PTO Suspends PTAB Atty Who Filed Multiple TM Apps For Cannabis Client

Michael E. McCabe, Jr.Conflicts of Interest, Unauthorized Practice of Law, USPTO Director Decisions, USPTO Ethics InvestigationLeave a Comment

The USPTO has suspended a PTO-employed attorney for thirty (30) days for practicing trademark law before the Office for private clients, in violation of federal conflicts of interest laws.  See In re Tara K. Laux, Proc. No. D2016-39 (USPTO Dir. Mar. 9, 2017).  According to a settlement agreement reached with the OED Director, attorney Tara Laux, who has worked at the USPTO since 2009 and is apparently employed as an attorney at the Patent Trial and Appeal Board (PTAB), violated multiple USPTO ethics rules for filing at least 33 trademark applications for a relative and his companies. According to the settlement agreement, Ms. Laux’s conduct violated 18 U.S.C. Sections 203 and 205, which prohibit federally-employed attorneys from representing clients before an agency in matters in which “the United States is a party or has a direct and substantial interest.”

According to the settlement agreement, in May 2014, Ms. Taux attended ethics training and was informed that she was not allowed to engage in the practice of law or work for someone who has matters pending before their office.  Nevertheless, in 2015, Ms. Laux filed multiple trademark applications for Dennis Hunter, a relative of hers from California.  Ms. Laux used her home address and a personal Gmail account to correspond with the USPTO in Mr. Hunter’s various trademark matters.  When the conflict was called to her attention, initially she did not immediately withdraw from the representations.

Although it was not discussed in the settlement agreement, Ms. Laux’s client, Mr. Hunter, is considered to be a “major player” in California’s medical marijuana industry.  See Alternet, Leading California Medical Marijuana Oil Maker Busted (June 16, 2016).  At least some of the marks filed by Ms. Laux on behalf of Mr. Hunter related to his cannabis business, including “CBD Guild,” which purports to promote awareness of the “benefits of medical marijuana.”  According to its website, “CBD” (or “Care By Design”), produces cannabis oils for use in sprays, gels, and cannabis oil cartridges for vaporizers.  Mr. Hunter filed a number of trademark applications, using Ms. Laux as his attorney, for various CBD products, including vaporizers and “natural essential oils.”   An article published in The Press Democrat reported that in June 2016, Mr. Hunter was arrest in a raid of a facility that produced cannabis oil-infused products.  Mr. Hunter previously served a six-year federal prison sentence for cultivating a marijuana farm.

Mr. Laux agreed with the OED Director that her conduct in preparing and, in some cases, trying to prosecute trademark applications for Mr. Hunter violated four separate USPTO ethics rules: (1) 37 C.F.R. § 11.111 (engaging in conduct contrary to federal ethics laws); (2) 37 C.F.R. § 11.505 (practicing law in violation of the regulation of the legal profession); (3) 37 C.F.R. § 11.804(d) (engaging in conduct prejudicial to the administration of justice); and (4) 37 C.F.R. § 11.116 (representing a client in violation of the USPTO’s ethics rules, and failing promptly to withdraw from the representation when notified of the violations).

It is not altogether clear how Ms. Laux’s suspension “from practice before the Office in trademark and other non-patent matters” affects her employment as an attorney with the USPTO.  The USPTO’s online employee directory currently identifies Ms. Laux as working at the PTAB.

Ms. Laux’s case does illustrate some of the dangers of doing “friends and family” work.  At some point in his or her career, every lawyer usually gets solicited by a friend or family member wanting legal help.  In this particular matter, Ms. Laux, as a federal employee, was given specific training that warned her she was prohibited from representing clients in matters before the Office.  That she worked as an attorney at the USPTO made this a particularly peculiar matter, since her role as outside counsel was much more likely to be discovered than a federal employee working at a different agency.  For federal government attorneys like Ms. Laux, there is only one correct response to the wannabee client, family member or otherwise, who asks for your legal representation in a matter against or involving the government.  In the words of former First Lady Nancy Reagan: “Just Say No.”

Note: A prior version of this post incorrectly stated that the practitioner is employed at the TTAB.

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