PTAB And District Court Litigators Risk USPTO Ethical Discipline For Protective Order Violations

Michael E. McCabe, Jr.Patent Ethics, PTAB Discipline, PTO Ethics Decisions, USPTO OED2 Comments

canstockphoto13007289In patent litigation, one of the first orders of business is entry of a protective order protecting the participant’s confidential information. While protective orders come in all shapes and sizes, such orders uniformly prohibit a receiving party from disclosing a producing party’s confidential information except to a limited universe of defined individuals. In addition, a standard provision in protective orders restricts a receiving party from using a producing party’s designated confidential information except for purposes of the litigation in which the information was produced. Protective orders also may be entered in proceedings before the PTAB.

An attorney who violates a protective order may be sanctioned by the tribunal. See, e.g. Smith & Fuller, P.A. v. Cooper Tire & Rubber Co., 685 F. 3d 486, 487 (5th Cir. 2012) (affirming sanctions against attorney and attorney’s law firm who disclosed confidential documents to unauthorized persons for violating Protective Order, which “strictly limited access of protected information to ‘authorized persons, solely in the performance of their duties in connection with the trial preparation of this case.’”)

Unauthorized Use of Confidential Litigation Documents In USPTO Proceedings

In addition to district court sanctions, an attorney’s violation of a protective order may lead to disciplinary proceedings for violation of one or more ethical rules of professional conduct. Attorneys who violate protective orders, therefore, can be professionally disciplined by Bar Counsel. Indeed, the USPTO’s Office of Enrollment and Discipline (OED) has investigated, and the USPTO has publicly disciplined, patent practitioners who filed documents or information in the USPTO in violation of a protective order. See, e.g., In the Matter of Janka, Proceeding No. D2011-57 (USPTO Dir. Nov. 21, 2011); In the Matter of Bollman, Proceeding No. D2010-40 (USPTO Dir. Oct. 19, 2011).

In Janka, for example, a patent attorney was a member of a litigation team that represented a plaintiff-patentee in an action for infringement of U.S. Patent No. 6,985,748 (the ’748 patent”). See Telecommunication Systems, Inc. v. Mobile 365, Inc., Civil Action No. 06CV 485 (E.D. Va.). The court’s protective order required documents labeled “CONFIDENTIAL-NON-PROSECUTING ATTORNEY EYES ONLY” to be sealed and required that the party submitting a document having designated confidential information to “submit it to the Court in a sealed envelope or other appropriate sealed container” with certain markings. The protective order in the TCS case also restricted the disclosure and use of designated discovery materials only for purposes directly related to the suit and not for any other purpose. Hence, it prohibited the use of the producing party’s confidential documents in proceedings before the USPTO.

After a trial, the jury returned its verdict expressly finding that Mobile 365 willfully infringed fourteen asserted claims of the ‘748 Patent. While post-trial motions were pending, and while the protective order was still in effect, defendant Mobile 365’s parent company, Sybase, Inc. (“Sybase”), initiated an inter partes reexamination of the ‘748 patent in the USPTO. The reexamination was assigned Control No. 95/000,353 (“the ‘353 reexamination proceeding”). William Bollman was TCS’s attorney of record in the ‘353 reexamination proceeding.

Mr. Janka assembled documents and prepared an Information Disclosure Statement pursuant to 37 C.F.R. § 1.933(a) (“IDS”). Mr. Janka acknowledged that he understood that 37 C.F.R. § 1.933(a) and 37 C.F.R. § 1.555(a) both explicitly impose a duty of disclosure upon “each individual associated with the patent owner in a reexamination” and he further believed that TCS had an obligation to disclose to the USPTO in the reexamination any potentially material prior art relied upon by the defendant during the lawsuit in order to avoid a situation in which TCS could be charged with inequitable conduct by the defendant.

canstockphoto9923886The IDS prepared by Mr. Janka included a number of documents designated “CONFIDENTIAL – NON PROSECUTING ATTORNEY EYES ONLY” pursuant to the district court’s protective order. However, because those documents had been disclosed in open court during trial, the attorney believed that the documents no longer were confidential.

At the direction of Mr. Janka, reexamination counsel (Mr. Bollman) identified the allegedly “confidential” documents in an IDS and filed those documents in the ’353 reexamination proceeding. Notably, reexamination counsel did not follow the procedures for filing confidential documents in the USPTO set forth in MPEP § 724.02, which provides in pertinent part:

Information which is considered by the party submitting the same to be either trade secret material or proprietary material, and any material subject to a protective order, must be clearly labeled as such and be filed in a sealed, clearly labeled, envelope or container. Each document or item must be clearly labeled as a “Trade Secret” document or item, a “Proprietary” document or item, or as an item or document “Subject To Protective Order.” . . . If the item or document is “Subject to Protective Order” the proceeding, including the tribunal, must be set forth on each document or item.

Because Mr. Bollman, the reexamination attorney, neglected to ensure that the designated protective order materials were properly treated as confidential by the USPTO, the allegedly confidential documents “became available for public inspection.”

canstockphoto0609521USPTO Discipline For Violating Protective Order

After the IDS was filed in the reexamination proceeding, Mobile 365 filed a contempt motion in the district court action against TCS based upon, in part, the filing of the allegedly confidential documents in the IDS assembled by Mr. Janka, forwarded to reexamination counsel Bollman, and filed in the USPTO, where the documents became publicly available information. In 2009, the district court granted the motion and found in part that TCS violated the protective order by allowing confidential information to be put into the public domain.

In 2011, TCS prevailed in the reexamination. The USPTO granted a petition to terminate the reexamination proceeding based, in part, upon a finding that TCS provided “an adequate showing that the Mobile 365 ‘could have raised,’ in the infringement action, the prior art which Mobile 365 later raised in the reexamination proceeding because the infringement action was still ongoing at the time the ‘353 reexamination proceeding was filed.”

The Office of Enrollment and Discipline investigated the matter.  Although Mr. Janka believed he did not violate any disciplinary rule of the USPTO, he eventually entered into a settlement agreement with the OED Director. Pursuant to the settlement agreement, Mr. Janka agreed to a public reprimand based on a purported violation of 37 C.F.R. § 10.77(b), which proscribes handling a legal matter without “preparation adequate under the circumstances.”

Mr. Bollman, the prosecuting attorney in the reexamination proceeding, also entered into a settlement agreement, pursuant to which he was publicly reprimanded for failing to take “reasonable steps to determine whether documents filed in the Office were subject to a protective order prohibiting their disclosure and/or without taking reasonable steps to file such documents in accordance with customary and acceptable practice.”  In the Matter of Bollman, Proceeding No. D2010-40 (USPTO Dir. Oct. 19, 2011).

PTAB Protective Order Violations

Protective Order issues also may arise in PTAB trial proceedings. Indeed, pursuant to 37 C.F.R. § 42.54, a party may move for entry of the Board’s “Default Protective Order” set forth in the “Patent Trial Practice Guide.” See 77 Fed. Reg. 48756, 48771 (Aug. 14, 2012). In RPX Corp. v. Applications in Internet Time LLC, IPR2015-01750, IPR2015-01751 and IPR2015-01751, for example, the parties entered into the Default Protective Order. On December 21, 2015, RPX filed a motion for sanctions with the PTAB, alleging that the patentee improperly disclosed RPX-designated confidential information to unauthorized persons, in violation of the PTAB protective order. The patentee opposed the motion on January 13, 2016. As of the present date, the PTAB has not yet ruled on the sanctions motion.

If the PTAB finds that the protective order was violated, the OED could, consistent with its mandate, investigate the matter to determine whether professional discipline is warranted.

For patent litigators and prosecutors who are subject to the disciplinary jurisdiction of the USPTO, due care must be exercised when handling protective order information.  If the terms of a protective order are violated, those responsible practitioners may find themselves the subject of an OED ethics investigation and could potentially face disciplinary charges by the USPTO.

2 Comments on “PTAB And District Court Litigators Risk USPTO Ethical Discipline For Protective Order Violations”

  1. Pingback: PTAB Awards Attorneys’ Fees As Sanction For Protective Order Violation | IPethics & INsights

  2. Pingback: For Your Eyes Only: IP Atty’s Who Misuse Confidential Documents Face Sanctions, Discipline | McCabe IP Ethics Law

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