On February 27, 2017, the U.S. District Court for the Eastern District of Virginia affirmed a decision by the USPTO Director excluding a registered patent agent from practice before the USPTO because the agent practiced trademark law.
Factual Background
Bang-er Shia became a registered patent agent in 2005; she has never been admitted to the bar of any court as an attorney. Ms. Shia began serving as a domestic representative and correspondent for foreign trademark applicants in 2005 or 2006. She entered the electronic signatures of her clients on those filings and personally filed the documents with the USPTO. She would use her own address as the correspondence address and would sign the name of another individual as the owner’s “domestic representative” on applications and other documents filed in the Office. Ms. Shia was never an officer or owner of any of these entities. We discussed this case previously at our post here.
On January 23, 2012, the Trademark Commissioner issued a Show Cause Order to Ms. Shia informing her that USPTO suspected her of engaging in the unauthorized practice of trademark law before the USPTO, and was considering issuing an exclusion order. Ms. Shia responded to the Show Cause Order on February 2, 2012, stating that she merely provided administrative support for applicants by serving as their correspondent or domestic representative. On February 21, 2013, the Commissioner found that Ms. Shia had engaged in unauthorized practice in trademark matters before the USPTO and excluded her from participating as a correspondent or domestic representative in any current or future trademark matters before the USPTO. The basis for that Exclusion Order was a finding that Ms. Shia engaged in the unauthorized practice of law before the USPTO by preparing and signing trademark applications and other documents. On December 27, 2013, the USPTO Director affirmed the Commissioner’s decision.
The USPTO Disciplinary Action
Ms. Shia continued assisting with trademark documents in violation of the Exclusion Order. On November 8, 2013, the OED Director filed a Complaint and Notice of Proceedings under 35 U.S.C. § 32 against Ms. Shia, captioned Proceeding No. D2014-04. On June 27, 2014, the OED Director filed a second Complaint against Ms. Shia, Proceeding No. D2014-31. At the OED Director’s request, the two cases were consolidated. On July 22, 2014, the OED Director filed an Amended Complaint in D2014-31 (“Amended Complaint”), which removed certain charges and clarified others, and the matter was scheduled for a hearing.
The Amended Complaint in D2014-31 alleged that Ms. Shia, who is not and never has been an attorney, went beyond acting as a domestic representative for foreign applicants and engaged in unauthorized practice in trademark matters before the Office. The Amended Complaint further alleged she forged the electronic signatures of applicants to trademark documents and filed those documents with the USPTO and continued doing so even after being excluded by the Commissioner and to have concealed her misconduct by using an e-mail or mailing address that had not yet been detected by the USPTO as being associated with her. Ms. Shia was further alleged to have actively assisted foreign attorneys in the unauthorized practice of trademark law.
On April 22, 2015, the ALJ issued an Initial Decision and Order. In that decision, the ALJ found that Ms. Shia’s actions regarding documents filed in connection with nine (9) trademark applications constituted misconduct in four (4) ways: (1) she improperly signed trademark documents filed with the USPTO; (2) she improperly filed trademark documents prepared by foreign attorneys; (3) she went beyond the role of a domestic representative and constituted practice before the Office in trademark matters; and (4) she continued to act as a domestic representative after being excluded from doing so by the Trademark Commissioner.
On appeal to the USPTO Director, Ms. Shia challenged the USPTO’s authority to discipline her. Those arguments were unavailing. The USPTO Director explained that Congress vested the USPTO with plenary, statutory authority to promulgate regulations “govern[ing] the recognition and conduct of agents, attorneys, or other persons representing applicants or other parties before the Office.” 35 U.S.C. § 2(b)(2)(D); see also Kroll v. Finnerty, 242 F.3d 1359, 1364 (Fed. Cir. 2001) (stating that the USPTO has the “exclusive authority to establish qualifications for admitting persons to practice before it, and to suspend or exclude them from practicing before it”). The Director of the USPTO may suspend or exclude a person from practice before the Patent and Trademark Office if the person is “shown to be incompetent or disreputable, or guilty of gross misconduct,” or if the person violates regulations established by the Office. 35 U.S.C. § 32.
The Director further rejected the argument that state law, rather than federal law, applied to Ms. Shia’s practice before the Office as being without any legal foundation. The Director ruled that it is long-settled that regulating admission and disciplinary issues before the USPTO lies within USPTO’s exclusive jurisdiction. See Sperry v. Florida ex rel. Florida Bar, 373 U.S 379, 385-86 (1963) (Registration with the USPTO confers a right to practice before the Office without regard to whether a state within which the practice is conducted would otherwise prohibit such conduct); see also Kroll, 242 F.3d at 1364 (“[T]he PTO has exclusive authority to establish qualifications and procedures for admitting persons to practice before the PTO, and to suspend or exclude those patent practitioners from practicing before the PTO.”)
Ms. Shia filed a request for reconsideration of the USPTO Director’s decision. The USPTO Director found that Ms. Shia failed to present any newly discovered evidence, or identify errors in law or fact that support her argument that the Final Order warrants dismissal. Accordingly the request for reconsideration was denied.
The Music Ends
On August 17, 2016, Ms. Shia filed suit in the United States District Court for the Eastern District of Virginia against the USPTO, the USPTO Director, and several officers and employees of the Office of Enrollment and Discipline.
In her complaint, she alleges that the OED’s investigation into her conduct was in “retaliation” for her filing a Congressional Inquiry into her purported ability to serve as a domestic representative.
The complaint further alleged that the OED’s investigation and disciplinary action amounted to a violation of her 5th Amendment privilege against self-incrimination, noting that the charges alleged for unauthorized practice of law exposed her to criminal sanctions.
The complaint further alleged that Dr. Shia had the right to serve as a domestic representative for foreign clients, and the USPTO’s denial of that right amounted to a violation of her Constitutional Due Process rights, in violation of the 5th Amendment.
Still further, the complaint alleged that the USPTO Director did not have the authority to discipline Ms. Shia because a “non-U.S. domestic representative does not practice trademark law.” The complaint also asserted that the USPTO’s ethics investigation was an unreasonable search in violation of the 4th Amendment.
The complaint sought monetary damages and injunctive relief pursuant to Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1971).
On February 27, 2017, the District Court (Trenga, J.) issued a memorandum opinion and order dismissing Ms. Shia’s complaint and entering judgment in favor of the defendants/USPTO employees.
The Court explained that while non-attorney patent agents may prosecute patents before the PTO, trademark proceedings allow a more limited role for non-attorneys. See 37 C.F .R. § 11.14 (“Individuals who are not attorneys are not recognized to practice before the [PTO] in trademark and other non-patent matters …. [R]egistration as a patent agent does not itself entitle an individual to practice before the [PTO] in trademark matters.”).
The court explained the difference between the right for a non-attorney to be designated as a “domestic representative” on the one hand, and the right to practice trademark law, on the other” The court held that the “mere designation of a domestic representative does not authorize the person designated to represent the applicant unless qualified under§ 11.14.”
The court further noted that it lacked subject matter jurisdiction to entertain Ms. Shia’s Constitutional claims because the sole remedy was for her to file a petition for review of the USPTO Director’s final decision pursuant to 35 U.S.C. Section 32 and the Administrative Procedures Act. Since Ms. Shia proceeded pro se, however, the court gave her the benefit of the doubt and decided to treat her “complaint” as a proper petition under Title 35, Section 32.
Applying the standard of review under the APA, the court held that Ms. Shia had the burden of proving that the Agency’s decision excluding her from practice was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Bender v. Dudas, 490 F.3d 1361, 1365 (Fed. Cir. 2007) (citing 5 U.S.C. § 706). A decision is arbitrary and capricious if predicated on a clear error of judgment or a mistake. President & Fellows of Harvard Coll. v. Lee, 589 F. App’x 982,986 (Fed. Cir. 2014).
First, the Court rejected Ms. Shia’s argument that the OED staff had prejudged her conduct. The court pointed to the OED’s requests for information, which stated that her response might result in a decision to terminate the investigation—the antithesis of any prejudging.
Second, the Court found that the record supported the conclusion that Ms. Shia was practicing law before the USPTO, pointing to numerous instances where she prepared, signed, and filed substantive trademark application documents on behalf of foreign clients. As such, the USPTO Director was authorized to discipline her pursuant to 35 U.S.C. Section 32.
Third, the Court found that her Constitutional claims lacked merit. With regard to her claim regarding self-incrimination, the Court found that Ms. Shia failed to produce any evidence demonstrating any statement that she made that could have been used in a criminal prosecution against her. Furthermore, the Court rejected her Due Process allegation, finding that she was given notice and an opportunity to be heard throughout the administrative proceedings. Further still, the Court found that the USPTO’s investigation did not violate her Fourth Amendment right against unlawful search and seizures because the OED’s Requests for Information were: (i) within the USPTO’s authority to issue; (ii) were sufficiently definite; and (iii) sought information reasonably relevant to the investigation pursued by the OED.
Conclusion
This action reaffirms the difficulty in asserting a Constitutional challenge against the USPTO arising from ethics investigations and related disciplinary proceedings. The Shia case is the latest case from the Eastern District of Virginia in which an aggrieved patent or trademark practitioners attempted to sue USPTO officials for violation of their Constitutional rights. See Haley v. Under Secy of Commerce for Intellectual Prop., 129 F. Supp. 3d 3 77, 381 (E.D. Va. 2015). The Eastern District has consistently refused to extend the rationale of Bivens to such complaints, finding that Article III review of the USPTO’s disciplinary decisions is only available under 35 U.S.C. § 32, where the Court sits as an appellate tribunal to review the Office’s decision.
