A Practitioner's View of Ethical Considerations Before the Board in Interferences
Richard A. Neifeld
Practitioners face many of the same types of ethical issues in representations before the Board of Patent Appeals and Interferences ("Board") as in any representation to the United States Patent and Trademark Office ("Office"). However, only the Board handles interference proceedings. There are substantial differences between ethical issues relating to interferences, ex parte prosecution, and other inter partes proceedings. In this paper, I identify some potential ethical pitfalls in interference practice.
II. The Duty of Disclosure in Interferences
An issue that the interference bar has repeatedly discussed is the extent to which the duty of disclosure applies in interferences. For example, does a patentee involved in an interference have a 37 CFR 1.56 duty of disclosure? What if the patentee knows of an anticipatory reference as to an involved claim or a non involved claim? What if the patentee knows of a reference either more material than prior art of record or that provides a prima facie case of obviousness? If you represent the patentee in such a situation, what do you tell your client, and what do you do? I suggest that you turn to section 10 of the 37 CFR, which governs all representations before the Office. See 37 CFR 10.1, first sentence. In situations just described, 37 CFR 10.18(b)(1) is relevant. It states in pertinent part that "whoever ... knowingly and willfully ... conceals, or covers up by any trick, scheme, or device a material fact ... shall be subject to penalties...." A lesson to draw from this example is that you should carefully review 37 CFR 10 in addition to 37 CFR 1.601 et seq. if you become involved in an interference.
III. New and Frivolous Arguments are Subject to Sanctions
In Leveen v. Edwards, Interference No. 104,290, paper No. 351 (PTOBPAI 2002)(non-precedential), a panel of the Board issued an opinion in which it explained why it decided not to issue sanctions against Edwards in the form of an award of fees, pursuant to 37 CFR 1.616(a)(5). The opinion was in response to a hearing, which was in response to an order to show cause (paper No. 348) why sanctions should not be imposed. The show cause order indicated that the panel believed that Edwards' new arguments in a brief were both new and frivolous. In the opinion, the panel indicated that it was not imposing sanctions because the practitioner had convinced them that the new arguments were not made in bad faith. While no sanctions were imposed, the opinion put practitioners on notice, stating that:
However, we choose to use this opinion as notice to practitioners not to change the thrust of arguments previously made when review of an interlocutory order is sought at final hearing. We do this in the interest of providing an "abundance of fairness" to parties who somehow might not have appreciated the impropriety of changing arguments on review. See e.g., Hockerson-Halberstadt v. Converse Inc., 183 F.3d 1369, 1374 (Fed. Cir. 1999).
Hockerson-Halberstadt does not discuss sanctions. Instead, it relates to whether the court will consider arguments on claim construction asserted on appeal that was not asserted at trial. In Hockerson-Halberstadt, the Court put the bar on notice that it will no longer consider arguments in support of a claim construction first presented on appeal. Hence, it does not clearly support the Board's warning regarding sanctions. However, the general thrust of Leveen is clear; the Board will not tolerate a low ethical standard of conduct including non-compliance with rules and orders.
IV. A Laundry List of Pitfalls
A. Avoid Ex Parte Communications
Practitioners can communicate ex parte with patent examiners when prosecuting patent applications. Don't try that with APJ's in an interference since ex parte communications are improper in an inter partes proceeding in general and in the Office in particular. See 37 CFR 10.93 (b). 37 CFR 10.93(b) indicates that ex parte communications "as to the merits of the cause" are prohibited. The Board addressed what constituted an ex parte communication as to the merits of the cause in A.S. v. B.R., Interference No. 104,AAA, paper No. 10 (PTOBPAI December 03, 1998)(precedential). In that case, the practitioner sent an email to the APJ in charge of an interference pointing out a formal problem with a count of a newly declared interference. The email apparently did not "cc" counsel for the opposing party. In response, the panel stated that:
In the future, an email received by the Trial Section plausibly related to a particular interference will be returned unanswered if it does not on its face indicate “service” by e-mail upon opposing counsel. Moreover, e-mail cannot take the place of pleadings which are to be filed in the manner required by the rules. Any e-mail sent to the Trial Section must also be sent by e-mail to opposing counsel. If opposing counsel does not have e-mail, then a party may not communicate inter partes with the Board through e-mail in a specific interference.
In F.M.W v. D.A.T, Interference No. 104, BBB, paper No. 4 (PTOBPAI December 23, 1998)(precedential to the Trial Section of the Board), the interference, as declared, apparently had initial times for responses set during a "holiday period" around the end of December. A first practitioner representing the junior party filed via facsimile a paper complaining about those times for responses. In addition, the APJ handling the interference received an email at his personal email address (as opposed to his "*.uspto.gov" email address) from a second practitioner representing the junior party, and the contents of that email apparently related to the deadlines complained about in the foregoing paper. The email had no indication that it was served on the senior party. The Board stated that:
[t]he e-mail communication can be viewed as supplementing arguments made in the ... [facsimile], in which case the email communication is an improper ex parte communication in an interference. On the other hand, it is possible to review [sic; view] the email communication as calling attention to a general problem in interference cases. *** We will give the second practitioner the benefit of the doubt .... [Emphasis in the original; interpolation supplied, at p. 6.]
A prudent course of action is for a practitioner to avoid communicating ex parte with any APJ on any matter arguably touching on the merits of any inter partes proceeding handled by an APJ.
However, F.M.W provides an additional lesson. F.M.W involved a notice declaring an interference sent to the "rather large patent department" of the junior party, and the junior party's complaints were received shortly after the junior party received the notice declaring interference. I surmise that the practitioners in the patent department for the junior party were unfamiliar with interference procedures. The attorney of record receiving a declaration of an interference usually has had little or no experience with interferences. Given those facts, it is advisable to inform all practitioners (1) to avoid ex parte communications in an interference and (2) to promptly consult a practitioner experienced with interferences upon receiving a notice declaring an interference. In addition, a special note of instruction can be placed in the file for any patent in which a patentee has received a 37 CFR 1.607(d) notice, amongst any other action the patentee decides to take in response to the notice.
B. Notify the Office When You Copy Claims
37 CFR 1.604(b) and 607(c) indicate that, when presenting a claim in an application that you think may interfere with a claim in another pending application or a patent, you "shall identify" to the Office the other application or patent and claim in the patent. Moreover, 37 CFR 10.23(c)(7) states that "[k]nowingly withholding from the Office information identifying a patent or patent application of another from which one or more claims have been copied" is misconduct, and that rule has been enforced. In Bovard v. Respondent, Office of Enrollment and Discipline ("OED") Proceeding D96-01 (Commissioner's Decision, August 27, 1997), an attorney of record in a patent application received a private reprimand for failing to properly notify the Office of copied claims. However, the Commissioner clearly indicated in the opinion that a private reprimand was an exception for violation of the duty of disclosing copied claims, stating that "[b]ecause of factual circumstances unique to this case, the Commissioner has chosen to issue only a private reprimand for this misconduct."
C. Comply with 35 USC 135(b)
Do not assume that you understand the implications of 135(b). See In re Berger, 61 USPQ2d 1523, ___, 279 F.3d 975, ___, 2002 U.S. App. LEXIS 1186. (Fed. Cir. 2002) and Housey v. Berman, Docket No. 01_1311 (Fed. Cir. May 29, 2002). If for whatever reason you do not exactly copy claims from a patent with which you want an interference, you may be barred from amending those claims later on in order to get into interference.
D. Pick Your Team Carefully
Representing in an interference usually involves a small team of attorneys. Especially in the DC area, many of the attorneys and patent agents are former patent examiners. Keep in mind that these former examiners have both a 37 CFR 10.10(b)(2) two year bar on preparation or prosecution of any application in technology in areas in which they examined and a 37 CFR 10.10(b)(1) temporally unlimited bar on all matters pending in the former examiner's group while the former examiner was an examiner.
What if a member of your team of attorneys worked in the Office (1) in the examining group in which the patent your are targeting for an interference was examined and (2) while the application for that patent was pending? That situation is not expressly covered by 37 CFR 10.10.
E. Avoid Conflicts
Conflicts are clearly a problem for the interference bar, especially at large firms. In fact, there is a case to be made that it is bad business for any large firm to target interferences as a source of business. An interference has the same preclusive effect on representations of other potential clients as does a patent infringement litigation, at least (in my opinion) as great a chance for attorney malpractice, and an interference is (in my opinion) much harder to competently staff. However, an interference typically brings to a firm only about ten percent as much in fees as an infringement litigation. Moreover, interferences are much rarer than litigations and therefore less likely to provide an ongoing source of business.
The ethical issues for a large firm are illustrated by the opinion in University of New Mexico v. Fordham, Interference No. 104,761, paper No. 47 (PTOBPAI 2002)(non-precedential). The opinion contains a panel decision on a request for reconsideration of a decision of an APJ denying a request to disqualify opposing counsel. The panel denied the University of New Mexico's (UNM's) request to disqualify attorneys from the firm of Pennie & Edmonds from representing Fordham. The decision indicates that an attorney that joined Pennie brought with him a patent application in which UNM was a co-assignee, and that the UNM inventor gave Pennie a power of attorney. Those actions occurred after another Pennie attorney had requested an interference with the Fordham patent. The Board ultimately decided to deny UNM's request to disqualify, but its opinion contains the following sobering statement:
To the extent that P&E may have harmed UNM in a way unrelated to this interference, UNM can seek redress through the Office of Enrollment and Discipline or a relevant State Bar.
APJs are also sensitive to their own potential conflicts. Noelle v. Armitage, Interference No. 104,724, paper No. 33 (PTOBPAI April 26, 2002) notes that the reason an interference had been transferred to another APJ was that the original APJ became aware through a press release that one of the real parties in interest was pursuing a merger that would have led to a conflict of interest for the APJ. The opinion noted the importance of the parties providing complete and up to date 1.602 real party in interest statements. The initial and continuing notification duties of 602(b) and (c) are mandatory, and practitioners need to comply with them.
F. Avoid Being the Attorney and a Witness
37 CFR 10.63 provides that when "it is obvious that [any practitioner] ... in the practitioner's firm ... [may be asked to sign an affidavit or become a witness other than on behalf of the practitioner's client] ... the practitioner shall withdraw." Thus, recognizing that an attorney representing in an interference may become a witness should set off a red flag. See, for example, XX v. YY, Interference No. 1xx,xxx, paper No. unknown, (PTOBPAI 1999)(non-precedential)(patent practitioner SS cross-examined in the presence of Senior APJ McKelvey on issue of fraud in patent procurement of involved patent for allegedly failing to disclose to the examiner experimental results supporting a rejection while disclosing experimental results supporting impropriety of the rejection).
G. Miscellaneous Items to Consider
APJs make many procedural rulings during telephone conference calls. I have personal knowledge of one instance where the attorney's and the APJ's understandings of those rulings differed. Obviously, there is a possibility of adverse consequences resulting from such misunderstandings. One way to avoid such a consequence is to have a court reporter make a transcript of any conference call.
In an effort to identify additional ethical issues of interest to interferences, I spoke with Harry Moatz, Director of OED. Director Moatz provided a litany list of the ethical failings that his office sees. The one that jumped out at me as potentially relevant to interference practitioners was failure to report to the client. Certain time periods for responding in interference proceedings are much shorter than ex parte time periods, and responses may require a larger volume of papers and numbers of copies than in ex parte filings. Hence, the relatively leisurely reporting schedules possible (but not advisable) for ex parte matters do not exist in an interference. Practitioners that are unprepared to managed this type of case may have trouble in keeping their client up to date.
V. Provide Competent Advice and Know What You Need to Know
Practitioners have a duty to act competently. 37 CFR 10.77. Interferences involve complicated analysis of substantive law, procedure, and facts. If a practitioner cannot act competently, the practitioner should not be handling an interference. There are a plethora of ways in which you can fail to act competently. I discuss some of them below.
The first question that arises when one has identified a potential for an interference is whether to request the interference (by complying with the provisions of 37 CFR 1.604 or 607). To answer that question, you have to look far into the future and analyze possible outcomes and consequences. Generally speaking, you need to know the consequences of case law and rule estoppel including the effect on any unclaimed subject matter in your application. You also need to have an understanding of the time line for an interference from request through judicial review. Keep in mind the potential for subsequent collateral attack even if you are successful in the interference. In the same vein, keep in mind that, if all involved cases are assigned to a single entity during the interference, the APJ is likely to issue an order requiring the assignee to make a priority "election," and a panel of the Board will enter judgement based upon that admission. 37 CFR 1.602(a). That election may be subject to collateral attack.
Practitioners should also know their case's priority proofs prior to requesting an interference. This is because you have to propose a count in the request for an interference, and the count of the interference defines the subject matter for which you have to prove a date of invention earlier than your opponent in order to win on priority.
Another concern to bear in mind is the evidence your client does and does not provide to you. For example, if there are declarations in the file for an application, double check to make sure that the assertions in the declarations are accurate and complete. See XX, supra. Knowing the weaknesses of your case allows you to competently advise your client on case strategy.
Practitioners that rely upon 37 CFR 1.608(b) showings in their interference request should bear in mind that 608(b) showings must meet more than the examiner's initial review. The 608(b) showings must also satisfy the APJ that you are entitled prima facie to judgement vis-a-vis the senior party. If your 608(b) showings do not make at least a prima facie case of entitlement to judgement, you will see an order to show cause why judgement should not be entered against you mailed with the notice declaring an interference. Do not expect to be entitled to cure deficient evidence in response to the order. Cf. Basmadjian v. Landry, Interference No. 103,694, paper No. 22 , at 10-11 (PTOBPAI 1997)(precedential).
Preliminary statements carry a specific legal effect. A party is not entitled to prove a date of invention earlier than the date you allege in the preliminary statement. Obviously, it is desirable to allege a relatively early date in a preliminary statement. Preliminary statements contain factual assertions. Factual assertions implicate your duty under 37 CFR 10.23(2)(ii)("knowingly giving false or misleading information ... [to the] Office..."). Also note that you have to allege derivation in your preliminary statement or you lose the right to contest that issue. See 37 CFR 1.623, 624, and 625.
Practitioners should file preliminary motions that are advantageous for their party's situation in an interference, and those motions should raise all issues the party intends to raise. You cannot raise an issue later on in the proceeding that you should have raised via a preliminary motion. Cf. 37 CFR 1.640(c)(request for reconsideration of decision on motion limited to "points misapprehended or overlooked" in the decision). In addition, you cannot raise in court review any issue you did not raise in the interference proceeding in the PTO. See for example Conservolite, Inc. v. Widmayer, 21 F.3d 1098, 1102, 30 USPQ2d 1626, 1629 (Fed. Cir. 1994) generally and Estee lauder Inc. v. L'Oreal, S.A., 129 F.3d 588, 592, 44 USPQ2d 1610, 1613 (Fed. Cir. 1997)(treating conception, diligence, and reduction to practice as distinct "issues" for purposes of raising them in a 35 USC 146 action).
Practitioners must meet the time periods noted as non-extendable in the orders setting time periods accompanying the standard "Notice Declaring Interference." Cf. B.M. v. H.G., Interference No. 104,CCC, paper No. 34 (PTOBPAI 1999)(binding precedent of the Interference Trial Section) ("Joint request for extensions of time for time periods 7 and 8 denied.").
Practitioners have to notice at the appropriate time in an interference intent to argue abandonment, suppression, or concealment or lose the right to contest those issues. 37 CFR 1.632.
Practitioners have to comply with the statutory requirements of 35 USC 135(c) to reduce to writing and file a copy of any agreement reached by the parties in contemplation of settlement of the interference. Failure to do so results in permanent unenforcability by operation of the statute. See 35 USC 135(c). While the Board may disagree, it is still prudent to file a copy of any such agreement reached during subsequent court review of the interference proceeding. See Johnston v. Beachy, Interference No. 104,286, paper No. 200 (PTOBPAI 2001)(binding precedent of the Interference Trial Section)(relating to filing of interference settlement for settlement occurring after termination of an interference proceeding in the Office).
Practitioners are obliged to inform the examiner of results of an interference and provide information from the interference to the examiner examining any relevant application. See Eli Lilly v. Cameron, Interference No. 104,104, paper No. 18 (PTOBPAI 2001) (non-precedential) (adverse judgement that "is material to the patentability with respect to pending claims in other applications under consideration before" the Office falls within the rule 56 duty not withstanding Lilly's characterization of request for entry of adverse judgement as not an admission).
There are differences between the ethical issues relating to representing in interferences before the Board compared to other types of representations, and these differences result from different applicable substantive law and procedure. A practitioner should be familiar with the ethical issues in interferences if representing in an interference.
Printed: July 30, 2002 (11:12AM)
The Board's notice at http://www.uspto.gov/web/offices/dcom/bpai/bpaifaq.htm states that "[u]nless an order is entered in a particular interference there currently is no regulation which requires a patentee in an interference to advise the board or its opponent of prior art falling within the scope of 37 CFR §§ 1.56" and indicates that the PTO's policy is under review. The post date for that web page is indicated at the bottom of the page to be 02/12/2002.
The AIPLA previously proposed that the Office include a duty of disclosure rule for interferences. However, the Office did not adopt that rule.
Board cases cited in this paper without reference to a conventional reporter are posted on the Interference Trial Section Opinion's portion of the Board's web site at: http://www.uspto.gov/web/offices/dcom/bpai/its.htm. Many of the posted Board opinions are designated, precedential, precedential to the Trial Section of the Board, or non-precedential. The implications of an opinion being designated non-precedential or being designated precedential to the Trial Section of the Board are not well defined.
Leveen at 5.
 A.S. at p. 14.
F.M.W at p. 4.
Bovard OED discipline opinion D01 posted at: http://www.uspto.gov/web/offices/com/sol/foia/oed/disc/disc.htm.
UNM at 7.
Basmadjian does not appear on the Trial Section Opinion's portion of the Board's web site at: http://www.uspto.gov/web/offices/dcom/bpai/its.htm. Instead, it appears on the "Precedential Opinions" section of the Board's web site at: http://www.uspto.gov/web/offices/dcom/bpai/prec.htm.