Federal Register, Volume 87 Issue 173 (Thursday, September 8, 2022)

[Federal Register Volume 87, Number 173 (Thursday, September 8, 2022)]
[Proposed Rules]
[Pages 54930-54937]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-18215]

[[Page 54930]]

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DEPARTMENT OF COMMERCE

Patent and Trademark Office

37 CFR Parts 1 and 11

[Docket No. PTO-C-2021-0045]
RIN 0651-AD58

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

AGENCY: United States Patent and Trademark Office, Department of
Commerce.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The U.S. Patent and Trademark Office (USPTO or Office)
proposes to amend the rules of practice in patent cases and the rules
regarding the representation of others before the USPTO to better
protect the public and improve compliance with USPTO requirements. In
particular, this rulemaking proposes to formalize the USPTO's Diversion
Pilot Program for patent and trademark practitioners whose physical or
mental health issues or law practice management issues resulted in
minor misconduct. Formalizing the Pilot would align USPTO disciplinary
practice with a majority of states and provide practitioners an
opportunity to address the root causes of such misconduct. In addition,
the USPTO proposes to require foreign attorneys or agents granted
reciprocal recognition in trademark matters to provide and update their
contact and status information or have their recognition withdrawn so
the public will have access to up-to-date information. Also, the USPTO
proposes to defer to state bars regarding fee sharing between
practitioners and non-practitioners to reduce the potential for
conflicts between USPTO and state bar rules. Further, the USPTO
proposes to remove a fee required when changing one's status from a
patent agent to a patent attorney and to make minor adjustments to
other rules related to the representation of others before the USPTO.

DATES: Written comments on the proposed rule and draft diversion
guidance document must be received on or before November 7, 2022.

ADDRESSES: For reasons of Government efficiency, comments on the
proposed rule and draft diversion guidance document must be submitted
through the Federal eRulemaking Portal at www.regulations.gov. To
submit comments via the portal, one should enter docket number PTO-C-
2021-0045 on the homepage and click ``search.'' The site will provide
search results listing all documents associated with this docket.
Commenters can find a reference to this rulemaking and click on the
``Comment Now!'' icon, complete the required fields, and enter or
attach their comments. Comments on the proposed rule and draft
diversion guidance document should be addressed to Will Covey, Deputy
General Counsel for Enrollment and Discipline and Director for the
Office of Enrollment and Discipline (OED Director). Attachments to
electronic comments will be accepted in Adobe[supreg] portable document
format (pdf) or Microsoft Word[supreg] format. 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.
Visit the Federal eRulemaking Portal for additional instructions on
providing comments via the portal. If electronic submission of or
access to comments is not feasible due to a lack of access to a
computer and/or the internet, please contact the USPTO using the
contact information below for special instructions.

FOR FURTHER INFORMATION CONTACT: Will Covey, Deputy General Counsel for
Enrollment and Discipline and OED Director, at 571-272-4097.

SUPPLEMENTARY INFORMATION:

Purpose

The USPTO proposes to amend 37 CFR parts 1 and 11 to better protect
the public and improve compliance with the requirements of part 11. 35
U.S.C. 2(b)(2)(A) and 2(b)(2)(D) provide the USPTO with the authority
to establish regulations to govern ``the conduct of proceedings in the
Office'' and ``the recognition and conduct of agents, attorneys, or
other persons representing applicants or other parties before the
Office,'' respectively. Title 37 CFR part 11 contains those regulations
that govern the representation of others before the USPTO, including
regulations related to the recognition to practice before the USPTO,
investigations, and disciplinary proceedings, and the USPTO Rules of
Professional Conduct.
The USPTO seeks to formalize its Diversion Pilot Program initiated
in September 2017 for patent and trademark practitioners whose physical
or mental health issues or law practice management issues resulted in
minor misconduct. The public has been supportive of the Pilot. Making
the Pilot permanent will provide practitioners an opportunity to
address the root causes of such misconduct to adhere to high standards
of ethics and professionalism in order to provide valuable service to
the public. Also, it will align USPTO disciplinary practice with a
majority of state attorney disciplinary systems.
The USPTO also seeks to require foreign attorneys or agents granted
reciprocal recognition in trademark matters to provide and update their
contact and status information or have their recognition withdrawn in
order to provide the public with current information.
Further, certain state bars have begun permitting the sharing of
legal fees between a practitioner and a non-practitioner. However, such
arrangements are currently prohibited by the USPTO Rules of
Professional Conduct, creating potential conflicts for patent and
trademark practitioners who are licensed to practice law in those
states. Accordingly, the USPTO proposes to defer to state bars
regarding certain aspects pertaining to the sharing of legal fees
between a practitioner and a non-practitioner in order to reduce the
potential for such conflicts.
Lastly, the USPTO proposes to make revisions to promote efficiency
and clarity in its regulations, such as to remove a fee required when
changing one's status from a patent agent to a patent attorney in order
to encourage more practitioners to update their status; align the rule
governing the limited recognition of persons ineligible to become
registered to practice before the Office in patent matters because of
their immigration status with existing practice; clarify procedures and
improve efficiencies regarding disciplinary proceedings and appeals;
and remove a reference to ``emeritus status.''

Formalizing a Diversion Program for Practitioners

The USPTO seeks to formalize its OED Diversion Pilot Program for
patent and trademark practitioners whose physical or mental health
issues or law practice management issues resulted in minor misconduct.
For example, a practitioner who lacked diligence in a matter due to a
law practice management issue that resulted in minimal impact on their
clients and/or the public may wish to consider diversion. Accordingly,
the program allows those practitioners to avoid formal discipline by
entering into, and successfully completing, diversion agreements with
the OED Director. The goal of the program is to help practitioners
address the root causes of such misconduct and adhere to high standards
of ethics and professionalism

[[Page 54931]]

in order to provide valuable service to the public.
Diversion is intended to be an action that the OED Director may
take to dispose of a disciplinary investigation. The program is not
typically available to a practitioner after the filing of a
disciplinary complaint. However, in extraordinary circumstances, the
OED Director may enter into a diversion agreement with an eligible
practitioner after a complaint under 37 CFR 11.34 has been filed. If
diversion is requested after a complaint has been filed, the matter
will be referred to the OED Director for consideration. The terms of
any diversion agreement will be determined by the OED Director and the
practitioner.
In 2017, the USPTO initiated the OED Diversion Pilot Program for
patent and trademark practitioners. The Pilot Program has enabled
practitioners to successfully implement specific remedial measures and
improve their practice, and the USPTO has received public comment
urging that the Pilot Program be incorporated into part 11. See Changes
to Representation of Others Before the United States Patent and
Trademark Office, 86 FR 28442, 28446 (May 26, 2021). Accordingly, the
USPTO proposes changes to part 11 to formalize the Pilot Program. As
the Pilot Program is set to expire in November 2022, formalizing the
Pilot Program will emphasize the USPTO's commitment to wellness within
the legal profession and align the USPTO with the practices of more
than 30 attorney disciplinary systems in the United States.
The criteria for participation are set forth in proposed rule 37
CFR 11.30. The criteria address eligibility, completion of the program,
and material breaches of the program. Based on the American Bar
Association Model Rules for Lawyer Disciplinary Enforcement, the
criteria also draw from experience gained during the administration of
the Pilot Program. Specifically, the criteria now allow practitioners
who have been disciplined by another jurisdiction within the past three
years to participate if the discipline was based on the conduct that
forms the basis for the OED Director's investigation. For example,
participation in the USPTO's diversion program may be appropriate in
cases in which the practitioner was recently publicly disciplined by a
jurisdiction that does not have a diversion program. See Changes to
Representation of Others Before the United States Patent and Trademark
Office, 86 FR 28442, 28443 (May 26, 2021). Additional experience gained
from the Pilot Program also indicates that eligibility could be
extended to practitioners evidencing a pattern of similar misconduct if
the misconduct at issue is minor and related to a chronic physical or
mental health condition or disease. Under the Pilot Program criteria,
practitioners recently disciplined by another jurisdiction and
practitioners evidencing a pattern of similar misconduct were not
eligible to participate.
The OED Director may consider all relevant factors when determining
whether a practitioner meets the criteria. See generally, Model Rules
of Lawyer Disciplinary Enforcement Rule 11 cmt. (American Bar
Association, 2002) (``Both mitigating and aggravating factors should
also be considered. The presence of one or more mitigating factors may
qualify an otherwise ineligible respondent for the program.''). Any
aspects of diversion not fully addressed in Sec. 11.30, such as
specific details regarding the material breach of an agreement, will be
addressed in individualized diversion agreements.
The USPTO believes that the diversion program is a valuable tool
that will benefit the public by fostering the skills and abilities of
those individuals who represent others before the USPTO. Additional
information may be found in a draft diversion guidance document,
available at https://www.uspto.gov/sites/default/files/documents/OED-Diversion-Guidance-Document.pdf. Comments regarding the draft diversion
guidance document must be provided as discussed in the DATES and
ADDRESSES sections above.

Changes to the Regulation of Foreign Attorneys or Agents Granted
Reciprocal Recognition in Trademark Matters

The USPTO proposes to amend Sec. 11.14 to ascertain the status and
contact information of foreign attorneys or agents who are granted
reciprocal recognition in trademark matters under Sec. 11.14(c)(1).
The proposed amendments will provide potential clients with more
certainty regarding the good standing of a foreign attorney or agent.
Accordingly, the USPTO proposes that any foreign attorney or agent
granted reciprocal recognition in trademark matters under Sec.
11.14(c)(1) must provide the OED Director their postal address, at
least one and up to three email addresses where they receive email, and
a business telephone number, as well as any change to these addresses
and telephone number, within 30 days of the date of any change. A
foreign attorney or agent granted reciprocal recognition under Sec.
11.14(c)(1) must also notify the OED Director of any lapse in their
authorization to represent clients before the trademark office in the
country in which they are registered and reside.
The USPTO also proposes that the OED Director may address a letter
to any foreign attorney or agent granted reciprocal recognition under
Sec. 11.14(c)(1) for the purposes of ascertaining the validity of the
foreign attorney or agent's contact information and good standing with
the trademark office or other duly constituted authority in the country
in which they are registered and reside (for Canadian trademark agents,
the term ``trademark office'' shall mean the College of Patent Agents
and Trademark Agents with respect to matters of practice eligibility in
Canada). Any such foreign attorney or agent failing to reply and
provide any information requested by the OED Director within a time
limit specified would be subject to having their reciprocal recognition
withdrawn by the OED Director. Withdrawal of recognition by the OED
Director does not obviate the foreign attorney's or agent's duty to
comply with any other relevant USPTO rules, such as the requirement to
withdraw from pending trademark matters.
Unless good cause is shown, the OED Director shall promptly
withdraw the reciprocal recognition of foreign attorneys or agents who:
(1) are no longer eligible to represent others before the trademark
office of the country upon which reciprocal recognition is based, (2)
no longer reside in such country, (3) have not provided current contact
information, or (4) failed to reply to the letter from the OED Director
within the time limit specified and/or provide any of the information
requested by the OED Director in that letter. The proposed rule shall
require the OED Director to publish a notice of any withdrawal of
recognition.
Lastly, the USPTO proposes that any foreign attorney or agent whose
recognition has been withdrawn may reapply for recognition upon
submission of a request to the OED Director and payment of the
application fee in Sec. 1.21(a)(1)(i), as provided under amended Sec.
11.14(f).

Removal of the Term ``Nonimmigrant Alien'' From Sec. 11.9(b)

The USPTO proposes to revise 37 CFR 11.9(b) in regard to limited
recognition for individuals who are neither U.S. citizens nor lawful
permanent residents, but who nevertheless have been granted status and
the authority to work in the United States by the U.S. Government in
order to practice before the USPTO in patent matters. Specifically, the
USPTO proposes to remove the term ``nonimmigrant alien'' from Sec.
11.9(b)

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because the term does not include all individuals eligible for limited
recognition under this provision. For example, the term ``nonimmigrant
alien'' does not include all individuals who are neither U.S. citizens
nor lawful permanent residents, but who nevertheless have been granted
status and the authority to work in the United States by the U.S.
Government. Rather, the appropriate description for those who may
qualify for limited recognition includes individuals who: (1) are
ineligible to become registered under Sec. 11.6 because of their
immigration status, (2) are authorized by the U.S. Government to be
employed or trained in the United States to represent a patent
applicant by preparing or prosecuting a patent application, and (3)
meet the requirements of paragraphs (d) and (e) of Sec. 11.9. This
revision would result in no change in practice.

Clarification That Limited Recognition Shall Not Be Granted or Extended
to a Non-U.S. Citizen Residing Outside the United States

The USPTO proposes to amend Sec. 11.9(b) to clarify that limited
recognition to practice before the USPTO in patent matters for
individuals who are neither U.S. citizens nor lawful permanent
residents, but who nevertheless have been granted status and the
authority to work in the United States by the U.S. Government, shall
not be granted or extended to non-U.S. citizens residing outside the
United States. This is consistent with current practice in which an
individual's limited recognition will not terminate if the individual
has been approved by the U.S. Government to temporarily depart from the
United States, but will terminate when the individual ceases to reside
in the United States.

Removal of Fee Required When Changing Status From Patent Agent to
Patent Attorney

The USPTO proposes to eliminate the $110.00 fee in Sec.
1.21(a)(2)(iii) that is charged when a registered patent agent changes
their registration from an agent to an attorney. It is expected that
the removal of this fee will improve the accuracy of the register of
patent attorneys and agents by incentivizing patent agents who become
patent attorneys to promptly update their status in that register.

Arrangements Between Practitioners and Non-Practitioners

The USPTO proposes to add Sec. 11.504(e) to allow a practitioner
who is an attorney to share legal fees with a non-practitioner, to form
a partnership with a non-practitioner, or to be part of a for-profit
association or corporation owned by a non-practitioner, provided such
arrangement fully complies with the laws, rules, and regulations of the
attorney licensing authority of a State that regulates such arrangement
and in which the practitioner is an active member in good standing.
Accordingly, this addition provides the practitioner some flexibility
when considering a business arrangement with a non-practitioner when
such business arrangement might have previously conflicted with Sec.
11.504(a), (b), and (d)(1) and (2) of the USPTO Rules of Professional
Conduct. However, that flexibility does not obviate the practitioner's
obligations under any other USPTO rules, including the USPTO Rules of
Professional Conduct, that may be relevant to such an arrangement.
Further, this addition does not permit a person who recommends,
employs, or pays the practitioner to render legal services for another
to direct or regulate the practitioner's professional judgment in
rendering such legal services as described in Sec. 11.504(c), nor does
this addition permit the practitioner to practice with or in the form
of a professional corporation or association authorized to practice law
for a profit, if a non-practitioner has the right to direct or control
the professional judgment of the practitioner as described in Sec.
11.504(d)(3).

Clarification of Written Memoranda Regarding Motions in Disciplinary
Proceedings

The USPTO proposes to amend Sec. 11.43 to clarify that: (1) only
motions for summary judgment and motions to dismiss are required to be
accompanied by a written memorandum, and (2) the prescribed time
periods to file response and reply memoranda regarding such motions
only apply to motions for summary judgment and motions to dismiss.
While not intended to discourage parties from providing support for
other types of motions, limiting memoranda and the specified briefing
schedule to motions for summary judgment and motions to dismiss
promotes the goal of continued efficient progress of disciplinary
proceedings. Hearing officers retain the discretion to order memoranda
and set time limits for other types of motions and papers.

Clarification That Disciplinary Hearings May Continue To Be Held by
Videoconference

The USPTO proposes to amend Sec. 11.44(a) to clarify that hearings
may be held by videoconference. The amendment reflects the current
practice of scheduling and conducting remote hearings. The amendment
also clarifies that a stenographer need not be used to create a hearing
transcript.

Five Days To Serve Discovery Requests After Authorization; 30 Days To
Respond After Service

The USPTO proposes to amend Sec. 11.52 to improve the procedures
for written discovery in disciplinary proceedings and to order those
procedures in a more chronological fashion. Accordingly, the contents
of paragraphs (a) and (b) are proposed to be restructured into revised
paragraphs (a), (b), and (c), and paragraphs (c) through (f) are
redesignated as paragraphs (d) through (g).
First, under paragraph (a), the amended rule sets forth the types
of requests for which a party may seek authorization in a motion for
written discovery. While the current rule sets forth the information in
paragraph (b), the amended rule logically sets forth the information in
paragraph (a) because paragraph (a) pertains to the content of the
initial motion for written discovery.
Second, under paragraph (b), the amendment requires a copy of the
proposed written discovery requests and a detailed explanation, for
each request made, of how the discovery sought is reasonable and
relevant to an issue actually raised in the complaint or the answer.
Any response to the motion shall include specific objections to each
request, if any. Any objection not raised in the response will be
deemed to have been waived.
Third, under paragraph (c), the amendment requires the moving party
to serve a copy of any authorized discovery requests following the
issuance of an order authorizing discovery within a default deadline of
five days following the order. This requirement ensures that the
opposing party promptly receives a copy of the authorized requests to
which the party must respond. Amended paragraph (c) also sets a default
deadline of 30 days from the date of service of the authorized requests
for the opposing party to serve responses. Setting the default period
to begin on the date of service provides the opposing party a
predictable and definitive time period for responding to authorized
discovery requests in circumstances in which the hearing officer's
order does not specify a different deadline.

[[Page 54933]]

Changes to Procedures Regarding Appeals to the USPTO Director

The USPTO proposes to amend Sec. 11.55(m) to remove the
requirement to submit a supporting affidavit when moving for an
extension of time to file a brief regarding an appeal of the initial
decision of a hearing officer and to place the amended requirement to
file a motion for an extension in a new paragraph (p) at the end of
Sec. 11.55. Affidavits would be removed to eliminate an unnecessarily
burdensome requirement in requesting the extension of time, while
retaining the necessity to show good cause. The provision would be
moved to the new paragraph (p) because it logically falls at the end of
Sec. 11.55.

Removal of Emeritus Status

The USPTO proposes to remove the reference to ``emeritus status''
in Sec. 11.19(a) because no such status was ever finalized and
inadvertently remains from a previous rulemaking.

Discussion of Specific Rules

The USPTO proposes to eliminate the fee in Sec. 1.21(a)(2)(iii)
for changing one's status from a registered patent agent to a
registered patent attorney.
The USPTO proposes to amend Sec. 11.7(l) to reflect the
elimination of the fee set forth in Sec. 1.21(a)(2)(iii).
The USPTO proposes to amend Sec. 11.9(b) to remove the term
``nonimmigrant alien'' and to clarify that limited recognition shall
not be granted or extended to a non-U.S. citizen residing outside the
United States.
The USPTO proposes to amend Sec. 11.14(c)(1) to remove unnecessary
references to paragraph (c).
The USPTO proposes to amend Sec. 11.14(f) to add references to
Sec. 11.14(c)(1) where Sec. 11.14(c) is presently referenced.
The USPTO proposes to add Sec. 11.14(g) to create a requirement
for a foreign attorney or agent granted reciprocal recognition under
Sec. 11.14(c)(1) to notify the OED Director of updates to contact
information within 30 days of the date of the change and to notify the
OED Director of any lapse in their authorization to represent clients
before the trademark office in the country in which they are registered
and reside.
The USPTO proposes to add Sec. 11.14(h) to ascertain the validity
of a reciprocally recognized foreign attorney's or agent's contact
information and good standing with the trademark office or other duly
constituted authority in the country in which the agent is registered
and resides. Any foreign attorney or agent failing to give any
information requested by the OED Director within a time limit specified
is subject to having their reciprocal recognition withdrawn.
The USPTO proposes to add Sec. 11.14(i) to create a process to
withdraw reciprocal recognition of a foreign attorney or agent
registered under paragraph (c)(1) if they: (1) are no longer registered
with, in good standing with, or otherwise eligible to practice before,
the trademark office of the country upon which reciprocal recognition
is based; (2) no longer reside in such country; or (3) have not
provided current contact information or have failed to validate their
good standing with the trademark office in the country in which they
are registered and reside as required in proposed Sec. 11.14(g) and
(h).
The USPTO proposes to add Sec. 11.14(j) to specify that the
process for a foreign attorney or agent whose recognition has been
withdrawn and who desires to become reinstated is to reapply for
recognition under Sec. 11.14(f).
The USPTO proposes to amend Sec. 11.19(a) to remove the term
``emeritus status.''
The USPTO proposes to amend Sec. 11.22(h)(3) and (4) and add Sec.
11.22(h)(5) to state that the OED Director may dispose of an
investigation by entering into a diversion agreement with a
practitioner.
The USPTO proposes to add Sec. 11.30 to state the criteria by
which the OED Director may enter into a diversion agreement with a
practitioner.
The USPTO proposes to amend Sec. 11.43 to clarify that prescribed
time periods apply to only dispositive motions and that such motions
shall be accompanied by a written memorandum.
The USPTO proposes to amend Sec. 11.44(a) to allow hearings to be
held by videoconference.
The USPTO proposes to amend Sec. 11.52 to redesignate paragraphs
(c) through (f) as paragraphs (d) through (g), and revise and
restructure the contents of paragraphs (a) and (b) into revised
paragraphs (a), (b), and (c) to provide clarity regarding certain
discovery obligations on the part of the propounding and responding
parties.
The USPTO proposes to amend Sec. 11.55(m) to eliminate the
requirement to submit an affidavit of support with a motion for an
extension of time to file a brief regarding an appeal to the USPTO
Director and to reorganize the section to move to new paragraph (p) the
provision allowing the USPTO Director to extend, for good cause, the
time for filing such a brief.
The USPTO proposes to add Sec. 11.504(e) to allow a practitioner
who is an attorney to share legal fees with a non-practitioner, to form
a partnership with a non-practitioner, or to be part of a for-profit
association or corporation owned by a non-practitioner, provided such
arrangement fully complies with the laws, rules, and regulations of the
attorney licensing authority of a State that regulates such arrangement
and in which the practitioner is an active member in good standing.

Rulemaking Requirements

A. Administrative Procedure Act: The changes in this rulemaking
involve rules of agency practice and procedure, and/or interpretive
rules. See Perez v. Mortgage Bankers Ass'n, 135 S. Ct. 1199, 1204
(2015) (interpretive rules ``advise the public of the agency's
construction of the statutes and rules which it administers'')
(citations and internal quotation marks omitted); Nat'l Org. of
Veterans' Advocates v. Sec'y of Veterans Affairs, 260 F.3d 1365, 1375
(Fed. Cir. 2001) (rule that clarifies interpretation of a statute is
interpretive); Bachow Commc'ns Inc. v. FCC, 237 F.3d 683, 690 (D.C.
Cir. 2001) (rules governing an application process are procedural under
the Administrative Procedure Act); Inova Alexandria Hosp. v. Shalala,
244 F.3d 342, 350 (4th Cir. 2001) (rules for handling appeals are
procedural where they do not change the substantive standard for
reviewing claims).
Accordingly, prior notice and opportunity for public comment for
the changes in this rulemaking are not required pursuant to 5 U.S.C.
553(b) or (c), or any other law. See Perez, 135 S. Ct. at 1206 (notice-
and-comment procedures are not required when an agency ``issue[s] an
initial interpretive rule'' or when it amends or repeals that
interpretive rule); Cooper Techs. Co. v. Dudas, 536 F.3d 1330, 1336-37
(Fed. Cir. 2008) (stating that 5 U.S.C. 553, and thus 35 U.S.C.
2(b)(2)(B), do not require notice-and-comment rulemaking for
``interpretative rules, general statements of policy, or rules of
agency organization, procedure, or practice'') (quoting 5 U.S.C.
553(b)(A)). Nevertheless, the USPTO has chosen to seek public comment
before implementing the rule to benefit from the public's input.
B. Regulatory Flexibility Act: For the reasons set forth in this
rulemaking, the Senior Counsel for Regulatory and Legislative Affairs,
Office of General Law, of the USPTO, has certified to the Chief Counsel
for Advocacy of the Small Business Administration that the changes
proposed in this rule will not

[[Page 54934]]

have a significant economic impact on a substantial number of small
entities. See 5 U.S.C. 605(b).
This proposed rule would eliminate the $110.00 fee that is charged
when a registered patent agent changes their registration from an agent
to an attorney to incentivize patent agents who become patent attorneys
to promptly update their status in the register. This proposed change
is expected to impact approximately 350 patent agents each year. Patent
agents who become licensed attorneys are expected to request a change
in status in order to accurately convey their status to the public. The
USPTO does not collect or maintain statistics on the size status of
impacted entities, which would be required to determine the number of
small entities that would be affected by the proposed rule. However,
assuming that all patent agents impacted by this rule are small
entities, the elimination of the fee would not impact a substantial
number of small entities because the approximately 350 patent agents do
not constitute a significant percentage of the approximately 47,000
patent practitioners registered to appear before the Office. In
addition, the elimination of the $110.00 fee would result in a modest
benefit to those patent agents, as they would no longer be required to
pay the fee when changing their designation from patent agent to patent
attorney.
This proposed rule would also amend the rules regarding the
representation of others before the USPTO by implementing new
requirements and clarifying or improving existing regulations to better
protect the public. This rule would make changes to the rules governing
reciprocal recognition for the approximately 400 recognized foreign
attorneys or agents who practice before the Office in trademark
matters. These changes would require any reciprocally recognized
foreign attorney or agent to keep contact information up to date,
provide proof of good standing as a trademark practitioner before the
trademark office of the country in which they reside, and notify the
OED Director of any lapse in their authorization to represent clients
before the trademark office in the country in which they are registered
and reside. Absent a showing of cause, failure to comply shall result
in the withdrawal of the reciprocal recognition, but an opportunity for
reinstatement may be offered.
The Office also proposes to make changes to its disciplinary
procedures to formalize a diversion program for patent and trademark
practitioners who struggle with physical or mental health issues or law
practice management issues. The program assists those practitioners in
addressing the root causes of those issues, in lieu of formal
discipline.
Finally, this rule would make other minor administrative changes to
the regulations to simplify and otherwise improve consistency with
existing requirements, thereby facilitating the public's compliance
with existing regulations, including aligning with existing practice
the rule governing practice before the Office by persons ineligible to
become registered under Sec. 11.6 because of their immigration status;
changing the rule governing the professional independence of a
practitioner to allow a practitioner to share legal fees with a non-
practitioner, to form a partnership with a non-practitioner, or to be
part of a for-profit association or corporation owned by a non-
practitioner, provided such arrangement fully complies with the laws,
rules, and regulations of the attorney licensing authority of a State
that regulates such arrangement and in which the practitioner is an
active member in good standing; clarifying the procedures regarding
disciplinary hearings and appeals of the same; and removing an
inadvertent reference to ``emeritus status.''
These proposed changes to the rules governing the recognition to
practice before the Office would apply to the approximately 400
reciprocally recognized trademark practitioners who currently appear
before the Office and approximately 47,000 patent practitioners
registered or granted limited recognition to appear before the Office,
as well as licensed attorneys practicing in trademark and other non-
patent matters before the Office. The USPTO does not collect or
maintain statistics on the size status of impacted entities, which
would be required to determine the number of small entities that would
be affected by the rule. However, a large number of the changes in this
rule are not expected to have any impact on otherwise regulated
entities because the changes to the regulations are procedural in
nature. The one proposed change that may impose a new requirement is
the provision for the approximately 400 reciprocally recognized foreign
attorneys or agents to provide contact information and certificates of
good standing as trademark practitioners before the trademark offices
of the countries in which they reside. However, this provision is not
expected to place a significant burden on those foreign attorneys or
agents. Accordingly, the changes are expected to be of minimal or no
additional burden to those practicing before the Office.
For the reasons discussed above, this rulemaking will not have a
significant economic impact on a substantial number of small entities.
C. Executive Order 12866 (Regulatory Planning and Review): This
rulemaking has been determined to be significant for purposes of E.O.
12866 (Sept. 30, 1993).
D. Executive Order 13563 (Improving Regulation and Regulatory
Review): The Office has complied with E.O. 13563 (Jan. 18, 2011).
Specifically, the Office has, to the extent feasible and applicable:
(1) made a reasoned determination that the benefits justify the costs
of the rule; (2) tailored the rule to impose the least burden on
society consistent with obtaining the regulatory objectives; (3)
selected a regulatory approach that maximizes net benefits; (4)
specified performance objectives; (5) identified and assessed available
alternatives; (6) involved the public in an open exchange of
information and perspectives among experts in relevant disciplines,
affected stakeholders in the private sector, and the public as a whole,
and provided online access to the rulemaking docket; (7) attempted to
promote coordination, simplification, and harmonization across
Government agencies and identified goals designed to promote
innovation; (8) considered approaches that reduce burdens and maintain
flexibility and freedom of choice for the public; and (9) ensured the
objectivity of scientific and technological information and processes.
E. Executive Order 13132 (Federalism): This rulemaking does not
contain policies with federalism implications sufficient to warrant
preparation of a Federalism Assessment under E.O. 13132 (Aug. 4, 1999).
F. Executive Order 13175 (Tribal Consultation): This rulemaking
will not: (1) have substantial direct effects on one or more Indian
tribes; (2) impose substantial direct compliance costs on Indian tribal
governments; or (3) preempt tribal law. Therefore, a tribal summary
impact statement is not required under E.O. 13175 (Nov. 6, 2000).
G. Executive Order 13211 (Energy Effects): This rulemaking is not a
significant energy action under E.O. 13211 because this rulemaking is
not likely to have a significant adverse effect on the supply,
distribution, or use of energy. Therefore, a Statement of Energy
Effects is not required under E.O. 13211 (May 18, 2001).
H. Executive Order 12988 (Civil Justice Reform): This rulemaking
meets

[[Page 54935]]

applicable standards to minimize litigation, eliminate ambiguity, and
reduce burden, as set forth in sections 3(a) and 3(b)(2) of E.O. 12988
(Feb. 5, 1996).
I. Executive Order 13045 (Protection of Children): This rulemaking
does not concern an environmental risk to health or safety that may
disproportionately affect children under E.O. 13045 (Apr. 21, 1997).
J. Executive Order 12630 (Taking of Private Property): This
rulemaking will not effect a taking of private property or otherwise
have taking implications under E.O. 12630 (Mar. 15, 1988).
K. Congressional Review Act: Under the Congressional Review Act
provisions of the Small Business Regulatory Enforcement Fairness Act of
1996 (5 U.S.C. 801 et seq.), prior to issuing any final rule, the USPTO
will submit a report containing the final rule and other required
information to the U.S. Senate, the U.S. House of Representatives, and
the Comptroller General of the Government Accountability Office. The
changes in this rulemaking are not expected to result in an annual
effect on the economy of $100 million or more, a major increase in
costs or prices, or significant adverse effects on competition,
employment, investment, productivity, innovation, or the ability of
U.S.-based enterprises to compete with foreign-based enterprises in
domestic and export markets. Therefore, this rulemaking is not expected
to result in a ``major rule'' as defined in 5 U.S.C. 804(2).
L. Unfunded Mandates Reform Act of 1995: The proposed changes in
this rulemaking do not involve a Federal intergovernmental mandate that
will result in the expenditure by State, local, and tribal governments,
in the aggregate, of $100 million (as adjusted) or more in any one
year, or a Federal private sector mandate that will result in the
expenditure by the private sector of $100 million (as adjusted) or more
in any one year, and will not significantly or uniquely affect small
governments. Therefore, no actions are necessary under the provisions
of the Unfunded Mandates Reform Act of 1995. See 2 U.S.C. 1501 et seq.
M. National Environmental Policy Act of 1969: This rulemaking will
not have any effect on the quality of the environment and is thus
categorically excluded from review under the National Environmental
Policy Act of 1969. See 42 U.S.C. 4321 et seq.
N. National Technology Transfer and Advancement Act of 1995: The
requirements of section 12(d) of the National Technology Transfer and
Advancement Act of 1995 (15 U.S.C. 272 note) are not applicable because
this rulemaking does not contain provisions that involve the use of
technical standards.
O. Paperwork Reduction Act of 1995: The Paperwork Reduction Act of
1995 (44 U.S.C. 3501 et seq.) requires that the Office consider the
impact of paperwork and other information collection burdens imposed on
the public. This rulemaking involves information collection
requirements that are subject to review and approval by the Office of
Management and Budget (OMB) under the Paperwork Reduction Act. The
collections of information involved in this rulemaking have been
reviewed and previously approved by OMB under OMB control numbers 0651-
0012 (Admission to Practice and Roster of Registered Patent Attorneys
and Agents Admitted to Practice Before the USPTO) and 0651-0017
(Practitioner Conduct and Discipline).
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
has a currently valid OMB control number.
P. E-Government Act Compliance: The USPTO is committed to
compliance with the E-Government Act to promote the use of the internet
and other information technologies, to provide increased opportunities
for citizen access to Government information and services, and for
other purposes.

List of Subjects

37 CFR Part 1

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

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 USPTO proposes to
amend 37 CFR parts 1 and 11 as follows:

PART 1--RULES OF PRACTICE IN PATENT CASES

0
1. The authority section for part 1 continues to read as follows:

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

Sec. 1.21 [Amended]

0
2. Amend Sec. 1.21 by removing and reserving paragraph (a)(2)(iii).

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

0
3. The authority citation for part 11 continues to read as follows:

Authority: 5 U.S.C. 500; 15 U.S.C. 1123; 35 U.S.C. 2(b)(2), 32,
41; Sec. 1, Pub. L. 113-227, 128 Stat. 2114.

0
4. Amend Sec. 11.7 by revising paragraph (l) to read as follows:

Sec. 11.7 Requirements for registration.

* * * * *
(l) Transfer of status from agent to attorney. An agent registered
under Sec. 11.6(b) may request registration as an attorney under Sec.
11.6(a). The agent shall demonstrate their good standing as an
attorney.
0
5. Amend Sec. 11.9 by revising paragraph (b) to read as follows:

Sec. 11.9 Limited recognition in patent matters.

* * * * *
(b) Limited recognition for a period consistent with immigration
status. An individual ineligible to become registered under Sec. 11.6
because of their immigration status may be granted limited recognition
to practice before the Office in patent matters, provided the U.S.
Government authorizes employment or training in the United States for
the individual to represent a patent applicant by preparing or
prosecuting a patent application, and the individual fulfills the
provisions of paragraphs (d) and (e) of this section. Limited
recognition shall be granted only for a period consistent with the
terms of the immigration status and employment or training authorized.
Limited recognition is subject to United States immigration rules,
statutes, laws, and regulations. If granted, limited recognition shall
automatically terminate if the individual ceases to: lawfully reside in
the United States, maintain authorized employment or training, or
maintain their immigration status. Limited recognition shall not be
granted or extended to a non-U.S. citizen residing outside the United
States.
* * * * *
0
6. Amend Sec. 11.14 by revising paragraphs (c)(1) and (f) and adding
paragraphs (g) through (j) to read as follows:

[[Page 54936]]

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

* * * * *
(c) * * *
(1) Any foreign attorney or agent who is not a resident of the
United States who shall file a written application for reciprocal
recognition under paragraph (f) of this section and prove to the
satisfaction of the OED Director that they are a registered and active
member in good standing as a trademark practitioner before the
trademark office of the country in which they reside and practice and
possess good moral character and reputation, 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 trademark office of such country and the USPTO have
reached an official understanding to allow substantially reciprocal
privileges to those permitted to practice in trademark matters before
the Office. Recognition under this paragraph (c)(1) shall continue only
during the period in which the conditions specified in this paragraph
(c)(1) are met.
* * * * *
(f) Application for reciprocal recognition. An individual seeking
reciprocal recognition under paragraph (c)(1) of this section, in
addition to providing evidence satisfying the provisions of paragraph
(c)(1) of this section, shall apply in writing to the OED Director for
reciprocal recognition, and shall pay the application fee required by
Sec. 1.21(a)(1)(i) of this subchapter.
(g) Obligation to provide updated contact information and licensure
status. A practitioner granted reciprocal recognition under paragraph
(c)(1) of this section must provide to the OED Director their postal
address, at least one and up to three email addresses where they
receive email, and a business telephone number, as well as any change
to such addresses and telephone number within 30 days of the date of
the change. Any reciprocally recognized practitioner failing to provide
the information to the OED Director or update the information within 30
days of the date of change is subject to having their reciprocal
recognition withdrawn under paragraph (i) of this section. A
practitioner granted reciprocal recognition under paragraph (c)(1) of
this section must notify the OED Director of any lapse in their
authorization to represent clients before the trademark office in the
country in which they are registered and reside.
(h) Communications with recognized trademark practitioners. The OED
Director may address a letter to any practitioner granted reciprocal
recognition under paragraph (c)(1) of this section, to the postal
address last provided to the OED Director, for the purposes of
ascertaining the practitioner's contact information and/or the
practitioner's good standing with the trademark office in the country
in which the practitioner is registered and resides. Any practitioner
who receives such letter must provide their contact information, and,
if requested, a certificate of good standing with the trademark office
in the country in which the practitioner is registered and resides. Any
practitioner failing to reply and give any information requested by the
OED Director within a time limit specified will be subject to having
their reciprocal recognition withdrawn under paragraph (i) of this
section.
(i) Withdrawal of reciprocal recognition. Upon notice that a
trademark practitioner registered under paragraph (c)(1) of this
section is no longer registered with, in good standing with, or
otherwise eligible to practice before, the trademark office of the
country upon which reciprocal recognition is based; that such
practitioner no longer resides in such country; or that such
practitioner has not provided information required in paragraphs (g)
and/or (h) of this section, and absent a showing of cause why the
practitioner's recognition should not be withdrawn, the OED Director
shall promptly withdraw such recognition and publish a notice of such
action.
(j) Reinstatement of reciprocal recognition. Any practitioner whose
recognition has been withdrawn pursuant to paragraph (i) of this
section may reapply for recognition under paragraph (f) of this
section.
0
7. Amend Sec. 11.19 by revising paragraph (a) to read as follows:

Sec. 11.19 Disciplinary jurisdiction; grounds for discipline and for
transfer to disability inactive status.

(a) Disciplinary jurisdiction. All practitioners engaged in
practice before the Office, all practitioners administratively
suspended under Sec. 11.11, all practitioners registered or recognized
to practice before the Office in patent matters, all practitioners
resigned or inactivated under Sec. 11.11, all practitioners authorized
under Sec. 41.5(a) or Sec. 42.10(c) of this chapter, and all
practitioners transferred to disability inactive status or publicly
disciplined by a duly constituted authority are subject to the
disciplinary jurisdiction of the Office and to being transferred to
disability inactive status. A non-practitioner is also subject to the
disciplinary authority of the Office if the person engages in or offers
to engage in practice before the Office without proper authority.
* * * * *
0
8. Amend Sec. 11.22 by revising paragraphs (h)(3) and (4) and adding
paragraph (h)(5) to read as follows:

Sec. 11.22 Disciplinary investigations.

* * * * *
(h) * * *
(3) Instituting formal charges upon the approval of the Committee
on Discipline;
(4) Entering into a settlement agreement with the practitioner and
submitting the same for the approval of the USPTO Director; or
(5) Entering into a diversion agreement with the practitioner.
* * * * *
0
9. Add Sec. 11.30 to read as follows:

Sec. 11.30 Participation in the USPTO Diversion Program.

(a) Before or after a complaint under Sec. 11.34 is filed, the OED
Director may dispose of a disciplinary matter by entering into a
diversion agreement with a practitioner. Diversion agreements may
provide for, but are not limited to, law office management assistance,
counseling, participation in lawyer assistance programs, and attendance
at continuing legal education programs. Neither the OED Director nor
the practitioner is under any obligation to propose or enter into a
diversion agreement. To be an eligible party to a diversion agreement,
a practitioner cannot have been disciplined by the USPTO or another
jurisdiction within the past three years, except that discipline by
another jurisdiction is not disqualifying if that discipline in another
jurisdiction was based on the conduct forming the basis for the current
investigation.
(b) For a practitioner to be eligible for diversion, the conduct at
issue must not involve:
(1) The misappropriation of funds or dishonesty, deceit, fraud, or
misrepresentation;
(2) Substantial prejudice to a client or other person as a result
of the conduct;
(3) A serious crime as defined in Sec. 11.1; or
(4) A pattern of similar misconduct unless the misconduct at issue
is minor and related to a chronic physical or mental health condition
or disease.
(c) The diversion agreement is automatically completed when the
terms of the agreement have been fulfilled. A practitioner's successful

[[Page 54937]]

completion of the diversion agreement bars the OED Director from
pursuing discipline based on the conduct set forth in the diversion
agreement.
(d) A material breach of the diversion agreement shall be cause for
termination of the practitioner's participation in the diversion
program. Upon a material breach of the diversion agreement, the OED
Director may pursue discipline based on the conduct set forth in the
diversion agreement.
0
10. Revise Sec. 11.43 to read as follows:

Sec. 11.43 Motions before a hearing officer.

Motions, including all prehearing motions commonly filed under the
Federal Rules of Civil Procedure, shall be served on an opposing party
and filed with the hearing officer. Every motion must include a
statement that the moving party or attorney for the moving party has
conferred with the opposing party or attorney for the opposing party in
a good-faith effort to resolve the issues raised by the motion and
whether the motion is opposed. If, prior to a decision on the motion,
the parties resolve issues raised by a motion presented to the hearing
officer, the parties shall promptly notify the hearing officer. Any
motion for summary judgment or motion to dismiss shall be accompanied
by a written memorandum setting forth a concise statement of the facts
and supporting reasons, along with a citation of the authorities upon
which the movant relies. All memoranda shall be double-spaced and
written in 12-point font unless otherwise ordered by the hearing
officer. Unless the hearing officer extends the time for good cause,
the opposing party shall serve and file a memorandum in response to any
motion for summary judgment or motion to dismiss within 21 days of the
date of service of the motion, and the moving party may file a reply
memorandum within 14 days after service of the opposing party's
responsive memorandum.
0
11. Amend Sec. 11.44 by revising paragraph (a) to read as follows:

Sec. 11.44 Hearings.

(a) The hearing officer shall preside over hearings in disciplinary
proceedings. After the time for filing an answer has elapsed, the
hearing officer shall set the time and place for the hearing. In cases
involving an incarcerated respondent, any necessary oral hearing may be
held at the location of incarceration. The hearing officer may order a
hearing to be conducted by remote videoconference in whole or in part.
Oral hearings will be recorded and transcribed, and the testimony of
witnesses will be received under oath or affirmation. The hearing
officer shall conduct the hearing as if the proceeding were subject to
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 also be provided to the
OED Director and the respondent at the expense of the Office.
* * * * *
0
12. Amend Sec. 11.52 by:
0
a. Revising paragraphs (a) and (b);
0
b. Redesignating paragraphs (c) through (f) as paragraphs (d) through
(g); and
0
c. Adding a new paragraph (c).
The revisions and addition read as follows:

Sec. 11.52 Written discovery.

(a) After an answer is filed under Sec. 11.36, a party may file a
motion under Sec. 11.43 seeking authorization to propound written
discovery of relevant evidence, including:
(1) A reasonable number of requests for admission, including
requests for admission as to the genuineness of documents;
(2) A reasonable number of interrogatories;
(3) A reasonable number of documents to be produced for inspection
and copying; and
(4) A reasonable number of things other than documents to be
produced for inspection.
(b) The motion shall include a copy of the proposed written
discovery requests and explain in detail, for each request made, how
the discovery sought is reasonable and relevant to an issue actually
raised in the complaint or the answer. Any response shall include
specific objections to each request, if any. Any objection not raised
in the response will be deemed to have been waived.
(c) The hearing officer may authorize any discovery requests the
hearing officer deems to be reasonable and relevant. Unless the hearing
officer orders otherwise, within 5 days of the hearing officer
authorizing any discovery requests, the moving party shall serve a copy
of the authorized discovery requests to the opposing party and, within
30 days of such service, the opposing party shall serve responses to
the authorized discovery requests.
* * * * *
0
13. Amend Sec. 11.55 by revising paragraph (m) and adding paragraph
(p) to read as follows:

Sec. 11.55 Appeal to the USPTO Director.

* * * * *
(m) Unless the USPTO Director permits, no further briefs or motions
shall be filed.
* * * * *
(p) The USPTO Director may extend the time for filing a brief upon
the granting of a motion setting forth good cause warranting the
extension.
0
14. Amend Sec. 11.504 by adding paragraph (e) to read as follows:

Sec. 11.504 Professional independence of a practitioner.

* * * * *
(e) The prohibitions of paragraph (a), (b), or (d)(1) or (2) of
this section shall not apply to an arrangement that fully complies with
the laws, rules, and regulations of the attorney licensing authority of
a State that regulates such arrangement and in which the practitioner
is an active member in good standing.

Katherine K. Vidal,
Under Secretary of Commerce for Intellectual Property and Director of
the United States Patent and Trademark Office.
[FR Doc. 2022-18215 Filed 9-7-22; 8:45 am]
BILLING CODE 3510-16-P