral character and reputation. The 
solicitation shall include the individual's name, and business or 
communication postal address.
    (b) An individual shall not be registered as an attorney under 
Sec.  11.6(a), registered as an agent under Sec. Sec.  11.6(b) or (c), 
or granted limited recognition under Sec.  11.9(b) unless the 
individual files the following in OED within 2 years of the issuance of 
a notice of passing registration examination; a completed Data Sheet; a 
completed form to obtain the Office's authorization to use a digital 
signature; an oath or declaration prescribed by the USPTO Director; the 
registration fee set forth in Sec.  1.21(a)(2) of this subchapter; and 
a certificate of good standing of the bar of the highest court of a 
State provided the certificate is no more than six months old.
    (c) An individual, including a former patent examiner, is 
responsible for updating all information and answers submitted in or 
with his or her application based upon anything occurring between the 
date the application is signed by the individual, and the date he or 
she is registered or recognized to practice before the Office in patent 
matters. The update shall be filed within thirty days after the date of 
the occasion that necessitates the update.
    (d) Annual fee. A registered patent attorney or agent shall 
annually pay to the USPTO Director a fee in the amount required by 
Sec.  1.21(a)(7) of this subchapter. The payment period for registered 
patent attorneys and agents shall be based on the first initial of each 
individual's last name. The payment period for last names beginning 
with A-E shall be every January 1 through March 31; the payment period 
for last names beginning with F-K shall be

[[Page 69523]]

every April 1 through June 30; the payment period for last names 
beginning with L through R shall be every July 1 through September 30; 
and the payment period for last names beginning with S through Z shall 
be every October 1 through December 31. Payment shall be for the 
following twelve months. Payment shall be due by the last day of the 
payment period. Persons newly registered to practice before the Office 
shall be permanently assigned to the appropriate payment period based 
on the first initial of their last name on the date of recognition. 
Persons newly registered shall not be liable for dues during the 
calendar year they are first registered. Failure to comply with the 
provisions of this paragraph (d) shall require the OED Director to 
subject a registered patent attorney or agent to a delinquency fee 
penalty set forth in Sec.  11.11(b)(1), and further financial penalties 
and administrative suspension as set forth in Sec.  11.11(b)(2).


Sec.  11.9  Limited recognition in patent matters.

    (a) Any individual not registered under Sec.  11.6 may, upon a 
showing of circumstances which render it necessary or justifiable, and 
that the individual is of good moral character and reputation, be given 
limited recognition by the OED Director to prosecute as attorney or 
agent a specified application or specified applications, but limited 
recognition under this paragraph shall not extend further than the 
application or applications specified. Limited recognition shall not be 
granted to individuals who have passed the examination or for whom the 
examination has been waived, and who are awaiting registration to 
practice before the Office in patent matters.
    (b) When registration under paragraphs (a) or (b) of Sec.  11.6(a) 
of an alien residing in the United States is not consistent with the 
terms on which the alien entered and remains in the United States, the 
resident alien may be given limited recognition under paragraph (a) of 
this section if:
    (1) The Immigration and Naturalization Service or the Department of 
State has authorized the resident alien to be employed in the capacity 
of representing a patent applicant by preparing and prosecuting the 
applicant's patent application; and
    (2) The resident alien fulfills the provisions of Sec. Sec.  
11.7(a), (b), and either Sec.  11.7(c) or Sec.  11.7(d). Limited 
recognition shall be granted in maximum increments of one year, 
fashioned to be consistent with the terms of authorized employment, and 
require the resident alien to be employed by or associated with a 
registered practitioner. Limited recognition shall not be granted or 
extended to an alien residing abroad. If granted, limited recognition 
shall automatically expire when the resident alien leaves the United 
States. Any person admitted to the United States to be trained in 
patent law shall not be admitted to the registration examination or 
granted recognition until completion of that training.
    (c) An individual not registered under Sec.  11.6 may, if appointed 
by applicant to do so, prosecute an international application only 
before the United States International Searching Authority and the 
United States International Preliminary Examining Authority, provided 
that the individual has the right to practice before the national 
office with which the international application is filed as provided in 
PCT Art. 49, Rule 90 and Sec.  1.455, or before the International 
Bureau when the USPTO is acting as Receiving Office pursuant to PCT 
Rules 83.1 bis and 90.1.
    (d) Limited recognition fee and annual dues. An individual, within 
30 days after being notified of being granted limited recognition under 
paragraph (b) or (c) of this section, shall pay to the USPTO Director a 
fee set forth in Sec.  1.21(a)(2) of this subchapter. The individual 
also shall pay annually a fee in the amount required by Sec.  
1.21(a)(8) of this subchapter upon extension, renewal, or new grant of 
limited recognition, provided that the individual granted limited 
recognition for the first time during a fiscal year shall not be liable 
for the annual fee during that calendar year. Failure to comply with 
the provisions of this paragraph (d) shall subject the individual to 
loss of recognition.


Sec.  11.10  Restrictions on practice in patent matters.

    (a) Only practitioners who are registered under Sec.  11.6 or 
individuals given limited recognition under Sec.  11.9 are permitted to 
prosecute patent applications of others before the Office; or represent 
others in a reexamination proceeding, correction of a patent, 
correction of inventorship, protest, or other proceeding before the 
Office.
    (b) Undertaking for registration by former Office employee. No 
individual not previously registered will be registered as an attorney 
or agent while employed by the Office. No individual who has served in 
the patent examining corps or elsewhere in the Office may practice 
before the Office after termination of his or her service, unless he or 
she signs the following written undertaking:
    (1) To not knowingly act as agent or attorney for, or otherwise 
represent, or aid in any manner the representation of, any other person 
in any formal or informal appearance before the Office, or with the 
intent to influence, make or assist in any manner the making of any 
oral or written communication on behalf of any other person:
    (i) To the United States,
    (ii) In connection with any particular patent or patent application 
involving a specific party, or
    (iii) In which said employee participated personally and 
substantially as an employee of the Office; and
    (2) To not knowingly act within two years after terminating 
employment by the United States as agent or attorney for, otherwise 
represent or assist in any manner the representation of any other 
person in any formal or informal appearance before the Office, or with 
the intent to influence, make or aid in any manner the making of any 
oral or written communication on behalf of any other person:
    (i) To the United States,
    (ii) In connection with any particular patent or patent application 
matter involving a specific party, or
    (iii) If such matter was actually pending under the employee's 
responsibility as an officer or employee within a period of one year 
prior to the termination of such responsibility.
    (3) The words and phrases in paragraphs (b)(1) and (b)(2) of this 
section are construed as follows:
    (i) Represent and representation means acting as patent attorney or 
patent agent or other representative in any appearance before the 
Office, or communicating with an employee of the Office with intent to 
influence.
    (A) Patent attorneys and patent agents. This provision is directed 
to the former employee who participates in a particular matter, e.g., 
patent application while employed by the Office and later either enters 
a ``revolving door'' by representing the applicant on the same matter, 
or ``switches sides'' by representing another person on the same 
matter. Note: The examples in this section do not incorporate the 
special statutory restrictions on ``Senior Employees.''

    Example 1: An attorney in the Solicitor's Office personally 
works on an appeal in the United States Court of Appeals for the 
Federal Circuit with respect to a patent application owned by 
Company X. After leaving the Office, she is registered as a patent 
attorney, and asked by Company X to represent it in that case. She 
may not do so.


[[Page 69524]]


    (B) Assist in any manner means aid or help another person on a 
particular matter involving representation. This provision is directed 
to the person who, as an employee, participates in a particular matter, 
e.g., patent application, while employed by the Office and after 
separation from the Office, behind the scenes, either enters a 
``revolving door'' by assisting the applicant on the same matter, or 
``switches sides'' by assisting another person on the same matter.

    Example 1: A primary patent examiner allows a patent application 
owned by Company X. After leaving the Office, he is registered as a 
patent agent, and is asked by Company X to assist its attorneys in 
filing and prosecuting a reissue patent application. He may neither 
participate in the drafting of claims to be included in the reissue 
application, nor advise Company X on tactics and procedure, 
including the form and content of the oath needed for the reissue 
application, nor participate in drafting amendments to be filed in 
the application, even if another registered practitioner signs the 
documents filed in the Office.
    Example 2: A patent examiner, shortly before resigning from the 
Office, signs an Office action rejecting claims in an inventor's 
patent application. The inventor replies, and a new examiner sends 
the inventor another Office action containing a final rejection of 
claims in the application. After resigning, the former examiner 
becomes registered as a patent agent. The inventor asks the former 
examiner--now registered patent agent for advice in replying to the 
Office action and to ghostwrite a reply for the inventor to sign and 
file as the inventor's own reply to the Office action. The former 
examiner may not do so.

    (C) A former Office employee is not prohibited from providing in-
house assistance that does not involve representation, but is 
prohibited from providing in-house assistance involving representation 
of another person.

    Example 1: An Office employee examined a patent application of 
Company X, and allowed the application, which matured into a patent. 
Upon separation from the Office, he is hired by Company X, and 
becomes registered as a patent attorney. He works on licensing the 
technology covered by the claims in the patent, but has no direct 
contact with the Office. At the request of a company vice president, 
he prepares a paper describing the persons at the Office who should 
be contacted regarding reexamination of the patent, and what they 
consider persuasive for a favorable reexamination ruling. He may do 
so.
    Example 2: A patent examiner examined a patent application of 
Company Z, and allowed an original application, which matured into a 
patent. Upon separation from the Office, he is hired by Company Z, 
and becomes registered as a patent attorney. Company Z filed a 
continuation-in-part application based on the original application. 
Another registered practitioner is prosecuting the CIP application. 
A company vice president requests the former patent examiner to 
assist the other practitioner by preparing an amendment for the CIP 
application to overcome outstanding rejections or objections. The 
amendment is to be signed by the other registered practitioner, and 
the former examiner is to have no direct contact with the Office. 
This would be a communication with intent to influence. The former 
patent examiner may not do so.

    (D) Appearance means that an individual is physically present 
before the Office in either a formal or informal setting, or the 
individual conveys material to the Office in connection with a formal 
proceeding or application; the appearance must occur in regard to a 
communication that is intended to influence. A communication is broader 
than an appearance and includes, for example, correspondence, or 
telephone calls.

    Example 1: An appearance occurs when a former patent examiner, 
now a registered patent agent, meets with a current patent examiner 
or group director in either the Office or a restaurant to discuss a 
patent application; or when the former examiner submits a 
communication, e.g., an amendment, appeal brief, or petition, 
bearing his or her name.
    Example 2: A former patent examiner, now a registered patent 
agent, makes a telephone call to a present patent examiner to 
discuss an Office action in an application to reissue a patent which 
the former patent examiner examined; or ghostwrites an amendment to 
be signed and filed by an inventor. The former examiner has made a 
communication.

    (E) Elements of ``influence'' and potential controversy are 
required. Communications that do not include an ``intent to influence'' 
are not prohibited. Moreover, a routine request not involving a 
potential controversy is not prohibited. For example, the following are 
not prohibited: inquiring into the status of a pending application 
being prosecuted by the practitioner's law firm; a request for publicly 
available documents; or a communication by a former examiner, not in 
regard to an adversarial proceeding, imparting purely factual 
information.

    Example 1: A member of the Board of Patent Appeals and 
Interferences personally works on an interference between a patent 
application of Company X and a patent application of Company Y. 
After leaving the Office, he is registered as a patent attorney, and 
asked by Company X and Company Y to act as arbitrator between the 
parties regarding the same interfering applications. The arbitration 
award is filed with the Office, and necessarily has the intent to 
influence that it meets all requirements to be dispositive and 
acceptable to the Office. The former member of the Board, through 
the award, in effect, represents both parties. He may not do so.
    (F) Project responses not included. In a context not involving a 
potential controversy involving the United States, no finding of 
``intent to influence'' shall be based on whatever influential effect 
inheres in an attempt to formulate a meritorious proposal or program.

    Example 1: The employee of Company X in the previous example is 
asked some ten years after being hired by the company to improve 
upon the claimed subject matter in the patent, which he does, and a 
patent application for the improvement is filed. This is not 
prohibited despite the fact that his improvement may be inherently 
influential on a question of patentability. However, he may not 
argue for its patentability.

    (ii) ``Particular patent or patent application involving a specific 
party or parties.'' (A) Particular patent or patent application. Like 
the prohibitions of sections (a) and (b) of 18 U.S.C. 207, the 
prohibitions of this section would be based on the former employee's, 
e.g., patent examiner's or assistant solicitor's, prior participation 
in or responsibility for a ``judicial or other proceeding, application, 
request for a ruling or other determination, contract, claim, 
controversy, investigation, charge, accusation, arrest, or other 
particular matter involving a specific party or parties'' in which the 
United States is a party or has a direct and substantial interest. Such 
matters typically involve a specific proceeding affecting the legal 
rights of the parties or an isolatable transaction or related set of 
transactions between identifiable parties.
    All patent issues, including the filing and prosecution of a patent 
application, are applications, claims, or other matters in which the 
United States is a directly or indirectly interested. For a patent 
examiner, a particular matter includes any patent application of a 
specific party, including a provisional, substitute, international, 
continuation, divisional, continuation-in-part, or reissue patent 
application, as well as any protest, reexamination, petition, appeal, 
or interference based on the patent application of a specific party. A 
``specific party'' includes the applicant, owner, or assignee of the 
application.

    Example 1: A patent examiner reviews and allows a particular 
patent application for an invention. After leaving the Office, and 
becoming registered as a patent agent, the former patent examiner 
may not represent the owner of the patent before the Office in an 
application for reissue of the patent, in a reexamination of the 
patent, in an interference involving the patent, in a divisional or 
continuation-in-part application, and the like.
    Example 2: A patent examiner participates by recommending an 
interference between an application she examined and an application 
that she did not examine. After leaving the Office and becoming a 
registered patent attorney, she may not represent the owner of

[[Page 69525]]

the application that she did not examine in the interference since 
her participation was by way of recommendation in a particular 
matter affecting a specific party or parties.

    (B) Relationship of personal participation to specificity. In 
certain cases, whether a patent or patent application should be treated 
as a ``particular patent or patent application matter involving 
specific parties'' depends on the employee's own participation in 
events. Participation may result in particularity and specificity to 
the patent or patent application.

    Example 1: A patent examiner without any signatory authority 
drafts the first Office action in an application filed by Company X. 
After drafting the Office action containing rejections of several 
claims over prior art, and a rejection of other claims under 35 
U.S.C. 112, she submits it to her supervisor for review. The 
supervisor reviews the draft and suggests changes. On her last day 
of employment at the Office, the examiner does not have an 
opportunity to make the changes. The application and drafted action 
are later assigned to another examiner, who is taking over her art. 
After she separates from the Office, the other examiner prepares the 
Office action, including the rejections she had urged, and signs the 
Office action. Thereafter, the Office action is duly mailed. The 
former patent examiner is then registered as a patent agent, and is 
asked by Company X to represent it before the Office on the same 
patent application. She may not do so.

    (C) The particular patent or patent application includes related 
patents and applications. The requirement of a ``particular patent or 
patent application involving a specific party'' applies both at the 
time that the Office employee acts in an official capacity and at the 
time in question after service in the Office. The same particular 
patent or application may continue in another form or in part. In 
determining whether two particular patents or applications are related, 
the Department of Commerce considers the extent to which the matters 
involve the same basic facts, related issues, the same or related 
parties, time elapsed, the same confidential information, and the 
continuing existence of an important Federal interest.

    Example 1: A patent examiner was substantially involved in the 
granting of a patent to Z Company for the development of alternative 
energy sources. Six years after he terminates Office employment, the 
patent is still in effect, but much of the technology has changed as 
have many of the personnel. An employee of the Q Company has 
invented an improvement on the original patent. The former patent 
examiner, now a registered patent attorney, may represent Q Company 
in its patent application for the improvement, since Q Company's 
patent application is a different matter from the patent granted to 
Z Company. The former employee should first consult the Office and 
request a written determination before undertaking any 
representation in the matter.
    Example 2: A patent examiner reviewed the claims in an initial 
patent application, and allowed the claims in the application. The 
prosecution in a divisional application of claims directed to 
subject matter disclosed but not originally sought to be claimed in 
the initial application must be regarded as part of the same 
particular matter as the initial application. The reason is that the 
validity of the patent may be put in issue, and many of the facts, 
e.g., benefit of priority to antedate any intervening prior art, 
giving rise to the patent would be involved.
    Example 3: An attorney in the Solicitor's Office personally 
works on an appeal in the Court of Appeals for the Federal Circuit 
of a patent application owned by Company X. A patent is later 
granted on the application. After leaving the Office, he is 
registered as a patent attorney, and asked by Company X to represent 
it in an infringement suit against an alleged infringer. He may not 
do so.
    Example 4: A member of the Board of Patent Appeals and 
Interferences personally works on an appeal of a patent application 
of Company X. After leaving the Office, he is registered as a patent 
attorney, and asked by Company X to represent it in an interference 
proceeding before the Office between the patent granted on the 
application, and an application of another party. He may not do so. 
Other examples: See paragraph (b)(3)(i)(A) of this section, Example 
1, and paragraph (b)(3)(ii)(A) of this section, Examples 1 and 2.

    (D) United States must be a party or have an interest. The 
particular patent or patent application must be one in which the United 
States is a party, such as in a judicial or administrative proceeding 
or a contract, or in which it has a direct and substantial interest. 
The importance of the Federal interest in a matter can play a role in 
determining whether two matters are the same particular matter. All 
patent issues, including the filing and prosecution of a patent 
application, are matters in which the United States is directly or 
indirectly interested. The United States is not only interested in the 
grant of a patent. Its interest continues. The United States may bring 
suit to cancel patents obtained by fraud.

    Example 1: A patent examiner participated in examining a patent 
application filed by the Z Company. After leaving the Office and 
becoming a registered patent attorney, she may not represent Z 
Company in a request for reexamination of the patent granted on the 
application, or assist other attorneys in drafting the request. The 
interest of the United States in preventing both inconsistent 
results and the appearance of impropriety in the same factual matter 
involving the same party, Z Company, is direct and substantial.

    (iii) ``Participate personally and substantially.'' (A) Basic 
requirements. The restrictions of section 207(a) apply only to those 
patents and applications in which a former patent examiner had 
``personal and substantial participation,'' exercised ``through 
decision, approval, disapproval, recommendation, the rendering of 
advice, investigation or otherwise.'' To participate personally means 
directly, and includes the participation of a subordinate when actually 
directed by the former Office employee in the matter. Substantially 
means that the examiner's involvement must be of significance to the 
matter, or form a basis for a reasonable appearance of such 
significance. It requires more than official responsibility, knowledge, 
perfunctory involvement, or involvement on an administrative or 
peripheral issue. A finding of substantiality should be based not only 
on the effort devoted to a matter, but also on the importance of the 
effort. While a series of peripheral involvements may be insubstantial, 
the single act of approving or participation in a critical step may be 
substantial. It is essential that the participation be related to a 
``particular patent or patent application involving a specific party.'' 
(See paragraph (b)(3)(ii)(A) of this section.)

    Example 1: A primary examiner is not in charge of patent 
applications assigned to another examiner having partial signatory 
authority. The primary examiner is asked by the supervisory patent 
examiner to be the acting supervisory patent examiner while the 
latter is on vacation. The primary examiner reviews and approves the 
second action final rejection in an Office action in a patent 
application (belonging to the Z Company) of the other examiner 
having partial signatory authority. Later, the other examiner, with 
the approval of the supervisory patent examiner, allows the 
application, and a patent is granted to the Z Company on the 
application. After retiring and being registered as a patent agent, 
the former primary examiner is asked by the Z Company to represent 
the patent owner in filing a reissue application to correct an error 
in the patent. The primary examiner, having personally and 
substantially participated by decision, or approval in the 
particular matter, may not do so.
    Example 2: A primary examiner is not in charge of, nor has 
official responsibility for the patent applications of new patent 
examiners she is training. However, she is frequently consulted as 
to searches, interpreting the scope of the claims, and drafting 
Office actions for the applications. Such an individual, as well as 
the new patent examiners, has personally and substantially 
participated in the matters.
    Example 3: A supervisory primary examiner signs a restriction 
requirement in an Office action prepared by a patent examiner having 
no signatory authority. The supervisory primary examiner and the 
patent examiner having no signatory authority have

[[Page 69526]]

each personally and substantially participated in the matter.
    Example 4: A primary patent examiner, having concluded that all 
the claims in a first application are allowable, conducts an 
interference search and finds interfering subject matter being 
claimed in a second application. The examiner has personally and 
substantially participated in the first and second applications, 
whether the second application is assigned to and being examined by 
the same examiner or another patent examiner.

    (B) Participation on ancillary matters. An Office employee's 
participation on subjects not directly involving the substantive merits 
of a matter may not be ``substantial,'' even if it is time-consuming. 
An employee whose responsibility is the review of a matter solely for 
compliance with administrative control or budgetary considerations and 
who reviews a particular matter for such a purpose should not be 
regarded as having participated substantially in the matter, except 
when such considerations also are the subject of the employee's 
proposed representation. (See paragraph (b)(3)(i)(C) of this section). 
Such an employee could theoretically cause a halt in a program for 
noncompliance with standards under his or her jurisdiction, but lacks 
authority to initiate a program or to disapprove it on the basis of its 
substance.

    Example 1: A primary examiner is asked to review the Office 
actions of another examiner having partial signatory authority for 
compliance with procedures to ascertain if the other examiner 
qualifies for full signatory authority. Such participation is not 
``substantial.''

    (C) Role of official responsibility in determining substantial 
participation. Official responsibility is defined in paragraph 
(b)(3)(v) of this section. ``Personal and substantial participation'' 
is different from ``official responsibility.'' One's responsibility 
may, however, play a role in determining the ``substantiality'' of an 
Office employee's participation. For example, ordinarily a patent 
examiner's forbearance on a matter is not substantial participation. 
If, however, a primary patent examiner is charged with responsibility 
for review of a patent application assigned to him, and action cannot 
be undertaken over his objection, the result may be different. If the 
primary patent examiner reviews Office actions of a new examiner whose 
Office actions, after several months, are deemed reliable, and passes 
them on, his participation may be regarded as ``substantial'' even if 
he claims merely to have engaged in inaction.
    (iv) Official responsibility in complex cases. In certain complex 
factual cases, the Office is likely to be in the best position to make 
a determination as to certain issues, for example, the identity or 
existence of a particular matter. Designated ethics officials at the 
Department of Commerce, in consultation with the Office when deemed 
beneficial, should provide advice promptly to former Office employees 
who make inquiry on any matter arising under these regulations.
    (v) Official responsibility is defined in 18 U.S.C. 202 as, ``the 
direct administrative or operating authority, whether intermediate or 
final, and either exercisable alone or with others, and either 
personally or through subordinates, to approve, disapprove, or 
otherwise direct Government actions.''
    (A) Determining official responsibility. Ordinarily, those areas 
assigned by statute, regulation, Executive Order, job description, or 
delegation of authority determine the scope of an employee's ``official 
responsibility''. All particular matters under consideration in the 
Office are under the ``official responsibility'' of the Director of the 
Office, and each is under that of any intermediate supervisor having 
responsibility for an employee who actually participates in the matter 
within the scope of his or her duties. A patent examiner would have 
``official responsibility'' for the patent applications assigned to him 
or her.

    Example 1: A patent examiner, to whom a new application is 
assigned, is officially responsible for reviewing the application 
for compliance with statutory, regulatory, and procedural 
requirements. Upon assignment of the application, the application 
became a particular matter for which the examiner is officially 
responsible.

    (B) Ancillary matters and official responsibility. Administrative 
authority as used in the foregoing definition means authority for 
planning, organizing and controlling matters rather than authority to 
review or make decisions on ancillary aspects of a matter such as the 
regularity of budgeting procedures, public or community relations 
aspects, or equal employment opportunity considerations. Responsibility 
for such an ancillary consideration does not constitute responsibility 
for the particular matter, except when such a consideration is also the 
subject of the employee's proposed representation.

    Example 1: A supervisory patent examiner would not have official 
responsibility for all patent applications in a technology center or 
the Office even though she must review the records of all the 
applications to locate a missing file.
    Example 2: Within two years after terminating employment, a 
supervisory patent examiner, now a registered patent attorney, is 
asked to represent Q Company in a continuation patent application of 
an application which was pending during the last year of the 
supervisory patent examiner's tenure. The continuation application 
contains a rejection that was first imposed in the parent 
application by a primary examiner who reported to the supervisory 
patent examiner. The supervisory patent examiner did not review the 
Office actions prepared by the primary examiner for the application. 
She may not represent Q Company on this matter.

    (C) Knowledge of matter pending required. In order for a former 
employee, e.g., former patent examiner, to be barred from representing 
another as to a particular matter, he or she need not have known, while 
employed by the Office, that the matter was pending under his or her 
official responsibility. However, the former employee is not subject to 
the restriction unless at the time of the proposed representation of 
another, he or she knows or learns that the matter had been under his 
or her responsibility. Ordinarily, a former employee who is asked to 
represent another on a matter will become aware of facts sufficient to 
suggest the relationship of the prior matter to his or her former 
office, e.g., technology center, group or art unit. If so, he or she is 
under a duty to make further inquiry, including direct contact with an 
agency's designated ethics official where the matter is in doubt. It 
would be prudent for a patent examiner to maintain a record of only 
application numbers of the applications actually acted upon by 
decision, recommendation, as well as those applications in the 
examiner's art which he or she has not acted upon.
    (D) Self-disqualification. A former employee, e.g., former patent 
examiner, cannot avoid the restrictions of this section on the ground 
by self-disqualification with respect to a matter for which he or she 
otherwise had official responsibility. However, as in Sec.  207(a), 
self-disqualification is effective to eliminate the restrictions.
    (vi) Actually pending means that the matter was in fact referred to 
or under consideration by persons within the employee's area of 
responsibility, not that it merely could have been.

    Example 1: A staff lawyer in the Office of General Law is 
consulted by procurement officers on the correct resolution of a 
contractual matter involving Q Company. The lawyer renders an 
opinion resolving the question. The same legal question arises later 
in several contracts with other companies, but none of the disputes 
with such companies is referred to the Office of General Law. The 
Office of General Law has official responsibility for the 
determination of the Q Company matter. The other matters were

[[Page 69527]]

never ``actually pending'' under that responsibility, although as a 
theoretical matter, such responsibility extended to all legal 
matters within the department.

    (vii) Other essential requirements. All other requirements of the 
statute must be met before the restriction on representation applies. 
The same considerations apply in determining the existence of a 
``particular matter involving a specific party,'' a representation in 
an ``appearance,'' or ``intent to influence,'' and so forth as set 
forth under paragraph (b)(1) of this section.

    Example 1: During her tenure as Director of the Office, the 
Director's subordinates undertook major changes in application of 
new rules for processing patent applications. Eighteen months after 
terminating employment, she is asked to represent before the Office 
Z Company, which believes it is being unfairly treated under the 
application of the rules. The Z Company matter first arose on patent 
applications filed after the Director terminated her employment. She 
may represent Z Company because the matter pending under her 
official responsibility was not one involving ``a specific party.'' 
(Moreover, the time-period covered by 18 U.S.C. 207(c) has elapsed).

    (viii) Measurement of two-year restriction period. The statutory 
two-year period is measured from the date when the employee's 
responsibility in a particular area ends, not from the termination of 
service in the Office, unless the two occur simultaneously. The 
prohibition applies to all particular matters subject to such 
responsibility in the one-year period before termination of such 
responsibility.

    Example 1: A Group Director retires after 26 years of service 
and enters private industry as a consultant. He will be restricted 
for two years with respect to all matters that were actually pending 
under his official responsibility in the year before his retirement.
    Example 2: A patent examiner transfers from a position in a 
first Group to a position in a second Group, and she leaves the 
Office for private employment nine months later. As a registered 
patent attorney or agent, after 15 months she will be free of 
restriction insofar as matters that were pending under her 
responsibility in the first Group in the year before her transfer. 
She will be restricted for two years in respect of the second Group 
matters that were pending in the year before her departure for 
private employment.

    (c) Former employees of the Office. Former employees of the Office, 
whether they are or are not a practitioner, are subject to the post-
employment provisions of 18 U.S.C. 207(a) and (b)(1), and the 
provisions of 5 CFR 2637.201 and 2637.202. A former employee who is a 
practitioner is subject to the provisions of Sec.  11.111.
    (d) A practitioner who becomes an employee of the Office may not 
prosecute or aid in any manner in the prosecution of any patent 
application before the Office. Noncompliance with this provision shall 
constitute misconduct under Sec.  11.804(i)(19).
    (e) Practice before the Office by Government employees is subject 
to any applicable conflict of interest laws, regulations or codes of 
professional responsibility. Noncompliance with said conflict of 
interest laws, regulations or codes of professional responsibility 
shall constitute misconduct under Sec. Sec.  11.804(b) or 11.804(h)(8). 
A practitioner who is a Government employee must so inform the OED 
Director, and must provide his or her complete Government address as 
his or her business address in every communication to OED.


Sec.  11.11  Administrative suspension, inactivation, resignation, and 
readmission.

    (a) Registered attorneys and agents must notify the OED Director of 
their postal address for his or her office, e-mail address for his or 
her business, and business telephone number, and of every change to any 
of said addresses, or telephone numbers within 30 days of the date of 
the change. A registered attorney or agent shall separately provide 
written notice to the OED Director in addition to any notice of change 
of address and telephone number filed in individual applications. A 
registered practitioner who is an attorney in good standing with the 
bar of the highest court of one or more states shall provide the OED 
Director with the state bar identification number associated with each 
membership. The OED Director shall publish from the roster a list 
containing the name, postal business addresses, business telephone 
number, registration number, and registration status as an attorney or 
agent of each registered practitioner recognized to practice before the 
Office in patent cases.
    (b) Administrative suspension. (1) Whenever it appears that a 
registered patent attorney or agent has failed to comply with Sec.  
11.8(d) or Sec. Sec.  11.12(a) and (e), the OED Director shall mail a 
notice to the attorney or agent advising of the noncompliance and 
demanding:
    (i) Compliance within sixty days after the date of such notice, and
    (ii) Payment of a delinquency fee set in Sec.  1.21(a)(9)(i) of 
this subchapter for each rule violated. The notice shall be 
communicated to the attorney or agent by mail or e-mail, according to 
the manner by which the practitioner last communicated his or her 
business postal or e-mail address to the OED Director, or by other 
service for practitioners located out of the United States, its 
possessions or territory.
    (2) In the event a registered patent attorney or agent fails to 
comply with the notice of paragraph (b)(1) of this section within the 
time allowed, the OED Director shall send notice in the manner provided 
for in paragraph (b)(1) of this section to the attorney or agent at the 
practitioner's most recent business postal or e-mail address on file 
advising:
    (i) That his or her registration has been administratively 
suspended, and
    (ii) That the attorney or agent may no longer practice before the 
Office in patent matters or in any way hold himself or herself out as 
being registered to practice before the Office in patent matters.
    (iii) Following administrative suspension, the suspended 
practitioner may be reinstated only upon demonstrating to the OED 
Director satisfaction that the practitioner has complied with the rules 
relating to registration, and upon payment of a reinstatement fee set 
by Sec.  1.21(a)(9)(ii) of this subchapter for each rule violated.
    (3) Whenever the OED Director notifies an attorney or agent that 
his or her registration has been administratively suspended, the OED 
Director shall publish notice of the administrative suspension in the 
Official Gazette.
    (4) An administratively suspended attorney or agent remains 
responsible for paying his or her annual fee required by Sec.  11.8(d), 
and for completing the required continuing training programs.
    (5) An administratively suspended attorney or agent is subject to 
investigation and discipline for his or her conduct prior to, during, 
or after the period his or her name was administratively suspended.
    (6) An administratively suspended attorney or agent is prohibited 
from continuing to practice before the Office in patent cases while 
administratively suspended. Failure to comply with this rule will 
subject the attorney or agent to discipline.
    (c) Administrative Inactivation. (1) Any registered practitioner 
who shall become employed by the Office shall comply with Sec.  11.116 
for withdrawal from the applications, patents, and trademark matters 
wherein he or she is an attorney or agent of record, and notify the OED 
Director in writing of said employment on the first day of said 
employment. The name of any registered practitioner employed by the 
Office shall be endorsed on the roster as administratively inactive. 
The practitioner shall not be responsible for

[[Page 69528]]

payments of the annual fee each complete fiscal year while in 
administratively inactive status. Upon separation from the Office, the 
practitioner may request reactivation by completing and filing an 
application, Data Sheet, signing a written undertaking required by 
Sec.  11.10, paying the fee required by Sec.  1.21(a)(1)(i) of this 
subchapter, and completing the required continuing training programs if 
the practitioner did not pass the recertification tests required for 
patent examiners during the practitioner's employment at the Office and 
appropriate to the practitioner's grade and position in the Office. 
Upon restoration to active status, the practitioner shall be 
responsible for the annual fee for the fiscal year in which he or she 
is restored to active status. An administratively inactive practitioner 
remains subject to the provisions of Sec. Sec.  11.100-11.806, and to 
proceedings and sanctions under Sec. Sec.  11.19-11.58 for conduct that 
violates a provision of Sec. Sec.  11.100-11.806 prior to or during 
employment at the Office.
    (2) Any registered practitioner who is a judge of a court of 
record, full time court commissioner, U.S. bankruptcy judge, U.S. 
magistrate judge, or a retired judge who is eligible for temporary 
judicial assignment and is not engaged in the practice of law should 
request, in writing, that his or her name be endorsed on the roster as 
administratively inactive. Upon acceptance of the request, the OED 
Director shall endorse the name as administratively inactive. The 
practitioner shall not be responsible for payment of the annual fee or 
completion of the required continuing training programs for each 
complete fiscal year the practitioner continues to be in 
administratively inactive status. Following separation from the bench, 
the practitioner may request restoration to active status by completing 
and filing an application, Data Sheet, signing a written undertaking 
required by Sec.  11.10, and paying the fee required by Sec.  
1.21(a)(1)(i) of this subchapter. Upon restoration to active status, 
the practitioner shall be responsible for the annual fee and required 
continuing training for the fiscal year in which he or she is restored 
to active status.
    (d) Voluntary Inactivation. (1) Except as provided in paragraph 
(d)(4) of this section, any registered practitioner may voluntarily 
enter inactive status by filing a request, in writing, that his or her 
name be endorsed on the roster as inactive. Upon acceptance of the 
request, the OED Director shall endorse the name as inactive.
    (2) A practitioner in voluntary inactive status shall be 
responsible for payment of the annual fee for voluntary inactive status 
required by Sec.  1.21(a)(7)(ii) of this subchapter, and for completing 
the required continuing training programs for each complete fiscal year 
the practitioner continues to be in voluntary inactive status.
    (3) A practitioner who seeks or enters into voluntary inactive 
status is subject to investigation and discipline for his or her 
conduct prior to, during, or after the period of his or her 
inactivation.
    (4) A practitioner who is in arrears in dues or under 
administrative suspension for fee delinquency is ineligible to seek or 
enter into voluntary inactive status.
    (5) A practitioner in voluntary inactive status is prohibited from 
continuing to practice before the Office in patent cases while in 
inactive status. Failure to comply with the provisions of this 
paragraph (d)(5) will subject the practitioner to discipline.
    (6) Any registered practitioner who has been voluntarily 
inactivated pursuant to paragraph (d) of this section and not under 
investigation, not subject to a disciplinary proceeding, not in arrears 
for annual fees or in arrears for complying with the continuing legal 
education requirements may be restored to active status to the register 
as may be appropriate provided that the practitioner files a written 
request for reinstatement, a completed application for registration on 
a form supplied by the OED Director furnishing all requested 
information and material, including information and material pertaining 
to the practitioner's moral character under Sec. Sec.  11.7(a)(2)(i) 
and (iii) during the period of inactivation, evidence of completion of 
all continuing legal education programs required by the USPTO Director 
under Sec.  11.12(a) for up to the past six years from the date of 
application for restoration to active status, a declaration or 
affidavit attesting to the fact that the practitioner has read the most 
recent revisions of the Patent Act and the rules of practice before the 
Office, and pays the fees set forth in Sec. Sec.  1.21(a)(7)(iii) and 
(iv) of this subchapter.
    (e) Resignation. A registered practitioner or a practitioner under 
Sec.  11.14, who is neither under investigation under Sec.  11.22 for a 
possible violation of the Rules of Professional Conduct, nor a 
practitioner against whom probable cause has been found by a panel of 
the Committee on Discipline under Sec.  11.23(b), may resign by 
notifying the OED Director in writing that he or she desires to resign. 
Upon acceptance in writing by the OED Director of such notice, that 
registered practitioner or practitioner under Sec.  11.14 shall no 
longer be eligible to practice before the Office, but shall continue to 
file a change of address for five years thereafter in order that he or 
she may be located in the event information regarding the 
practitioner's conduct comes to the attention of the OED Director, or 
any complaint is made about his or her conduct while he or she engaged 
in practice before the Office. The name of any registered practitioner 
whose resignation is accepted shall be removed from the register, 
endorsed as resigned, and notice thereof published in the Official 
Gazette. Upon acceptance of the resignation by the OED Director, the 
practitioner must comply with the provisions of Sec.  11.116(d). A 
resigned practitioner may be again registered only in accordance with 
Sec.  11.7. A resigned practitioner's willful failure to comply with 
the provisions of this rule or Sec.  11.116(d) constitutes grounds for 
denying his or her application for registration until complete 
compliance with said rules is achieved.
    (f) Administrative reinstatement. (1) Any registered practitioner 
who has been administratively suspended pursuant to paragraph (b) of 
this section or 11.12(e), or who has resigned pursuant to paragraph (d) 
of this section, may be reinstated on the register provided the 
practitioner has applied for reinstatement on an application form 
supplied by OED Director, demonstrated compliance with the provisions 
of Sec. Sec.  11.7(a)(2)(i) and (iii), has completed the training 
programs required by the USPTO Director under Sec.  11.12(a) since the 
Office's fiscal year the practitioner was last registered, and paid the 
fees set forth in Sec. Sec.  1.21(a)(3), (a)(7), and (a)(9). Any 
reinstated practitioner is subject to investigation and discipline for 
his or her conduct that occurred prior to, during, or after the period 
of his or her administrative suspension or resignation.
    (2) Any registered practitioner whose registration has been 
inactivated pursuant to paragraph (c) of this section may be reinstated 
to the register as may be appropriate provided that a request for 
reinstatement, a completed application for registration on a form 
supplied by the OED Director furnishing all requested information and 
material, and payment of the fees set forth in Sec.  1.21(a)(3) of this 
subchapter are filed within two years after his or her employment with 
the Office or in a judicial capacity ceases. Any registered 
practitioner inactivated or reinstated is subject to investigation and 
discipline for his or her conduct before, during, or

[[Page 69529]]

after the period of his or her inactivation.


Sec.  11.12  Mandatory continuing training for licensed practitioners.

    (a) Continuing education requirements. (1) All practitioners 
licensed under Sec. Sec.  11.6 or 11.9 to practice before the Office 
shall complete a continuing education program as required from time-to-
time by the USPTO Director, except those registered practitioners 
expressly exempted in paragraph (b) of this section from the 
requirement of this regulation. The USPTO Director will announce each 
fiscal year whether an education program will be required, and the 
dates for the program. No more than one mandatory continuing education 
program would be required each fiscal year and the requirement may be 
as infrequent as once every three years. The fiscal year is October 1 
through September 30.
    (2) Only continuing education programs pre-approved by the OED 
Director as meeting the requirements set forth in Sec.  11.13 will be 
deemed eligible to satisfy the requirements set forth in paragraph 
(a)(1) of this section. Eligible continuing education programs and the 
starting date for completing each program will be announced in the 
Official Gazette and on the OED Web site. Failure to consult the 
foregoing locations for said announcement will not excuse a 
practitioner from completing the mandatory continuing education 
program.
    (3) Each practitioner shall be responsible for ascertaining whether 
the USPTO Director has required completion of a mandatory continuing 
education program during a fiscal year, and complying with the 
requirement.
    (b) Exemptions. Each practitioner shall comply with the provisions 
of paragraphs (a) and (b) of this section except as follows:
    (1) A newly registered practitioner shall be exempt from completing 
the mandatory continuing education program during the fiscal year he or 
she is first registered.
    (2) A practitioner who becomes inactive in accordance with Sec.  
11.11(c)(1) shall be exempt from completing the mandatory continuing 
education program if, while qualifying for inactive status, the 
practitioner passed the recertification program for patent examiners 
required during the practitioner's employment in the Office and 
appropriate to practitioner's grade and position in the Office.
    (3) A practitioner who becomes inactive in accordance with Sec.  
11.11(c)(2) shall be exempt from completing the continuing education 
program while qualifying for inactive status as a judge.
    (4) A practitioner who has obtained a waiver of the deadline for 
completing a program for good cause shown. A practitioner dissatisfied 
with a final decision of the OED Director may seek review of the 
decision upon petition to the USPTO Director accompanied by payment of 
the fee set forth in Sec.  1.21(a)(5). See Sec.  11.2(d).
    (c) Reinstatement. A person who, after having resigned in 
accordance with Sec.  11.11(e), having been transferred to disability 
inactive status under Sec.  11.28, or having been suspended or excluded 
from practice before the Office under Sec. Sec.  11.24, 11.25, 11.27, 
11.55, or 11.56, seeks to be reinstated shall arrange with the OED 
Director to complete the continuing education programs for currency in 
patent laws, practices, policies and procedures. Thereafter, the person 
shall have the same continuing education program requirement as is 
required of a registered practitioner.
    (d) Administrative suspension for failure to complete continued 
education program requirement. Any practitioner in active status who 
fails to complete the requirement within the time allowed by paragraph 
(a) of this section shall be delinquent in meeting the requirement, and 
the practitioner shall be subject to the provisions of Sec.  11.11(b) 
to overcome a delinquency. Failure to pass each continuing education 
program within the permitted sixty-day period set in Sec.  11.11(b)(1) 
shall subject the practitioner to the fees required by Sec.  1.21(a)(9) 
of this subchapter and administrative suspension in accordance with the 
procedure of Sec.  11.11(b)(2).


Sec.  11.13  Eligible mandatory continuing education programs.

    (a) Eligibility. (1) A continuing education program is eligible to 
satisfy the mandatory continuing education requirements of Sec.  
11.12(a)(1) if either:
    (i) the Office provides the program via Web-delivery or, if Web-
delivery is unavailable, via a traditional or other appropriate 
distance delivery method, or
    (ii) a USPTO pre-approved sponsor offers a course pre-approved by 
the OED Director as providing the legal, procedural and policy subject 
matter identified by the USPTO Director as being required to satisfy 
the mandatory continuing education program.
    (b) USPTO-delivered program. A continuing education program 
provided by the USPTO in accordance with paragraph (a)(1) of this 
section will include narrative material, such as notices, rule 
packages, or the Manual of Patent Examining Procedure, and questions 
regarding the material. A practitioner choosing this educational mode 
shall complete the program, including answering the questions, on the 
Internet unless the latter is unavailable to the practitioner. A 
practitioner completing the program by traditional or other appropriate 
distance delivery method shall obtain and pay the fee required by Sec.  
1.21(a)(12) of this subchapter for the program and furnished materials.
    (c) USPTO pre-approved sponsor of a mandatory continuing education 
program. A continuing education program provided by a USPTO pre-
approved sponsor in accordance with paragraph (a)(2) of this section 
shall include the topics and content required to satisfy the mandatory 
continuing education program, and shall complete presentation of the 
program.
    (d) Certificate of completion. (1) Upon completion of a required 
continuing education program in accordance with paragraph (b)(2) of 
this section, the OED Director shall credit the practitioner with 
completing the program.
    (2) Upon completion of a required continuing education program in 
accordance with paragraph (b)(2) of this section, the pre-approved 
program sponsor shall file with the OED Director a certificate of 
completion of the program for each practitioner attending and 
completing the mandatory continuing education program. Upon receipt of 
the certificate the OED Director shall credit the practitioner with 
completing the program.
    (3) The OED Director will not give credit for completion by 
practitioners of programs which have not been pre-approved by the OED 
Director as providing the legal, procedural and policy subject matter 
identified by the USPTO Director as being required to satisfy the 
mandatory continuing education program.
    (e) Standards for approval of USPTO pre-approved sponsor-delivered 
mandatory continuing education programs. (1) The OED Director shall 
review and approve the content of all sponsor-delivered education 
programs.
    (2) A sponsor-delivered mandatory continuing education program is 
approved as eligible to satisfy the mandatory education requirements of 
Sec.  11.12(a)(1) if the OED Director has specifically approved it.
    (3) To be approved, the program must have significant intellectual 
or practical content and be directed to legal, procedural and policy 
subject matter identified by the USPTO Director as being required to 
satisfy the mandatory continuing education program. Its

[[Page 69530]]

primary objective must be to enhance the attendee's professional 
competence and skills as a patent practitioner, and to enhance the 
quality of legal services rendered to the public.
    (4) All sponsor-delivered mandatory continuing education programs 
must be conducted in a setting physically suitable to the program. If 
not Web-delivered, a suitable writing surface should be provided.
    (5) Where USPTO instructional material is available, a pre-approved 
sponsor will provide copies of the same or the equivalent thereof.
    (f) Procedure for approval of programs. (1) A sponsor desiring 
approval of a delivered education program shall submit to the OED 
Director all information called for by the ``Application by Sponsor for 
Pre-approval of a Continuing Education Program,'' and the fee required 
by Sec.  1.21(a)(13) of this subchapter. The content of this 
application will be promulgated by the OED Director and may be changed 
from time-to-time.
    (2) If the program proposed by a sponsor is approved, the OED 
Director also shall notify the requesting sponsor of the decision 
within 60 days after receipt of the completed application. The OED 
Director shall maintain and make available on the Office Web site a 
list of all approved programs for each completion period. Approval of a 
program is only effective for the completion period for which it is 
approved.
    (3) The sponsor of a pre-approved continuing education program 
should include in its brochures or course descriptions the information 
contained in the following illustrative statement: ``This course or 
program has been pre-approved by the United States Patent and Trademark 
Office for Mandatory Continuing Education Program.'' An announcement is 
permissible only after the program has been specifically approved 
pursuant to an application submitted directly by the sponsor.
    (g) Procedure for approval of sponsors. (1) Any sponsor may apply 
for approval of individual courses by complying with the criteria of 
paragraphs (e) and (f) of this section.
    (2) A USPTO-approved sponsor shall be subject to and governed by 
the applicable provisions of these regulations, including the quality 
standards of paragraph (f) of this section and the recordkeeping and 
reporting requirements. The OED Director may at any time review a 
USPTO-approved sponsor's program and reserves the right to withdraw 
approval when the standards for approval are not met or maintained. If 
the OED Director finds there is a basis for revocation of the approval 
granted, the OED Director shall send notice by certified mail to that 
sponsor of the revocation within thirty days of the OED Director's 
decision.
    (3) A USPTO-approved sponsor must notify the OED Director at least 
two weeks in advance of a program of the name, date, and location of a 
particular continuing education program. The OED Director may request 
additional information regarding a program.
    (4) Law firms, professional corporations, and corporate law 
departments are not eligible to become approved sponsors.


Sec.  11.14  Individuals who may practice before the Office in 
trademark and other non-patent matters.

    (a) Attorneys. Any individual who is an attorney may represent 
others before the Office in trademark and other non-patent matters. An 
attorney is not required to apply for registration or recognition to 
practice before the Office in trademark and other non-patent matters. 
Registration as a patent attorney does not entitle an individual to 
practice before the Office in trademark matters.
    (b) Non-lawyers. Individuals who are not attorneys are not 
recognized to practice before the Office in trademark and other non-
patent matters, except that individuals not attorneys who were 
recognized to practice before the Office in trademark matters under 
this chapter prior to January 1, 1957, will be recognized as agents to 
continue practice before the Office in trademark matters.
    (c) Foreigners. Any foreign attorney or agent not a resident of the 
United States who shall prove to the satisfaction of the OED Director 
that he or she is registered or in good standing before the patent or 
trademark office of the country in which he or she resides and 
practices, may be recognized for the limited purpose of representing 
parties located in such country before the Office in the presentation 
and prosecution of trademark matters, provided: the patent or trademark 
office of such country allows substantially reciprocal privileges to 
those permitted to practice in trademark matters before the Office. 
Recognition under this paragraph shall continue only during the period 
that the conditions specified in this paragraph obtain.
    (d) Recognition of any individual under this section shall not be 
construed as sanctioning or authorizing the performance of any act 
regarded in the jurisdiction where performed as the unauthorized 
practice of law.
    (e) No individual other than those specified in paragraphs (a), 
(b), and (c) of this section will be permitted to practice before the 
Office in trademark matters. Any individual may appear in a trademark 
or other non-patent matter in his or her own behalf. Any individual may 
appear in a trademark matter for:
    (1) A firm of which he or she is a member,
    (2) A partnership of which he or she is a partner, or
    (3) A corporation or association of which he or she is an officer 
and which he or she is authorized to represent, if such firm, 
partnership, corporation, or association is a party to a trademark 
proceeding pending before the Office.
    (f) Application for reciprocal recognition. An individual seeking 
reciprocal recognition under paragraph (c) of this section, in addition 
to providing evidence satisfying the provisions of paragraph (c) of 
this section, shall apply in writing to the OED Director for reciprocal 
recognition, and shall pay the application fee required by Sec. Sec.  
1.21(a)(1)(i) and (a)(6) of this subchapter.


Sec.  11.15  Refusal to recognize a practitioner.

    Any practitioner authorized to appear before the Office may be 
suspended, excluded, or reprimanded in accordance with the provisions 
of this Part. Any practitioner who is suspended or excluded under this 
part or removed under Sec.  11.11(b) shall not be entitled to practice 
before the Office in patent, trademark, or other non-patent matters.


Sec.  11.16  Financial books and records.

    A practitioner, in return for being registered under Sec.  11.6, 
granted limited recognition under Sec.  11.9, or recognized to practice 
before the Office under Sec.  11.14, agrees that the OED Director may 
examine financial books and records maintained by or for the 
practitioner for the practice before the Office, including, without 
limitation, any and all trust accounts, including any trust account 
that may not be in compliance with the Rules of Professional Conduct, 
fiduciary accounts, and operating accounts maintained by the 
practitioner or his or her law firm. The OED Director may also examine 
any trust account maintained by a practitioner whenever the OED 
Director reasonably believes that the trust account may not be in 
compliance with the Rules of Professional Conduct.

[[Page 69531]]

Sec.  11.17  [Reserved]


Sec.  11.18  Signature and certificate for correspondence filed in the 
Office.

    (a) For all documents filed in the Office in patent, trademark, and 
other non-patent matters, and all documents filed with a hearing 
officer in a disciplinary proceeding, except for correspondence that is 
required to be signed by the applicant or party, each piece of 
correspondence filed by a practitioner in the Office must bear a 
signature, personally signed by such practitioner, in compliance with 
Sec.  1.4(d)(1) of this subchapter.
    (b) By presenting to the Office or hearing officer in a 
disciplinary proceeding (whether by signing, filing, submitting, or 
later advocating) any paper, the party presenting such paper, whether a 
practitioner or non-practitioner, is certifying that--
    (1) All statements made therein of the party's own knowledge are 
true, all statements made therein on information and belief are 
believed to be true, and all statements made therein are made with the 
knowledge that whoever, in any matter within the jurisdiction of the 
Office, knowingly and willfully falsifies, conceals, or covers up by 
any trick, scheme, or device a material fact, or makes any false, 
fictitious or fraudulent statements or representations, or makes or 
uses any false writing or document knowing the same to contain any 
false, fictitious or fraudulent statement or entry, shall be subject to 
the penalties set forth under 18 U.S.C. 1001, and violations of the 
provisions of this section may jeopardize the validity of the 
application or document, or the validity or enforceability of any 
patent, trademark registration, or certificate resulting therefrom; and
    (2) To the best of the party's knowledge, information and belief, 
formed after an inquiry reasonable under the circumstances,
    (i) The paper is not being presented for any improper purpose, such 
as to harass someone or to cause unnecessary delay or needless increase 
in the cost of prosecution before the Office;
    (ii) The other legal contentions therein are warranted by existing 
law or by a nonfrivolous argument for the extension, modification, or 
reversal of existing law or the establishment of new law;
    (iii) The allegations and other factual contentions have 
evidentiary support or, if specifically so identified, are likely to 
have evidentiary support after a reasonable opportunity for further 
investigation or discovery; and
    (iv) The denials of factual contentions are warranted on the 
evidence, or if specifically so identified, are reasonably based on a 
lack of information or belief.
    (c) Violations of paragraph (b)(1) of this section by a 
practitioner or non-practitioner may jeopardize the validity of the 
application or document, or the validity or enforceability of any 
patent, trademark registration, or certificate resulting therefrom. 
Violations of any of paragraphs (b)(2)(i) through (iv) of this section 
are, after notice and reasonable opportunity to respond, subject to 
such sanctions as deemed appropriate by the USPTO Director, or hearing 
officer, which may include, but are not limited to, any combination 
of--
    (1) Holding certain facts to have been established;
    (2) Returning papers;
    (3) Precluding a party from filing a paper, or presenting or 
contesting an issue;
    (4) Imposing a monetary sanction;
    (5) Requiring a terminal disclaimer for the period of the delay; or
    (6) Terminating the proceedings in the Office.
    (d) Any practitioner violating the provisions of this section may 
also be subject to disciplinary action. See Sec.  11.303(e)(4).

Subpart C--Investigations and Disciplinary Proceedings

Jurisdiction, Sanctions, Investigations, and Proceedings


Sec.  11.19  Disciplinary jurisdiction.

    (a) Individuals subject to disciplinary jurisdiction. The following 
individuals are subject to the disciplinary jurisdiction of the Office:
    (1) Practitioners. All practitioners engaged in practice before the 
Office; all practitioners administratively suspended under Sec.  
11.11(b); all practitioners who have resigned under Sec.  11.11(d); all 
practitioners inactivated under Sec.  11.11(c); all practitioners 
authorized under Sec.  11.6(d) to take testimony; and all practitioners 
reprimanded, suspended, or excluded from the practice of law by a duly 
constituted authority, including by the USPTO Director.
    (2) Other individuals. An applicant for patent (Sec.  1.41(b) of 
this subchapter) representing himself, herself, or representing himself 
or herself and other individuals who are applicants pursuant to 
Sec. Sec.  1.31 or 1.33(b)(4) of this subchapter; an individual who is 
an assignee as provided for under Sec.  3.71(b) of this subchapter; and 
an individual appearing in a trademark or other non-patent matter 
pursuant to Sec.  11.14(e), whether representing a firm, corporation, 
or association are subject to the disciplinary jurisdiction of the 
Office, including Sec. Sec.  11.19(c)(2), (d) and (e); 11.20(a)(2), and 
(b); 11.21-11.23; 11.24; 11.25 -11.28, 11.32-11.45, and 11.49-11.60.
    (b) Jurisdiction of courts and voluntary bar associations. Nothing 
in these rules shall be construed to deny to any State or Federal Court 
such powers as are necessary for that court to maintain control over 
proceedings conducted before it, such as the power of contempt. 
Further, nothing in these rules shall be construed to prohibit any 
State or Federal Court, or a voluntary or mandatory bar association 
from censuring, reprimanding, suspending, disbarring, or otherwise 
disciplining its members, including registered practitioners for 
conduct regarding practice before the Office in any matter.
    (c) Misconduct--grounds for discipline. (1) Practitioners. Acts or 
omissions by a practitioner (including a suspended, excluded, or 
inactive practitioner), acting individually or in concert with any 
other person or persons constituting gross misconduct, violating the 
imperative USPTO Rules of Professional Conduct, or the oath taken by 
practitioner shall constitute misconduct and shall be grounds for 
discipline, whether or not the act or omission occurred in the course 
of providing legal services to a client, or in a matter pending before 
the Office. Grounds for discipline include:
    (i) Conviction of a crime (see Sec. Sec.  11.24, 11.803(d) and 
11.804(b));
    (ii) Discipline imposed in another jurisdiction (see Sec. Sec.  
11.24 and 11.803(e)(1) and (f)(4));
    (iii) Failure to comply with any order of a Court disciplining a 
practitioner, or any order of the USPTO Director disciplining a 
practitioner;
    (iv) Failure to respond to a written inquiry from OED Director in 
the course of an investigation into whether there has been a violation 
of the imperative USPTO Rules of Professional Conduct without 
asserting, in writing, the grounds for refusing to do so; or
    (v) Violation of the imperative USPTO Rules of Professional 
Conduct. See Sec.  11.100(a).
    (2) Other individuals. Acts or omissions by applicants for patent 
(Sec.  1.41(b) of this subchapter) representing themselves, or an 
individual applicant representing himself or herself and other 
individuals who are applicants pursuant to Sec. Sec.  1.31 or 
1.34(b)(4) of this subchapter; an individual who an assignee as 
provided for under Sec.  3.71(b) of this subchapter; and an individual 
appearing in a trademark or other non-patent matter pursuant to Sec.  
11.14(e), whether

[[Page 69532]]

representing a firm, corporation, or association who violate the 
provisions of Sec. Sec.  11.303(a)(1), 11.304, 11.305(a), or 11.804 
shall constitute misconduct and shall be grounds for discipline.
    (d) Petitions to disqualify a practitioner in ex parte or inter 
partes matters in the Office are not governed by Sec. Sec.  11.19 
through 11.806 and will be handled on a case-by-case basis under such 
conditions as the USPTO Director deems appropriate.
    (e) Unauthorized practice of law matters may be referred to the 
appropriate authority in the jurisdiction(s) where the act(s) occurred.


Sec.  11.20  Disciplinary sanctions.

    (a) Types of discipline. (1) For practitioners. The USPTO Director, 
after notice and opportunity for a hearing, may impose on a 
practitioner shown to be incompetent or disreputable, who is guilty of 
gross misconduct, or who violates a Rule of Professional Conduct 
currently in effect in the Office, any of the following types of 
discipline:
    (i) Exclusion from practice before the Office in patent, trademark 
or other non-patent law;
    (ii) Suspension from practice before the Office in patent, 
trademark or other non-patent law for an indefinite period, or 
appropriate fixed period of time not to exceed five years. Any order of 
suspension may include a requirement stated in the order that the 
practitioner satisfy certain conditions prior to reinstatement, 
including furnishing proof of rehabilitation;
    (iii) Reprimand, or
    (iv) Probation for not more than three years. Probation may be 
imposed in lieu of or in addition to any other disciplinary sanction. 
Any conditions of probation shall be stated in writing in the order 
imposing probation. The order shall also state whether, and to what 
extent, the practitioner or other person shall be required to notify 
clients of the probation. The order shall establish procedures for the 
supervision of probation. Violation of any condition of probation shall 
make the practitioner subject to revocation of probation, and the 
disciplinary sanction stated in the order imposing probation.
    (2) For Other Individuals. In regard to a patent applicant 
representing himself or herself, or representing himself or herself and 
other individual who are applicants under Sec. Sec.  1.31 or 1.33(b)(4) 
of this subchapter; an individual who is an assignee as provided for 
under Sec.  3.71(b) of this subchapter; an individual appearing in a 
trademark or other non-patent matter pursuant to Sec.  11.14(e), 
whether representing a firm, corporation, or association, the USPTO 
Director, after notice and opportunity for a hearing, may impose on 
said applicant, assignee, person, or individual appearing in a 
trademark or other non-patent matter shown to have violated a provision 
of Sec. Sec.  11.303(a)(1), 11.304, 11.305(a), or 11.804, may be 
appropriately sanctioned by, but not limited to, requiring the 
individual to be represented by counsel, striking the filing of any 
document, or dismissing the filing of an application with prejudice.
    (b) Conditions imposed with discipline. When imposing discipline, 
the practitioner, or other individual may be required to make 
restitution either to persons financially injured by the 
practitioner's, or other individual's conduct or to an appropriate 
client's security trust fund, or both, as a condition of probation or 
of reinstatement. Any other reasonable condition may also be imposed, 
including a requirement that the practitioner or other individual take 
and pass a professional responsibility examination.


Sec.  11.21  Warnings.

    Warning. A warning is not a disciplinary sanction. The OED 
Director, in consultation with and consent from a panel of the 
Committee on Discipline, may conclude an investigation with the 
issuance of a warning. The warning shall contain a brief statement of 
facts and relevant imperative USPTO Rules of Professional Conduct upon 
which the warning is based. The warning shall be final and not 
reviewable.


Sec.  11.22  Investigations.

    (a) The OED Director is authorized to investigate possible 
violations of an imperative Rule of Professional Conduct by 
practitioners; or possible violations of Sec. Sec.  11.303(a)(1), 
11.304, 11.305(a), or 11.804 by other individuals identified in Sec.  
11.19(a)(2). See Sec.  11.2(b)(2). The investigation may be based on 
information from any source whatsoever, or on a complaint where alleged 
or presented facts, if true, may warrant discipline. The information 
need not be in the form of a complaint.
    (b) Any practitioner, other individual (see Sec.  11.19(a)(2)), or 
nonpractitioner possessing knowledge or information concerning a 
possible violation of an imperative Rule of Professional Conduct 
currently in effect before the Office by a practitioner may report the 
violation to the OED Director. The OED Director may require that the 
report be presented in the form of an affidavit or declaration.
    (c) Initiation of investigations. An investigation may be initiated 
upon complaint or information. A staff attorney under the supervision 
of the OED Director shall conduct all investigations. Neither 
unwillingness nor neglect by a complainant to prosecute a charge, nor 
settlement, compromise, or restitution, shall in itself justify 
abatement of an investigation.
    (d)(1) Complaints. A complaint is a communication by a person 
outside the Office alleging or presenting facts of possible misconduct 
by a practitioner or other individual (see Sec.  11.19(a)(2)). A 
complaint shall be in writing and shall contain a brief statement of 
the facts upon which the complaint is based. The complaint need not be 
a sworn statement.
    (2) Information. Information is one or more written communications 
from any source alleging or containing facts that, if true, may warrant 
discipline for misconduct by a practitioner or other individual (see 
Sec.  11.19(a)(2)). The information need not be a sworn statement.
    (e) Preliminary screening of complaints and information. Under the 
supervision of the OED Director, a staff attorney shall examine all 
complaints and information. The staff attorney, after such preliminary 
inquiry as appears appropriate, shall determine whether the complaint 
or information is to be docketed. A complaint or information shall be 
docketed if it:
    (1) Is not unfounded on its face;
    (2) Contains allegations or information which, if true, would 
constitute a violation of the practitioner's oath or an imperative Rule 
of Professional Conduct currently in effect before the Office that 
would merit discipline; and
    (3) Is within the jurisdiction of the Office.
    (f) Decision not to docket and notice to complainant. If OED 
Director determines that a matter is not to be docketed, the OED 
Director shall so notify the complainant and the practitioner or other 
individual (see Sec.  11.19(a)(2)), giving a brief statement of the 
reasons therefor. The OED Director's decision is final and not subject 
to review.
    (g) Docketing of complaint or information; notification to 
complainant. A docketed complaint or information shall be assigned a 
docket number with the first two digits showing the fiscal year in 
which the complaint is docketed. Complainants shall be promptly advised 
in writing by the OED Director or a staff attorney of the docketing of 
the complaint.

[[Page 69533]]

    (h) Notification. The OED Director or staff attorney shall promptly 
notify the practitioner or other individual (see Sec.  11.19(a)(2)) in 
writing when a formal investigation into a practitioner's or other 
individual's conduct has been initiated. This notice shall include a 
copy of the complaint, information, or other relevant documents upon 
which the investigation is based, a request for a written response from 
the practitioner or other individual, and any questions reasonably 
likely to elicit answers, records, and information helpful in the 
conduct of the investigation.
    (i) Duty to reply; response. A practitioner, or other individual 
(see Sec.  11.19(a)(2)) under investigation has an obligation to reply 
to the OED Director's written inquiries in the conduct of an 
investigation. The reply shall set forth the position of the 
practitioner or other individual under investigation with respect to 
allegations contained in the complaint, facts contained in the 
information, and all inquiries by the OED Director. The reply shall be 
filed with the OED Director within thirty calendar days after the 
mailing date of the notice in paragraph (h) of this section. A single 
extension of time shall be granted to reply to an inquiry upon written 
request of the practitioner or other individual (see Sec.  
11.19(a)(2)), and in no case shall the extension of time exceed thirty 
days.
    (j) Request for information by OED Director. (1) In the course of 
the investigation, the OED Director may request information concerning 
the practitioner's actions from:
    (i) The complainant,
    (ii) The practitioner,
    (iii) Another individual as defined by Sec.  11.19(a)(2), or
    (iv) Any party who may reasonably be expected to have information.
    (2) The OED Director, or staff attorney or other representative may 
also request information from a noncomplaining client after obtaining 
either the consent of the practitioner or, upon a written showing of 
good cause, the authorization of the Director (see Sec.  11.23(a)). 
Neither a request for, nor disclosure of, information shall constitute 
a violation of any of the Rules of Professional Conduct contained in 
Sec. Sec.  11.100 et seq.
    (k) Request for financial records by OED Director. In the course of 
an investigation, the OED Director, alone or through a staff attorney, 
may examine financial books and records maintained by a practitioner 
for the practice before the Office, including, without limitation, any 
and all trust accounts, fiduciary accounts, and operating accounts 
maintained by the practitioner or his or her law firm. The OED 
Director, alone or through a staff attorney, may also examine any trust 
account maintained by a practitioner whenever the OED Director 
reasonably believes that the trust account may not be in compliance 
with the Rules of Professional Conduct. In the exercise of this 
authority, the OED Director or staff attorney may seek the assistance 
of State bar counsel to obtain such summons and subpoenas as he or she 
may reasonably deem necessary for the effective conduct of an 
investigation or an examination of a trust account. In every case in 
which the OED Director or staff attorney initiates examination of a 
trust account, or seeks any summons or subpoena in the conduct of an 
examination of or an investigation concerning said trust account, other 
than on the basis of a complaint against the practitioner, the OED 
Director or staff attorney shall file a written statement as part of 
the record in the case setting forth the reasons supporting the belief 
that the subject trust account may not be in compliance with the Rules 
of Professional Conduct. After State bar counsel agrees to seek such 
summons and subpoenas, a copy of the written statement shall be 
delivered to the practitioner whose trust account is the subject of the 
investigation.
    (l) Failure to reply to OED Director. If a practitioner, or other 
individual (see Sec.  11.19(a)(2)) fails to reply to the request for 
information sought under paragraph (j) of this section, fails to 
provide requested financial records sought under paragraph (k) of this 
section, or replies evasively in the conduct of an investigation, the 
OED Director may request the Committee on Discipline to enter an 
appropriate finding of probable cause of violating Sec.  11.804(d).
    (m) Disposition of investigation. Upon the consideration of an 
investigation, the OED Director may:
    (1) Close the investigation with neither a warning, nor 
disciplinary action; or
    (2) Issue a warning to the practitioner or other individual (see 
Sec.  11.19(a)); or
    (3) Institute formal charges with the prior approval of the 
Committee on Discipline; or
    (4) Enter into a diversion agreement with the approval of the USPTO 
Director (see Sec.  11.26).
    (n) Closing investigation with no warning. The OED Director shall 
terminate an investigation and decline to refer a matter to the 
Committee on Discipline if the OED Director determines that:
    (1) The complaint is unfounded; or
    (2) The complaint is not within the jurisdiction of the Office; or
    (3) As a matter of law, the conduct questioned or alleged does not 
constitute misconduct, even if the conduct may involve a legal dispute; 
or
    (4) The available evidence shows that the practitioner, or other 
individual (see Sec.  11.19(a)(2)) did not engage or did not willfully 
engage in the misconduct questioned or alleged; or
    (5) There is no credible evidence to support any allegation of 
misconduct on the part of the practitioner, or other individual (see 
Sec.  11.19(a)(2)), or
    (6) The available evidence could not reasonably be expected to 
support any allegation of misconduct under a ``clear and convincing'' 
evidentiary standard.


Sec.  11.23  Committee on Discipline.

    (a) The USPTO Director shall appoint a Committee on Discipline. The 
Committee on Discipline shall consist of at least three employees of 
the Office, plus at least three alternate members who also are 
employees of the Office. None of the Committee members or alternates 
shall report directly or indirectly to the OED Director or the General 
Counsel. Each Committee member and the alternates shall be a member in 
good standing of the bar of the highest court of a State. The Committee 
members and alternates shall select a Chairperson from among 
themselves. The Committee or its panels shall meet at regular intervals 
with the OED Director. Three Committee members or alternates so 
selected will constitute a panel of the Committee.
    (b) Powers and duties of the Committee on Discipline. The Committee 
shall have the power and duty:
    (1) To appoint two or more panels of its members and alternates, 
each consisting of at least three Committee members or alternates, who 
shall review information and evidence presented by the OED Director;
    (2) To meet as a panel at the request of the OED Director and, 
after reviewing evidence presented by the OED Director, shall by 
majority vote, to determine whether there is probable cause to bring 
charges under Sec.  11.32 against a practitioner or other individual 
(see Sec.  11.19(a)(2)). When probable cause is found regarding a 
practitioner or other individual (see Sec.  11.19(a)(2)), no Committee 
member or alternate on the panel, employee under the direction of the 
OED Director, or employee under the direction of the Deputy General 
Counsel for Intellectual Property shall participate in rendering a 
decision on any complaint filed against the practitioner or other 
individual;
    (3) To assign a Contact Member to review and approve or suggest

[[Page 69534]]

modifications of recommendations by the OED Director for dismissals, 
and warnings; and
    (4) To prepare and forward its own probable cause findings and 
recommendations to the OED Director.
    (c) No discovery shall be authorized of, and no member of or 
alternate to the Committee on Discipline shall be required to testify 
about, deliberations of the Committee on Discipline or of any panel.


Sec.  11.24  Interim suspension and discipline based upon reciprocal 
discipline.

    (a) Notification. A practitioner who has been disbarred (including 
disbarred or excluded on consent) or suspended by a disciplinary court, 
or who has resigned in lieu of a disciplinary proceeding before or 
while an investigation is pending shall notify the OED Director in 
writing of the same within ten days from the date he or she is so 
suspended, disbarred, excluded or disbarred on consent, or has 
resigned. Upon learning that a practitioner subject to the disciplinary 
jurisdiction of the Office has been disbarred, suspended or has 
resigned in lieu of disciplinary action, the OED Director shall obtain 
a certified copy of the record of the suspension, disbarment or 
resignation from the disciplinary court, and file the same with the 
USPTO Director and the hearing officer if a disciplinary proceeding is 
pending at the time. Every attorney who has been suspended, or 
disbarred, or who has resigned shall be disqualified from practicing 
before the Office in patent, trademark, and other non-patent cases, as 
a practitioner, during the time of suspension, disbarment, or 
resignation.
    (b) Notice to Show Cause and Interim Suspension. (1) Following 
receipt of a certified copy of the record, the USPTO Director shall 
enter an order suspending the practitioner from practice before the 
Office and afford the practitioner an opportunity to show cause, within 
40 days, why an order for identical disciplinary action should not be 
entered. Upon response, and any reply by the OED Director authorized by 
the USPTO Director, or if no response is timely filed, the USPTO 
Director will enter an appropriate order.
    (2) After said notice and opportunity to show cause why identical 
disciplinary action should not be taken, and if one or more material 
facts set forth in paragraphs (c)(1) through (c)(4) of this section are 
in dispute, the USPTO Director may enter any appropriate disciplinary 
sanction upon any practitioner who is admitted to practice before the 
Office for failure to comply with the Rules of Professional 
Responsibility.
    (3) The other provisions of this part providing a procedure for the 
discipline of a practitioner do not apply to proceedings pursuant to 
this section.
    (c) Proof of misconduct. (1) In all proceedings under this section, 
a final adjudication in a disciplinary court shall establish 
conclusively the misconduct clearly disclosed on the face of the record 
upon which the discipline is predicated. A certified copy of the record 
of suspension, disbarment, or resignation shall be conclusive evidence 
of the commission of professional misconduct in any reciprocal 
disciplinary proceeding based thereon. However, nothing this paragraph 
(c) shall preclude the practitioner from demonstrating at the hearing 
provided for under paragraph (b) of this section by clear and 
convincing evidence the existence of one or more of material facts in 
paragraphs (c)(1)(i) through (c)(1)(iv) of this section as a reason for 
not imposing the identical discipline. The practitioner shall bear the 
burden of demonstrating, by clear and convincing evidence that the 
identical discipline should not be imposed because:
    (i) The procedure elsewhere was so lacking in notice or opportunity 
to be heard as to constitute a deprivation of due process; or
    (ii) There was such infirmity of proof establishing the misconduct 
as to give rise to the clear conviction that the Office could not, 
consistently with its duty, accept as final the conclusion on that 
subject; or
    (iii) The imposition of the same discipline by the Office would 
result in grave injustice; or
    (iv) The misconduct established warrants substantially different 
discipline in the Office.
    (2) If the practitioner does not satisfy the practitioner's burden 
of showing the existence of one of material facts of paragraphs 
(c)(1)(i), (c)(1)(ii) or (c)(1)(iii) of this section, then a final 
determination by a disciplinary court that a practitioner has been 
guilty of professional misconduct shall conclusively establish the 
misconduct for the purpose of a reciprocal disciplinary proceeding in 
the Office.
    (d) Reciprocal discipline-action where practice has ceased. (1) If 
the practitioner has promptly notified the OED Director of his or her 
discipline in another jurisdiction, and otherwise establishes to the 
satisfaction of the USPTO Director, by affidavit or otherwise, that the 
practitioner has voluntarily ceased all practice before the Office, and 
the OED Director confirms the same, the USPTO Director will favorably 
consider that the effective date of any suspension or disbarment be 
imposed nunc pro tunc to the date respondent voluntarily ceased all 
practice before the Office. The USPTO Director will not favorably 
consider retroactive effectiveness of a suspension or disbarment if the 
practitioner has not also complied with the provisions of Sec.  11.58, 
as such section would apply if voluntary cessation from all practice 
before the Office were treated as a suspension ordered by the USPTO 
Director.
    (2) Action when reciprocal discipline is not recommended. If the 
USPTO Director concludes that reciprocal discipline should not be 
imposed, the USPTO Director shall accept the facts found by the 
disciplinary court unless he or she makes a finding under paragraphs 
(c)(1)(i), (c)(1)(ii) or (c)(1)(iii) of this section. In the absence of 
such a finding, the USPTO Director shall enter an appropriate order.
    (e) Appropriate Order. The USPTO Director may impose the identical 
discipline unless the practitioner demonstrates by clear and convincing 
evidence, or the USPTO Director finds said evidence on the face of the 
record on which the discipline is predicated, that one or more of the 
grounds set forth in paragraph (a) of this section exists. If the USPTO 
Director determines that the identical discipline should not be 
imposed, the USPTO Director shall enter an appropriate order, including 
entry of a different sanction on the practitioner, or referral of the 
matter to a hearing officer for further consideration and 
recommendation.
    (f) Reinstatement following discipline. A practitioner may petition 
for reinstatement under conditions set forth in Sec.  11.60 no sooner 
than after completion of the suspension, disbarment, or probation, and 
conditions for reinstatement to the bar of the highest court of the 
State where the practitioner was suspended or disbarred.


Sec.  11.25  Interim suspension and discipline based upon conviction of 
committing a serious crime or other crime coupled with confinement or 
commitment to imprisonment.

    (a) Serious crimes. If the serious crime for which the practitioner 
was convicted involves moral turpitude per se, the practitioner shall 
be excluded, or if the conduct underlying the offense involved moral 
turpitude, the practitioner shall be excluded. A conviction shall be 
deemed a felony if the judgment was entered as a felony irrespective of 
any subsequent order suspending sentence or granting probation.

[[Page 69535]]

    (b) Other crime coupled with confinement or commitment to 
imprisonment. Every practitioner convicted of a crime in a court of the 
United States, or of any state, district, territory of the United 
States, or of a foreign country shall be disqualified from practicing 
before the Office in patent, trademark or other non-patent law matters 
as attorney or patent agent during the actual time of confinement or 
commitment to imprisonment and during release from actual confinement 
on condition of probation or parole.
    (c) Notification. A practitioner who has been convicted of a 
serious crime in a court of the United States, or of any state, 
district, territory of the United States, or of a foreign country, 
except as to misdemeanor traffic offenses or traffic ordinance 
violations, not including the use of alcohol or drugs, or a 
practitioner who is convicted of any other crime and is confined or 
committed to imprisonment shall inform the OED Director within ten days 
from the date of such conviction. Upon learning that a practitioner has 
been convicted of a serious crime or another crime coupled with 
confinement or commitment to imprisonment, the OED Director shall 
obtain a certified copy of the conviction or docket entry, and file the 
same with the USPTO Director.
    (d) Notice to show cause and interim suspension. (1) Following 
receipt of a certified copy of the court record or docket entry of the 
conviction, the USPTO Director shall enter an order suspending the 
practitioner in the interim from practice before the Office until the 
time for appeal has elapsed, if no appeal has been taken, or until the 
judgment or conviction has been affirmed on appeal, or has otherwise 
become final, and until further order of the USPTO Director. The USPTO 
Director may, sua sponte, decline to impose or may set aside, the 
suspension when it appears to be in the interest of justice to do so, 
with due regard being given to maintaining the integrity of, and 
confidence in, the profession of law. Upon a conviction becoming final, 
or imposition of a sentence or probation, the USPTO Director shall 
afford the practitioner an opportunity to show cause, within 40 days, 
why an order disciplining the practitioner should not be entered. Upon 
response, or if no response is timely filed, the USPTO Director shall 
enter an appropriate order.
    (2) After said opportunity to show cause why disciplinary action 
should not be taken, and if one or more material facts are in dispute, 
the USPTO Director may enter an order disciplining any practitioner 
recognized to practice before the Office for failure to comply with the 
Rules of Professional Responsibility.
    (3) The other provisions of this Part providing a procedure for the 
discipline of a practitioner do not apply to proceedings pursuant to 
this section to discipline a practitioner convicted of a serious crime 
or a practitioner who is convicted of a crime and is confined or 
committed to imprisonment.
    (e) Proof of guilt. A certified copy of the court record or docket 
entry of the conviction shall be conclusive evidence of the guilt of 
the crime of which the practitioner has been convicted, and of any 
imposed confinement or commitment to imprisonment. However, nothing 
this paragraph (e) shall preclude the practitioner from demonstrating 
in said hearing afforded by the USPTO Director, by clear and convincing 
evidence, material facts to be considered when determining if a serious 
crime was committed and whether a disciplinary sanction should be 
entered.
    (f) If the USPTO Director finds that the offense involves moral 
turpitude per se, or that the conduct underlying the offense involves 
moral turpitude, the practitioner shall be excluded. If the USPTO 
Director finds that the practitioner was convicted of a crime and has 
been incarcerated, regardless of whether the offense involved moral 
turpitude, the practitioner shall be suspended or excluded and shall 
not be eligible for reinstatement during the time of confinement or 
commitment to imprisonment or release from actual confinement on 
conditions of probation or parole. If the USPTO Director finds that the 
practitioner has been convicted of a serious crime without being 
incarcerated, the USPTO Director may either continue the suspension or 
exclude the practitioner from practice before the Office. A copy of the 
USPTO Director's decision shall be served on the practitioner by 
certified mail, or any other available means, and upon the OED 
Director.
    (g) Crime determined not to be serious crime. If the USPTO Director 
determines under paragraph (d) of this section not only that the crime 
is not a serious crime, but also that the practitioner has not been 
confined or committed to imprisonment, an order shall be entered 
reinstating the practitioner immediately. The proceeding shall continue 
(without referral of the matter to the Committee on Discipline under 
Sec.  11.23) on a complaint pursuant to Sec.  11.34 that the OED 
Director files within the time set by the order, and an answer pursuant 
to Sec.  11.35 that the practitioner files within the time set by the 
order. A disciplinary proceeding may continue before the hearing 
officer, and the hearing officer may hold such hearings and receive 
such briefs and other documents under Sec. Sec.  11.35 through 11.53, 
as the hearing officer deems appropriate. However, the proceeding 
before the hearing officer shall not be concluded until all direct 
appeals from conviction of the crime have been completed.
    (h) Reinstatement.--(1) Upon reversal, vacation or setting aside of 
conviction. A practitioner suspended or excluded under this section may 
file with the USPTO Director, at any time, a certificate demonstrating 
that the conviction, for which interim suspension was imposed, has been 
reversed, vacated or set aside by a court having jurisdiction of the 
criminal matter. Upon the filing of the certificate, the USPTO Director 
shall promptly enter an order reinstating the practitioner, but the 
reinstatement shall not terminate any other disciplinary proceeding 
then pending against the practitioner, the disposition of which shall 
be determined by the USPTO Director or hearing officer before whom the 
matter is pending, on the basis of all available evidence.
    (2) Following conviction of a crime coupled with confinement or 
commitment to imprisonment. Any practitioner convicted of a crime and 
confined or committed to imprisonment, and who is disciplined in whole 
or in part in regard thereto, may petition for reinstatement under 
conditions set forth in Sec.  11.60 no sooner than five years following 
discharge after completion of service of his or her sentence, or after 
completion of service under probation or parole, whichever is later.
    (i) Other crimes not coupled with confinement or commitment to 
imprisonment. Upon being notified by a practitioner or upon receipt of 
a certified copy of a court record demonstrating that a practitioner 
has been found convicted of a crime other than a serious crime, and 
that the practitioner has not been confined or committed to 
imprisonment, the OED Director shall investigate the matter under Sec.  
11.22 and proceed as appropriate under Sec. Sec.  11.26, 11.27, 11.28, 
and/or 11.32.


Sec.  11.26  Diversion.

    (a) Availability of diversion. Subject to the limitations in 
paragraph (b) of this section, the OED Director may offer diversion to 
a practitioner under investigation for a disciplinary violation.
    (b) Limitations on diversion. Diversion shall be available in 
matters

[[Page 69536]]

of alleged minor misconduct, but shall not be available where:
    (1) The alleged misconduct resulted in, or is likely to result in, 
prejudice to a client or another person; or
    (2) Discipline previously has been imposed, diversion previously 
has been offered and accepted, or a warning was previously issued, 
unless the OED Director finds the presence of exceptional circumstances 
justifying a waiver of this limitation; or
    (3) The alleged misconduct involves fraud, dishonesty, deceit, 
misappropriation or conversion of client funds or other things of 
value, or misrepresentation; or
    (4) The alleged misconduct constitutes a criminal offense under 
applicable law.
    (c) Procedures for diversion. At the conclusion of an 
investigation, the OED Director, at his or her sole discretion, may 
offer to a practitioner being investigated for misconduct the option of 
entering a diversion program in lieu of other procedures available to 
the OED Director. The OED Director shall be free to accept or reject a 
request by the practitioner for diversion. If the practitioner accepts 
diversion, a written diversion agreement shall be entered into by both 
parties including, inter alia, the time of commencement and completion 
of the diversion program, the content of the program, and the criteria 
by which successful completion of the program will be measured. The 
diversion agreement shall state that it is subject to review by the 
USPTO Director, to whom it shall be submitted for review and approval 
after execution by the OED Director and the practitioner.
    (d) Content of diversion program. The diversion program shall be 
designed to rehabilitate the practitioner's practices or procedures 
leading to the alleged misconduct of the practitioner. It may include 
participation in formal courses of education sponsored by a voluntary 
bar organization, a law school, or another organization; completion of 
an individualized program of instruction specified in the agreement or 
supervised by another entity; or any other arrangement agreed to by the 
parties which is designed to improve the ability of the practitioner to 
practice in accordance with the Rules of Professional Conduct.
    (e) Proceedings after completion or termination of diversion 
program. Except as provided in paragraph (b)(2) of this section, if the 
practitioner successfully completes a diversion program, the OED 
Director's investigation shall be closed. The practitioner shall have a 
record of the misconduct that was investigated, and the record may be 
considered in determining the discipline, if any, to be imposed based 
on other charges of misconduct brought against the practitioner in the 
future. If the practitioner does not successfully complete the 
diversion program, the OED Director shall take such other action as is 
authorized and prescribed under Sec.  11.32.


Sec.  11.27  Exclusion by consent.

    (a) Required affidavit. The OED Director may confer with a 
practitioner concerning possible violations by the practitioner of the 
Rules of Professional Conduct whether or not a disciplinary proceeding 
has been instituted. A practitioner who is the subject of an 
investigation or a pending disciplinary proceeding based on allegations 
of misconduct, and who desires to resign or settle the matter may only 
do so by consenting to exclusion and delivering to the OED Director an 
affidavit declaring the consent of the practitioner to exclusion and 
stating:
    (1) That the consent is freely and voluntarily rendered, that the 
practitioner is not being subjected to coercion or duress, and that the 
practitioner is fully aware of the implication of consenting to 
exclusion;
    (2) That the practitioner is aware that there is currently pending 
an investigation into, or a proceeding involving, allegations of 
misconduct, the nature of which shall be specifically set forth in the 
affidavit;
    (3) That the practitioner submits the consent because the 
practitioner knows that if disciplinary proceedings based on the 
alleged misconduct were brought, the practitioner could not 
successfully defend against them; and
    (4) That it may be conclusively presumed, for the purpose of 
determining any request for reinstatement under Sec.  11.60, that the 
alleged facts on which the complaint was based are true and that the 
practitioner violated one or more Rules of Professional Conduct.
    (b) Action by the USPTO Director. Upon receipt of the required 
affidavit, the OED Director shall file the affidavit and any related 
papers with the USPTO Director for review and approval. Upon such 
approval, the USPTO Director will enter an order excluding the 
practitioner on consent.
    (c) When an affidavit under paragraph (a) of this section is 
received after a complaint under Sec.  11.34 has been filed, the OED 
Director shall notify the hearing officer. The hearing officer shall 
enter an order transferring the disciplinary proceeding to the USPTO 
Director, who may enter an order excluding the practitioner on consent.
    (d) Reinstatement. Any practitioner excluded by consent under this 
section cannot petition for reinstatement for five years. A 
practitioner excluded on consent who intends to reapply for admission 
to practice before the Office must comply with the provisions of Sec.  
11.58, and apply for reinstatement in accordance with Sec.  11.60. 
Willful failure to comply with the provisions of Sec.  11.58 
constitutes grounds for denying an application for reinstatement.


Sec.  11.28  Incompetent and incapacitated practitioners.

    (a) Scope of disability proceedings. This section applies to all 
disability matters, specifically including those to determine:
    (1) Whether a practitioner has been judicially declared to be 
mentally incompetent or involuntarily committed to a mental hospital as 
an inpatient;
    (2) Whether the hearing officer should apply to a Court for an 
order requiring a practitioner to submit to an examination by qualified 
medical experts regarding an alleged disability or addiction;
    (3) Whether a practitioner is incapacitated from continuing to 
practice before the Office by reason of disability or addiction;
    (4) Whether the OED Director should hold in abeyance a disciplinary 
investigation, or a hearing officer should hold in abeyance a 
disciplinary proceeding because of a practitioner's alleged disability 
or addiction;
    (5) Whether a practitioner, having previously been suspended solely 
on the basis of a judicial order declaring the practitioner to be 
mentally incompetent, has subsequently been judicially declared to be 
competent and is therefore entitled to have the prior suspension 
terminated;
    (6) Whether a practitioner, having previously been suspended solely 
on the basis of an involuntary commitment to a mental hospital as an 
inpatient, has subsequently been discharged from inpatient status and 
is therefore entitled to have the prior order of suspension terminated; 
and
    (7) Whether a practitioner, having previously acknowledged or 
having been found by the hearing officer or USPTO Director to have 
suffered from a prior disability or addiction sufficient to warrant 
suspension (whether or not any suspension has yet occurred), has 
recovered to the extent, and for the period of time, sufficient to 
justify the conclusion that the practitioner is fit to resume or 
continue the practice before the Office and/or is fit to defend the

[[Page 69537]]

alleged charges against the practitioner in a disciplinary 
investigation or disciplinary proceeding that has been held in abeyance 
pending such recovery.
    (b) Appointment of counsel. In a disability matter wherein the OED 
Director contends that the practitioner should be excluded or suspended 
from practice before the Office, subjected to probationary conditions, 
or required to submit to a medical examination, the hearing officer 
shall authorize the OED Director to apply to a court of competent 
jurisdiction for an order appointing counsel to represent the 
practitioner whose disability or addiction is under consideration if it 
appears to the hearing officer's satisfaction, based on the 
practitioner's motion or notice of the OED Director, that otherwise the 
practitioner will appear pro se and may therefore be without adequate 
representation.
    (c) Proceedings before the hearing officer. (1) Motions. All 
proceedings addressing disability matters before a hearing officer 
shall be initiated by motion filed by the OED Director or practitioner. 
In addition to any other requirement of Sec.  11.43, each such motion 
shall include or have attached thereto:
    (i) A brief statement of all material facts;
    (ii) A proposed petition and/or recommendation to be filed with the 
USPTO Director if the movant's motion is granted by the hearing 
officer; and
    (iii) Affidavits, medical reports, official records, or other 
documents setting forth or establishing any of the material facts on 
which the movant is relying.
    (2) Response. The non-moving party shall file a response to any 
motion hereunder setting forth the following:
    (i) All objections, if any, to the actions requested in the motion;
    (ii) An admission, denial or allegation of lack of knowledge with 
respect to each of the material facts in the movant's papers; and
    (iii) Affidavits, medical reports, official records, or other 
documents setting forth facts on which the non-moving party intends to 
rely for purposes of disputing or denying any material fact set forth 
in the movant's papers.
    (iv) Except as the hearing officer may otherwise order, the 
response shall be served and filed within fourteen (14) days after 
service of the motion unless such time is shortened or enlarged by the 
hearing officer for good cause shown.
    (d) Mentally disabled practitioners. (1) Action by OED Director. 
The OED Director, upon obtaining proof that a practitioner has been 
judicially declared to be mentally incompetent or has been 
involuntarily committed to a mental hospital as an inpatient, shall 
either
    (i) Promptly request authority from a panel of the Committee on 
Discipline to submit evidence (appropriate affidavits and/or other 
documentary proof) to a hearing officer seeking, pursuant to this 
section, an order from the USPTO Director directing that the 
practitioner's name be transferred to disability inactive status, and 
that the practitioner cease practicing before the Office effective 
immediately and for an indefinite period of time until further ordered 
by the USPTO Director; or
    (ii) Notify a panel of the Committee on Discipline of the OED 
Director's intention not to file a petition under paragraph (d)(1)(i) 
of this section and the reasons therefor. All further proceedings shall 
be pursuant to paragraph (f) of this section.
    (e) Incapacitation due to disability or addiction.--(1) OED 
Director's request. If the OED Director receives information providing 
reason to believe that a practitioner is incapacitated from continuing 
to practice before the Office because of disability or addiction and 
the practitioner is nonetheless likely to offer or attempt to perform 
legal services while so incapacitated, the OED Director may request a 
panel of the Committee on Discipline to find probable cause authorizing 
the OED Director to petition the USPTO Director for an order 
transferring the practitioner to disability inactive status effective 
immediately for an indefinite period until further ordered by the USPTO 
Director, or possibly imposing probationary conditions with or without 
a period of suspension. All further proceedings shall be pursuant to 
paragraph (f) of this section, unless the practitioner agrees to have 
his or her name transferred to disability inactive status, and to cease 
practicing before the Office effective immediately and for an 
indefinite period of time until further ordered by the USPTO Director.
    (2) Required evidence. In the absence of unusual circumstances, 
probable cause sufficient to support the OED Director's request under 
paragraph (e)(1) of this section shall include, either a written 
acknowledgment of the practitioner or a report of an examination by one 
or more qualified medical experts confirming the existence of the 
alleged disability or addiction and otherwise indicating the 
practitioner to be incapacitated as alleged.
    (f) Further proceedings for matters in paragraphs (d) and (e) of 
this section.--(1) Action by Committee on Discipline panel. A panel of 
the Committee on Discipline may issue a probable cause determination 
granting or denying the OED Director's request based on written 
acknowledgments, affidavits, and other documentary proof.
    (2) Action by OED Director. Upon issuance of a finding of probable 
cause, the OED Director shall file a motion provided for in paragraph 
(c) of this section with the hearing officer. A copy of the motion 
shall be served on the practitioner in accordance with Sec.  11.35, and 
upon the practitioner's guardian, if any and known.
    (3) Response by Practitioner. The practitioner may respond with a 
motion in accordance with paragraph (c) of this section. The hearing 
officer will otherwise follow the procedures set forth in Sec. Sec.  
11.37 through 11.54.
    (4) Initial decision by the hearing officer. The hearing officer 
shall urge a practitioner who is not represented by counsel to obtain 
counsel of his or her own choice to represent the practitioner if it is 
determined that the practitioner is without adequate representation. 
The hearing officer shall enter a recommendation to grant or deny the 
OED Director's motion based on the affidavits and other documentary 
proof of the parties, unless the hearing officer determines that there 
is a genuine issue concerning one or more of the material facts, and 
issues an order for an evidentiary hearing. A copy of the hearing 
officer's recommendation shall be served on the practitioner, the 
practitioner's guardian, if any, and the OED Director.
    (5) Appeal. The OED Director or practitioner may, as a matter of 
right, appeal the hearing officer's recommendation in accordance with 
the provisions of Sec.  11.55.
    (6) Action by USPTO Director. When a practitioner has been 
judicially declared to be mentally incompetent or has been 
involuntarily committed to a mental hospital as an inpatient, the USPTO 
Director, upon proper proof of that fact, shall enter an order 
directing that the practitioner's name be transferred to disability 
inactive status, and that the practitioner cease practicing before the 
Office in patent, trademark, and other non-patent law effective 
immediately and for an indefinite period of time until further ordered 
by the USPTO Director. A copy of the order shall be served upon the 
practitioner's guardian or counsel, or in the absence thereof, upon the 
practitioner and the director of the mental hospital, if any, in such 
manner as the USPTO Director may direct. If at any time thereafter the 
practitioner is

[[Page 69538]]

judicially declared to be competent or discharged from inpatient status 
in the mental hospital, the USPTO Director may dispense with further 
evidence that the disability has ended and may direct the reinstatement 
of the practitioner's former recognition or registration upon such 
terms as is deemed appropriate. In a case of addiction to drugs or 
intoxicants, the USPTO Director alternatively may consider the 
possibility of probationary conditions.
    (g) Self-reported incapacitation due to disability or addiction; no 
intent to continue representation.--(1) OED Director's request. If the 
OED Director receives from a practitioner or the practitioner's 
guardian either a written acknowledgment of the practitioner or 
guardian confirming the existence of the alleged disability or 
addiction, and otherwise showing the practitioner is incapacitated as 
alleged, or a report of an examination by one or more qualified medical 
experts providing reason to believe that a practitioner is 
incapacitated from continuing to practice before the Office because of 
disability or addiction, and the practitioner does not intend to offer 
or attempt to perform legal services while so incapacitated, the OED 
Director shall petition the USPTO Director for an order directing that 
the practitioner's name be transferred to disability inactive status, 
and that the practitioner cease practicing before the Office in patent, 
trademark, and other non-patent law effective immediately and for an 
indefinite period of time until further ordered by the USPTO Director. 
In the case of addiction to drugs or intoxicants, the OED Director may 
petition the USPTO Director to prohibit reinstatement absent 
satisfaction of specified conditions.
    (2) Action by the USPTO Director. When a practitioner is 
incapacitated from continuing to practice before the Office because of 
disability or addiction, and reports the same to the OED Director, the 
USPTO Director, upon proper proof of that disability or addiction, 
shall enter an order directing that the practitioner's name be 
transferred to disability inactive status, and that the practitioner 
cease practicing before the Office in patent, trademark, and other non-
patent law effective immediately and for an indefinite period of time 
until further ordered by the USPTO Director. A copy of the order shall 
be served upon the practitioner, and the practitioner's guardian, if 
any, in such manner as the USPTO Director may direct. In a case of 
addiction to drugs or intoxicants, the USPTO Director may prohibit 
reinstatement absent satisfaction of specified conditions.
    (h) Holding in abeyance a disciplinary proceeding because of 
disability or addiction.--(1) Practitioner's motion. In the course of a 
disciplinary proceeding under Sec.  11.32, but before an initial 
decision is mailed, the practitioner therein may file a motion 
requesting the hearing officer to enter an order holding such 
proceeding in abeyance based on the contention that the practitioner is 
suffering from a disability or addiction that makes it impossible for 
the practitioner to adequately defend the charges in the disciplinary 
proceeding. The practitioner's motion shall be accompanied by all 
pertinent medical records and in all cases must include a signed form 
acknowledging the alleged incapacity by reason of disability or 
addiction.
    (2) Disposition of practitioner's motion. The hearing officer shall 
decide the motion and any response thereto. If the motion satisfies 
paragraph (h)(1) of this section, the hearing officer shall:
    (i) Enter a temporary order holding the disciplinary proceeding in 
abeyance (but not any investigation instituted by the OED Director with 
respect to the practitioner);
    (ii) Submit to the USPTO Director a report that includes a 
petition, prepared by the OED Director, seeking from the USPTO Director 
an order immediately transferring the practitioner to disability 
inactive status and otherwise precluding the practitioner from practice 
before the Office in patent, trademark and other non-patent law until a 
determination is made of the practitioner's capability to resume 
practice before the Office in a proceeding instituted by the 
practitioner under paragraph (h)(2)(i) of this section; and
    (iii) If the OED Director raises a genuine issue as to any material 
fact concerning the practitioner's self-alleged disability or 
addiction, to enter an order referring such issue(s) to the hearing 
officer for an evidentiary hearing pursuant to paragraph (e) of this 
section. The temporary abeyance order shall remain in effect until a 
determination is made by the hearing officer that the practitioner is 
not incapacitated and that resumption of the matters held in abeyance 
would be proper and advisable.
    (i) Determination of practitioner's recovery and removal of 
disability or addiction.--(1) Scope of rule. This section applies to 
disability matters involving allegations that a practitioner's prior 
disability or addiction has been removed, including proceedings for 
reactivation or for resumption of disciplinary matters being held in 
abeyance.
    (2) Reactivation. Any practitioner transferred to disability 
inactive status for incapacity by reason of disability or addiction 
shall be entitled to file a motion for reactivation once a year 
beginning at any time not less than one year after the initial 
effective date of suspension, or once during any shorter interval 
provided by the USPTO Director's order of suspension or any 
modification thereof. In addition to complying with all applicable 
rules, such motion shall conform to the requirements of paragraph 
(f)(3) of this section, and include all alleged facts showing that the 
practitioner's disability or addiction has been removed and that the 
practitioner is fit to resume practice before the Office.
    (3) Contents of motion for reactivation. A motion for reactivation 
alleging that a practitioner has recovered from a prior disability or 
addiction shall be accompanied by all available medical reports or 
similar documents relating thereto and shall also include allegations 
specifically addressing the following matters:
    (i) The nature of the prior disability or addiction, including its 
beginning date and the most recent date (both dates approximate if 
necessary) on which the practitioner was still afflicted with the prior 
disability;
    (ii) The relationship between the prior disability or addiction and 
the practitioner's incapacity to continue to practice before the Office 
during the period of such prior disability or addiction;
    (iii) In the case of prior addiction, for an appropriate prior 
period (including the entire period following any suspension thereof), 
the dates or period (approximate if necessary) for each and every 
occasion on or during which the practitioner used any drugs or 
intoxicants having the potential to impair the practitioner's capacity 
to practice before the Office, whether or not such capacity was in fact 
impaired;
    (iv) A brief description of the supporting medical evidence 
(including names of medical or other experts) that the practitioner 
expects to submit in support of the alleged recovery and 
rehabilitation;
    (v) A written statement disclosing the name of every medical expert 
(such as psychiatrist, psychologist, or physician) or other expert and 
hospital by whom or in which the practitioner has been examined or 
treated during the period since the date of suspension for disability 
or addiction;
    (vi) The practitioner's written consent, to be provided to each 
medical

[[Page 69539]]

or other expert or hospital identified in paragraph (i)(3)(v) of this 
section, to divulge such information and records as may be required by 
any medical experts who are appointed by the hearing officer or who 
examine the practitioner pursuant to his or her consent at the OED 
Director's request; and
    (vii) The practitioner's written consent (without further order 
from a hearing officer, the USPTO Director, or the OED Director) to 
submit to an examination of qualified medical experts (at the 
practitioner's expense) if so requested by the OED Director.
    (4) Resumption of disciplinary proceeding held in abeyance. The OED 
Director may file a motion requesting the hearing officer to terminate 
a prior order holding in abeyance any pending proceeding because of the 
practitioner's disability or addiction. The hearing officer shall 
decide the matter presented by the OED Director motion hereunder based 
on the affidavits and other admissible evidence attached to the OED 
Director's motion or the practitioner's response. If there is any 
genuine issue as to one or more material facts, the hearing officer 
will hold an evidentiary hearing in which the following procedures 
shall apply:
    (i) If the prior order of abeyance was based solely on the 
practitioner's self-alleged contention of disability or addiction, the 
OED Director's motion under paragraph (e)(1) of this section shall 
operate as a show cause order placing the burden on the practitioner to 
establish by a preponderance of the evidence that the prior self-
alleged disability or addiction continues to make it impossible for the 
practitioner to defend himself/herself in the underlying proceeding 
being held in abeyance; and
    (ii) If such prior order of abeyance was based on a finding 
supported by affirmative evidence of the practitioner's disability or 
addiction, the burden shall be on the OED Director to establish by a 
preponderance of the evidence that the prior evidence of disability or 
addiction was erroneous or that the practitioner's disability or 
addiction has been removed and full recovery therefrom has been 
achieved.
    (j) Action by the hearing officer when practitioner is not 
incapacitated. If, in the course of a proceeding under this section or 
a disciplinary proceeding, the hearing officer determines that the 
practitioner is not incapacitated from defending himself/herself, or is 
not incapacitated from practicing before the Office, the hearing 
officer shall take such action as is deemed appropriate, including the 
entry of an order directing the resumption of the disciplinary 
proceeding against the practitioner.


Sec. Sec.  11.29-11.31  [Reserved]


Sec.  11.32  Initiating a disciplinary proceeding; reference to a 
hearing officer.

    If after conducting an investigation under Sec.  11.22(a) the OED 
Director is of the opinion that a practitioner has violated an 
imperative USPTO Rule of Professional Conduct, or that an other 
individual (see Sec.  11.19(a)(2)) has violated any of Sec. Sec.  
11.303(a)(1), 11.304, 11.305(a), or 11.804, the OED Director, except 
for complying with the provisions of Sec. Sec.  27 or 28 for a 
practitioner, shall, after complying where necessary with the 
provisions of 5 U.S.C. 558(c), call a meeting of a panel of the 
Committee on Discipline. The panel of the Committee on Discipline shall 
then determine as specified in Sec.  11.23(b) whether a disciplinary 
proceeding shall be instituted under paragraph (b) of this section. If 
the panel of the Committee on Discipline determines that probable cause 
exists to believe that a Rule of Professional Conduct has been 
violated, the OED Director shall institute a disciplinary proceeding by 
filing a complaint under Sec.  11.34. The complaint shall be filed in 
the Office of the USPTO Director. A disciplinary proceeding may result 
in a reprimand, or suspension or exclusion of a practitioner from 
practice before the Office. Upon the filing of a complaint under Sec.  
11.34, the USPTO Director will refer the disciplinary proceeding to a 
hearing officer.


Sec.  11.33  [Reserved]


Sec.  11.34  Complaint.

    (a) A complaint instituting a disciplinary proceeding shall:
    (1) Name the practitioner or other individual (see Sec.  
11.19(a)(2)) who may then be referred to as the ``respondent'';
    (2) Give a plain and concise description of the respondent's 
alleged violations of the imperative USPTO Rules of Professional 
Conduct;
    (3) State the place and time, not less than thirty days from the 
date the complaint is filed, for filing an answer by the respondent;
    (4) State that a decision by default may be entered if an answer is 
not timely filed by the respondent; and
    (5) Be signed by the OED Director.
    (b) A complaint will be deemed sufficient if it fairly informs the 
respondent of any violation of the imperative USPTO Rules of 
Professional Conduct that form the basis for the disciplinary 
proceeding so that the respondent is able to adequately prepare a 
defense. If supported by the facts presented to the Committee on 
Discipline, the complaint may include alleged violations even if the 
specific violations were not in the finding of the probable cause 
decision.


Sec.  11.35  Service of complaint.

    (a) A complaint may be served on a respondent in any of the 
following methods:
    (1) By delivering a copy of the complaint personally to the 
respondent, in which case the individual who gives the complaint to the 
respondent shall file an affidavit with the OED Director indicating the 
time and place the complaint was handed to the respondent.
    (i) A respondent who is a registered practitioner at the address 
for which separate notice was last received by the OED Director, or
    (ii) A respondent who is a nonregistered practitioner at the last 
address for the respondent known to the OED Director.
    (3) By any method mutually agreeable to the OED Director and the 
respondent.
    (4) In the case of a respondent who resides outside the United 
States, by sending a copy of the complaint by any delivery service that 
provides ability to electronically follow the progress of delivery or 
attempted delivery, to:
    (i) A respondent who is a registered practitioner at the last 
address for which separate notice was last received by the OED 
Director; or
    (ii) A respondent who is a nonregistered practitioner at the last 
address for the respondent known to the OED Director.
    (5) In the case of a respondent being an other individual (see 
Sec.  11.19(a)(2)) by sending a copy of the complaint by any delivery 
service providing tracking and delivery or attempted delivery records, 
including the U.S. Postal Service to:
    (i) The last address for the other individual (see Sec.  
11.19(a)(2)) for which notice was last received by the Office in an 
application; or
    (ii) At the last address for the other individual (see Sec.  
11.19(a)(2)) known to OED; or
    (b) If a copy of the complaint cannot be delivered to the 
respondent through any one of the procedures in paragraph (a) of this 
section, the OED Director shall serve the respondent by causing an 
appropriate notice to be published in the Official Gazette for two 
consecutive weeks, in which case the time for filing an answer shall be 
thirty days from the second publication of the notice. Failure to 
timely file an answer will constitute an admission of the allegations 
in the complaint in accordance with paragraph

[[Page 69540]]

(d) of Sec.  11.34, and the hearing officer may enter an initial 
decision on default.
    (c) If the respondent is known to the OED Director to be 
represented by an attorney under Sec.  11.40(a), a copy of the 
complaint shall also be served on the attorney in the manner provided 
for in paragraph (a) or (b) of this section, in addition to the 
complaint being served on respondent.


Sec.  11.36  Answer to complaint.

    (a) Time for answer. An answer to a complaint shall be filed within 
the time set in the complaint that shall be not less than thirty days.
    (b) With whom filed. The answer shall be filed in writing with the 
hearing officer. The hearing officer may extend the time for filing an 
answer once for a period of no more than thirty days upon a showing of 
good cause, provided a motion requesting an extension of time is filed 
within thirty days after the date the complaint is served on 
respondent. A copy of the answer shall be served on the OED Director.
    (c) Content. The respondent shall include in the answer a statement 
of the facts that constitute the grounds of defense and shall 
specifically admit or deny each allegation set forth in the complaint. 
The respondent shall not deny a material allegation in the complaint 
that the respondent knows to be true or state that respondent is 
without sufficient information to form a belief as to the truth of an 
allegation when in fact the respondent possesses that information. The 
respondent shall also state affirmatively special matters of defense.
    (d) Failure to deny allegations in complaint. Every allegation in 
the complaint that is not denied by a respondent in the answer shall be 
deemed to be admitted and may be considered proven. The hearing officer 
at any hearing need receive no further evidence in respect of that 
allegation. Failure to timely file an answer will constitute an 
admission of the allegations in the complaint, and may result in entry 
of default judgment.
    (e) Reply by the OED Director. No reply to an answer is required by 
the OED Director unless ordered by the hearing officer, and any 
affirmative defense in the answer shall be deemed to be denied. The OED 
Director may, however, file a reply if he or she chooses.
    (f) Notice of intent to raise disability in mitigation.--(1) 
Respondent's notice. If respondent intends to raise an alleged 
disability in mitigation pursuant to Sec.  11.28, respondent shall file 
by delivery to the OED Director and hearing officer notice of said 
allegation no later than the date that the answer to the complaint is 
due. The notice shall specify the disability, its nexus to the 
misconduct, and the reason it provides mitigation. Failure to deliver 
the notice of intent to raise an alleged disability in mitigation shall 
operate as a waiver of the right to raise an alleged disability in 
mitigation, subject to the provisions of paragraph (f)(3) of this 
section.
    (2) Conditions of practice. If a respondent files a notice pursuant 
to paragraph (f)(1) of this section, the hearing officer, after 
providing the OED Director with an opportunity to reply to said notice, 
shall forthwith issue an order providing for appropriate conditions 
under which the respondent shall practice before the Office. Said order 
may include the appointment of monitor(s) depending upon the particular 
circumstances of the case.
    (i) Monitors. Should the hearing officer appoint monitors, the 
monitor(s) shall report to the hearing officer and OED Director on a 
periodic basis to be determined by the hearing officer. The monitoring 
shall remain in effect during the pendency of the disciplinary 
proceeding or until order of the USPTO Director. The monitor(s) shall 
respond to the OED Director's inquiries concerning such monitoring and 
may be called by the OED Director or respondent to testify regarding 
sanctions.
    (ii) Waiver. The filing of the notice pursuant to paragraph (f)(1) 
of this section is deemed to constitute a waiver by respondent of any 
claim of the right to withhold from the OED Director information coming 
to the attention of a monitor.
    (3) Late-filed notice.--(i) Notice filed 30 or more days before 
scheduled hearing. If respondent wishes to raise an alleged disability 
in mitigation after the date prescribed in paragraph (f)(1) of this 
section, but no later than 30 days before the date scheduled by the 
hearing officer for the hearing, respondent shall file a motion with 
the hearing officer, on notice to the OED Director, setting forth good 
cause why respondent should be allowed to raise a plea in mitigation 
out of time. The OED Director may consent in writing to the grant of 
the motion. The hearing officer may grant or deny the motion, with or 
without an evidentiary hearing. Leave to assert the plea in mitigation 
shall be freely granted when justice so requires, and in the absence of 
a showing of prejudice by the OED Director. An order by the hearing 
officer granting such a motion may include the provisions in paragraphs 
(f)(2), (f)(2)(i), and (f)(2)(ii) of this section, or, in circumstances 
where the hearing officer determines it to be just and appropriate, may 
be conditioned upon respondent's consent to an interim suspension 
pending disposition of the disciplinary proceeding.
    (ii) Notice filed within 30 days after scheduled hearing. If a 
respondent wishes to raise an alleged disability in mitigation after 
the date prescribed in paragraph (f)(3)(i) of this section, respondent 
shall file a motion with the hearing officer, containing the showing 
prescribed in paragraph (f)(3)(i) of this section; however, such a 
motion will be granted only on the condition that respondent consent to 
an interim suspension pending disposition of the disciplinary 
proceeding.
    (4) Violations of conditions of practice. If a monitor reports that 
respondent has violated a term or condition under which respondent is 
continuing to practice, the OED Director may request the hearing 
officer to schedule the matter for a hearing on the issue of whether 
the monitoring shall be lifted, and respondent suspended, pending final 
disposition of the disciplinary proceeding.
    (5) Motion to vacate or modify suspension. A respondent suspended 
pursuant to paragraphs (f)(3)(i) or (f)(4) of this section may file a 
motion at any time with the hearing officer to vacate or modify the 
suspension. If respondent's motion presents a prima facie case that 
respondent is significantly rehabilitated from the alleged disability, 
the matter will be considered by the hearing officer at an evidentiary 
hearing on the issue of rehabilitation. Reinstatement pursuant to this 
paragraph shall be subject to monitoring and waiver provisions of 
paragraphs (f)(2), (f)(2)(i), and (f)(2)(ii) of this section. 
Respondent shall have the burden of proving, by clear and convincing 
evidence, significant rehabilitation from the alleged disability.


Sec.  11.37  Supplemental complaint.

    False statements in an answer, motion, notice, or other filed 
communication may be made the basis of a supplemental complaint.


Sec.  11.38  Contested case.

    Upon the filing of an answer by the respondent, a disciplinary 
proceeding shall be regarded as a contested case within the meaning of 
35 U.S.C. 24. Evidence obtained by a subpoena issued under 35 U.S.C. 24 
shall not be admitted into the record or considered unless leave to 
proceed under 35 U.S.C. 24 was previously authorized by the hearing 
officer.

[[Page 69541]]

Sec.  11.39  Hearing officer; appointment; responsibilities; review of 
interlocutory orders; stays.

    (a) Appointment. A hearing officer, appointed by the USPTO Director 
under 5 U.S.C. 3105 or 35 U.S.C. 32, shall conduct disability or 
disciplinary proceedings as provided by this part.
    (b) Independence of the Hearing Officer. (1) A hearing officer 
appointed in accordance with paragraph (a) of this section shall not be 
subject to first level and second level supervision, review or 
direction of the USPTO Director.
    (2) A hearing officer appointed in accordance with paragraph (a)(1) 
of this section shall not be subject to supervision, review or 
direction of the person(s) investigating or prosecuting the case.
    (3) A hearing officer appointed in accordance with paragraph (a)(1) 
of this section shall be impartial, shall not be an individual who has 
participated in any manner in the decision to initiate the proceedings, 
and shall not have been employed under the immediate supervision of the 
practitioner.
    (4) A hearing officer appointed in accordance with paragraph (a) of 
this section shall be admitted to practice law and have suitable 
experience and training to conduct the hearing, reach a determination 
and render an initial decision in an equitable manner.
    (c) Responsibilities. The hearing officer shall have authority, 
consistent with specific provisions of these regulations, to:
    (1) Administer oaths and affirmations;
    (2) Make rulings upon motions and other requests;
    (3) Rule upon offers of proof, receive relevant evidence, and 
examine witnesses;
    (4) Authorize the taking of a deposition of a witness in lieu of 
personal appearance of the witness before the hearing officer;
    (5) Determine the time and place of any hearing and regulate its 
course and conduct;
    (6) Hold or provide for the holding of conferences to settle or 
simplify the issues;
    (7) Receive and consider oral or written arguments on facts or law;
    (8) Adopt procedures and modify procedures from time-to-time as 
occasion requires for the orderly disposition of proceedings;
    (9) Make initial decisions under Sec. Sec.  11.24, 11.25, and 
11.154;
    (10) Engage in no ex parte discussions with any party on the merits 
of the complaint, beginning with appointment and until the final agency 
decision is issued; and
    (11) Perform acts and take measures as necessary to promote the 
efficient, timely and impartial conduct of any disciplinary proceeding.
    (d) Time for making initial decision. The hearing officer shall set 
times and exercise control over a disciplinary proceeding such that an 
initial decision under Sec.  11.54 is normally issued within nine 
months of the date a complaint is filed. The hearing officer may, 
however, issue an initial decision more than nine months after a 
complaint is filed if in his or her opinion there exist unusual 
circumstances which preclude issuance of an initial decision within 
nine months of the filing of the complaint.
    (e) Review of interlocutory orders. The USPTO Director will not 
review an interlocutory order of a hearing officer except:
    (1) When the hearing officer shall be of the opinion:
    (i) That the interlocutory order involves a controlling question of 
procedure or law as to which there is a substantial ground for a 
difference of opinion, and
    (ii) That an immediate decision by the USPTO Director may 
materially advance the ultimate termination of the disciplinary 
proceeding, or
    (2) In an extraordinary situation where the USPTO Director deems 
that justice requires review.
    (f) Stays pending review of interlocutory order. If the OED 
Director or a respondent seeks review of an interlocutory order of a 
hearing officer under paragraph (b)(2) of this section, any time period 
set for taking action by the hearing officer shall not be stayed unless 
ordered by the USPTO Director or the hearing officer.


Sec.  11.40  Representative for OED Director or respondent.

    (a) A respondent may represent himself or herself, or be 
represented by an attorney before the Office in connection with an 
investigation or disciplinary proceeding. The attorney shall file a 
written declaration that he or she is an attorney within the meaning of 
Sec.  11.1(e) and shall state:
    (1) The address to which the attorney wants correspondence related 
to the investigation or disciplinary proceeding sent, and
    (2) A telephone number where the attorney may be reached during 
normal business hours.
    (b) The USPTO Director shall designate at least two disciplinary 
attorneys under the aegis of the General Counsel to act as 
representatives for the OED Director. The disciplinary attorneys 
prosecuting disciplinary proceedings shall not consult with the General 
Counsel and the Deputy General Counsel for General Law regarding the 
proceeding. The General Counsel and the Deputy General Counsel for 
General Law shall remain insulated from the investigation and 
prosecution of all disciplinary proceedings in order that they shall be 
available as counsel to the USPTO Director in deciding disciplinary 
proceedings. However, the Deputy General Counsel for Intellectual 
Property Law and Solicitor shall not remain insulated from the 
investigation and prosecution of disciplinary proceedings, and thus 
shall not be available to counsel the USPTO Director in deciding such 
proceedings.
    (c) Upon serving a complaint pursuant to Sec.  11.34, the members 
of the Committee on Discipline, and the disciplinary attorneys 
prosecuting a disciplinary proceeding shall not participate in 
rendering a decision on the charges contained in the complaint.


Sec.  11.41  Filing of papers.

    (a) The provisions of Sec.  1.8 of this subchapter do not apply to 
disciplinary proceedings. All papers filed after the complaint and 
prior to entry of an initial decision by the hearing officer shall be 
filed with the hearing officer at an address or place designated by the 
hearing officer.
    (b) All papers filed after entry of an initial decision by the 
hearing officer shall be filed with the USPTO Director. A copy of the 
paper shall be served on the OED Director. The hearing officer or the 
OED Director may provide for filing papers and other matters by hand, 
by ``Express Mail,'' or by facsimile followed in a specified time by 
the original hard copy.


Sec.  11.42  Service of papers.

    (a) All papers other than a complaint shall be served on a 
respondent who is represented by an attorney by:
    (1) Delivering a copy of the paper to the office of the attorney; 
or
    (2) Mailing a copy of the paper by first-class mail, ``Express 
Mail,'' or other delivery service to the attorney at the address 
provided by the attorney under Sec.  11.40(a)(1); or
    (3) Any other method mutually agreeable to the attorney and a 
representative for the OED Director.
    (b) All papers other than a complaint shall be served on a 
respondent who is not represented by an attorney by:
    (1) Delivering a copy of the paper to the respondent; or
    (2) Mailing a copy of the paper by first-class mail, ``Express 
Mail,'' or other delivery service to the respondent at the address to 
which a complaint may be served or such other address as may be

[[Page 69542]]

designated in writing by the respondent; or
    (3) Any other method mutually agreeable to the respondent and a 
representative of the OED Director.
    (c) A respondent shall serve on the representative for the OED 
Director one copy of each paper filed with the hearing officer or the 
OED Director. A paper may be served on the representative for the OED 
Director by:
    (1) Delivering a copy of the paper to the representative; or
    (2) Mailing a copy of the paper by first-class mail, ``Express 
Mail,'' or other delivery service to an address designated in writing 
by the representative; or
    (3) Any other method mutually agreeable to the respondent and the 
representative.
    (d) Each paper filed in a disciplinary proceeding shall contain 
therein a certificate of service indicating:
    (1) The date of which service was made; and
    (2) The method by which service was made.
    (e) The hearing officer or the USPTO Director may require that a 
paper be served by hand or by ``Express Mail.''
    (f) Service by mail is completed when the paper mailed in the 
United States is placed into the custody of the U.S. Postal Service.


Sec.  11.43  Motions.

    Motions may be filed with the hearing officer. The hearing officer 
will determine on a case-by-case basis the time period for response to 
a motion and whether replies to responses will be authorized. No motion 
shall be filed with the hearing officer unless such motion is supported 
by a written statement by the moving party that the moving party or 
attorney for the moving party has conferred with the opposing party or 
attorney for the opposing party in an effort in good faith to resolve 
by agreement the issues raised by the motion and has been unable to 
reach agreement. If the parties prior to a decision on the motion 
resolve issues raised by a motion by the hearing officer, the parties 
shall promptly notify the hearing officer.


Sec.  11.44  Hearings.

    (a) The hearing officer shall preside at hearings in disciplinary 
proceedings. The hearing officer shall set time and place for a 
hearing. In setting a time and place, the hearing officer shall 
normally give preference to a Federal facility in the district where 
the Office's principal office is located or Washington, DC, for all 
respondents recognized or registered to practice before the Office, and 
otherwise shall give due regard to the convenience and necessity of the 
parties or their representatives. In cases involving an incarcerated 
respondent, any necessary oral hearing may be held at the location of 
incarceration. Oral hearings will be stenographically recorded and 
transcribed, and the testimony of witnesses will be received under oath 
or affirmation. The hearing officer shall conduct hearings in 
accordance with 5 U.S.C. 556. A copy of the transcript of the hearing 
shall become part of the record. A copy of the transcript shall be 
provided to the OED Director and the respondent at the expense of the 
Office.
    (b) If the respondent to a disciplinary proceeding fails to appear 
at the hearing after a notice of hearing has been given by the hearing 
officer, the hearing officer may deem the respondent to have waived the 
right to a hearing and may proceed with the hearing in the absence of 
the respondent.
    (c) A hearing under this section will not be open to the public 
except that the hearing officer may grant a request by a respondent to 
open his or her hearing to the public and make the record of the 
disciplinary proceeding available for public inspection, provided, 
Agreement is reached in advance to exclude from public disclosure 
information which is privileged or confidential under applicable laws 
or regulations. If a disciplinary proceeding results in disciplinary 
action against a practitioner, and subject to Sec.  11.59(c), the 
record of the entire disciplinary proceeding, including any settlement 
agreement, will be available for public inspection.


Sec.  11.45  Proof; variance; amendment of pleadings.

    Whenever in the course of a hearing evidence is presented upon 
which another charge or charges against the respondent might be made, 
it shall not be necessary for the Committee on Discipline to find 
probable cause based on an additional charge or charges on the 
respondent, but with the consent of the hearing officer, the OED 
Director shall provide respondent with reasonable notice and an 
opportunity to be heard, and the hearing officer shall proceed to 
consider such additional charge or charges as if the same had been made 
and served at the time of the service of the original charge or 
charges. Any party who would otherwise be prejudiced by the amendment 
will be given reasonable opportunity to meet the allegations in the 
complaint, answer, or reply, as amended, and the hearing officer shall 
make findings on any issue presented by the complaint, answer, or reply 
as amended.


Sec. Sec.  11.46-11.48  [Reserved]


Sec.  11.49  Burden of proof.

    In a disciplinary proceeding, the OED Director shall have the 
burden of proving his or her case by clear and convincing evidence and 
a respondent shall have the burden of proving any affirmative defense 
by clear and convincing evidence.


Sec.  11.50  Evidence.

    (a) Rules of evidence. The rules of evidence prevailing in courts 
of law and equity are not controlling in hearings in disciplinary 
proceedings. However, the hearing officer shall exclude evidence that 
is irrelevant, immaterial, or unduly repetitious.
    (b) Depositions. Depositions of witnesses taken pursuant to Section 
11.51 may be admitted as evidence.
    (c) Government documents. Official documents, records, and papers 
of the Office, including all papers collected during the disciplinary 
investigation, are admissible without extrinsic evidence of 
authenticity. These documents, records, and papers may be evidenced by 
a copy certified as correct by an employee of the Office.
    (d) Exhibits. If any document, record, or other paper is introduced 
in evidence as an exhibit, the hearing officer may authorize the 
withdrawal of the exhibit subject to any conditions the hearing officer 
deems appropriate.
    (e) Objections. Objections to evidence will be in short form, 
stating the grounds of objection. Objections and rulings on objections 
will be a part of the record. No exception to the ruling is necessary 
to preserve the rights of the parties.


Sec.  11.51  Depositions.

    (a) Depositions for use at the hearing in lieu of personal 
appearance of a witness before the hearing officer may be taken by 
respondent or the OED Director upon a showing of good cause and with 
the approval of, and under such conditions as may be deemed appropriate 
by, the hearing officer. Depositions may be taken upon oral or written 
questions, upon not less than ten days' written notice to the other 
party, before any officer authorized to administer an oath or 
affirmation in the place where the deposition is to be taken. The 
parties may waive the requirement of ten days' notice and depositions 
may then be taken of a witness at a time and place mutually agreed to 
by the parties. When a deposition is taken upon written questions, 
copies of the written

[[Page 69543]]

questions will be served upon the other party with the notice and 
copies of any written cross-questions will be served by hand or 
``Express Mail'' not less than five days before the date of the taking 
of the deposition unless the parties mutually agree otherwise. A party 
on whose behalf a deposition is taken shall file a copy of a transcript 
of the deposition signed by a court reporter with the hearing officer 
and shall serve one copy upon the opposing party. Expenses for a court 
reporter and preparing, serving, and filing depositions shall be borne 
by the party at whose instance the deposition is taken. Depositions may 
not be taken to obtain discovery.
    (b) When the OED Director and the respondent agree in writing, a 
deposition of any witness who will appear voluntarily may be taken 
under such terms and conditions as may be mutually agreeable to the OED 
Director and the respondent. The deposition shall not be filed with the 
hearing officer and may not be admitted in evidence before the hearing 
officer unless he or she orders the deposition admitted in evidence. 
The admissibility of the deposition shall lie within the discretion of 
the hearing officer who may reject the deposition on any reasonable 
basis including the fact that demeanor is involved and that the witness 
should have been called to appear personally before the hearing 
officer.


Sec.  11.52  Discovery.

    Discovery shall not be authorized except as follows.
    (a) After an answer is filed under Sec.  11.36 and when a party 
establishes in a clear and convincing manner that discovery is 
necessary and relevant, the hearing officer, under such conditions as 
he or she deems appropriate, may order an opposing party to:
    (1) Answer a reasonable number of written requests for admission or 
interrogatories;
    (2) Produce for inspection and copying a reasonable number of 
documents; and
    (3) Produce for inspection a reasonable number of things other than 
documents.
    (b) Discovery shall not be authorized under paragraph (a) of this 
section of any matter which:
    (1) Will be used by another party solely for impeachment or cross-
examination;
    (2) Is not available to the party under 35 U.S.C. 122;
    (3) Relates to any disciplinary proceeding commenced in the Office 
prior to March 8, 1985;
    (4) Relates to experts except as the hearing officer may require 
under paragraph (e) of this section.
    (5) Is privileged; or
    (6) Relates to mental impressions, conclusions, opinions, or legal 
theories of any attorney or other representative of a party.
    (c) The hearing officer may deny discovery requested under 
paragraph (a) of this section if the discovery sought:
    (1) Will unduly delay the disciplinary proceeding;
    (2) Will place an undue burden on the party required to produce the 
discovery sought; or
    (3) Is available:
    (i) Generally to the public;
    (ii) Equally to the parties; or
    (iii) To the party seeking the discovery through another source.
    (d) Prior to authorizing discovery under paragraph (a) of this 
section, the hearing officer shall require the party seeking discovery 
to file a motion (Sec.  11.43) and explain in detail for each request 
made how the discovery sought is necessary and relevant to an issue 
actually raised in the complaint or the answer.
    (e) The hearing officer may require parties to file and serve, 
prior to any hearing, a pre-hearing statement that contains:
    (1) A list (together with a copy) of all proposed exhibits to be 
used in connection with a party's case-in-chief;
    (2) A list of proposed witnesses;
    (3) As to each proposed expert witness:
    (i) An identification of the field in which the individual will be 
qualified as an expert;
    (ii) A statement as to the subject matter on which the expert is 
expected to testify; and
    (iii) A statement of the substance of the facts and opinions to 
which the expert is expected to testify;
    (4) The identity of Government employees who have investigated the 
case; and
    (5) Copies of memoranda reflecting respondent's own statements to 
administrative representatives.
    (f) After a witness testifies for a party, if the opposing party 
requests, the party may be required to produce, prior to cross-
examination, any written statement made by the witness.


Sec.  11.53  Proposed findings and conclusions; post-hearing 
memorandum.

    Except in cases in which the respondent has failed to answer the 
complaint or amended complaint, the hearing officer, prior to making an 
initial decision, shall afford the parties a reasonable opportunity to 
submit proposed findings and conclusions and a post-hearing memorandum 
in support of the proposed findings and conclusions.


Sec.  11.54  Initial decision of hearing officer.

    (a) The hearing officer shall make an initial decision in the case. 
The decision will include:
    (1) A statement of findings and conclusions, as well as the reasons 
or basis therefor with appropriate references to the record, upon all 
the material issues of fact, law, or discretion presented on the 
record, and
    (2) An order of suspension or exclusion from practice, an order of 
reprimand, or an order dismissing the complaint. The hearing officer 
shall transmit a copy of the decision to the OED Director and to the 
respondent. After issuing the decision, the hearing officer shall 
transmit the entire record to the OED Director. In the absence of an 
appeal to the USPTO Director, the decision of the hearing officer will, 
without further proceedings, become the decision of the USPTO Director 
thirty (30) days from the date of the decision of the hearing officer.
    (b) The initial decision of the hearing officer shall explain the 
reason for any reprimand, suspension or exclusion. In determining any 
sanction, the following should normally be considered:
    (1) The public interest;
    (2) The seriousness of the violation of the imperative USPTO Rules 
of Professional Conduct;
    (3) The deterrent effects deemed necessary;
    (4) The integrity of the legal and patent professions; and
    (5) Any extenuating circumstances.


Sec.  11.55  Appeal to the USPTO Director.

    (a) Within thirty (30) days from the date of the initial decision 
of the hearing officer under Sec. Sec.  11.28, or 11.54, either party 
may appeal to the USPTO Director. The appeal shall include the 
appellant's brief. If an appeal is taken, the time for filing a cross-
appeal shall expire 14 days after the date of service of the appeal 
pursuant to Sec.  11.42, or 30 days after the date of the initial 
decision of the hearing officer, whichever is later. The cross-appeal 
shall include the cross appellant's brief. An appeal or cross-appeal by 
the respondent will be filed with the USPTO Director and served on the 
OED Director, and will include exceptions to the decisions of the 
hearing officer and supporting reasons for those exceptions. All briefs 
must include a separate section containing a concise statement of the 
disputed facts and disputed points of law. Any issue not raised in the 
concise statement of

[[Page 69544]]

disputed facts and disputed points of law will be deemed to have been 
abandoned by the appellant and may be disregarded by the USPTO Director 
in reviewing the initial determination, unless the USPTO Director 
chooses to review the issue on his or her own initiative under Sec.  
11.56. If the OED Director, through his or her representative, files 
the appeal or cross-appeal, the OED Director shall serve on the other 
party a copy of the appeal or cross-appeal. The other party to an 
appeal or cross-appeal may file a reply brief. A copy of respondent's 
reply brief shall be served on the OED Director. The time for filing 
any reply brief expires thirty (30) days after the date of service 
pursuant to Sec.  11.42 of an appeal, cross-appeal or copy thereof. If 
the OED Director files the reply brief, the OED Director shall serve on 
the other party a copy of the reply brief. Upon the filing of an 
appeal, cross-appeal, if any, and reply briefs, if any, the OED 
Director shall transmit the entire record to the USPTO Director. Unless 
the USPTO Director permits, no further briefs or motions shall be 
filed.
    (b) An appellant's or cross-appellant's brief shall be no more than 
30 pages in length on 8\1/2\ by 11-inch paper, and shall comply with 
Rule 28(A)(2), (3), and (5) through (10), and Rule 32(a)(4), (5), (6), 
and (7) of the Federal Rules of Appellate Procedure. An appellee's or 
cross appellee's reply brief shall be no more than 15 pages in length 
on 8\1/2\ by 11-inch paper, and shall comply with Rule 28(A)(2), (3), 
(8), and (9), and Rule 32(a)(4), (5), (6), and (7) of the Federal Rules 
of Appellate Procedure. If a cross-appeal is filed, the party who files 
an appeal first is the appellant for purposes of this rule. If appeals 
are filed on the same day, the respondent is the appellant. The USPTO 
Director may refuse entry of a nonconforming brief.
    (c) The USPTO Director will decide the appeal on the record made 
before the hearing officer.
    (d) The USPTO Director may order reopening of a disciplinary 
proceeding in accordance with the principles that govern the granting 
of new trials. Any request to reopen a disciplinary proceeding on the 
basis of newly discovered evidence must demonstrate that the newly 
discovered evidence could not have been discovered by due diligence.
    (e) In the absence of an appeal by the OED Director, failure by the 
respondent to appeal under the provisions of this section shall be 
deemed to be both acceptance by the respondent of the initial decision 
and waiver by the respondent of the right to further administrative or 
judicial review.


Sec.  11.56  Decision of the USPTO Director.

    (a) The USPTO Director shall decide an appeal from an initial 
decision of the hearing officer. The USPTO Director may affirm, 
reverse, or modify the initial decision or remand the matter to the 
hearing officer for such further proceedings as the USPTO Director may 
deem appropriate. In making a final decision, the USPTO Director shall 
review the record or the portions of the record designated by the 
parties. The USPTO Director shall transmit a copy of the final decision 
to the OED Director and to the respondent.
    (b) A final decision of the USPTO Director may dismiss a 
disciplinary proceeding, reprimand a practitioner, or may suspend or 
exclude the practitioner from practice before the Office.
    (c) The respondent or the OED Director may make a single request 
for reconsideration or modification of the decision by the USPTO 
Director if filed within 20 days from the date of entry of the 
decision. No request for reconsideration or modification shall be 
granted unless the request is based on newly discovered evidence, and 
the requestor must demonstrate that the newly discovered evidence could 
not have been discovered by due diligence. Such a request shall have 
the effect of staying the effective date of the order of discipline in 
the final decision. The decision by the USPTO Director is effective on 
its date of entry.


Sec.  11.57  Review of final decision of the USPTO Director.

    (a) Review of the final decision by USPTO Director in a 
disciplinary case may be had, subject to Sec.  11.55(d), by a petition 
filed in the United States District Court for the District of Columbia 
in accordance with the local rule of said court. 35 U.S.C. 32. The 
Respondent must serve the USPTO Director with the petition. Service 
upon the USPTO Director is effected (1) by delivering a copy of the 
petition by registered or certified mail or as otherwise authorized by 
law on the USPTO to: Director of the USPTO, Office of the General 
Counsel, United States Patent and Trademark Office, P.O. Box 15667, 
Arlington, VA 22215; or (2) by hand-delivering a copy of the petition 
during business hours to: Director of the USPTO, Office of the General 
Counsel, Crystal Park Two, Suite 905, 2121 Crystal Dr., Arlington, VA 
22215.
    (b) The USPTO Director may stay an order of discipline in the final 
decision pending review of the final decision of the USPTO Director.


Sec.  11.58  Suspended or excluded practitioner.

    (a) A practitioner who is suspended or excluded under Sec. Sec.  
11.24, 11.25, 11.27, 11.55, or 11.56, or has resigned from practice 
before the Office under Sec. Sec.  11.11(d) shall not engage in 
practice of patent, trademark and other non-patent law before the 
Office. No practitioner suspended or excluded under Sec. Sec.  11.24, 
11.25, 11.27, 11.55, or 11.56 will be automatically reinstated at the 
end of his or her period of suspension. A practitioner who is suspended 
or excluded, or who resigned under Sec.  11.11(d) must comply with the 
provisions of this section and Sec. Sec.  11.12 and 11.60 to be 
reinstated. Willful failure to comply with the provisions of this 
section constitutes grounds for denying a suspended or excluded 
practitioner's application for reinstatement or readmission. Willful 
failure to comply with the provisions of this section constitutes cause 
not only for denial of reinstatement, but also cause for further 
action, including seeking further exclusion, suspension, and for 
revocation of any pending probation.
    (b) Unless otherwise ordered by the USPTO Director, any 
practitioner who is suspended or excluded from practice before the 
Office under Sec. Sec.  11.24, 11.25, 11.55, or 11.56, who has been 
excluded on consent under provisions of Sec.  11.27, or whose notice of 
resignation has been accepted under Sec.  11.11(d) shall:
    (1) Within 20 days after the date of entry of the order of 
suspension, exclusion, or exclusion by consent, or of acceptance of 
resignation:
    (i) File a notice of withdrawal as of the effective date of the 
suspension, exclusion, or exclusion by consent, or acceptance of 
resignation in each pending patent and trademark application, each 
pending reexamination and interference proceeding, and every other 
matter pending in the Office, together with a copy of the notices sent 
pursuant to paragraphs (b) and (c) of this section;
    (ii) Provide notice to all bars of which the practitioner is a 
member and all clients on retainer having immediate or prospective 
business before the Office in patent, trademark and other non-patent 
matters, all clients the practitioner represents before the Office, and 
all clients having immediate or prospective business before the Office 
in patent, trademark and other non-patent matters of the order of 
suspension, exclusion, exclusion by consent, or resignation and of the 
practitioner's consequent inability to act as a practitioner after the 
effective date of the order; and that, if not represented by another 
practitioner, the

[[Page 69545]]

client should act promptly to substitute another practitioner, or to 
seek legal advice elsewhere, calling attention to any urgency arising 
from the circumstances of the case;
    (iii) Provide notice to the practitioner(s) for all opposing 
parties (or, to the parties in the absence of a practitioner 
representing the parties) in matters pending before the Office that the 
practitioner has been excluded or suspended and, as a consequence, is 
disqualified from acting as a practitioner regarding matters before the 
Office after the effective date of the suspension, exclusion, exclusion 
by consent, or resignation, and state in the notice the mailing address 
of each client of the excluded or suspended attorney who is a party in 
the pending reexamination or interference matter;
    (iv) Deliver to all clients having immediate or prospective 
business before the Office in patent, trademark or other non-patent 
matters any papers or other property to which the clients are entitled, 
or shall notify the clients and any co-practitioner of a suitable time 
when and place where the papers and other property may be obtained, 
calling attention to any urgency for obtaining the papers or other 
property;
    (v) Refund any part of any fees paid in advance that has not been 
earned,
    (vi) Close every client account, trust account, deposit account in 
the Office, or other fiduciary account to the extent the accounts have 
fees for practice before the Office, and properly disburse or otherwise 
transfer all client and fiduciary funds for practice before the Office 
in his or her possession, custody or control; and
    (vii) Take any necessary and appropriate steps to remove from any 
telephone, legal, or other directory any advertisement, statement, or 
representation which would reasonably suggest that the practitioner is 
authorized to practice patent, trademark, or other non-patent law 
before the Office.
    (viii) All notices required by paragraphs (b)(1)(i) through 
(b)(1)(vii) of this section shall be served by certified mail, return 
receipt requested, unless mailed abroad. If mailed abroad, all notices 
shall be served with a receipt to be signed and returned to the 
practitioner.
    (2) Within 30 days after entry of the order of suspension, 
exclusion, or exclusion by consent, or of acceptance of resignation the 
practitioner shall file with the OED Director an affidavit certifying 
that the practitioner has fully complied with the provisions of the 
order, and with the imperative USPTO Rules of Professional Conduct. 
Appended to the affidavit of compliance shall be:
    (i) A copy of each form of notice, the names and addressees of the 
clients, practitioners, courts, and agencies to which notices were 
sent, and all return receipts or returned mail received up to the date 
of the affidavit. Supplemental affidavits shall be filed covering 
subsequent return receipts and returned mail. Such names and addresses 
of clients shall remain confidential unless otherwise ordered by the 
USPTO Director;
    (ii) A schedule showing the location, title and account number of 
every bank account designated as a client, trust, deposit account in 
the Office, or other fiduciary account, and of every account in which 
the practitioner holds or held as of the entry date of the order any 
client, trust, or fiduciary funds regarding practice before the Office;
    (iii) A schedule describing the practitioner's disposition of all 
client and fiduciary funds in the practitioner's possession, custody or 
control as of the date of the order or thereafter;
    (iv) Such proof of the proper distribution of said funds and the 
closing of such accounts as has been requested by the OED Director, 
including copies of checks and other instruments;
    (v) A list of all other State, Federal, and administrative 
jurisdictions to which the practitioner is admitted to practice; and
    (vi) An affidavit describing the precise nature of the steps taken 
to remove from any telephone, legal, or other directory any 
advertisement, statement, or representation which would reasonably 
suggest that the practitioner is authorized to practice patent, 
trademark, or other non-patent law before the Office. The affidavit 
shall also state the residence or other address of the practitioner to 
which communications may thereafter be directed, and list all State and 
Federal jurisdictions, and administrative agencies to which the 
practitioner is admitted to practice. The OED Director may require such 
additional proof as is deemed necessary. In addition, for five years 
following the effective date of the suspension, exclusion, exclusion by 
consent, a suspended, excluded, or excluded-on-consent practitioner 
shall continue to file a statement in accordance with Sec.  11.11(a), 
regarding any change of residence or other address to which 
communications may thereafter be directed, so that the suspended, 
excluded, or excluded-on-consent practitioner may be located if a 
complaint is made about any conduct occurring before or after the 
exclusion or suspension. The practitioner shall retain copies of all 
notices sent and shall maintain complete records of the steps taken to 
comply with the notice requirements.
    (3) Not hold himself or herself out as authorized to practice law 
before the Office.
    (4) Not advertise the practitioner's availability or ability to 
perform or render legal services for any person having immediate or 
prospective business before the Office.
    (5) Not render legal advice or services to any person having 
immediate or prospective business before the Office as to that 
business.
    (6) Promptly take steps to change any sign identifying a 
practitioner's or the practitioner's firm's office and practitioner's 
or the practitioner's firm's stationery to delete therefrom any 
advertisement, statement, or representation which would reasonably 
suggest that the practitioner is authorized to practice law before the 
Office.
    (c) Effective date of discipline. Except as provided in Sec. Sec.  
11.24, 11.25, and 11.28, an order of suspension, exclusion, or 
exclusion by consent shall be effective immediately upon entry unless 
the USPTO Director directs otherwise. The practitioner who is 
suspended, excluded, excluded-on-consent, or who has resigned, after 
entry of the order, shall not accept any new retainer regarding 
immediate, pending, or prospective business before the Office, or 
engage as a practitioner for another in any new case or legal matter 
regarding practice before the Office. The order shall grant limited 
recognition for a period of 30 days. During the 30-day period of 
limited recognition, the practitioner shall conclude other work on 
behalf of a client on any matters that were pending before the Office 
on the date of entry. If such work cannot be concluded, the 
practitioner shall so advise the client so that the client may make 
other arrangements.
    (d) Required records. A practitioner who is suspended, excluded or 
excluded-on-consent, or who has resigned, other than a practitioner 
suspended under Sec. Sec.  11.28 (c) or (d), shall keep and maintain 
records of the various steps taken under this section, so that in any 
subsequent proceeding proof of compliance with this section and with 
the exclusion or suspension order will be available. The OED Director 
will require the practitioner to submit such proof as a condition 
precedent to the granting of any petition for reinstatement. In the 
case of a practitioner suspended under Sec. Sec.  11.28 (c) or (d), the 
USPTO Director shall

[[Page 69546]]

enter such order as may be required to compile and maintain all 
necessary records.
    (e) A practitioner who is suspended, excluded, or excluded-on-
consent, or who has resigned, and who aids another practitioner in any 
way in the other practitioner's practice of law before the Office, may, 
under the direct supervision of the other practitioner, act as a 
paralegal for the other practitioner or perform other services for the 
other practitioner which are normally performed by laypersons, 
provided:
    (1) The practitioner who is suspended, excluded or excluded on 
consent, or who has resigned is:
    (i) A salaried employee of:
    (A) The other practitioner;
    (B) The other practitioner's law firm; or
    (C) A client-employer who employs the other practitioner as a 
salaried employee;
    (2) The other practitioner assumes full professional responsibility 
to any client and the Office for any work performed by the practitioner 
who is suspended, excluded, or excluded-on-consent, or who has resigned 
for the other practitioner;
    (3) The practitioner who is suspended, excluded, or excluded-on-
consent, or who has resigned does not:
    (i) Communicate directly in writing, orally, or otherwise with a 
client of the other practitioner in regard to any immediate, 
prospective, or pending business before the Office;
    (ii) Render any legal advice or any legal services to a client of 
the other practitioner in regard to any immediate, prospective, or 
pending business before the Office; or
    (iii) Meet in person or in the presence of the other practitioner 
in regard to any immediate, prospective, or pending business before the 
Office, with:
    (A) Any Office official in connection with the prosecution of any 
patent, trademark, or other case;
    (B) Any client of the other practitioner, the other practitioner's 
law firm, or the client-employer of the other practitioner; or
    (C) Any witness or potential witness which the other practitioner, 
the other practitioner's law firm, or the other practitioner's client-
employer may or intends to call as a witness in any proceeding before 
the Office. The term ``witness'' includes individuals who will testify 
orally in a proceeding before, or sign an affidavit or any other 
document to be filed in, the Office.
    (f) When a practitioner who is suspended, excluded, or excluded-on-
consent, or who has resigned, acts as a paralegal or performs services 
under paragraph (c) of this section, the practitioner shall not 
thereafter be reinstated to practice before the Office unless:
    (1) The practitioner shall have filed with the OED Director an 
affidavit which:
    (i) Explains in detail the precise nature of all paralegal or other 
services performed by the practitioner, and
    (ii) Shows by clear and convincing evidence that the practitioner 
has complied with the provisions of this section and all imperative 
USPTO Rules of Professional Conduct; and
    (2) The other practitioner shall have filed with the OED Director a 
written statement which
    (i) Shows that the other practitioner has read the affidavit 
required by paragraph (d)(1) of this section and that the other 
practitioner believes every statement in the affidavit to be true, and
    (ii) States why the other practitioner believes that the 
practitioner who is suspended, excluded, or excluded-on-consent, or who 
has resigned has complied with paragraph (c) of this section.


Sec.  11.59  Notice of suspension or exclusion.

    (a) Upon issuance of an order reprimanding a practitioner or 
suspending, excluding, or excluding on consent a practitioner from 
practice before the Office, the OED Director shall give notice of the 
final decision to appropriate employees of the Office, to interested 
departments, agencies, and courts of the United States, and to the 
National Discipline Data Bank maintained by the American Bar 
Association Standing Committee on Professional Discipline. The OED 
Director shall also give notice to appropriate authorities of any State 
in which a practitioner is known to be a member of the bar and any 
appropriate bar association.
    (b) Publication of notices, orders, and decisions. The OED Director 
shall cause to be published in the Official Gazette the name of every 
practitioner who is suspended, excluded, or excluded-on-consent, who 
resigns from practice, and who is transferred to disability inactive 
status. The order suspending, excluding, or excluding by consent a 
practitioner, or accepting resignation, and the decision by the USPTO 
Director, including an initial decision of a hearing officer under 
Sec.  11.54(a) that becomes the decision of the USPTO Director, 
suspending or excluding a practitioner shall be published. Unless 
otherwise ordered by the USPTO Director, the OED Director shall publish 
in the Official Gazette the name of any practitioner reprimanded by the 
USPTO Director, as well as the order and any decision by the USPTO 
Director, including an initial decision of a hearing officer under 
Sec.  11.54(a) that becomes the decision of the USPTO Director, 
reprimanding the practitioner.
    (c) Records available to the public. Consistent with a retention 
schedule set for disciplinary records, the OED Director shall maintain 
records that shall be available for public inspection of every 
disciplinary proceeding where practitioner is reprimanded, suspended, 
or excluded, excluded-on-consent, or who resigns while under 
investigation, unless the USPTO Director orders that the proceeding or 
a portion of the record be kept confidential. The record of a 
proceeding that results in a practitioner being transferred to 
disability inactive status will not be available to the public.
    (d) Access to records of exclusion by consent. The order excluding 
a practitioner on consent under Sec.  11.27 shall be a matter of public 
record. However, the affidavit required under paragraph (a) of Sec.  
11.27 shall not be publicly disclosed or made available for use in any 
other proceeding except by order of the USPTO Director or upon written 
consent of the practitioner.


Sec.  11.60  Petition for reinstatement.

    (a) Restrictions on reinstatement. A practitioner who is suspended, 
excluded, or excluded on consent is required to furnish proof of 
rehabilitation under paragraph (d) of this section, and shall not 
resume practice of patent, trademark, or other non-patent law before 
the Office until reinstated by order of the OED Director or the USPTO 
Director.
    (b) Reinstatement of practitioners transferred to disability 
inactive status. A practitioner who has been transferred to disability 
inactive status under Sec.  11.28 may move for reinstatement in 
accordance with that section, but reinstatement shall not be ordered 
except on a showing by clear and convincing evidence that the 
disability has ended, that the practitioner has complied with Sec.  
11.12, and that the practitioner is fit to resume the practice of law.
    (c) Petition for reinstatement of practitioners excluded or 
suspended on other grounds. A suspended or excluded practitioner shall 
be eligible to apply for reinstatement only upon expiration of the 
period of suspension or exclusion and the practitioner's full 
compliance with Sec.  11.58. A practitioner who is excluded or excluded 
on consent shall be eligible to apply for reinstatement no earlier than 
at least five years from the effective date of the exclusion.

[[Page 69547]]

    (d) Review of reinstatement petition. A practitioner suspended, 
excluded, or excluded-on-consent shall file a petition for 
reinstatement accompanied by the fee required by Sec.  1.21(a)(10) of 
this subchapter. The petition for reinstatement by a practitioner 
suspended, excluded, or excluded-on-consent for misconduct, must 
provide proof of rehabilitation and compliance with the provisions of 
Sec.  11.11(d)(2), and it shall be filed with the OED Director. A 
suspended or excluded practitioner who has violated any provision of 
Sec.  11.58 shall not be eligible for reinstatement until a continuous 
period of the time in compliance with Sec.  11.58 that is equal to the 
period of suspension or exclusion has elapsed. If the suspended, 
excluded, or excluded-on-consent practitioner is not eligible for 
reinstatement, or if the OED Director determines that the petition is 
insufficient or defective on its face, the OED Director may dismiss the 
petition. Otherwise the OED Director shall consider the petition for 
reinstatement. The suspended, excluded, or excluded-on-consent 
practitioner seeking reinstatement shall have the burden of proof by 
clear and convincing evidence. Such proof shall be included in or 
accompany the petition, and shall establish:
    (1) That the practitioner has the moral character qualifications, 
competency, and learning in law required under Sec.  11.7 for 
admission;
    (2) That the resumption of practice before the Office will not be 
detrimental to the administration of justice, or subversive to the 
public interest; and
    (3) That the suspended practitioner has complied with the 
provisions of Sec.  11.58 for the full period of suspension, or that 
the excluded or excluded-on-consent practitioner has complied with the 
provisions of Sec.  11.58 for at least five continuous years.
    (e) Petitions for reinstatement--Action by the OED Director 
granting reinstatement. (1) If the petitioner is found fit to resume 
the practice before the Office, the OED Director shall enter an order 
of reinstatement, which may be conditioned upon the making of partial 
or complete restitution to persons harmed by the misconduct which led 
to the suspension or exclusion, or upon the payment of all or part of 
the costs of the disciplinary proceedings, the reinstatement 
proceedings, or any combination thereof.
    (2) Payment of costs of disciplinary or reinstatement proceedings. 
Upon petitioning for reinstatement, the practitioner shall pay the 
costs of the disciplinary proceeding, and costs for the reinstatement 
proceeding. The costs imposed pursuant to this section include all of 
the following:
    (i) The actual expense incurred by the OED Director or the Office 
for the original and copies of any reporter's transcripts of the 
disciplinary proceedings or reinstatement proceedings, and any fee paid 
for the services of the reporter;
    (ii) All expenses paid by the OED Director or the Office which 
would qualify as taxable costs recoverable in civil proceedings; and
    (iii) The charges determined by the OED Director to be ``reasonable 
costs'' of investigation, hearing, and review. These amounts shall 
serve to defray the costs, other than fees for services of attorneys 
and experts, of the Office of Enrollment and Discipline in the 
preparation or hearing of disciplinary proceeding or reinstatement 
proceeding, and costs incurred in the administrative processing of the 
disciplinary proceeding or reinstatement proceeding.
    (3) A suspended, excluded, or excluded-on-consent practitioner may 
be granted relief, in whole or in part, only from an order assessing 
costs under this section, or may be granted an extension of time to pay 
these costs, in the discretion of the OED Director, upon grounds of 
hardship, special circumstances, or other good cause.
    (f) Petitions for reinstatement--Action by the OED Director denying 
reinstatement. If the petitioner is found unfit to resume the practice 
of patent law before the Office, the OED Director shall first provide 
the suspended, excluded, or excluded-on-consent practitioner with an 
opportunity to show cause in writing why the petition should not be 
denied. Failure to comply with Sec.  11.12(d)(2) shall constitute 
unfitness. If unpersuaded by the showing, the OED Director shall deny 
the petition. The OED Director may require the suspended, excluded, or 
excluded-on-consent practitioner, in meeting the requirements of Sec.  
11.7, to take and pass an examination under Sec.  11.7(b), ethics 
courses, and/or the Multistate Professional Responsibility Examination. 
The OED Director shall provide findings, together with the record. The 
findings shall include on the first page, immediately beneath the 
caption of the case, a separate section entitled ``Prior Proceedings'' 
which shall state the docket number of the original disciplinary 
proceeding in which the suspension, exclusion, or exclusion by consent 
was ordered.
    (g) Resubmission of petitions for reinstatement. If a petition for 
reinstatement is denied, no further petition for reinstatement may be 
filed until the expiration of at least one year following the denial 
unless the order of denial provides otherwise.
    (h) Reinstatement proceedings open to public. Proceedings on any 
petition for reinstatement shall be open to the public. Before 
reinstating any suspended, excluded, or excluded-on-consent 
practitioner, the OED Director shall publish in the Official Gazette a 
notice of the suspended, excluded, or excluded-on-consent 
practitioner's petition for reinstatement and shall permit the public a 
reasonable opportunity to comment or submit evidence with respect to 
the petition for reinstatement.


Sec.  11.61  Savings clause.

    (a) A disciplinary proceeding based on conduct engaged in prior to 
the effective date of these regulations may be instituted subsequent to 
such effective date, if such conduct would continue to justify 
suspension or exclusion under the provisions of this Part.
    (b) No practitioner shall be subject to a disciplinary proceeding 
under this Part based on conduct engaged in before the effective date 
hereof if such conduct would not have been subject to disciplinary 
action before such effective date.


Sec.  11.62  Protection of clients interests when practitioner becomes 
unavailable.

    If a practitioner dies, disappears, or is suspended or transferred 
to inactive status for incapacity or disability, and there is no 
partner, associate, or other responsible practitioner capable of 
conducting the practitioner's affairs, a court of competent 
jurisdiction may appoint a registered practitioner to make appropriate 
disposition of any patent application files. All other matters should 
be handled in accordance with the laws of the local jurisdiction.

Subpart D--USPTO Rules of Professional Conduct


Sec.  11.100  Interpretation of the USPTO Rules of Professional 
Conduct.

    (a) Rules in Sec. Sec.  11.101 through 11.806 that are imperatives 
are cast in the terms ``shall'' or ``shall not.'' These define proper 
conduct for purposes of professional discipline.
    (b) Rules in Sec. Sec.  11.101 through 11.806 that are permissive 
are cast in the term ``may.'' These define areas under the Rules in 
which the practitioner has professional discretion. No disciplinary 
action should be taken when the practitioner chooses not to act or acts 
within the bounds of such discretion.
    (c) Other rules in Sec. Sec.  11.101 through 11.806 defining the 
nature of relationships between the practitioner

[[Page 69548]]

and others, are thus partly obligatory and disciplinary and partly 
constitutive and descriptive in that they define a practitioner's 
professional role.

Client-Practitioner Relationship


Sec.  11.101  Competence.

    (a) A practitioner shall provide competent representation to a 
client having immediate or prospective business before the Office. 
Competent representation requires the legal knowledge, skill, 
thoroughness and preparation reasonably necessary for the 
representation.
    (b) A practitioner shall serve a client having immediate or 
prospective business before the Office with skill and care commensurate 
with that generally afforded to clients by other practitioners in 
similar matters.
    (c) Conduct that constitutes a violation of paragraphs (a) or (b) 
of this section includes, but is not limited to:
    (1) A practitioner handling a legal matter which the practitioner 
knows or should know that the practitioner, due to legal or scientific 
training, is not competent to handle, without associating with the 
practitioner, another practitioner, who is competent to handle the 
matter;
    (2) A practitioner withholding from the Office information 
identifying a patent or patent application of another from which one or 
more claims have been copied. See Sec. Sec.  1.604(b) and 1.607(c) of 
this subchapter;
    (3) A practitioner employs one or more procedures that the Office 
no longer authorizes practitioners to use to present or prosecute a 
patent application; and
    (4) A practitioner filing and/or prosecuting, or assisting in the 
filing and/or prosecuting an application claiming a frivolous 
invention; or submitting or assisting in the submission to the Office 
of a frivolous filing. An application claims a frivolous invention or a 
filing is frivolous where the claim of patentability or argument is 
known or should have been known by a reasonably prudent registered 
practitioner to be unwarranted under existing law, and said claim or 
argument cannot be supported by good faith argument for an extension, 
modification, or reversal of existing law.


Sec.  11.102  Scope of representation.

    (a) A practitioner shall abide by a client's decisions concerning 
the objectives of representation in practice before the Office, subject 
to paragraphs (c), (d), (e), and (g) of this section, and shall consult 
with the client as to the means by which they are to be pursued. A 
practitioner shall abide by a client's decision whether to accept an 
offer of settlement of a matter.
    (b) A practitioner's representation of a client having immediate or 
prospective business before the Office does not constitute an 
endorsement of the client's political, economic, social, or moral views 
or activities.
    (c) A practitioner may limit the objectives of the representation 
if the client having immediate or prospective business before the 
Office consents in writing after full disclosure by the practitioner.
    (d) When a practitioner knows that a client having immediate or 
prospective business before the Office expects assistance not permitted 
by the Rules of Professional Conduct or other law, including 
perpetrating a fraud, disregarding any provision of this Part, or 
disregarding a decision of the Office made in the course of a 
proceeding before the Office, the practitioner shall both consult with 
the client regarding the relevant limitations on the practitioner's 
conduct, and advise the client of the legal consequences of any 
proposed course of action.
    (e) A practitioner shall not counsel a client having immediate or 
prospective business before the Office to engage, or assist said 
client, in conduct that the practitioner knows is criminal or 
fraudulent, but a practitioner may discuss the legal consequences of 
any proposed course of conduct with the client and may counsel or 
assist the client to make a good-faith effort to determine the 
validity, scope, meaning, or application of the law.
    (f) The authority and control of a practitioner, employed by the 
Federal Government, over decisions concerning the representation may, 
by statute or regulation, be expanded beyond the limits imposed by 
paragraphs (a) and (c) of this section.
    (g) A practitioner receiving information clearly establishing that 
the client has, in the course of the representation, perpetrated a 
fraud upon a person or tribunal in connection with practice before the 
Office shall promptly call upon the client to rectify the same, and if 
the client refuses or is unable to do so the practitioner shall reveal 
the fraud to the affected person or tribunal, except where the 
information is protected as a privileged communication.


Sec.  11.103  Diligence and zeal.

    (a) A practitioner shall represent a client having immediate or 
prospective business before the Office zealously and diligently within 
the bounds of the law.
    (b) A practitioner shall act with reasonable promptness in 
representing a client having immediate or prospective business before 
the Office.
    (c) Conduct that constitutes a violation of paragraphs (a) or (b) 
of this section includes, but is not limited to, a practitioner:
    (1) Neglecting an entrusted legal matter;
    (2) Intentionally failing to seek the lawful objectives of a client 
through reasonably available means permitted by law and the imperative 
USPTO Rules of Professional Conduct; or
    (3) Intentionally prejudicing or damaging a client during the 
course of the professional relationship.


Sec.  11.104  Communication.

    (a) A practitioner shall keep a client having immediate or 
prospective business before the Office reasonably informed about the 
status of a matter, and promptly comply with reasonable requests for 
information. In particular:
    (1) A practitioner who has been engaged to represent or counsel an 
inventor as a result of a referral from an invention promoter shall 
communicate directly with the inventor, and promptly report each Office 
action and communicate directly with the inventor; and
    (2) A practitioner who has been engaged to represent or counsel an 
inventor or other client having immediate, prospective, or pending 
business before the Office as a result of a referral by a foreign 
attorney or foreign patent agent located in a foreign country may, with 
the written and informed consent of said inventor or other client, 
conduct said communications with the inventor or other client through 
said foreign attorney or foreign patent agent.
    (b) A practitioner shall explain a matter to the extent reasonably 
necessary to permit the client having immediate or prospective business 
before the Office to enable the client to make informed decisions 
regarding the representation.
    (c) A practitioner who receives an offer of settlement in an inter 
partes matter before the Office shall inform the client promptly of the 
substance of the communication.
    (d) Conduct that constitutes a violation of paragraph (a) of this 
section includes, but is not limited to:
    (1) Failing to inform a client or former client or failing to 
timely notify the Office of an inability to notify a client or former 
client of correspondence received from the Office or the client's or 
former client's opponent in an inter partes proceeding before the 
Office when the correspondence:
    (i) Could have a significant effect on a matter pending before the 
Office;

[[Page 69549]]

    (ii) Is received by the practitioner on behalf of a client or 
former client, and
    (iii) Is correspondence of which a reasonable practitioner would 
believe under the circumstances the client or former client should be 
notified.
    (2) [Reserved]


Sec.  11.105  Fees.

    (a) A practitioner's fee shall be reasonable. The factors to be 
considered in determining the reasonableness of a fee include the 
following:
    (1) The time and labor required, the novelty and difficulty of the 
questions involved, and the skill requisite to perform the legal 
service properly;
    (2) The likelihood, if apparent to the client, that the acceptance 
of the particular employment will preclude other employment by the 
practitioner;
    (3) The fee customarily charged in the locality for similar legal 
services;
    (4) The amount involved and the results obtained;
    (5) The time limitations imposed by the client or by the 
circumstances;
    (6) The nature and length of the professional relationship with the 
client;
    (7) The experience, reputation, and ability of the practitioner or 
practitioners performing the service; and
    (8) Whether the fee is fixed or contingent.
    (b) When the practitioner has not regularly represented the client 
having immediate or prospective business before the Office, the basis 
or rate of the fee shall be communicated directly to the client, in 
writing, before or within a reasonable time after commencing the 
representation. The communication shall distinguish between and specify 
the basis or rate for preparation and filing an application in the 
Office, and for prosecution of the application (including replies to 
Office actions, petitions, affidavits, appeal briefs, and the like).
    (c) A fee in regard to practice before the Office may be contingent 
on the outcome of the matter for which the service is rendered, except 
in a matter in which a contingent fee is prohibited by paragraph (d) of 
this section or other law. In accordance with paragraph (a) of this 
section, a contingent fee shall be reasonable. A contingent fee 
agreement shall be in writing and shall state the method by which the 
fee is to be determined, including the percentage or percentages that 
shall accrue to the practitioner in the event of grant of a patent, 
registration of a mark, settlement, hearing or appeal, litigation, and 
other expenses to be deducted from the recovery, and whether such 
expenses are to be deducted before or after the contingent fee is 
calculated. Upon conclusion of a contingent fee matter, the 
practitioner shall provide the client with a written statement stating 
the outcome of the matter and, if there is a recovery, showing the 
remittance to the client and the method of its determination.
    (d) A division of a fee between practitioners who are not in the 
same firm may be made in regard to practice before the Office only if:
    (1) The division is in proportion to the services performed by each 
practitioner or by written agreement with the client, each practitioner 
assumes joint responsibility for the representation;
    (2) The client is advised, in writing, of the identity of the 
practitioners who will participate in the representation, of the 
contemplated division of responsibility, and of the effect of the 
association of practitioners outside the firm on the fee to be charged;
    (3) The client gives informed consent in writing to the 
arrangement; and
    (4) The total fee is reasonable.
    (e) Any fee that is prohibited by law is per se unreasonable.


Sec.  11.106  Confidentiality of information.

    (a) A practitioner, in regard to practice before the Office, shall 
not:
    (1) Reveal information relating to representation of a client 
unless the client gives informed consent in writing after full 
disclosure by the practitioner, except for disclosures that are 
impliedly authorized in order to carry out the representation, and 
except as stated in paragraphs (b), (c), or (d) of this section;
    (2) Knowingly use information relating to representation of a 
client to the disadvantage of the client; or
    (3) Use a confidence or secret of the practitioner's client for the 
advantage of the practitioner or of a third person.
    (b) A practitioner, in regard to practice before the Office, may 
reveal such information to the extent the practitioner reasonably 
believes necessary:
    (1) To prevent the client from committing a criminal act that the 
practitioner believes is likely to result in imminent death or 
substantial bodily harm; or
    (2) To establish a claim or defense on behalf of the practitioner 
in a controversy between the practitioner and the client, to establish 
a defense to a criminal charge or civil claim against the practitioner 
based upon conduct in which the client was involved, or to respond to 
allegations in any proceeding concerning the practitioner's 
representation of a client.
    (c) A practitioner, in regard to practice before the Office, shall 
use or reveal information relating to representation of a client to 
comply with the provisions of Sec.  1.56 of this subchapter in practice 
before the Office in patent matters (see 11.303(d));
    (d) A practitioner, in regard to practice before the Office may use 
or reveal information relating to representation of a client to comply:
    (1) With the informed consent in writing of the client affected, 
but only after full disclosure by the practitioner to the client;
    (2) With rules, law or court order when permitted by these rules or 
required by law or court order; or
    (3) With the law or regulations of the Office, when permitted or 
authorized by the law or regulations, in connection with representation 
before the Office, whether or not the practitioner is employed by the 
Federal Government.
    (e) The client of practitioner employed by the Federal Government 
is the Department, agency, or commission that employs the practitioner 
unless appropriate law, regulation, or order expressly provides to the 
contrary.
    (f) A practitioner shall exercise reasonable care to prevent the 
practitioner's employees, associates, and others whose services are 
utilized by the practitioner from disclosing or using such information 
of a client, except that such persons may reveal information permitted 
to be disclosed by paragraphs (c), (d), or (e) of this section.
    (g) The practitioner's obligation to preserve in confidence such 
information continues after termination of the practitioner's 
employment, except as provided for in Sec.  1.56.
    (h) The obligation of a practitioner under paragraph (a) of this 
section also applies to such information learned prior to becoming a 
practitioner in the course of providing assistance to another 
practitioner.


Sec.  11.107  Conflict of interest: General rule.

    (a) A practitioner shall not represent a client having immediate or 
prospective business before the Office if the representation of that 
client will be directly adverse to another client having immediate or 
prospective business before the Office, unless:
    (1) The practitioner reasonably believes the representation will 
not adversely affect the relationship with the other client; and
    (2) Each client gives informed consent in writing after full 
disclosure by the practitioner. When a practitioner has both an 
inventor and an invention promoter, who referred the inventor to

[[Page 69550]]

the practitioner, as clients the disclosure and consent shall be in 
writing.
    (b) A practitioner shall not represent a client if the 
representation of that client may be materially limited by the 
practitioner's responsibilities to another client or to a third party, 
or by the practitioner's own interests, where any of the clients or 
third party have immediate or prospective business before the Office, 
unless:
    (1) The practitioner reasonably believes the representation will 
not be adversely affected; and
    (2) The client gives informed consent in writing after full 
disclosure, including implications of the common representation and the 
advantages and risks involved, by the practitioner.
    (c) The requirements of paragraph (b) of this section apply when 
the third party is an invention promoter, or the practitioner's 
interests involve receiving payment from an invention promoter.


Sec.  11.108  Conflict of interest: Prohibited transactions.

    (a) A practitioner shall not enter into a business transaction with 
a client having immediate or prospective business before the Office, or 
knowingly acquire an ownership, possessory, security, or other 
pecuniary interest adverse to a client having immediate or prospective 
business before the Office unless:
    (1) The transaction and terms on which the practitioner acquires 
the interest are fair and reasonable to the client, and are fully 
disclosed and transmitted in writing by the practitioner to the client 
in a manner which can be reasonably understood by the client;
    (2) The client is advised to and given a reasonable opportunity by 
the practitioner to seek the advice of independent counsel in the 
transaction; and
    (3) The client gives informed consent in writing thereto after full 
disclosure by the practitioner.
    (b) A practitioner shall not use information relating to 
representation of a client having immediate or prospective business 
before the Office to the disadvantage of the client unless the client 
gives informed consent in writing after full disclosure by the 
practitioner, except as permitted or required by Sec. Sec.  11.106 or 
11.303.
    (c) A practitioner shall not prepare an instrument giving the 
practitioner or a person related to the practitioner as parent, child, 
sibling, or spouse any substantial gift from a client having immediate 
or prospective business before the Office, including a testamentary 
gift, except where the client is related to the donee.
    (d) Prior to the conclusion of representation of a client having 
immediate or prospective business before the Office, a practitioner 
shall not make or negotiate an agreement giving the practitioner 
literary or media rights to a portrayal or account based in substantial 
part on information relating to the representation.
    (e) A practitioner shall not provide financial assistance to a 
client in connection with pending or contemplated litigation or 
proceeding before the Office, except that:
    (1) A practitioner may advance court costs and expenses of 
litigation, or a proceeding before the Office, the repayment of which 
may be contingent on the outcome of the matter;
    (2) A practitioner representing an indigent client may pay court or 
Office costs and expenses of litigation or proceeding before the Office 
on behalf of the client; and
    (3) A practitioner may advance or guarantee the expenses of going 
forward in a proceeding before the Office including fees required by 
law to be paid to the Office in connection with the prosecution of the 
matter, expenses of investigation, expenses of medical examination, and 
costs of obtaining and presenting evidence, provided the client remains 
ultimately liable for such expenses. A practitioner may, however, 
advance any fee required to prevent or remedy an abandonment of a 
client's application by reason of an act or omission attributable to 
the practitioner and not to the client, whether or not the client is 
ultimately liable for such fee.
    (f) A practitioner shall not accept compensation for representing a 
client having immediate or prospective business before the Office from 
one other than the client unless:
    (1) The client gives informed consent, confirmed in writing, after 
full disclosure by the practitioner;
    (2) There is no actual or potential interference with the 
practitioner's independence of professional judgment or with the 
attorney-client or agent-client relationship; and
    (3) Information relating to representation of a client is protected 
as required by Sec.  11.106.
    (g) A practitioner who represents two or more clients having 
immediate or prospective business before the Office shall not 
participate in making an aggregate settlement of the claims of or 
against the clients, unless each client gives informed consent, 
confirmed in writing, after full disclosure by the practitioner, 
including disclosure of the existence and nature of all the claims or 
pleas involved and of the participation of each person in the 
settlement.
    (h) A practitioner, in regard to practice before the Office, shall 
not:
    (1) Make an agreement prospectively limiting the practitioner's 
liability to a client or former client for malpractice unless permitted 
by law and the client is independently represented in making the 
agreement; or
    (2) Settle a claim for such liability with an unrepresented client 
or former client without first advising that person in writing that 
independent representation is appropriate in connection therewith.
    (i) A practitioner related to another practitioner as parent, 
child, sibling, or spouse shall not represent a client having immediate 
or prospective business before the Office in a representation directly 
adverse to a person who the practitioner knows is represented by the 
other practitioner except upon informed consent by the client, 
confirmed in writing, after full disclosure by the practitioner 
regarding the relationship.
    (j) A practitioner shall not acquire a proprietary interest in 
papers received from a client having immediate or prospective business 
before the Office, or in a proceeding before the Office that the 
practitioner is conducting for a client, except that the practitioner 
may:
    (1) Acquire a lien granted by law to secure the practitioner's fee 
or expenses except as provided in Sec.  11.116(d); and
    (2) Contract with a client for a reasonable contingent fee in a 
civil case or proceeding before the Office; or
    (3) In a patent case, after complying with the provisions of 
paragraph (a) of this section, and, in the case of a practitioner who 
is or has been an officer or employee of the Office, only at such time 
and insofar as is permitted by 35 U.S.C. 4, take an interest in a 
patent or in the proceeds from a patent as part or all of his or her 
fee. However, the fee obtained by said interest may not exceed an 
amount that is reasonable. See Sec.  11.105(a).
    (k) If an invention promoter provides the practitioner with access 
to an inventor-client whom the practitioner undertakes to represent 
before the Office, the practitioner shall not accept or continue 
representation of the inventor-client without providing full disclosure 
of all conflicts in writing to the inventor-client where:
    (1) The practitioner has a legal, business, financial, 
professional, or personal relationship with a company in the same 
matter; or
    (2) The practitioner has or had a legal, business, financial, 
professional, or personal relationship with another

[[Page 69551]]

person the practitioner knows or reasonably should know would be 
affected substantially by the representation or lack of representation 
of the inventor-client.


Sec.  11.109  Conflict of interest: Former client.

    (a) A practitioner who, in practice before the Office, has formerly 
represented a client shall not thereafter represent another person in 
the same or a substantially related matter in which that person's 
interests are materially adverse to the interests of the former client 
unless the former client gives informed consent, confirmed in writing, 
after consultation.
    (b) A practitioner, in regard to practice before the Office, shall 
not knowingly represent a person in the same or substantially related 
matter in which a firm or a member of the firm, with which the 
practitioner formerly was associated, had previously represented a 
client,
    (1) Whose interests are materially adverse to that person; and
    (2) About whom the practitioner has acquired information protected 
by Sec. Sec.  11.106 and 11.109(c) that is material to the matter; 
unless the former client gives informed consent, confirmed in writing, 
after full disclosure by the practitioner;
    (c) A practitioner who has formerly represented a client in a 
matter before the Office, or whose present or former firm, or a 
practitioner in the firm, has formerly represented a client in a matter 
before the Office shall not thereafter:
    (1) Use information relating to the representation to the 
disadvantage of the former client except as Sec. Sec.  11.106 or 11.303 
would permit or require with respect to a client, or when the 
information has become generally known; or
    (2) Reveal information relating to the representation except as 
Sec. Sec.  11.106 or 11.303 would permit or require with respect to a 
client.


Sec.  11.110  Imputed disqualification: General rule.

    (a) While practitioners are associated in a firm, or are associated 
on a continuing basis with an invention promoter, none of them shall 
knowingly represent a client having immediate or prospective business 
before the Office when any one of them practicing alone would be 
prohibited from doing so by Sec. Sec.  11.107, 11.108(b), 11.109, or 
11.202.
    (b) In regard to practice before the Office, when a practitioner 
has terminated an association with a firm, the firm is not prohibited 
from thereafter representing a person with interests materially adverse 
to those of a client represented by the formerly associated 
practitioner, and not currently represented by the firm, unless:
    (1) The matter is the same or substantially related to that in 
which the formerly associated practitioner represented the client; and
    (2) Any practitioner remaining in the firm has information 
protected by Sec. Sec.  11.106 and 11.109(c) that is material to the 
matter.
    (c) A disqualification prescribed by this section may be waived by 
the affected client under the conditions stated in Sec.  11.107.


Sec.  11.111  Successive Government and private employment.

    (a) A practitioner shall not accept private employment in 
connection with a matter that is the same as, or substantially related 
to, a matter in which the practitioner participated personally and 
substantially as an employee of the Office. Such participation 
includes, but is not limited to, acting on the merits of a matter in an 
administrative or adjudicative capacity.
    (b) If a practitioner is required to decline or to withdraw from 
employment under paragraph (a) of this section on account of personal 
and substantial participation in a matter, no partner or associate of 
that practitioner, or practitioner with an of counsel relationship to 
that practitioner, may accept or continue such employment except as 
provided in paragraph (c) of this section. The disqualification of such 
other practitioners does not apply if the sole form of participation 
was as a judicial or administrative law clerk, including a law clerk at 
the Board of Patent Appeals and Interferences, or at the Trademark 
Trial and Appeal Board.
    (c) The prohibition stated in paragraph (b) of this section shall 
not apply if the personally disqualified practitioner is screened from 
any form of participation in the matter or representation as the case 
may be, and from sharing in any fees resulting therefrom, and if the 
requirements of paragraphs (d) and (e) of this section are satisfied.
    (d) Except as law may otherwise expressly permit, a practitioner 
having information that the practitioner knows is confidential 
Government information about a person that was acquired when the 
practitioner was an employee of the Office, may not represent a private 
client whose interests are adverse to that person in a matter in which 
the information could be used to the material disadvantage of that 
person. A firm with which that practitioner is associated may undertake 
or continue representation in the matter only if the disqualified 
practitioner is screened from any participation in the matter and is 
apportioned no part of the fee therefrom.
    (e) Except as law may otherwise expressly permit, a practitioner 
serving as an employee of the Office shall not:
    (1) Participate in a matter in which the practitioner participated 
personally and substantially while in private practice or 
nongovernmental employment, unless under applicable law no one is, or 
by lawful delegation may be, authorized to act in the practitioner's 
stead in the matter; or
    (2) Negotiate for private employment with any person who is 
involved as a party or as practitioner for a party in a matter in which 
the practitioner is participating personally or substantially, except:
    (i) A practitioner serving as a law clerk to a judge, 
administrative law judge, administrative patent judge, or 
administrative trademark judge may negotiate for private employment as 
permitted by Sec.  11.112(b) and subject to the conditions stated in 
Sec.  11.112(b); and
    (ii) A practitioner serving in the Office may negotiate for 
employment with a party or practitioner involved in a matter in which 
the practitioner is participating personally and substantially, but 
only after the practitioner has notified his or her supervisor, and the 
matter is withdrawn from the practitioner's scope of authority.
    (f) A practitioner serving in the Office shall not in any manner 
assist his or her former client, or another practitioner in the 
presentation or prosecution of said former client's patent application 
before the Office, including, but not limited to, providing assistance 
regarding the presentation or amendment of the specification, claims, 
or drawings, a translation of any foreign document, or provision of 
funds.
    (g) As used in this section, the terms matter, participated, 
personally, and substantially are described in Sec.  11.10(b)(3).
    (h) As used in this section, the term confidential Government 
information means information that has been obtained under governmental 
authority and which, at the time this section is applied, the 
Government is prohibited by law from disclosing to the public or has a 
legal privilege not to disclose, and which is not otherwise available 
to the public.
    (i) Conduct that constitutes a violation of paragraph (a) of this 
section includes, but is not limited to:
    (1) A practitioner preparing or prosecuting or providing assistance 
in

[[Page 69552]]

the preparation or prosecution of a patent application in violation of 
an undertaking signed under Sec.  11.10(b), or knowingly aiding in any 
manner another practitioner in conduct violating an undertaking signed 
by the other practitioner under Sec.  11.10(b).


Sec.  11.112  Former judge or arbitrator.

    (a) Except as stated in paragraph (b) of this section, a 
practitioner shall not represent anyone in connection with a matter 
before the Office in which the practitioner participated personally and 
substantially as an arbitrator, unless all parties to the proceeding 
give informed consent, confirmed in writing, after disclosure by the 
practitioner.
    (b) A practitioner shall not negotiate for employment with any 
person who is involved as a party or as practitioner for a party in a 
matter in which the practitioner is participating personally and 
substantially as a judge, administrative law judge, administrative 
patent judge, administrative trademark judge, or other adjudicative 
officer, or arbitrator. A practitioner serving as a law clerk to a 
judge, administrative patent judge, administrative trademark judge, 
other adjudicative officer or arbitrator may negotiate for employment 
with a party or practitioner involved in a matter in which the clerk is 
participating personally and substantially, but only after the 
practitioner has notified the judge, other adjudicative officer or 
arbitrator.
    (c) If a practitioner is disqualified by paragraph (a) of this 
section, no practitioner in a firm with which that practitioner is 
associated may knowingly undertake or continue representation in the 
matter unless:
    (1) The disqualified practitioner is screened from any 
participation in the matter and is apportioned no part of the fee 
therefrom; and
    (2) Written notice is promptly given to the appropriate tribunal to 
enable it to ascertain compliance with the provisions of this section.
    (d) An arbitrator selected as a partisan of a party in a 
multimember arbitration panel is not prohibited from subsequently 
representing that party.


Sec.  11.113  Organization as client.

    (a) A practitioner employed or retained by an organization 
represents the organization, which acts through its duly authorized 
constituents.
    (b) If a practitioner employed or retained by an organization 
having immediate or prospective business before the Office knows that 
an officer, employee or other person associated with the organization 
is engaged in action, intends to act or refuses to act in a matter 
related to the representation that is a violation of a legal obligation 
to the organization, or a violation of law which reasonably might be 
imputed to the organization, and is likely to result in substantial 
injury to the organization, the practitioner shall proceed as is 
reasonably necessary in the best interest of the organization. In 
determining how to proceed, the practitioner shall give due 
consideration to the seriousness of the violation and its consequences, 
the scope and nature of the practitioner's representation, the 
responsibility in the organization and the apparent motivation of the 
person involved, the policies of the organization concerning such 
matters and any other relevant considerations. Any measures taken shall 
be designed to minimize disruption of the organization and the risk of 
revealing information relating to the representation to persons outside 
the organization. Such measures may include among others:
    (1) Asking reconsideration of the matter;
    (2) Advising that a separate legal opinion on the matter be sought 
for presentation to appropriate authority in the organization; and
    (3) Referring the matter to higher authority in the organization, 
including, if warranted by the seriousness of the matter, referral to 
the highest authority that can act in behalf of the organization as 
determined by applicable law.
    (c) If, despite the practitioner's efforts in accordance with 
paragraph (b) of this section, the highest authority that can act on 
behalf of the organization insists upon acting, or a refusal to act, 
that is clearly a violation of law and is likely to result in 
substantial injury to the organization, the practitioner may resign in 
accordance with Sec.  11.116.
    (d) In dealing with an organization's directors, officers, 
employees, members, shareholders, or other constituents, a practitioner 
shall explain the identity of the client when it is apparent that the 
organization's interests may be adverse to those of the constituents 
with whom the practitioner is dealing.
    (e) A practitioner representing an organization may also represent 
any of its directors, officers, employees, members, shareholders, or 
other constituents, subject to the provisions of Sec.  11.107. If the 
organization's consent to the dual representation is required by Sec.  
11.107, the consent shall be confirmed in writing by an appropriate 
official of the organization other than the individual who is to be 
represented, or by the shareholders.


Sec.  11.114  Client under a disability.

    (a) When the ability of a client who has immediate or prospective 
business before the Office, to make adequately considered decisions in 
connection with the representation is impaired, whether because of 
minority, mental disability, or for some other reason, the practitioner 
shall, as far as reasonably possible, maintain a normal attorney-client 
or agent-client relationship with the client.
    (b) A practitioner may seek the appointment of a guardian or take 
other protective action with respect to a client having immediate or 
prospective business before the Office, only when the practitioner 
reasonably believes that the client cannot adequately act in the 
client's own interest.


Sec.  11.115  Safekeeping property.

    (a) All funds received or held by a practitioner or law firm on 
behalf of a client having immediate or prospective business before the 
Office, other than reimbursement of advances for costs and expenses, 
shall be deposited in one or more identifiable escrow accounts 
maintained at a financial institution in the State, authorized by 
Federal or State law to do business in the jurisdiction where the 
practitioner or law firm is situated and which is a member of the 
Federal Deposit Insurance Corporation, or the Federal Savings and Loan 
Insurance Corporation, or successor agencies or, in the case of a 
practitioner having an office in a foreign country or registered under 
Sec.  11.6(c), in said financial institution in the United States or in 
a comparable financial institution in a foreign country, and no funds 
belonging to the practitioner or law firm shall be deposited therein 
except as follows:
    (1) Funds reasonably sufficient to pay service or other charges or 
fees imposed by the financial institution may be deposited therein; or
    (2) Funds belonging in part to a client and in part presently or 
potentially to the practitioner or law firm must be deposited in said 
financial institution, and the portion belonging to the practitioner or 
law firm must be withdrawn promptly after it is due unless the right of 
the practitioner or law firm to receive it is disputed by the client, 
in which event the disputed portion shall not be withdrawn until the 
dispute is finally resolved.
    (b) A practitioner having an arrangement with an invention promoter 
for payment of his or her legal fees for legal services rendered for a 
client referred to the practitioner by the promoter must ascertain upon 
accepting said referral whether the client advances

[[Page 69553]]

funds for legal services to the promoter, and must take all reasonable 
steps to safeguard the advanced funds.
    (c) When in the course of representation before the Office a 
practitioner is in possession of property in which both the 
practitioner and another person claim interests, the practitioner shall 
keep the property separate until there is an accounting and severance 
of their interests. If a dispute arises concerning their respective 
interests, the practitioner shall keep the portion in dispute separate 
until the dispute is resolved.
    (d) A practitioner, in connection with a client having immediate or 
prospective business before the Office, shall:
    (1) Promptly notify a client of the receipt of the client's funds, 
securities, or other properties;
    (2) Identify and label securities and properties of a client 
promptly upon receipt and place them in a safe deposit box or other 
place of safekeeping as soon as practicable;
    (3) Maintain complete records of all funds, securities, and other 
properties of a client coming into the possession of the practitioner 
and render appropriate accounts to the client regarding them; and
    (4) Promptly pay and deliver to the client or another as requested 
by such person the funds, securities, or other properties in the 
possession of the practitioner that such person is entitled to receive.
    (e) Funds, securities or other properties. Funds, securities or 
other properties held by a practitioner or law firm as a fiduciary in 
connection with a client having immediate or prospective business 
before the Office shall be maintained in separate fiduciary accounts, 
and the practitioner or law firm shall not commingle the assets of such 
fiduciary accounts in a common account (including a book-entry custody 
account), except in the following cases:
    (1) Funds may be maintained in a common escrow account subject to 
the provisions of paragraphs (a) and (c) of this section when 
authorized by professional conduct rules for lawyers in the 
jurisdiction where the practitioner or law firm is situated; or
    (2) Funds, securities or other properties may be maintained in a 
common account when authorized by professional conduct rules for 
lawyers in the jurisdiction where the practitioner or law firm is 
situated.
    (f) Recordkeeping requirements, required books and records. Every 
practitioner in regard to his or her practice before the Office shall 
maintain or cause to be maintained, on a current basis, books and 
records that establish compliance with paragraphs (a) and (d) of this 
section. Whether a practitioner or a law firm maintains computerized 
records or a manual accounting system, such system shall produce the 
records or information required by this section.
    (1) In the case of funds held in an escrow account subject to this 
section, the required books and records include:
    (i) A cash receipts journal or journals listing all funds received, 
the sources of the receipts and the date of receipts. Checkbook entries 
of receipts and deposits, if adequately detailed and bound, may 
constitute a journal for this purpose. If separate cash receipts 
journals are not maintained for escrow and non-escrow funds, then the 
consolidated cash receipts journal shall contain separate columns for 
escrow and non-escrow receipts;
    (ii) A cash disbursements journal listing and identifying all 
disbursements from the escrow account. Checkbook entries of 
disbursements, if adequately detailed and bound, may constitute a 
journal for this purpose. If separate disbursements journals are not 
maintained for escrow and non-escrow disbursements then the 
consolidated disbursements journal shall contain separate columns for 
escrow and non-escrow disbursements;
    (iii) A subsidiary ledger containing a separate account for each 
client and for every other person or entity from whom money has been 
received in escrow shall be maintained. The ledger account shall by 
separate columns or otherwise clearly identify escrow funds disbursed, 
and escrow funds balance on hand. The ledger account for a client or a 
separate subsidiary ledger account for a client shall clearly indicate 
all fees paid from trust accounts; and
    (iv) Reconciliations and supporting records required under this 
section.
    (2) The records required under paragraph (f)(1) of this section 
shall be preserved for at least five full calendar years following 
termination of the fiduciary relationship.
    (3) In the case of funds or property held by a practitioner or law 
firm as a fiduciary subject to paragraph (c) of this section, the 
required books and records include:
    (i) An annual summary of all receipts and disbursements and changes 
in assets comparable to an accounting that would be required of a court 
supervised fiduciary in the same similar capacity. Such annual summary 
shall be in sufficient detail as to allow a reasonable person to 
determine whether the practitioner is properly discharging the 
obligations of the fiduciary relationship; and
    (ii) Original source documents sufficient to substantiate and, when 
necessary, to explain the annual summary required under paragraph 
(f)(2)(A) of this section.
    (4) The records required under paragraph (f)(3) of this section 
shall be preserved for at least five full years following the 
termination of the fiduciary relationship.
    (g) Required escrow accounting procedures. The following minimum 
accounting procedures are applicable to all escrow accounts subject to 
paragraphs (a) and (c) of this section by practitioners in regard to 
practice before the Office.
    (1) Insufficient fund check reporting.
    (i) Clearly identified escrow accounts required. A practitioner or 
law firm shall deposit all funds held in escrow in a clearly identified 
account, and shall inform the financial institution in writing of the 
purpose and identity of the account. Practitioner escrow accounts shall 
be maintained only in financial institutions authorized by these rules.
    (ii) Overdraft notification. A financial institution may report to 
the Office of Enrollment and Discipline if any instrument which would 
be properly payable if sufficient funds were available, is presented 
against a practitioner escrow account containing insufficient funds, 
irrespective of whether or not the instrument is honored.
    (iii) Overdraft reports. All reports made by a financial 
institution shall be in the following format:
    (A) In the case of a dishonored instrument, the report shall be 
identical of the overdraft customarily forwarded to the depositor, and 
should include a copy of the dishonored instrument, if such a copy is 
normally provided to depositors;
    (B) In the case of instruments that are presented against 
insufficient funds but which instruments are honored, the report shall 
identify the financial institution, the practitioner or law firm, the 
account name, the account number, the date of presentation for payment, 
and the date paid, as well as the amount of the overdraft created 
thereby; and
    (C) Every practitioner or law firm shall be conclusively deemed to 
have consented to the reporting and production requirements mandated by 
this section.
    (2) Deposits. All receipts of escrow money shall be deposited 
intact and a retained duplicate deposit slip or other such record shall 
be sufficiently

[[Page 69554]]

detailed to show the identity of each item.
    (3) Deposit of mixed escrow and non-escrow funds other than fees 
and retainers. Mixed escrow and non-escrow funds shall be deposited 
intact to the escrow account. The non-escrow portion shall be withdrawn 
upon the clearing of the mixed fund deposit instrument.
    (4) Periodic trial balance. A regular periodic trial balance of the 
subsidiary ledger shall be made at least quarterly, within 30 days 
after the close of the period and shall show the escrow account balance 
of the client or other period at the end of each period.
    (A) The total of the trial balance must agree with the control 
figure computed by taking the beginning balance, adding the total 
monies received in escrow for the period and deducting the total escrow 
monies disbursed for the period; and
    (B) The trial balance shall identify the preparer and be approved 
by the practitioner or one of the practitioners in the law firm.
    (5) Reconciliations. (i) A monthly reconciliation shall be made at 
month end of the cash balance derived from the cash receipts journal 
and cash disbursements journal total, the escrow account checkbook 
balance, and the escrow account bank Statement balance;
    (ii) A periodic reconciliation shall be made at least quarterly, 
within 30 days after the close of the period, reconciling cash balances 
to the subsidiary ledger trial balance;
    (iii) Reconciliations shall identify the preparer and be approved 
by the practitioner or one of the practitioners in the law firm.
    (6) Receipts and disbursements explained. The purpose of all 
receipts and disbursements of escrow funds reported in the escrow 
journals and subsidiary ledgers shall be explained and supported by 
adequate records.
    (h) All financial accounts kept by a registered practitioner must 
comply with the provisions of paragraph (f) of this section, except 
that:
    (1) Attorneys: The financial records maintained by a practitioner 
who is an attorney in good standing of a bar of the highest court in a 
state will be deemed to be in substantial compliance with the 
provisions of paragraphs (f) and (g) of this section if the attorney's 
principal place of business is in the United States, and the financial 
records are in compliance with the financial recordkeeping requirements 
of the state bar of which he or she is a member in good standing; or
    (2) Patent agents employed by a law firm: The trust account records 
maintained by a law firm with regard to a patent agent employed by the 
law firm will be deemed to be in substantial compliance with the 
provisions of paragraphs (f) and (g) of this section for the patent 
agent if the principal place of business of the law firm and the patent 
agent are in the United States, the patent agent is employed by the law 
firm, and the financial records maintained by the law firm comply with 
the financial record-keeping requirements that apply to at least one 
attorney in the law firm at the principal place of business.
    (i) Conduct that constitutes a violation of paragraph (a) of this 
section includes, but is not limited to misappropriation of, or failure 
to properly or timely remit, funds received by a practitioner or the 
practitioner's firm from a client having immediate or prospective 
business before the Office to pay a fee which the client is required by 
law to pay to the Office.


Sec.  11.116  Declining or terminating representation.

    (a) Except as stated in paragraph (c) of this section, a 
practitioner shall not represent a client before the Office, or where 
representation has commenced, shall withdraw from the representation of 
a client before the Office if:
    (1) The representation will result in violation of the Rules of 
Professional Conduct or other law;
    (2) The practitioner's physical or mental condition materially 
impairs the practitioner's ability to represent the client;
    (3) The practitioner is discharged; or
    (4) The practitioner becomes an employee of the Office, and before 
becoming an employee the practitioner has a matter, including a patent 
application, in which the practitioner acts as attorney or agent for 
prosecuting a claim against the United States, or receives any 
gratuity, or any share of or interest in such claim, or acts as 
attorney or agent for anyone before the Office in which the United 
States is a party or has a substantial interest. In the latter 
instance, the practitioner shall withdraw before the first day of 
employment at the Office from every such matter.
    (b) Except as stated in paragraph (c) of this section, a 
practitioner may withdraw from representing a client before the Office 
if withdrawal can be accomplished without material adverse effect on 
the interests of the client, or if:
    (1) The client persists in a course of action involving the 
practitioner's services that the practitioner reasonably believes is 
criminal or fraudulent;
    (2) The client has used the practitioner's services to perpetrate a 
crime or fraud;
    (3) A client insists upon pursuing an objective that the lawyer 
considers repugnant or imprudent;
    (4) The client fails substantially to fulfill an obligation to the 
practitioner regarding the practitioner's services and has been given 
reasonable warning that the practitioner will withdraw unless the 
obligation is fulfilled;
    (5) The representation will result in an unreasonable financial 
burden on the practitioner or obdurate or vexatious conduct on the part 
of the client has rendered the representation unreasonably difficult; 
or
    (6) Other good cause for withdrawal exists.
    (c) When ordered to do so by the Office, a practitioner shall 
continue representation notwithstanding good cause for terminating the 
representation.
    (d) Upon termination of representation before the Office, a 
practitioner shall take steps reasonably practicable to protect a 
client's interests, such as giving reasonable notice to the client, 
allowing time for employment of other counsel, surrendering papers and 
property to which the client is entitled, and refunding any advance 
payment of fee that has not been earned. The practitioner may retain 
papers relating to the client to the extent permitted by other law, 
Sec.  11.108(j), but in regard to any proceeding before the Office a 
practitioner shall not retain:
    (1) Any part of the client's files regarding the proceeding, 
including patent or trademark application files, that has been filed 
with the Office,
    (2) Any work product regarding the proceeding for which the 
practitioner has been paid, or
    (3) Any proceeding-related paper whenever assertion of a retaining 
lien on the paper would materially prejudice or imperil the protection 
of the client's interests.


Sec.  11.117  Sale of practice.

    A practitioner may sell or purchase a law practice involving patent 
or trademark matters before the Office, including good will, if the 
following conditions are satisfied:
    (a) The seller ceases to engage in the private practice before the 
Office;
    (b) The practice, to the extent it involves patent proceedings, is 
sold as an entirety to another registered practitioner or firm 
comprising registered practitioners;
    (c) Actual written notice is given to each of the seller's clients 
having immediate or prospective business before the Office regarding:

[[Page 69555]]

    (1) The proposed sale;
    (2) The terms of any proposed change in the fee arrangement 
authorized by paragraph (d) of this section;
    (3) The client's right to retain other counsel or to take 
possession of the file; and
    (4) The fact that the client's consent to the sale will be presumed 
if the client does not take any action or does not otherwise object 
within ninety (90) days after receipt of the notice. If a client cannot 
be given notice, the representation of that client may be transferred 
to the purchaser only upon entry of an order so authorizing by a court 
having jurisdiction. The seller may disclose to the court in camera 
information relating to the representation only to the extent necessary 
to obtain an order authorizing the transfer of a file.
    (d) The fees charged clients having immediate or prospective 
business before the Office shall not be increased by reason of the 
sale. The purchaser may, however, refuse to undertake the 
representation unless the client gives informed consent, confirmed in 
writing, to pay the purchaser fees at a rate not exceeding the fees 
charged by the purchaser for rendering substantially similar services 
prior to the initiation of the purchase negotiations.


Sec. Sec.  11.118-11.200  [Reserved]

Counselor


Sec.  11.201  Advisor.

    (a) In representing a client having immediate or prospective 
business before the Office, a practitioner shall exercise independent 
professional judgment and render candid advice. In rendering advice, a 
practitioner may refer not only to law but also to other considerations 
such as moral, economic, social and political factors that may be 
relevant to the client's situation.
    (b) In rendering patentability advice to a client referred by an 
invention promoter, a practitioner shall identify the element(s) of the 
references and invention considered, and specify the element or 
combination of elements of the invention that are believed to support a 
conclusion that the invention may be patentable.


Sec.  11.202  Intermediary.

    (a) A practitioner may act as intermediary between clients, any one 
of which has immediate or prospective business before the Office, if:
    (1) The practitioner consults with each client concerning the 
implications of the common representation, including the advantages and 
risks involved, and the effect on the attorney-client or agent-client 
privileges, and the practitioner obtains from each client informed 
consent, confirmed in writing, to the common representation;
    (2) The practitioner reasonably believes that the matter can be 
resolved on terms compatible with the clients' best interests, that 
each client will be able to make adequately informed decisions in the 
matter, and that there is little risk of material prejudice to the 
interests of any of the clients if the contemplated resolution is 
unsuccessful; and
    (3) The practitioner reasonably believes that the common 
representation can be undertaken impartially and without improper 
effect on other responsibilities the practitioner has to any of the 
clients.
    (b) While acting as intermediary between clients, any one of which 
has immediate or prospective business before the Office, the 
practitioner shall consult with each client concerning the decisions to 
be made and the considerations relevant in making them, so that each 
client can make adequately informed decisions.
    (c) A practitioner shall withdraw as intermediary between clients, 
any one of which has immediate or prospective business before the 
Office, if any of the clients so request, or if any of the conditions 
stated in paragraph (a) of this section are no longer satisfied. In 
connection with a proceeding pending before the Office, the 
practitioner shall submit a written request to withdraw to the USPTO 
Director. Upon withdrawal, the practitioner shall not continue to 
represent any of the clients in the matter that was the subject of the 
intermediation.
    (d) Except in unusual circumstances that may make it infeasible, 
prior to undertaking intermediation in a matter between clients who are 
an inventor and an invention promoter, a practitioner shall provide 
both clients with full disclosure of all potential and actual conflicts 
of interest, and obtain from each client informed consent, confirmed in 
writing.


Sec.  11.203  Evaluation for use by third persons.

    (a) A practitioner may undertake an evaluation of a matter 
affecting a client for the use of someone other than the client, where 
either the client or other person has immediate or prospective business 
before the Office, if:
    (1) The practitioner reasonably believes that making the evaluation 
is compatible with other aspects of the practitioner's relationship 
with the client; and
    (2) The client gives informed consent, confirmed in writing, after 
full disclosure by the practitioner.
    (b) Except as disclosure is required in connection with a report of 
an evaluation regarding a patent, trademark or other non-patent law 
matter before the Office, information relating to the evaluation is 
otherwise protected by Sec.  11.106.
    (c) If a practitioner provides an evaluation regarding a patent, 
trademark or other non-patent matter before the Office to an invention 
promoter, which the invention promoter forwards in whole or in part to 
an inventor, and the evaluation includes any evaluation of 
patentability, the inventor shall constitute a client of the 
practitioner and provisions of Sec. Sec.  11.104(a)(1), 11.107(a)(2), 
11.107(b)(2), 11.108(f)(1), 11.201(b), 11.202(d), and 11.701(b), and 
the practitioner must satisfy the provisions of Sec. Sec.  11.804(h)(2) 
or (h)(3) before the practitioner provides any evaluation. The 
evaluation may not disclose or be based upon knowledge or information 
that the inventor regards as confidential, and may not otherwise 
provide publication of the invention prior to the filing of an 
application for the inventor.


Sec. Sec.  11.204-11.300  [Reserved]

Advocate


Sec.  11.301  Meritorious claims and contentions.

    A practitioner shall not bring or defend a proceeding before the 
Office, or assert or controvert an issue therein, unless there is a 
basis for doing so that is not frivolous, which includes a good-faith 
argument for an extension, modification, or reversal of existing law.


Sec.  11.302  Expediting litigation and Office proceedings.

    (a) A practitioner shall make reasonable efforts to expedite 
proceedings before the Office consistent with the interests of the 
client.
    (b) In representing a client having immediate or prospective 
business before the Office, a practitioner shall not delay a proceeding 
when the practitioner knows or when it is obvious that such action 
would serve solely to harass or maliciously injure another.


Sec.  11.303  Candor toward the tribunal.

    (a) A practitioner, in regard to practice before the Office, shall 
not knowingly:
    (1) Make a false statement of material fact or law to a tribunal;
    (2) Fail to disclose a material fact to the Office when disclosure 
is necessary to avoid assisting a criminal or fraudulent act by a 
client;

[[Page 69556]]

    (3) Fail to disclose to the Office legal authority in the 
controlling jurisdiction known to the practitioner to be directly 
adverse to the position of the client and not disclosed by opposing 
counsel; or
    (4) Offer evidence that the practitioner knows to be false or 
misleading. If a practitioner has offered material evidence and comes 
to know of its falsity or that it is misleading, the practitioner shall 
take reasonable remedial measures. If a practitioner has offered 
evidence in the Office material to patentability in regard to a patent 
or patent application, and comes to know of its falsity or that it is 
misleading, the practitioner shall disclose to the Office in writing 
information regarding the falsity or that it is misleading with respect 
to each pending claim until the claim is cancelled or withdrawn from 
consideration, or the application becomes abandoned.
    (b) The duties stated in paragraph (a) of this section continue to 
the conclusion of the proceeding, and apply even if compliance requires 
disclosure of information otherwise protected by Sec.  11.106.
    (c) A practitioner, in regard to practice before the Office, may 
refuse to offer evidence that the practitioner reasonably believes is 
false or misleading.
    (d) In a proceeding before the Office other than those involving 
the granting of a patent or registration of a mark, a practitioner 
shall inform the Office of all material facts known to the practitioner 
that will enable the Office to make an informed decision, whether or 
not the facts are adverse. In a patent proceeding before the Office, a 
practitioner shall inform the Office of all information material to 
patentability known to the practitioner in accordance with Sec.  1.56, 
whether or not such information is adverse.
    (e) Conduct that constitutes a violation of paragraphs (a) through 
(d) of this section includes, but is not limited to:
    (1) Knowingly misusing a ``Certificate of Mailing or Transmission'' 
under Sec.  1.8 of this subchapter;
    (2) Knowingly violating or causing to be violated the requirements 
of Sec. Sec.  1.56 or 1.555 of this subchapter;
    (3) Except as permitted by Sec.  1.52(c) of this subchapter, 
knowingly filing or causing to be filed a patent application containing 
any material alteration made in the application papers after the 
signing of the accompanying oath or declaration without identifying the 
alteration at the time of filing the application papers;
    (4) Knowingly signing a paper filed in the Office in violation of 
the provisions of Sec.  11.18 or making a scandalous statement in a 
paper filed in the Office; and
    (5) Knowingly giving false or misleading information or knowingly 
participating in a material way in giving false or misleading 
information, to the Office or any employee of the Office.


Sec.  11.304  Fairness to opposing party, the Office, and counsel.

    A practitioner, in regard to practice before the Office, shall not:
    (a) Unlawfully obstruct another party's access to evidence or 
unlawfully alter, destroy or conceal documents or other material having 
potential evidentiary value. A practitioner shall not counsel or assist 
another person to do any such act;
    (b) Falsify evidence, counsel or assist a witness to testify 
falsely, or offer an inducement to a witness that is prohibited by law;
    (c) Knowingly disobey an obligation under the rules of the Office 
except for an open refusal based on an assertion that no valid 
obligation exists;
    (d) In an inter partes proceeding before the Office, make a 
frivolous discovery request, or fail to make a reasonably diligent 
effort to comply with a legally proper discovery request by an opposing 
party;
    (e) In a proceeding before the Office, allude to any matter that 
the practitioner does not reasonably believe is relevant or that will 
not be supported by admissible evidence, assert personal knowledge of 
facts in issue except when testifying as a witness, or state a personal 
opinion as to the justness of a cause, the credibility of a witness, 
the culpability of a civil litigant, or the guilt or innocence of an 
accused; or
    (f) Request a person other than a client to refrain from 
voluntarily giving relevant information to another party unless:
    (1) The person is a relative or an employee or other agent of a 
client; and
    (2) The practitioner reasonably believes that the person's 
interests will not be adversely affected by refraining from giving such 
information.


Sec.  11.305  Impartiality and decorum of the tribunal.

    A practitioner shall not:
    (a) Seek to influence an administrative law judge, administrative 
patent judge, administrative trademark judge, hearing officer, 
tribunal, employee of a tribunal, or other official by means prohibited 
by law;
    (b) Communicate ex parte with such a person except as permitted by 
law; or
    (c) Engage in conduct intended to disrupt a tribunal.
    (d) Conduct that constitutes a violation of paragraphs (a) through 
(c) of this section includes, but is not limited to:
    (1) Directly or indirectly improperly influencing, attempting to 
improperly influence, offering or agreeing to improperly influence, or 
attempting to offer or agree to improperly influence an official action 
of any tribunal or employee of a tribunal by:
    (i) Use of threats, false accusations, duress, or coercion;
    (ii) An offer of any special inducement or promise of advantage, or
    (iii) Improperly bestowing of any gift, favor, or thing of value.


Sec.  11.306  [Reserved]


Sec.  11.307  Practitioner as witness.

    (a) A practitioner shall not act as advocate in a proceeding before 
the Office in which the practitioner is likely to be a necessary 
witness except where:
    (1) The testimony relates to an uncontested issue;
    (2) The testimony relates to the nature and value of legal services 
rendered in the case; or
    (3) Disqualification of the practitioner would work substantial 
hardship on the client.
    (b) A practitioner may act as advocate in a proceeding before the 
Office in which another practitioner in the practitioner's firm is 
likely to be called as a witness unless precluded from doing so by 
Sec. Sec.  11.107 or 11.109. The provisions of this paragraph do not 
apply if the practitioner who is appearing as an advocate is employed 
by, and appears on behalf of, a Government agency.


Sec.  11.308  [Reserved]


Sec.  11.309  Advocate in nonadjudicative proceedings.

    A practitioner representing a client before a legislative or 
administrative body in a nonadjudicative proceeding shall disclose that 
the appearance is in a representative capacity and shall conform to the 
provisions of Sec. Sec.  11.303(a) through (c), 11.304(a) through (c), 
and 11.305.


Sec. Sec.  11.310-11.400  [Reserved]

Transactions With Persons Other Than Clients


Sec.  11.401  Truthfulness in statements to others.

    In the course of representing a client having immediate or 
prospective business before the Office, a practitioner shall not 
knowingly:
    (a) Make a false statement of material fact or law to a third 
person; or

[[Page 69557]]

    (b) Fail to disclose a material fact to a third person when 
disclosure is necessary to avoid assisting a criminal or fraudulent act 
by a client, unless disclosure is prohibited by Sec.  11.106.


Sec.  11.402  Communication with person represented by counsel.

    (a) In representing a client having immediate or prospective 
business before the Office a practitioner shall not communicate or 
cause another to communicate about the subject of the representation 
with a party the practitioner knows to be represented by another 
practitioner in the matter, unless the practitioner has the consent of 
the practitioner representing such other party or is authorized by law 
to do so.
    (b) For purposes of this section, the term party includes any 
person, including an employee of a party organization, who has the 
authority to bind a party organization as to the representation to 
which the communication relates.
    (c) This section does not prohibit communication by a practitioner 
with Government officials who have the authority to redress the 
grievances of the practitioner's client, whether or not those 
grievances or the practitioner's communications relate to matters that 
are the subject of the representation, provided that in the event of 
such communications the disclosures specified in paragraph (b) of this 
section are made to the Government official to whom the communication 
is made.


Sec.  11.403  Dealing with unrepresented person.

    In dealing with a person who is not represented by counsel on 
behalf of a client having immediate or prospective business before the 
Office, a practitioner shall not state or imply to unrepresented 
persons that the practitioner is disinterested. When the practitioner 
knows or reasonably should know that the unrepresented person 
misunderstands the practitioner's role in the matter, the practitioner 
shall make reasonable efforts to correct the misunderstanding.


Sec.  11.404  Respect for rights of third persons.

    In representing a client having immediate or prospective business 
before the Office, a practitioner shall not use means that have no 
substantial purpose other than to embarrass, delay, or burden a third 
person, or use methods of obtaining evidence that violate the legal 
rights of such a person.


Sec. Sec.  11.405-11.500  [Reserved]

Law Firms and Associations


Sec.  11.501  Responsibilities of a partner or supervisory 
practitioner.

    (a) A partner in a law firm shall make reasonable efforts to ensure 
that the firm has in effect measures giving reasonable assurance that 
all practitioners in the firm conform to the Rules of Professional 
Conduct.
    (b) A practitioner having direct supervisory authority over another 
practitioner shall make reasonable efforts to ensure that the other 
practitioner conforms to the Rules of Professional Conduct.
    (c) A practitioner shall be responsible for another practitioner's 
violation of the Rules of Professional Conduct if:
    (1) The practitioner orders or, with knowledge of the specific 
conduct, ratifies the conduct involved; or
    (2) The practitioner is a partner in the law firm in which the 
other practitioner practices, or has direct supervisory authority over 
the other practitioner, and knows of the conduct at a time when its 
consequences can be avoided or mitigated but fails to take reasonable 
remedial action.


Sec.  11.502  Responsibilities of a subordinate practitioner.

    (a) A practitioner is bound by the Rules of Professional Conduct 
notwithstanding that the practitioner acted at the direction of another 
person.
    (b) A subordinate practitioner does not violate the Rules of 
Professional Conduct if that practitioner acts in accordance with a 
supervisory practitioner's reasonable resolution of an arguable 
question of professional duty.


Sec.  11.503  Responsibilities regarding nonpractitioner assistants.

    With respect to a nonpractitioner employed or retained by, or 
associated with a practitioner practicing before the Office:
    (a) A partner in a law firm shall make reasonable efforts to ensure 
that the firm has in effect measures giving reasonable assurance that 
the person's conduct is compatible with the professional obligations of 
the practitioner;
    (b) A practitioner having direct supervisory authority over the 
nonpractitioner shall make reasonable efforts to ensure that the 
person's conduct is compatible with the professional obligations of the 
practitioner; and
    (c) A practitioner shall be responsible for conduct of such a 
person that would be a violation of the Rules of Professional Conduct 
if engaged in by a practitioner if:
    (1) The practitioner orders or, with the knowledge of the specific 
conduct, ratifies the conduct involved; or
    (2) The practitioner is a partner in the law firm in which the 
person is employed or has direct supervisory authority over the person, 
and knows of the conduct at a time when its consequences can be avoided 
or mitigated but fails to take reasonable remedial action.


Sec.  11.504  Professional independence of a practitioner.

    (a) A practitioner or law firm, in regard to practice before the 
Office, shall not share legal fees with a nonpractitioner, except that:
    (1) An agreement by a practitioner with the practitioner's firm, 
partner, or associate may provide for the payment of money, over a 
reasonable period of time after the practitioner's death, to the 
practitioner's estate or to one or more specified persons;
    (2) A practitioner who purchases the practice of a deceased, 
disabled, or disappeared practitioner may, pursuant to the provisions 
of Sec.  11.117, pay to the estate or other representative of that 
practitioner the agreed upon purchase price; and
    (3) A practitioner or law firm may include nonpractitioner 
employees in a compensation or retirement plan, even though the plan is 
based in whole or in part on a profit-sharing arrangement.
    (b) A practitioner accepting a client referred by an invention 
promoter shall not divide legal fees paid by the client with the 
promoter for legal services rendered in regard to practice before the 
Office, including by accepting payment from the promoter a portion of 
funds the promoter receives from the referred client, delivering to the 
promoter a portion of any funds the practitioner receives from the 
client. The proscribed delivery of funds includes any transfer of funds 
before or after services are rendered. The legal services include, but 
are not limited to, providing an opinion regarding the patentability of 
the client's invention, providing an opinion regarding the 
registrability of a mark, preparing a patent or trademark application, 
and prosecuting a patent or trademark application.
    (c) A practitioner shall not form a partnership with a 
nonpractitioner if any of the activities of the partnership consist of 
the practice of law before the Office.
    (d) A practitioner shall not permit a person who recommends, 
employs, or pays the practitioner to render legal services for another 
before the Office to direct or regulate the practitioner's

[[Page 69558]]

professional judgment in rendering such legal services.
    (e) A practitioner shall not practice with or in the form of a 
professional corporation or association authorized to practice law for 
a profit in regard to practice before the Office, if:
    (1) A nonpractitioner owns any interest therein, except that a 
fiduciary representative of the estate of a practitioner may hold the 
stock or interest of the practitioner for a reasonable time during 
administration;
    (2) A nonpractitioner is a corporate director or officer thereof; 
or
    (3) A nonpractitioner has the right to direct or control the 
professional judgment of a practitioner.


Sec.  11.505  Unauthorized practice of law.

    A practitioner shall not:
    (a) Practice law in a jurisdiction where doing so violates the 
regulation of the legal profession in that jurisdiction, except that a 
registered practitioner may practice before the Office in patent 
matters in any State;
    (b) Assist a person who is not a member of the bar in the 
performance of activity that constitutes the unauthorized practice of 
law;
    (c) Aid a non-practitioner in the unauthorized practice of law 
before the Office;
    (d) Aid a practitioner under suspension, exclusion, disbarment, or 
disbarment on consent, or who resigned during a pending investigation 
in the unauthorized practice of patent, trademark, or other non-patent 
law before the Office or aid a suspended or disbarred attorney in the 
unauthorized practice of law in any other jurisdiction;
    (e) Practice before the Office in trademark matters if the 
practitioner was registered as a patent agent after January 1, 1957, 
and is not an attorney; or
    (f) Practice before the Office in patent, trademark, or other non-
patent law if suspended, excluded, or excluded on consent from practice 
by the USPTO Director under Sec. Sec.  11.24, 11.25, 11.27, 11.28, or 
11.56; if administratively suspended under Sec.  11.11(b); or if in 
contravention of restrictions imposed on a practitioner under Sec.  
11.36(f).


Sec.  11.506  Restrictions on right to practice.

    A practitioner, in regard to practice before the Office, shall not 
participate in offering or making:
    (a) A partnership or employment agreement that restricts the rights 
of a practitioner to practice after termination of the relationship, 
except an agreement concerning benefits upon retirement; or
    (b) An agreement in which a restriction on the practitioner's right 
to practice is part of the settlement of a controversy between parties.


Sec.  11.507  Responsibilities regarding law-related services.

    (a) A practitioner shall be subject to the Rules of Professional 
Conduct with respect to the provision of law-related services before 
the Office, as defined in paragraph (b) of this section, if the law-
related services are provided:
    (1) By the practitioner in circumstances that are not distinct from 
the practitioner's provision of legal services to clients; or
    (2) By a separate entity controlled by the practitioner 
individually or with others if the practitioner fails to take 
reasonable measures to assure that a person obtaining the law-related 
services knows that the services of the separate entity are not legal 
services and that the protections of the client-lawyer or client-agent 
relationship do not exist; or
    (3) By a separate entity controlled by an invention promoter which 
refers legal services to the practitioner if the practitioner fails to 
take reasonable measures to assure that a person obtaining the law-
related services knows that the services of the invention promoter are 
not legal services and that the protections of the client-lawyer or 
client-agent relationship do not exist.
    (b) The term ``law-related services'' means services that might 
reasonably be performed in conjunction with and in substance are 
related to the provision of legal services in patent, trademark, or 
other non-patent law matters before the Office, and that are not 
prohibited as unauthorized practice of law when provided by a 
nonlawyer.


Sec. Sec.  11.508-11.600  [Reserved]

Public Service


Sec.  11.601  Pro Bono Publico service.

    A practitioner, in regard to practice before the Office, should 
participate in serving those persons, or groups of persons, who are 
unable to pay all or a portion of reasonable attorneys' fees or who are 
otherwise unable to obtain counsel. A practitioner may discharge this 
responsibility by providing professional services at no fee, or at a 
substantially reduced fee, to persons and groups who are unable to 
afford or obtain counsel, or by active participation in the work of 
organizations that provide legal services to them. When personal 
representation is not feasible, a practitioner may discharge this 
responsibility by providing financial support for organizations that 
provide legal representation to those unable to obtain counsel.


Sec.  11.602  Accepting appointments.

    A practitioner, who is a lawyer, shall not seek to avoid 
appointment by a tribunal to represent a person except for good cause, 
such as:
    (a) Representing the client is likely to result in violation of the 
Rules of Professional Conduct or other law;
    (b) Representing the client is likely to result in an unreasonable 
financial burden on the practitioner; or
    (c) The client or the cause is so repugnant to the practitioner as 
to be likely to impair the attorney-client or agent-client relationship 
or the practitioner's ability to represent the client.


Sec.  11.603  Membership in legal services organization.

    A lawyer may serve as a director, officer, or member of a legal 
services organization, apart from the law firm in which the 
practitioner practices, notwithstanding that the organization serves 
persons having interests adverse to a client of the practitioner. The 
practitioner shall not knowingly participate in a decision or action of 
the organization:
    (a) If participating in the decision would be incompatible with the 
practitioner's obligations to a client under Sec.  11.107; or
    (b) Where the decision could have a material adverse effect on the 
representation of a client of the organization whose interests are 
adverse to a client of the practitioner.


Sec.  11.604  Law reform activities.

    A practitioner may serve as a director, officer, or member of an 
organization involved in reform of the law or its administration 
notwithstanding that the reform may affect the interests of a client of 
the practitioner. When the practitioner knows that the interests of a 
client may be materially benefited by a decision in which the 
practitioner participates, the practitioner shall disclose that fact 
but need not identify the client.


Sec. Sec.  11.605-11.700  [Reserved]

Information About Legal Services


Sec.  11.701  Communications concerning a practitioner's services.

    (a) A practitioner, or another on behalf the practitioner, shall 
not make a false or misleading communication about the practitioner or 
the practitioner's services for persons having immediate, prospective 
or pending business before the Office. A

[[Page 69559]]

communication is false or misleading if it:
    (1) Contains a material misrepresentation of fact or law, or omits 
a fact necessary to make the statement considered as a whole not 
materially misleading;
    (2) Is likely to create an unjustified expectation about results 
the practitioner can achieve, or states or implies that the 
practitioner can achieve results by means that violate the Rules of 
Professional Conduct or other law; or
    (3) Compares the practitioner's services with other practitioners' 
services, unless the comparison can be factually substantiated.
    (b) A practitioner, or another on behalf of a practitioner, shall 
not seek by in-person contact, employment (or employment of a partner, 
associate, or other person or party) by a potential client having 
immediate or prospective business before the Office who has not sought 
the practitioner's advice regarding employment of a practitioner, if:
    (1) The solicitation involves use of a statement or claim that is 
false or misleading, within the meaning of paragraph (a) of this 
section;
    (2) The solicitation involves the use of undue influence;
    (3) The potential client is apparently in a physical or mental 
condition which would make it unlikely that the potential client could 
exercise reasonable, considered judgment as to the selection of a 
practitioner;
    (4) The solicitation involves the use of an intermediary and the 
practitioner has not taken all reasonable steps to ensure that the 
potential client is informed of:
    (i) The consideration, if any, paid or to be paid by the 
practitioner to the intermediary; and
    (ii) The effect, if any, of the payment to the intermediary on the 
total fee to be charged; or
    (5) The solicitation involves the use of an invention promoter and 
the practitioner has not taken all reasonable steps to ensure that the 
potential client is informed:
    (i) In every contract or other agreement between the potential 
client and invention promoter the specific amount of all legal fees and 
expenses included in funds the client delivers or is obligated to 
deliver to the promoter;
    (ii) In every communication by the invention promoter requesting 
funds from the client the specific amount of all legal fees and 
expenses included in funds the client delivers or is obligated to 
deliver to the promoter; and
    (iii) The discount (expressed as a percent) from the customary fee 
the practitioner gives or will give in the fees charged for legal 
services rendered for a client referred by the promoter.
    (c) A practitioner shall not knowingly assist an organization that 
furnishes or pays for legal services to others having immediate or 
prospective business before the Office to promote the use of the 
practitioner's services or those of the practitioner's partner or 
associate, or any other practitioner affiliated with the practitioner 
or the practitioner's firm, as a private practitioner, if the 
promotional activity involves the use of coercion, duress, compulsion, 
intimidation, threats, or vexatious or harassing conduct.
    (d) No practitioner shall personally, or through acts of another, 
with respect to any prospective business before the Office, by word, 
circular, letter, or advertising, with intent to defraud in any manner, 
deceive, mislead, or threaten any prospective applicant or other person 
having immediate or prospective business before the Office.
    (e) A practitioner may not use the name of a Member of either House 
of Congress or of an individual in the service of the United States in 
advertising the practitioner's practice before the Office.


Sec.  11.702  Advertising.

    (a) Subject to the requirements of Sec. Sec.  11.701 and 11.703, a 
practitioner may advertise services regarding practice before the 
Office through public media, such as a telephone directory, legal 
directory, newspaper or other periodical, outdoor advertising, radio or 
television, through written or recorded communication, or through 
electronic media.
    (b) A copy or recording of an advertisement or communication 
(whether in printed or electronic media) authorized by paragraph (a) of 
this section shall be kept for two years after its last dissemination 
along with a record of when and where it was used.
    (c) A practitioner shall not give anything of value to a person or 
organization for recommending the practitioner's services in practice 
before the Office except that a practitioner may:
    (1) Pay the reasonable costs of advertisements or communications 
permitted by this section; and
    (2) Pay the usual charges of a not-for-profit lawyer referral 
service or legal service organization.
    (d) A practitioner who is a lawyer may pay for a law practice in 
accordance with Sec.  11.117.
    (e) Any advertisement or communication to the public made pursuant 
to this section shall include the name of at least one practitioner 
responsible for its content.


Sec.  11.703  Direct contact with prospective clients

    (a) A practitioner personally, or through the actions of another, 
shall not by in-person or telephone contact solicit professional 
employment from a prospective client having immediate or prospective 
business before the Office with whom the practitioner has no family or 
prior professional relationship when a significant motive for the 
practitioner's doing so is the practitioner's pecuniary gain under 
circumstances evidencing undue influence, intimidation, or 
overreaching.
    (b) A practitioner personally, or through the actions of another, 
shall not solicit professional employment from a prospective client 
having immediate or prospective business before the Office by written 
or recorded communication or by in-person or telephone contact even 
when not otherwise prohibited by paragraph (a) of this section, if:
    (1) The prospective client has made known to the practitioner a 
desire not to be solicited by the practitioner; or
    (2) The solicitation involves false or misleading statements, undue 
influence, coercion, duress or harassment.
    (c) Every written (including in print or electronic media) or 
recorded communication from or on behalf of a practitioner, soliciting 
professional employment from a prospective client known to be in need 
of legal services in a particular matter before the Office, and with 
whom the practitioner has no family or prior professional relationship, 
shall include the words ``Advertising Material'' on the outside 
envelope, and at the beginning and ending of any electronic or recorded 
communication.
    (d) Notwithstanding the prohibitions in paragraph (a) of this 
section, a practitioner may participate with a prepaid or group legal 
service plan operated by an organization not owned or directed by the 
practitioner which uses in-person or telephone contact to solicit 
memberships or subscriptions for the plan from persons who are not 
known to need legal services in a particular matter covered by the 
plan.


Sec.  11.704  Communication of fields of practice and certification.

    A practitioner may communicate the fact that the practitioner does 
or does not practice in particular fields of law. A practitioner shall 
not state or imply that the practitioner has been recognized or 
certified as a specialist in a particular field of law except as 
follows:

[[Page 69560]]

    (a) Unless a practitioner is an attorney, the practitioner shall 
not hold himself or herself out to be an attorney, lawyer, or member of 
a bar, or as qualified or authorized to practice general law. Unless 
authorized by Sec.  11.14(b), a non-lawyer shall not hold himself or 
herself out as being qualified or authorized to practice before the 
Office in trademark matters;
    (b) A registered practitioner who is an attorney may use the 
designation ``Patents,'' ``Patent Attorney,'' ``Patent Lawyer,'' 
``Registered Patent Attorney,'' or a substantially similar designation;
    (c) A registered practitioner who is not an attorney may use the 
designation ``Patents,'' ``Patent Agent,'' ``Registered Patent Agent,'' 
or a substantially similar designation;
    (d) An individual granted limited recognition may use the 
designation ``Limited Recognition''; and
    (e) A lawyer engaged in Admiralty practice may use the designation 
``Admiralty,'' ``Proctor in Admiralty'' or a substantially similar 
designation.


Sec.  11.705  Firm names and letterheads.

    (a) A practitioner shall not use a firm name, letterhead, or other 
professional designation that violates Sec.  11.701. A practitioner in 
private practice may use a trade name if it does not imply a connection 
with a Government agency or with a public or charitable legal services 
organization and is not otherwise in violation of Sec.  11.701.
    (b) A law firm with offices in more than one jurisdiction may use 
the same name in each jurisdiction, but identification of the 
practitioners in an office of the firm shall indicate the 
jurisdictional limitations of those not licensed to practice in the 
jurisdiction where the office is located.
    (c) The name of a practitioner holding a public office shall not be 
used in the name of a law firm, or in communications on its behalf, 
during any substantial period in which the practitioner is not actively 
and regularly practicing with the firm.
    (d) Practitioners may state or imply that they practice in a 
partnership or other organization only when that is the fact.


Sec. Sec.  11.706-11.800  [Reserved]

Maintaining the Integrity of the Profession


Sec.  11.801  Bar admission, registration, and disciplinary matters.

    An applicant for registration, or a practitioner in connection with 
an application for registration, or a practitioner in connection with a 
disciplinary matter or reinstatement, shall not:
    (a) Knowingly make a false statement of material fact, knowingly 
fail to disclose a material fact, or knowingly fail to update 
information regarding a material fact; or
    (b) Fail to disclose a fact necessary to correct a misapprehension 
known by the practitioner or applicant to have arisen in the matter, or 
knowingly fail to respond reasonably to a lawful demand for information 
from an admissions or disciplinary authority, except that the 
provisions of this paragraph (b) do not require disclosure of 
information otherwise protected by Sec.  11.106.
    (c) Conduct that constitutes a violation of paragraphs (a) or (b) 
of this section includes, but is not limited to, willfully refusing to 
reveal or report knowledge or evidence to the OED Director contrary to 
paragraphs (a) or (b) of this section.


Sec.  11.802  Judicial and legal officials.

    (a) A practitioner shall not make a statement that the practitioner 
knows to be false, or with reckless disregard as to its truth or 
falsity, concerning the qualifications or integrity of a judge, 
administrative law judge, administrative patent judge, administrative 
trademark judge, adjudicatory officer, or public legal officer, or of a 
candidate for election or appointment to judicial or legal office.
    (b) A practitioner who is a candidate for judicial office shall 
comply with the applicable provisions of the Code of Judicial Conduct.


Sec.  11.803  Reporting professional misconduct.

    (a) A practitioner having knowledge that another practitioner has 
committed a violation of the Rules of Professional Conduct that raises 
a substantial question as to that practitioner's honesty, 
trustworthiness, or fitness as a practitioner in other respects, shall 
inform the appropriate professional authority.
    (b) A practitioner having knowledge that an employee of the Office 
has committed a violation of applicable Federal statutes, and rules 
adopted by the Office of Government Ethics that raises a substantial 
question as to the employee's fitness for office shall inform the 
appropriate authority. The Office of Enrollment and Discipline is not 
an appropriate authority for reporting under this section unless an 
imperative rule of the USPTO Rules of Professional Conduct is violated.
    (c) The provisions of this section does not require disclosure of 
information otherwise protected by Sec.  11.106, or information gained 
by a lawyer or judge, administrative law judge, administrative patent 
judge, or administrative trademark judge while serving as a member of 
an approved lawyers assistance program to the extent that such 
information would be confidential if it were communicated subject to 
the attorney-client privilege. The provisions of this section do not 
authorize the filing of frivolous complaints.
    (d) A practitioner:
    (1) Found guilty of a crime or who pleads guilty or nolo contendre 
or enters an Alford plea to a criminal charge in a court of a State, or 
of the United States, except as to misdemeanor traffic offenses or 
traffic ordinance violations, not including the use of alcohol or 
drugs, shall within ten days from the date of such finding or plea 
advise the OED Director in writing of the finding or plea and file with 
the OED Director a certified copy of the court record or conviction or 
docket entry of the finding or plea; or
    (2) Found by a court of record or duly constituted authority of the 
United States to have engaged in inequitable conduct to obtain a patent 
shall within ten days from the date of such finding advise the OED 
Director of the finding and file with the OED Director a certified copy 
of the court record or finding.
    (e) A practitioner:
    (1) Reprimanded, suspended, disbarred as an attorney, or disbarred 
on consent from practice as an attorney on any ethical grounds 
(including ethical grounds not specified in this Part) by any duly 
constituted authority of a State, or the United States, or who resigns 
from the bar of any State, or Federal court while under investigation; 
shall within ten days from the date of such action advise the OED 
Director in writing of such action and file with the OED Director a 
certified copy of the order, finding or plea;
    (2) Residing in a foreign country or registered under Sec.  
11.6(c), who is reprimanded, suspended, disbarred, disbarred on consent 
from practice as an attorney on any ethical grounds, by any duly 
constituted authority of a foreign country, including by any foreign 
patent or trademark office, or who resigns while under investigation by 
any duly constituted authority of a foreign country, shall within ten 
days from the date of such action advise the OED Director in writing of 
such action and file with the OED Director a certified copy of the 
order, finding or plea; or
    (3) Who, as a result of any other event or change, would be 
precluded from continued registration under Sec. Sec.  11.6(a),

[[Page 69561]]

or 11.6(b), or 11.6(c), or as a result of any other event or change 
would be precluded from continued recognition under Sec. Sec.  11.9 or 
11.14, or any event or change that would be grounds for disciplinary 
action under Sec.  11.25(c) shall within ten days from the date of such 
event or change advise the OED Director in writing of the event or 
change and file with the OED Director any records regarding the event 
or change.
    (f) Conduct that constitutes a violation of paragraphs (a) through 
(e) of this section includes, but is not limited to:
    (1) Failing to comply with the provisions of paragraphs (d) or (e) 
of this section;
    (2) Willfully refusing to reveal or report knowledge or evidence to 
the OED Director contrary to Sec. Sec.  11.24(a) or (b), or 10.25(b);
    (3) In the absence of information sufficient to establish a 
reasonable belief that fraud or inequitable conduct has occurred, 
alleging before a tribunal that anyone has committed a fraud on the 
Office or engaged in inequitable conduct in a proceeding before the 
Office; or
    (4) Being suspended, disbarred as an attorney, or disbarred on 
consent from practice as an attorney on any ethical grounds (including 
ethical grounds not specified in this part) by any duly constituted 
authority of a State, or the United States, or resigning from the bar 
of any State, or Federal court while under investigation.


Sec.  11.804  Misconduct.

    It is professional misconduct for a practitioner to:
    (a) Violate or attempt to violate the Rules of Professional 
Conduct, knowingly assist or induce another to do so, or do so through 
the acts of another;
    (b) Commit a criminal act that reflects adversely on the 
practitioner's honesty, trustworthiness, or fitness as a practitioner 
in other respects, including crimes for which the practitioner is found 
guilty, pleads guilty or nolo contendre, and crimes to which the 
practitioner enters an Alford plea to a criminal charge in a court of a 
State, or of the United States, but does not include misdemeanor 
traffic offenses or traffic ordinance violations, not including the use 
of alcohol or drugs;
    (c) Engage in conduct involving dishonesty, fraud, deceit, or 
misrepresentation;
    (d) Engage in conduct that is prejudicial to the administration of 
justice;
    (e) State or imply an ability to influence improperly a Government 
agency or official;
    (f) Knowingly assist an administrative law judge, administrative 
patent judge, administrative trademark judge, patent examiner, other 
employee of the Office, or judicial officer in conduct that is a 
violation of applicable Federal statutes, rules adopted by the Office 
of Government Ethics, or other law; or
    (g) Engage in disreputable or gross misconduct.
    (h) Conduct that constitutes a violation of paragraphs (a) through 
(g) of this section includes, but is not limited to:
    (1) Knowingly giving false or misleading information or knowingly 
participating in a material way in giving false or misleading 
information, to a client in connection with any immediate, prospective, 
or pending business before the Office;
    (2) Representing before the Office in a patent matter either a 
joint venture comprising an inventor and an invention promoter, or an 
inventor referred to the registered practitioner by an invention 
promoter when:
    (i) The registered practitioner knows, or has been advised by the 
Office, that a formal complaint filed by a Federal or State agency, 
alleging a violation of any law relating to securities, unfair methods 
of competition, unfair or deceptive acts or practices, mail fraud, or 
other civil or criminal conduct, is pending before a Federal or State 
court or Federal or State agency, or has been resolved unfavorably by 
such court or agency, against the invention promoter in connection with 
marketing an invention; and
    (ii) The registered practitioner fails to fully advise the inventor 
of the existence of the pending complaint or unfavorable resolution 
thereof prior to undertaking or continuing representation of the joint 
venture or inventor;
    (3) Accepting referral of a matter or inventor from an invention 
promoter wherein:
    (i) A contract or other agreement for marketing and patenting an 
invention does not specify the total amount of funds constituting legal 
fees the inventor becomes obligated to pay the invention promoter,
    (ii) A contract or other agreement for marketing and patenting an 
invention does not specify the total amount of funds constituting costs 
and expenses for legal services the inventor becomes obligated to pay 
the invention promoter,
    (iii) The inventor delivers funds for legal fees, expenses or costs 
to the invention promoter,
    (iv) A patentability opinion or patent search report by a 
registered practitioner is included in, accompanies, or is referenced 
in any report issued by the invention promoter,
    (v) A contract or other agreement for marketing and patenting an 
invention provides for the preparation, drafting, or filing of a patent 
application for a design or a utility invention, or
    (vi) The contract or other agreement for marketing and patenting an 
invention guarantees a patent;
    (4) Accepting assistance in a specific matter from any former 
employee of the Office who participated personally and substantially in 
the matter as an employee of the Office;
    (5) Representing, or permitting another party, including an 
invention promoter, to represent, that a fee for non-legal services is 
inclusive of any fee(s) for a practitioner's professional services 
without also separately stating in writing the full amount of the legal 
fees;
    (6) Being a partner or associate of an employee of the Office, and 
representing anyone in any proceeding before the Office in which the 
employee of the Office participates or has participated personally and 
substantially as an employee of the Office, or which is subject to that 
employee's official responsibility;
    (7) Accepting or using the assistance of an Office employee in the 
presentation or prosecution of an application, whether or not the 
employee is compensated, except to the extent that the employee may 
lawfully provide the assistance in an official capacity;
    (8) Being a Federal employee and practicing before the Office while 
so employed in violation of applicable conflict of interest laws, 
regulations or codes of professional responsibility;
    (9) Failing to report a change of address within thirty days of the 
change; or
    (10) Knowingly filing, or causing to be filed, a frivolous 
complaint alleging that a practitioner violated an imperative USPTO 
Rule of Professional Conduct.
    (i) A practitioner who acts with reckless indifference to whether a 
representation is true or false is chargeable with knowledge of its 
falsity. Deceitful statements of half-truths or concealment of material 
facts shall be deemed fraud within the meaning of this Part.


Sec.  11.805  Disciplinary authority: Choice of law.

    (a) Disciplinary authority. A practitioner registered or recognized 
to practice or practicing before the Office in patent, trademark, or 
other non-patent law is subject to the disciplinary authority of the 
Office, regardless of

[[Page 69562]]

where the practitioner's conduct occurs. A practitioner may be subject 
to the disciplinary authority of both the Office and another 
jurisdiction where the practitioner is admitted to practice for the 
same conduct. An applicant for patent (Sec.  1.41(b) of this 
subchapter) representing himself, herself, or representing himself or 
herself and other individual applicants pursuant to Sec. Sec.  1.31 and 
1.33(b)(4) of this subchapter; an individual who is an assignee as 
provided for under Sec.  3.71(b) of this subchapter; and an individual 
appearing in a trademark or other non-patent matter pursuant to Sec.  
11.14 is subject to the disciplinary authority of the Office for 
matters arising in connection with their practice before the Office.
    (b) Choice of law. In any exercise of the disciplinary authority of 
the Office, the Rules of Professional Conduct to be applied shall be as 
follows:
    (1) For conduct in connection with practice before the Office in 
patent, trademark, or other non-patent law a practitioner registered or 
recognized to practice (either generally or for purposes of that 
practice), the rules to be applied shall be the rules of the Office;
    (2) For conduct in connection with a proceeding in a court before 
which a practitioner has been admitted to practice (either generally or 
for purposes of that proceeding), the rules to be applied shall be the 
rules of the jurisdiction in which the court sits, unless the rules of 
the court provide otherwise; and
    (3) For any other conduct,
    (i) If the practitioner is registered or recognized to practice 
only before the Office, the rules to be applied shall be the rules of 
the Office, and
    (ii) If the practitioner is registered or recognized to practice 
before the Office, and is licensed to practice in another jurisdiction, 
the rules to be applied by the Office shall be the rules of the Office 
in regard to practice before the Office, and otherwise the rules 
applied shall be those of the admitting jurisdiction in which the 
practitioner principally practices; provided, however, that if 
particular conduct clearly has its predominant effect in another 
jurisdiction in which the practitioner is licensed to practice, the 
rules of that jurisdiction shall be applied to that conduct.


Sec.  11.806  Sexual relations with clients and third persons.

    (a) Sexual relations means sexual intercourse or the touching of an 
intimate part of another person for the purpose of sexual arousal, 
sexual gratification, or sexual abuse.
    (b) A practitioner shall not:
    (1) Require or demand sexual relations with a client or third party 
incident to or as a condition of any professional representation;
    (2) Require or demand sexual relations with an employee incident to 
or as a condition of employment; or
    (3) Employ coercion, intimidation, or undue influence in entering 
into sexual relations with a client.
    (c) Paragraph (b) of this section shall not apply to sexual 
relations between a practitioner and his or her spouse or significant 
other, or to ongoing consensual sexual relationships that predate the 
initiation of the practitioner-client relationship or practitioner-
employee relationship.
    (d) Where a practitioner in a firm has sexual relations with a 
client but does not participate in the representation of that client, 
the practitioners in the firm shall not be subject to discipline under 
this section solely because of the occurrence of such sexual relations.


Sec. Sec.  11.807-11.900  [Reserved]

    Dated: November 17, 2003.
James E. Rogan,
Under Secretary of Commerce for Intellectual Property and Director of 
the United States Patent and Trademark Office.
[FR Doc. 03-29150 Filed 12-11-03; 8:45 am]
BILLING CODE 3510-16-P