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Daily Rules, Proposed Rules, and Notices of the Federal Government

DEPARTMENT OF COMMERCE

United States Patent and Trademark Office

37 CFR Parts 1, 2, 7, 10, 11 and 41

[Docket No. PTO-C-2012-0034]

RIN 0651-AC81

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.
SUMMARY: The United States Patent and Trademark Office (Office or USPTO) proposes to align the USPTO's professional responsibility rules with those of most other U.S. jurisdictions by replacing the current Patent and Trademark Office Code of Professional Responsibility, adopted in 1985, based on the 1980 version of the Model Code of Professional Responsibility of the American Bar Association ("ABA"), with new USPTO Rules of Professional Conduct, which are based on the Model Rules of Professional Conduct of the ABA, which were published in 1983, substantially revised in 2003 and updated through 2011. Changes approved by the ABA House of Delegates in August 2012 have not been incorporated in these proposed rules. The Office also proposes to revise the existing procedural rules governing disciplinary investigations and proceedings.
DATES: To be ensured of consideration, written comments must be received on or before December 17, 2012.
ADDRESSES: Comments may also be sent by electronic mail message over the Internet via the Federal eRulemaking Portal. See the Federal eRulemaking Portal Web site (http://www.regulations.gov) for additional instructions on providing comments via the Federal eRulemaking Portal.

Although comments may be submitted by postal mail, the Office prefers to receive comments by electronic mail message over the Internet because sharing comments with the public is more easily accomplished. Electronic comments are preferred to be submitted in plain text, but also may be submitted in ADOBE(r) portable document format or MICROSOFT WORD(r) format. Comments not submitted electronically should be submitted on paper in a format that facilitates convenient digital scanning into ADOBE(r) portable document format.

Comments will be made available for public inspection at the Office of Enrollment and Discipline, located on the 8th Floor of the Madison West Building, 600 Dulany Street, Alexandria, Virginia. Comments also will be available for viewing via the Office's Internet Web site (http://www.uspto.gov). Because comments will be made available for public inspection, information that the submitter does not desire to make public, such as an address or phone number, should not be included in the comments.

FOR FURTHER INFORMATION CONTACT: William R. Covey, Deputy General Counsel for Enrollment and Discipline and Director of the Office of Enrollment and Discipline, by telephone at 571-272-4097.
SUPPLEMENTARY INFORMATION:

Executive Summary

Pursuant to 35 U.S.C. 2(b)(2)(D), the Office governs “the recognition and conduct of agents, attorneys, or other persons representing applicants or other parties before the Office.” The Office also has the authority to suspend or exclude from practice before the Office any practitioner who “is shown to be incompetent or disreputable, or guilty of gross misconduct, or who does not comply with the regulations established under section 2(b)(2)(D) of this title.” 35 U.S.C. 32. Pursuant to the authority provided in sections 2(b)(2)(D) and 32 of Title 35, practitioners representing parties in patent, trademark and other non-patent matters presently are required to conform to the Patent and Trademark Office Code of Professional Responsibility set forth in 37 CFR 10.20 through 10.112. These rules have been in place since 1985 and are based on the ABA Model Code of Professional Responsibility.See50 FR 5158 (February 6, 1985). Since that time, the vast majority of State bars in the United States have adopted substantive disciplinary rules based on the newer ABA Model Rules of Professional Conduct. As noted below, the Office believes individuals representing others before the Office will benefit from modernization of the regulations governing professional conduct before the Office and harmonization of these regulations with corresponding rules adopted by bars in the States and the District of Columbia.

The bars of 50 U.S. jurisdictions including the District of Columbia have adopted the ABA Model Rules of Professional Conduct or a modification thereof. This notice of proposed rulemaking sets out proposed USPTO Rules of Professional Conduct. The changes from the existing USPTO Code of Professional Responsibility are intended to bring standards of ethical practice before the Office into closer conformity with the Rules of Professional Conduct adopted by nearly all States and the District of Columbia, while addressing circumstances particular to practice before the Office. By adopting professional conduct rules consistent with the ABA Model Rules and the professional responsibility rules of 50 U.S. jurisdictions, the USPTO both would provide attorneys with consistent professional conduct standards, and would provide practitioners with large bodies of both case law and opinions written by disciplinary authorities that have adopted the ABA Model Rules of Professional Conduct. At this time, nearly 42,000 individuals are registered practitioners, of whom at least 75% are attorneys. The registered patent attorneys have offices located in all fifty States, the District of Columbia, and more than forty foreign countries. In addition to registered patent attorneys, any attorney who is a member in good standing of the bar of the highest court of a State, territory or possession of the United States is eligible to practice before the Office in trademark and other non-patent matters, without becoming a registered practitioner. 5 U.S.C. 500(b); 37 CFR 11.14. The attorneys who appear before the Office are subject to these rules as well. 37 CFR 11.19.

A body of precedent specific to practice before the USPTO will develop as disciplinary matters brought under the USPTO Rules of Professional Conduct progress through the USPTO and the Federal Courts. In the absence of binding USPTO-specific precedent, practitioners may refer to various sources for guidance. For example, it is expected that precedent based on the current Patent and Trademark Office Code of Professional Responsibility will assist interpretation of professional conduct standards under the proposed USPTO Rules of Professional Conduct. A practitioner also may refer to the Comments and Annotations to the ABA Model Rules of Professional Conduct forguidance as to how to interpret the equivalent USPTO Rules of Professional Conduct. Additionally, relevant guidance may be provided by opinions issued by State bars and disciplinary decisions based on similar professional conduct rules in the States. Such guidance is not binding precedent relative to USPTO Rules of Professional Conduct, but it may provide a useful tool in interpreting the rules while a larger body of USPTO-specific precedent is established.

This rulemaking benefits and reduces costs for most practitioners by clarifying and streamlining their professional responsibility obligations. With this rulemaking, the USPTO would be adopting professional conduct rules consistent with the ABA Model Rules and the professional responsibility rules already followed by 50 U.S. jurisdictions,i.e.,the District of Columbia and 49 States, excluding California. Further, any change is not a significant deviation from rules of professional conduct for practitioners that are already required by the Office.

Table 1 shows the principal sources of the rules proposed for the USPTO Rules of Professional Conduct. In general, numbering of the USPTO Rules of Professional Conduct largely track numbering of the ABA Model Rules of Professional Conduct. For example, USPTO Rule of Professional Conduct 11.101 parallels ABA Model Rule of Professional Conduct 1.1; USPTO Rule of Professional Conduct 11.102 parallels ABA Model Rule of Professional Conduct 1.2; USPTO Rule of Professional Conduct 11.201 parallels ABA Model Rule of Professional Conduct 2.1; et cetera. The discussion below highlights instances where the USPTO Rules of Professional Conduct diverge from the ABA Model Rules of Professional Conduct.

The proposed USPTO Rules of Professional Conduct reserve or decline to implement certain provisions set forth in the ABA Model Rules of Professional Conduct. For example, the ABA Model Rules set forth specific provisions concerning domestic relations or criminal practice that do not appear in the proposed USPTO Rules of Professional Responsibility.See, e.g.,sections 11.102, 11.105(d), 11.108(g), 11.108(j), 11.301, 11.303(a)(3), 11.306, 11.308 and 11.704(c). Conduct that would violate an unadopted provision might nevertheless also violate an adopted provision (e.g.,the conduct might also violate the broader obligations under section 11.804 of the proposed USPTO Rules of Professional Conduct). In addition, a licensed attorney is subject to the professional conduct rules of appropriate State licensing authorities, as well as of any courts before which the attorney practices. Failure to comply with those rules may lead to disciplinary action against the practitioner by the appropriate State bar or court and, in turn, possible reciprocal action against the practitioner by the USPTO.See37 CFR 11.24 and 11.804(h).

In August 2012, the ABA House of Delegates approved revisions to the ABA Model Rules of Professional Conduct recommended by the ABA Commission on Ethics 20/20.See http://www.americanbar.org/content/dam/aba/administrative/ethics_2020/20120808_house_action_compilation_redline_105a-f.authcheckdam.pdf.These revisions have not been incorporated into these proposed rules since the states have not adopted those changes at this time. However, comments are solicited as to whether those changes should be incorporated into the USPTO Rules of Professional Conduct.

The Office does not propose any change to the preamble to section 11.1. This preamble provides in part: “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.” Attorneys who practice before the Office are subject to professional conduct rules established by the Office as well as the appropriate State bars.

The Office adopted rules governing the conduct of disciplinary investigations in 2008.See73 FR 47650 (August 14, 2008). Experience under these rules has demonstrated areas in which the rules could be clarified. Accordingly, the Office also proposes revisions to existing rules set forth at 37 CFR 11.19, 11.20, 11.22, 11.32, 11.34, 11.35 and 11.54. Finally, the Office proposes incorporating the survey rule, currently set forth at 37 CFR 10.11, as section 11.11(a)(2).

Discussion of Specific Rules

Section 1.4(d)(4)would be corrected by deleting the reference to section 11.804(b)(9), which does not exist.

Sections 1.21(a)(7) and (a)(8)would be deleted since the annual practitioner maintenance fee is proposed to be removed by this rule package. The Office has published a Notice of Proposed Rulemaking, Setting and Adjusting Patent Fees, 77 FR 55028, 55082, proposing to adjust the practitioner maintenance fee to $120, and noting elsewhere in the rulemaking materials that the Office has suspended collection of those fees, making total collections $0. The Office now proposes to remove this practitioner maintenance fee which is set forth in 11.8(d).

Section 2.2(c)would be revised to delete the reference to part 10 of this chapter, which would be removed and reserved.

Section 7.25(a)would be revised to delete the reference to part 10 of this chapter, which would be removed and reserved.

Section 11.1would set out definitions of terms used in the USPTO Rules of Professional Conduct. The definitions ofmandatory disciplinary ruleandmatterhave been deleted; the definitions offraudorfraudulentandpractitionerhave been revised; and the termsconfirmed in writing, firmorlaw firm, informed consent, law-related services, partner, person, reasonable belieforreasonably believes, reasonably should know, screened, tribunal,andwritingorwrittenwould be newly defined. The definition ofpractitionerwould be updated to refer to section 11.14 rather than section 10.14, and to refer to sections 11.14(a), (b) and (c) rather than sections 11.14(b), (c) and (e). The new definitions generally comport to definitions set forth in the ABA Model Rules of Professional Conduct. However, the definition offraudorfraudulentused in the ABA Model Rules has not been adopted. Instead, the Office believes a uniform definition based on common law should apply to all individuals subject to the USPTO Rules of Professional Conduct. Accordingly, the definition of common law fraud is based on the definition discussed by the United States Court of Appeals for the Federal Circuit.See Unitherm Food Systems, Inc.v.Swift-Ekrich, Inc.,375 F.3d 1341, 1358 (Fed. Cir. 2004);In re Spalding Sports Worldwide, Inc.,203 F.3d 800, 807 (Fed. Cir. 2000). Further, in the definition oftribunal,the reference to “the Office” includes those persons or entities acting in an adjudicative capacity.

Section 11.2(c)would be revised to delete redundant language.

Section 11.2(d)would be revised to clarify that a party dissatisfied with a final decision of the OED Director regarding enrollment or recognition must exhaust administrative remedies before seeking relief under the Administrative Procedure Act, 5 U.S.C. 551 et seq.

Section 11.2(e)would be revised to clarify that a party dissatisfied with an action or notice of the OED Directorduring or at the conclusion of a disciplinary investigation must exhaust administrative remedies before seeking relief under the Administrative Procedure Act, 5 U.S.C. 551 et seq.

Section 11.8(d)would be reserved. The USPTO is deleting reference to an annual practitioner maintenance fee.

Section 11.11would be revised to change the language “registered attorney or agent” to “registered practitioner” and add the term “registered” as appropriate.

Section 11.11(a) and (b)would be revised to substantially incorporate the provisions currently set forth in 37 CFR 10.11. Specifically, the current provisions of section 11.11(a) would appear as section 11.11(a)(1) and the current provisions of section 10.11 would appear as section 11.11(a)(2). Additionally, section 11.11(b) would be revised to provide that a practitioner failing to comply with section 11.11(a)(2) would be placed on administrative suspension, rather than removed from the register as set forth in section 10.11. Additionally, section 11.11(b)(1) would be revised to delete reference to section 11.8(d). Also, section 11.11(b)(4) would be deleted and reserved since an annual practitioner maintenance fee would be deleted by this rules package.

Section 11.11(c)would be revised to change the reference to the “Mandatory Disciplinary Rules” to the “USPTO Rules of Professional Conduct.” Section 11.11(c) would also be revised to delete reference to an annual practitioner maintenance fee.

Section 11.11(d)would be revised by updating the previous reference to section 10.40 to refer to section 11.116, which, with this rulemaking, would include provisions related to withdrawal from representation. Section 11.11(d) would also be revised to delete reference to an annual practitioner maintenance fee. Sections 11.11(d)(2) and (d)(4) are deleted and reserved since they are directed to an annual practitioner maintenance fee.

Section 11.11(e)would be revised to update the reference to the “Mandatory Disciplinary Rules” to read “USPTO Rules of Professional Conduct.”

Section 11.11(f)would be revised to remove reference to sections 1.21(a)(7)(i) and (a)(8)(i) which provide for annual practitioner maintenance fees.

Section 11.19(a)would be revised to expressly provide jurisdiction over a person not registered or recognized to practice before the Office if the person provides or offers to provide any legal services before the Office. This change is consistent with the USPTO's statutory and inherent authority to regulate practice before the Office, and it is consistent with the second sentence of ABA Model Rule of Professional Conduct 8.5(a).

Section 11.20(a)(4)would be revised to clarify that disciplinary sanctions that may be imposed upon revocation of probation are not necessarily limited to the remainder of the probation period.

Section 11.20(b)would be revised to more clearly set forth conditions that may be imposed with discipline.

Section 11.21would be revised to update the reference to the “Mandatory Disciplinary Rules” to read “USPTO Rules of Professional Conduct.”

Section 11.22would be revised to change the title to “Disciplinary Investigations” for clarification.

Section 11.22(f)(2)would be revised to update the reference to the “Mandatory Disciplinary Rules” to read “USPTO Rules of Professional Conduct.”

Section 11.22(i)would be revised to correct a technical error in the heading. Specifically, the reference to a warning letter in the heading could mistakenly be viewed as indicating that issuance of a warning means at least one of the conditions set forth in that section apply. Indeed, a warning may be issued in situations where, for example, there is sufficient evidence to conclude that there is probable cause to believe that grounds exist for discipline. However, in a situation where a potential violation of the disciplinary rules is minor in nature or was not willful, it often is in the interest of the Office, practitioners, and the public to resolve the matter with a warning rather than a formal disciplinary action.

Section 11.24(e)would be revised to make a technical correction. Specifically, the previous reference to 37 CFR 10.23 would be updated to refer to new section 11.804.

Section 11.25(a)would be revised to update the reference to the “Mandatory Disciplinary Rules” to read “USPTO Rules of Professional Conduct.”

Section 11.32would be revised to clarify that the Director of the Office of Enrollment and Discipline has the authority to exercise discretion in referring matters to the Committee on Discipline and in recommending settlement or issuing a warning in matters wherein the Committee on Discipline has made a probable cause determination. The section also would be revised to make a technical correction by deleting the reference to sections 11.19(b)(3) through (5), which do not exist.

Section 11.34would be revised to incorporate several technical corrections. Specifically, section 11.34(a) would be revised to eliminate an erroneous reference to section 11.25(b)(4). The requirements set forth in section 11.34 apply to complaints filed in disciplinary proceedings filed under sections 11.24, 11.25 and 11.32. The revision to section 11.34(a)(1) clarifies that an individual other than a “practitioner” may be a respondent. The revision to section 11.34(b) updates the reference to the “Mandatory Disciplinary Rules” to read “USPTO Rules of Professional Conduct.”

Section 11.35(a)(2)(ii) and (a)(4)(ii)would be revised by changing the term “a nonregistered practitioner” to “not registered.” The section would now specify the service address for an individual subject to the Office's disciplinary jurisdiction who does not meet the definition of “practitioner” set forth in section 11.1.

Section 11.54(a)(2) and (b)would be revised to clarify that an initial decision of the hearing officer may impose conditions deemed appropriate under the circumstances, and should explain the reason for probation and any conditions imposed with discipline.

Section 11.58(b)(2)would be revised to update the reference to section 10.40 to refer to section 11.116.

Section 11.58(f)(1)(ii)would be revised to update the reference to the “Mandatory Disciplinary Rules” to read “USPTO Rules of Professional Conduct” and to delete reference to section 10.20(b).

Section 11.61would be deleted and reserved. A savings clause would be added at the end of Part 11.

USPTO Rules of Professional Conduct

Section 11.101would address the requirement that practitioners provide competent representation to a client. Consistent with the provisions of 37 CFR 11.7, this rule acknowledges that competent representation in patent matters requires scientific and technical knowledge, skill, thoroughness and preparation as well as legal knowledge, skill, thoroughness and preparation, and otherwise corresponds to the ABA Model Rule of Professional Conduct 1.1.

Section 11.102would provide for the scope of representation of a client by a practitioner and the allocation of authority between the client and the practitioner. This section corresponds to the ABA Model Rule of Professional Conduct 1.2. However, the USPTO is declining to enact the substance of the last sentence of ABA Model Rule of Professional Conduct 1.2(a) as the USPTO does not regulate criminal law practice. Nonetheless, a patent attorney who engages in the practice of criminal law is subject to the disciplinary rulesof the appropriate State and Court authorities. Failure to comply with those rules may lead to disciplinary action against the practitioner and, in turn, possible reciprocal action against the practitioner by the USPTO.See37 CFR 11.24 and 11.804(h). Moreover, the lack of a specific disciplinary rule concerning particular conduct should not be viewed as suggesting that the conduct would not violate one of the USPTO Rules of Professional Conduct.

Section 11.102(b)is reserved as the USPTO is declining to enact a specific rule regarding a practitioner's endorsement of a client's view or activities. However, the USPTO is not implying that a practitioner's representation of a client constitutes an endorsement of the client's political, economic, social, or moral views or activities.

Section 11.103would address a practitioner's duty to act with reasonable diligence and promptness in representing a client. This rule corresponds to the ABA Model Rule of Professional Conduct 1.3.

Section 11.104would address the practitioner's duty to communicate with the client. This rule corresponds to the ABA Model Rule of Professional Conduct 1.4. As in prior § 10.23(c)(8), under this rule a practitioner should not fail to timely and adequately inform a client or former client of correspondence received from the Office in a proceeding before the Office or from the client's or former client's opponent in aninter partesproceeding 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 11.105would address the practitioner's responsibilities regarding fees. This rule corresponds to the ABA Model Rule of Professional Conduct 1.5. Nothing in paragraph (c) should be construed to prohibit practitioners gaining proprietary interests in patents under section 11.108(i)(3).

Section 11.105(d)is reserved as the USPTO is declining to enact a specific rule regarding contingent fee arrangements for domestic relations and criminal matters.

Section 11.106would address the practitioner's responsibilities regarding maintaining confidentiality of information. This section generally corresponds to the ABA Model Rule of Professional Conduct 1.6, but it includes exceptions in the case of inequitable conduct before the Office in addition to crimes and fraud.

Section 11.106(b)(3)would state that a practitioner may reveal information relating to the representation of a client to the extent the practitioner reasonably believes necessary to prevent, mitigate or rectify substantial injury to the financial interests or property of another that is reasonably certain to result or has resulted from inequitable conduct before the Office.

Section 11.106(c)would additionally provide that regardless of the confidentiality requirements of Section 11.106(a), a practitioner is required to disclose to the Office all information necessary to comply with the duty of disclosure rules of this subchapter in practice before the Office.

Section 11.107would prohibit a practitioner from representing a client if the representation involves a concurrent conflict of interest. This rule corresponds to the ABA Model Rule of Professional Conduct 1.7.See also,37 CFR 10.66.

Section 11.108would address conflicts of interest for current clients and specific rules, including rules regarding practitioners entering into business transactions with clients, the use of information by a practitioner relating to representation of a client, gifts between the practitioner and a client, literary rights based on information relating to representation of a client, a practitioner's provision of financial assistance to the client, compensation for services by a third party, aggregate settlement of claims where the practitioner represents two or more clients in a similar matter, agreements between the client and practitioner limiting liability of the practitioner, and the practitioner's acquiring a proprietary interest in the matter. This rule corresponds to the ABA Model Rule of Professional Conduct 1.8.

Section 11.108(e)would provide that a practitioner shall not provide financial assistance to a client in connection with pending or contemplated litigation or proceeding before the Office, except that a practitioner may advance court or tribunal costs and expenses of either litigation or a proceeding before the Office and a practitioner representing an indigent client may pay court or tribunal costs and expenses of litigation or a proceeding before the Office.

Section 11.108(g)differs from ABA Model Rule of Professional Conduct 1.8(g) in that the USPTO is declining to enact the portion of the rule relating to representation of clients in criminal matters and the corresponding regulation of multiple clients agreeing to an aggregated agreement as to guilty or nolo contendere pleas.

Section 11.108(i)differs from ABA Model Rule of Professional Conduct 1.8(i) in that the USPTO would provide that a practitioner may, in a patent case, take an interest in the patent as part or all of his or her fee.See37 CFR 10.64(a)(3).

Section 11.108(j)is reserved. The USPTO is declining to enact a rule that would specifically address sexual relations between practitioners and clients. Because of the fiduciary duty to clients, combining a professional relationship with any intimate personal relationship may raise concerns about conflict of interest and impairment of the judgment of both practitioner and client. To the extent warranted, such conduct may be investigated under more general provisions (e.g.,37 CFR 11.804).

Section 11.109would address conflicts of interest and duties to former clients. This rule corresponds to the ABA Model Rule of Professional Conduct 1.9.

Section 11.110would address the imputation of conflicts of interest for practitioners in the same firm. This rule corresponds to the ABA Model Rule of Professional Conduct 1.10.

Section 11.111would address former or current Federal Government employees. This rule deals with practitioners who leave public office and enter other employment. It applies to judges and their law clerks as well as to practitioners who act in other capacities. The USPTO is declining to enact ABA Model Rule of Professional Conduct 1.11 and is instead enacting its own rule regarding successive government and private employment, namely, that a practitioner who is a former or current Federal Government employee shall not engage in any conduct which is contrary to applicable Federal ethics laws, including conflict of interest statutes and regulations of the department, agency or commission formerly or currently employing said practitioner.See, e.g.,18 U.S.C. 207.

A practitioner representing a government agency, whether employed or specially retained by the government, is subject to the USPTO Rules of Professional Conduct, including the prohibition against representing adverse interests stated in section 11.107 and the protections afforded former clients in section 11.109. In addition, such a practitioner is subject to this section and to statutes and regulations, as well as government policies, concerning conflicts of interest and other Federal ethics requirements.

Section 11.112would provide specific rules regarding the imputation of conflicts of interest for practitioners who were former judges, arbitrators, mediators or third-party neutrals. This rule corresponds to the ABA Model Rule of Professional Conduct 1.12.

Section 11.113would provide specific rules regarding a practitioner's responsibilities when representing an organization as a client. This rule corresponds to the ABA Model Rule of Professional Conduct 1.13.

Section 11.114would provide specific rules regarding a practitioner's responsibilities when representing a client with diminished capacity. This rule corresponds to the ABA Model Rule of Professional Conduct 1.14.

Section 11.115would provide specific rules regarding a practitioner's responsibilities regarding safekeeping of client property and maintenance of financial records. This rule corresponds to the ABA Model Rule of Professional Conduct 1.15.

Section 11.115(a)would require that funds be kept in a separate client or third person account maintained in the state where the practitioner's office is situated, or elsewhere with the consent of the client or third person. The USPTO bar includes practitioners who are located outside the United States. The USPTO rules would propose that where the practitioner's office is situated in a foreign country, funds shall be kept in a separate account maintained in that foreign country or elsewhere with the consent of the client or third person.See also,37 CFR 10.112.

Sections 11.115(b)-(e)correspond to the ABA Model Rules of Professional Conduct 1.15(b)-(e).

Section 11.115(f)would require that the type of records specified by section 11.115(a) would include those records consistent with (i) the ABA Model Rules for Client Trust Account Records; (ii) for lawyer practitioners, the types of records that are maintained meet the recordkeeping requirements of a state in which the lawyer is licensed and in good standing, the recordkeeping requirements of the state where the lawyer's principal place of business is located, or the recordkeeping requirements of this section; and/or (iii) for patent agents and persons granted limited recognition who are employed in the United States by a law firm, the types of records that are maintained meet the recordkeeping requirements of the state where at least one lawyer of the law firm is licensed and in good standing, the recordkeeping requirements of the state where the law firm's principal place of business is located, or the recordkeeping requirements of this section. According to the ABA Standing Committee on Client Protection, the ABA Model Rules for Client Trust Account Records responds to a number of changes in banking and business practices that may have left lawyers “inadvertently running afoul of their jurisdiction's rules of professional conduct.” The new rule addresses recordkeeping requirements after electronic transfers and clarifies who can authorize such transfers. The proposed rule also accounts for the Check Clearing for the 21st Century Act, which allows banks to substitute electronic images of checks for canceled checks. The rule also addresses the increasing prevalence of electronic banking and wire transfers or electronic transfers of funds, for which banks do not routinely provide specific confirmation. The proposed rule acknowledges those issues, addressing recordkeeping requirements after electronic transfers and clarifying who can authorize such transfers, record maintenance and safeguards required for electronic record storage systems. The rule also details minimum safeguards practitioners must implement when they allow non-practitioner employees to access client trust accounts; addresses partner responsibilities for storage of and access to client trust account records when partnerships are dissolved or when a practice is sold; and allows practitioners to maintain client trust account records in electronic, photographic, computer or other media or paper format, either at the practitioner's office or at an off-site storage facility, but it requires that records stored off-site be readily accessible to the practitioner and that the practitioner be able to produce and print them upon request.

Section 11.115(f) would require a practitioner to keep the same records as 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 Model 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 periodic trial balances, and insufficient fund check reporting.See Wrightv.Virginia State Bar,357 SE.2d 518, 519 (Va. 1987);In re Librizzi,569 A.2d 257, 258-259 (N.J. 1990);In re Heffernan,351 NW.2d 13, 14 (Minn. 1984);In re Austin,333 NW.2d 633, 634 (Minn. 1983); andIn re Kennedy,442 A.2d 79, 84-85 (Del. 1982). Thus, § 11.115(f) clarifies recordkeeping requirements that currently apply to all practitioners through section 10.112(c)(3).

Section 11.116would provide rules regarding a practitioner's responsibilities in declining or terminating representation of a client. This rule corresponds to the ABA Model Rule of Professional Conduct 1.16.

Section 11.117would provide rules regarding a practitioner's responsibilities when buying or selling a law practice or an area of law practice, including good will. This rule corresponds to the ABA Model Rule of Professional Conduct 1.17.

Section 11.117(b)differs from ABA Model Rule of Professional Conduct 1.17(b) in that the USPTO is proposing that to the extent the practice or the area of practice to be sold involves patent proceedings before the Office, that practice or area of practice may be sold only to one or more registered practitioners or law firms that includes at least one registered practitioner.

Section 11.118would provide rules regarding a practitioner's responsibilities to prospective clients. This rule corresponds to the ABA Model Rule of Professional Conduct 1.18.

Sections 11.119-11.200are reserved.

Section 11.201would provide a rule addressing the practitioner's role in providing advice to a client and corresponds to the ABA Model Rule of Professional Conduct 2.1. However, the USPTO is declining to enact the substance of the last sentence of ABA Model Rule of Professional Conduct 2.1, which provides that in representing a client, a practitioner may refer to not only legal considerations, but also other factors. However, by not enacting the last sentence of Rule 2.1, the USPTO is not implying that a practitioner may not refer to other considerations such as moral, economic, social and political factors that may be relevant to the client's situation.

Section 11.202is reserved. ABA Model Rule of Professional Conduct 2.2 was deleted in 2002 as the ABA no longer treats intermediation and the conflict-of-interest issues it raises separately from any other multi-representation conflicts. Issues relating to practitioners acting as intermediaries are dealt with under § 11.107.

Section 11.203would articulate the ethical standards for circumstances where a practitioner provides anevaluation of a matter affecting a client for the use by a third party. This rule corresponds to the ABA Model Rule of Professional Conduct 2.3. It should be noted that with respect to evaluation information under § 11.203 a practitioner is required to disclose information in compliance with the duty of disclosures provisions of this subchapter subject to disclosure to the USPTO pursuant to § 11.106(c).

Section 11.204would provide a rule addressing the practitioner's role in serving as a third-party neutral, whether as an arbitrator, a mediator or in such other capacity, and corresponds to the ABA Model Rule of Professional Conduct 2.4.

Sections 11.205-11.300are reserved.

Section 11.301would require that a practitioner present well-grounded positions. The advocate has a duty to use legal procedure for the fullest benefit of the client's cause. The advocate also has a duty not to abuse the legal procedure. This rule corresponds to the ABA Model Rule of Professional Conduct 3.1; however, the USPTO is declining to enact the ABA Model Rule requirement that a lawyer for the defendant in a criminal proceeding may defend the proceeding by requiring that every element of the case be established. The USPTO proposes deleting the specific reference because it is a professional conduct rule limited to the practice of criminal law.

Section 11.302would require that practitioners diligently pursue litigation and Office proceedings. This rule corresponds to the ABA Model Rule of Professional Conduct 3.2, adding that a practitioner shall make reasonable efforts to expedite proceedings before the Office as well as in litigated matters.

Section 11.303would continue the duty of candor to a tribunal while specifying its application under different situations, and corresponds to the ABA Model Rule of Professional Conduct 3.3. Section 11.303(a)(2) sets forth the duty to disclose to the tribunal 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 in aninter partesproceeding. It also sets forth this duty for anex parteproceeding before the Office where the legal authority is not otherwise disclosed. All decisions made by the Office in patent and trademark matters affect the public interest.See Learv.Adkins,395 U.S. 653 (1969). Many of the decisions made by the Office are madeex 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. Section 11.303(a)(3) does not include a reference to testimony of a defendant in a criminal matter, as set forth in ABA Model Rule 3.3(a)(3).

Section 11.303(e)would specify that in a proceeding before the Office, a practitioner must disclose information necessary to comply with the duty of disclosure provisions of this subchapter in practice before the Office. The practitioner's responsibility to present the client's case with persuasive force is qualified by the practitioner's duty of candor to the tribunal.See Lipman v. Dickinson ,174 F.3d 1363,50 USPQ2d 1490 (Fed. Cir. 1999).

Section 11.304would contemplate that evidence be marshaled fairly in a case before a tribunal, including inex parteandinter partesproceedings before the Office. This rule corresponds to the ABA Model Rule of Professional Conduct 3.4, but it clarifies that the duties of the practitioner are not limited to trial matters but also to any proceeding before a tribunal.

Section 11.305would contemplate that practitioners act with impartiality and decorum inex parteandinter partesproceedings. This rule corresponds to the ABA Model Rule of Professional Conduct 3.5, but it clarifies that it is improper to seek to improperly influence a hearing officer, administrative law judge, administrative patent judge, administrative trademark judge, employee or officer of the Office.

Section 11.305(c)is reserved as the USPTO is declining to enact a specific rule regarding a practitioner's communication with a juror or prospective juror. Nonetheless, a practitioner who engages in the practice of improper communication with a juror or prospective juror is subject to criminal laws and the disciplinary rules of the appropriate State and Court authorities. Failure to comply with those laws and rules may lead to disciplinary action against the practitioner and, in turn, possible reciprocal action against the practitioner by the USPTO.See37 CFR 11.24 and 11.804(h). Moreover, the lack of a specific disciplinary rule concerning particular conduct should not be viewed as suggesting that the conduct would not violate one or more of the USPTO Rules of Professional Conduct (e.g.,§ 11.804).

Section 11.306is reserved as the USPTO is declining to enact a specific rule regarding trial publicity. Nonetheless, a practitioner who engages in improper conduct relating to trial publicity is subject to the disciplinary rules of the appropriate State and Court authorities. Failure to comply with those rules may lead to disciplinary action against the practitioner and, in turn, possible reciprocal action against the practitioner by the USPTO.See37 CFR 11.24 and 11.804(h). Moreover, the lack of a specific disciplinary rule concerning particular conduct should not be viewed as suggesting that the conduct would not violate one or more of the USPTO Rules of Professional Conduct (e.g.,§ 11.804).

Section 11.307would generally proscribe a practitioner from acting as an 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. This rule corresponds to the ABA Model Rule of Professional Conduct 3.7.

Section 11.308is reserved. ABA Model Rule of Professional Conduct 3.8 addresses the “Special Responsibilities of a Prosecutor” in the context of criminal proceedings. Because practice before the Office does not involve criminal proceedings, the content of ABA Model Rule of Professional Conduct 3.8 is not being proposed. Nevertheless, an attorney who is both a practitioner before the Office and a criminal prosecutor may be subject to both the Office and other professional conduct rules. Discipline by a duly constituted authority of a State, the United States, or the country in which a practitioner resides may lead to reciprocal disciplinary action by the Office.See37 CFR 11.24. Moreover, the lack of a specific disciplinary rule concerning particular conduct should not be viewed as suggesting that the conduct would not violate one or more of the USPTO Rules of Professional Conduct (e.g.,§ 11.804).

Section 11.309would regulate a practitioner's conduct when he or she is representing a client in a non-adjudicative proceeding before an administrative agency, such as the Office. This rule corresponds to the ABA Model Rule of Professional Conduct 3.9.

Sections 11.310-11.400are reserved.

Section 11.401would require a practitioner to be truthful when dealing with others on a client's behalf. This rule corresponds to the ABA Model Rule of Professional Conduct 4.1.

Section 11.402would provide a standard for communicating with a represented party. Section 11.402(a) corresponds to the ABA Model Rule of Professional Conduct 4.2. Section 11.402(a) differs from ABA Model Rule of Professional Conduct 4.2 in that the proposed rule adds that in addition toa practitioner being authorized to communicate with a represented party when the practitioner is authorized by law or a court order, a practitioner may communicate with a represented party when the practitioner is authorized by rule to do so.

Section 11.402(b)is based on District of Columbia Rule of Professional Conduct 4.2(b) and would recognize that special considerations come into play when the Federal Government, including the Office, is involved in a lawsuit. It would permit communications with those in Government having the authority to redress such grievances (but not with 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 § 11.402(b) in the case of communications with non-party employees.

Section 11.402(b) does not permit a practitioner to bypass 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 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 11.403would provide a standard for communicating with an unrepresented person, particularly one not experienced in dealing with legal matters. This rule corresponds to the ABA Model Rule of Professional Conduct 4.3.

Section 11.404would 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. The rule also provides guidance to practitioners regarding the receipt of inadvertently sent documents. This rule corresponds to the ABA Model Rule of Professional Conduct 4.4.

Sections 11.405-11.500are reserved.

Section 11.501would set forth the responsibilities of a partner or supervisory practitioner. This rule corresponds to the ABA Model Rule of Professional Conduct 5.1.

Section 11.502would set forth the ethical and professional conduct responsibilities of a subordinate practitioner. This rule corresponds to the ABA Model Rule of Professional Conduct 5.2.

Section 11.503would set forth a practitioner's responsibilities regarding non-practitioner assistants. Practitioners generally employ assistants in their practice, including secretaries, technical advisors, student associates, draftspersons, investigators, law student interns, and paraprofessionals. This rule specifies the practitioner's responsibilities in supervising non-practitioner assistants and corresponds to the ABA Model Rule of Professional Conduct 5.3.

Section 11.504would protect the professional independence of a practitioner by providing traditional limitations on sharing fees with non-practitioners. This rule corresponds to the ABA Model Rule of Professional Conduct 5.4. (See also,37 CFR 10.48, 10.49, 10.68)

Section 11.504(a)(4)would differ from the ABA Model Rule in favor of District of Columbia Rule of Professional Conduct 5.4(a)(5). Section 11.504(a)(4) permits a practitioner to share legal fees with a nonprofit organization that employed, retained, or recommended employment of the practitioner in the matter. A practitioner may decide to contribute all or part of legal fees recovered from the opposing party to the nonprofit organization. Such a contribution may or may not involve fee-splitting, but when it does, the prospect that the organization will obtain all or part of the practitioner's fees does not inherently compromise the practitioner's professional independence, whether the practitioner is employed by the organization or was only retained or recommended by it. A practitioner who has agreed to share legal fees with such an organization remains obligated to exercise professional judgment solely in the client's best interests. Moreover, fee-splitting in these circumstances may promote the financial viability of such nonprofit organizations and facilitate their public interest mission. Unlike the corresponding provision of the ABA Model Rules, this provision is not limited to sharing of fees awarded by a court because that restriction would significantly interfere with settlement of cases outside of court, without significantly advancing the purpose of the exception. To prevent abuse, it applies only if the nonprofit organization has been recognized by the Internal Revenue Service as an organization described in Section 501(c)(3) of the Internal Revenue Code.

Section 11.505would proscribe practitioners from engaging in or aiding the unauthorized practice of law. This rule corresponds to the ABA Model Rule of Professional Conduct 5.5(a). The USPTO is declining to adopt the ABA Model Rules regarding multijurisdictional practice of law.

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 and registration to practice before the USPTO sanctions “the performance of those services which are reasonably necessary and incident to the preparation and prosecution of patent applications.”Sperryv.Florida,373 U.S. 379, 386, 137 USPQ 578, 581 (1963). Thus, a registered practitioner may practice in patent matters before the Office regardless of where they reside within the United States.

It is noted that the USPTO registers individuals, not law firms or corporations, to practice in patent matters before the Office. Thus, a corporation is not authorized to practice law and render legal services. Instead, upon request and for a fee, the corporation could cause a patent application to be prepared by a registered practitioner.See Lefkowitzv.Napatco,415 NE.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. For example, 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 NE.2d 1177 (Ohio 1996).See Comm. on Professional Ethics & Conductv.Baker,492 NW.2d 695,597 (Iowa 1992);see also Peoplev.Laden,893 P.2d 771 (Colo. 1995); Peoplev.Macy,789 P.2d 188 (Colo. 1990);Peoplev.Boyles,591 P.2d 1315 (Colo. 1979);In re Discipio,645 NE.2d 906 (Ill. 1994);In re Komar,532 NE.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).

Section 11.505(b)would specifically proscribe practice before the Office in patent, trademark, or other non-patent law if a practitioner is suspended, excluded, or excluded on consent before the Office. The rule would also proscribe practice before the Office in patent, trademark, or other non-patent law if a practitioner has been transferred to disability inactive status before the Office, has been administratively suspended before the Office, or is administratively inactive before the Office.

Section 11.505(c)would clarify that a practitioner is prohibited from assisting a person who is not a member of the bar of a jurisdiction in the performance of an activity that constitutes the unauthorized practice of law, and from assisting a person who is not registered to practice before the Office in patent matters in the unauthorized practice of law before the Office.

Sections 11.505(d),like current § 10.47(b), would clarify that a practitioner is prohibited from aiding a suspended or excluded practitioner in the practice of law before the Office.

Sections 11.505(e)would provide that a practitioner is prohibited from aiding a suspended or excluded practitioner in the practice of law in any other jurisdiction.

Section 11.505(f),consistent with § 11.14(b), would recognize that individuals who are not attorneys but who were recognized to practice before the Office in trademark matters prior to January 1, 1957, will continue to be recognized as agents to continue practice before the Office in trademark matters and such practice by those individuals is not the unauthorized practice of trademark law before the Office.

Section 11.506would prohibit agreements restricting rights to practice. This rule corresponds to the ABA Model Rule of Professional Conduct 5.6.

Section 11.507would provide for a practitioner being subject to the USPTO Rules of Professional Conduct if the practitioner provides law-related services. This rule corresponds to the ABA Model Rule of Professional Conduct 5.7. The definition of “law-related service” is set forth in § 11.1.

Sections 11.508-11.600are reserved.

Section 11.601-11.700are reserved. The USPTO is declining to adopt the ABA Model Rules regarding public service. The USPTO recognizes that every practitioner, regardless of professional prominence or professional workload, has a responsibility to provide legal services to those unable to pay and that every practitioner should support all proper efforts to meet this need for legal services. However, attorney practitioners' individual state ethical rules should provide guidance and regulations regarding their respective duties to provide voluntarypro bonoservice, accept court appointed representation, and serve as members of legal service and legal reform organizations. The USPTO is declining to add an increased regulatory requirement on attorney practitioners.

Section 11.701would govern all communications about a practitioner's services, including advertising, and corresponds to the ABA Model Rule of Professional Conduct 7.1.

Section 11.702would provide for advertising by practitioners. This section corresponds to the ABA Model Rule of Professional Conduct 7.2. However, the USPTO is declining to enact the substance of ABA Model Rule of Professional Conduct 7.2(b)(2) as the USPTO does not currently regulate and does not anticipate regulating lawyer referral services.

Section 11.703would address the direct contact by a practitioner with a prospective client known to need legal services. This section corresponds to the ABA Model Rule of Professional Conduct 7.3.

Section 11.704would permit a practitioner to indicate areas of practice in communications about the practitioner's services. Section 11.704(a) corresponds to the ABA Model Rule of Professional Conduct 7.4(a).

Section 11.704(b),as with current § 10.34, would continue the long-established policy of the USPTO for the designation of practitioners practicing before the Office.

Section 11.704(c)is reserved as the USPTO is declining to regulate the communication of specialization in Admiralty practice.

Section 11.704(d)corresponds to the ABA Model Rule of Professional Conduct 7.4(d).

Section 11.704(e)would provide guidance to, and permit, an individual granted limited recognition under § 11.9 to use the designation “Limited Recognition” to indicate in communications about the individual's services that the individual, while not a “registered practitioner,” is authorized to practice before the USPTO in patent matters subject to the limitations in the individual's grant of limited recognition under § 11.9.

Section 11.705would regulate firm names and letterheads. This section corresponds to the ABA Model Rule of Professional Conduct 7.5.

Section 11.705(b)is reserved as the USPTO is declining to enact a specific rule regarding law firms with offices in more than one jurisdiction since the USPTO encompasses one Federal jurisdiction. However, the USPTO is not implying that a law firm with offices in more than one jurisdiction may violate a State authority regulating this conduct. Nonetheless, a practitioner who engages in the improper use of firm names and letterhead is subject to the disciplinary rules of the appropriate State and Court authorities. Failure to comply with those rules may lead to disciplinary action against the practitioner and, in turn, possible reciprocal action against the practitioner by the USPTO.See37 CFR 11.24 and 11.804(h). Moreover, the lack of a specific disciplinary rule concerning particular conduct should not be viewed as suggesting that the conduct would not violate one or more of the USPTO Rules of Professional Conduct (e.g.,§ 11.804).

Section 11.705(d)is reserved. The USPTO declines to adopt ABA Model Rule of Professional Conduct 7.5(d) providing that practitioners may state or imply that they practice in a partnership or other organization only when that is the fact. However, the USPTO is not implying that practitioners may state or imply that they practice in a partnership or other organization if that is not the fact. Nonetheless, a practitioner who engages in the improper use of firm names and letterhead is subject to the disciplinary rules of the appropriate State and Court authorities. Failure to comply with those rules may lead to disciplinary action against the practitioner and, in turn, possible reciprocal action against the practitioner by the USPTO.See37 CFR 11.24 and 11.804(h). Moreover, the lack of a specific disciplinary rule concerning particular conduct should not be viewed as suggesting that the conduct would not violate one or more of the USPTO Rules of Professional Conduct (e.g.,§ 11.804).

Section 11.706is reserved as the USPTO is declining to enact a specific rule regarding political contributions to obtain legal engagements or appointments by judges. However, the USPTO is not implying that apractitioner or law firm may accept a government legal engagement or an appointment by a judge if the practitioner or law firm makes a political contribution or solicits political contributions for the purpose of obtaining or being considered for that type of legal engagement or appointment. Nonetheless, a practitioner who engages in this type of practice is subject to the disciplinary rules of the appropriate State and Court authorities. Failure to comply with those rules may lead to disciplinary action against the practitioner and, in turn, possible reciprocal action against the practitioner by the USPTO.See37 CFR 11.24 and 11.804(h). Moreover, the lack of a specific disciplinary rule concerning particular conduct should not be viewed as suggesting that the conduct would not violate one or more of the USPTO Rules of Professional Conduct.

Sections 11.707-11.800are reserved.

Section 11.801would impose the same duty to persons seeking admission to a bar as well as to practitioners seeking registration or limited recognition. This section corresponds to the ABA Model Rule of Professional Conduct 8.1. This section would clarify that the section pertains to applicants for registration or an applicant for recognition to practice before the Office and would conform to current USPTO practice in §§ 11.6, 11.7, 11.9, 11.14 and 11.58.

If a person makes a material false statement in connection with an application for registration or recognition, it may be the basis for subsequent disciplinary action if the person is admitted, and in any event it may be relevant in a subsequent application. The duty imposed by § 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 to knowingly 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. Moreover, Section 11.801(d) requires practitioners to cooperate with the Office of Enrollment and Discipline in an investigation of any matter before it and would continue the practice set forth under former § 10.131(b).

Section 11.802would require that a practitioner 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, adjudicatory officer or public legal officer, or of a candidate for election or appointment to judicial or legal office. This section corresponds to the ABA Model Rule of Professional Conduct 8.2. Government employees and officers such as administrative patent judges, administrative trademark judges, patent examiners, trademark examining attorneys, and petitions examiners, perform judicial and quasi-j