USPTO Reciprocal Discipline Case Illustrates Flaw In Rules

Michael E. McCabe, Jr.Continuing Legal Education, Gross Misconduct, Moral turpitide, Office of Enrollment and Discipline, Reciprocal Discipline, USPTO Director Decisions0 Comments

A recent disciplinary decision published by the USPTO Director illustrates a serious flaw in the Office’s rules governing reciprocal discipline.  In re Sanjeev Kumar Dhand, D2016-17 (USPTO Dir. Nov. 16, 2016).

California Discipline

The factual background of the Dhand case is eerily similar to our post from yesterday (link here).   This matter involves California-based patent attorney Sanjeev Kumar Dhand. Mr. Dhand was required to complete at least 25 hours of minimum continuing legal education (“MCLE”) during the period of February 1, 2010, through January 31, 2013 (the “compliance period”). Mr. Dhand falsely reported to the California State Bar that he had timely completed all of his MCLE during the compliance period, when in fact he had only completed 9.75 MCLE hours during the compliance period. Mr. Dhand represented that he “believed that he had in fact complied” but that he affirmed his MCLE compliance “without checking his records to ascertain whether his belief was correct.” An audit revealed the misrepresentation.

The California Bar alleged, and Mr. Dhand agreed, that his false report to the State Bar was grossly negligent and an act involving moral turpitude in willful violation of California ethics law. In re Sanjeev Kumar Dhand, Case No. 14-O-01528 (Cal. May 14, 2015).

In considering the appropriate sanction, the California Bar noted the absence of aggravating factors and the existence of five mitigating factors: (1) discipline free practice for twelve and one-half years (which is given “significant weight”); (2) evidence from eleven individuals attesting to Mr. Dhand’s good character; (3) evidence of substantial community service and pro bono work; (4) change in law office procedure to avoid future non-compliance; and (5) cooperation in the State Bar’s investigation.

The California Bar ordered Mr. Dhand to serve a one-year suspension, which was fully stayed.  In addition, during the stayed suspension period, Mr. Dhand received a one-year term of probation and was ordered to retake and pass the Multistate Professional Responsibility Exam (MPRE) during his probationary period.  Thus, unlike our discussion yesterday, Mr. Dhand was able to avoid any actual term of suspension.

iuy_3dvm__w-matt-duncanUSPTO Reciprocal Discipline

Mr. Dhand reported his suspension to the OED Director pursuant to 37 C.F.R. § 11.24(a). Thereafter, the USPTO Director served Mr. Dhand with a complaint for reciprocal discipline and an order to show cause why he should not receive the same disciplinary sanction from the USPTO that he received in California.

Mr. Dhand did not contest the imposition of a stayed one-year suspension. He requested, however, that since he had already completed the one-year probationary period imposed by California and he had passed the MPRE, the USPTO should not impose those additional disciplinary sanctions.

On November 16, 2016, the USPTO Director issued its Order imposing reciprocal discipline pursuant to 37 C.F.R. § 11.24.  In re Sanjeev Kumar Dhand, D2016-17 (USPTO Dir. Nov. 16, 2016).  The USPTO Director agreed that since Mr. Dhand had submitted proof that he had retaken and passed the MPRE, he would not be required to do so again by the USPTO.  Id. at 4. The USPTO Director, however, rejected Mr. Dhand’s request that he be placed on one-year probation nunc pro tunc from the date of the start of his California probationary period.

The USPTO Director explained that the probation “was always part of the state level discipline separate and apart from the other terms of that discipline.” The Director further stated that Mr. Dhand’s request that he not be placed on a reciprocal one-year probation was, in effect, asking that the term of his probation run nunc pro tunc from the start of his California probation period.

The USPTO Director held that imposition of reciprocal discipline nunc pro tunc is governed by 37 C.F.R. § 11.24(f), which states that:

Upon request by the practitioner, reciprocal discipline may be imposed nunc pro tunc only if the practitioner promptly notified the OED Director of his or her censure, public reprimand, probation, disbarment, suspension or disciplinary disqualification in another jurisdiction, and establishes by clear and convincing evidence that the practitioner voluntarily ceased all activities related to practice before the Office and complied with all provisions of [37 C.F.R.] § 11.58. The effective date of any public censure, public reprimand, probation, suspension, disbarment or disciplinary disqualification imposed nunc pro tunc shall be the date the practitioner voluntarily ceased all activities related to practice before the Office and complied with all provisions of § 11.58.

Here is where the decision gets weird.  The USPTO Director held that for Mr. Dhand to have been  eligible for nunc pro tunc treatment with respect to his one-year term of probation, Mr. Dhand was required to: (1) promptly notify the OED Director of the California discipline; and (2) cease all activities relating to practice before the USPTO and comply with all of the duties of a suspended practitioner pursuant to 37 C.F.R. § 11.58.  Id. at 5-6. Since he failed to meet these requirements, the USPTO Director reasoned, Mr. Dhand simply was not eligible for nunc pro tunc treatment with respect to the running of his period of probation.

uss2u1-98io-john-mark-kuznietsovI have no issue with the first requirement: a practitioner is required to report public discipline imposed by another jurisdiction within thirty (30) days.  37 C.F.R.  § 11.24.  It is the requirement that Mr. Dhand “voluntarily cease all activities related to practice before the Office” and comply with “all of the provisions of [37 C.F.R.] § 11.58” that make no sense in Mr. Dhand’s case.  These requirements make no sense because they assume that Mr. Dhand was actually suspended by the California disciplinary authorities.  But he was not.  He received a fully-stayed suspension.

Because Mr. Dhand’s state court suspension was fully stayed, the USPTO Director could not have legally imposed upon him any period of actual suspension.  On the contrary, the state bar discipline imposes a ceiling on the maximum amount of reciprocal discipline permitted by the USPTO.  Thus, the USPTO Director’s finding that Mr. Dhand was required to “cease all activities related to practice before the Office” for some undefined period of time just to qualify for nunc pro tunc treatment of his probationary period makes no sense.  On the contrary, this part of the holding is illogical and is contrary to the USPTO’s reciprocal discipline scheme, which mandates that a practitioner may not receive any greater discipline than what he or she received from the other disciplinary jurisdiction.

The second error in the decision is the USPTO Director’s finding that Mr. Dhand was required to comply with all of the requirements set forth in 37 C.F.R. § 11.58. That provision, however, only applies when a practitioner has been excluded, suspended, or resigned.  When a practitioner is suspended, for example, he must notify all of his clients of the suspension, withdraw from all proceedings before the Office, and take numerous other steps consistent with the inability to practice patent or trademark law before the USPTO.

Because his suspension was fully stayed, however, Mr. Dhand was expressly not required to withdraw his appearance from any matters before the USPTO.  He was, and is, fully qualified to practice before the USPTO since the full-term of his suspension was stayed. The USPTO Director’s holding that Mr. Dhand was required to comply with Section 11.58 in order to qualify for nunc pro tunc treatment of his one-year probation period is illogical and flies in the face of the USPTO’s reciprocal discipline scheme.

In denying nunc pro tunc treatment, the USPTO Director did follow the plain language of  37 C.F.R. § 11.24(f).  The problem, however, is that the rule itself is flawed.  To be sure, the rule as written makes sense if a practitioner receives an actual period of suspension from a state bar.  But where, as in the Dhand case, the practitioner’s suspension is fully-stayed, then it makes no sense because to qualify for nunc pro tunc treatment of the state bar discipline requires the practitioner to voluntarily cease practice before the USPTO–i.e. agree to a suspension even though no actual suspension was imposed.  This renders the putative benefit of nunc pro tunc treatment illusory since a practitioner who received no actual suspension would be required to terminate his USPTO practice and suffer the same consequences as a suspended practitioner simply to enjoy the benefit of an earlier start date of his probationary period.

In sum, in its current form, the nunc pro tunc rule only works when a practitioner receives an actual term of suspension from another bar. When a practitioner receives a stayed suspension from another bar, however, the nunc pro tunc rule imposes no benefit whatsoever, only detriment to the practitioner. Section 11.24(f) should be modified so that a practitioner who receives a fully-stayed suspension is not required to cease practice before the Office simply to qualify for nunc pro tunc treatment of other disciplinary sanctions by the USPTO (such as the term of probation).  Alternatively, Section 11.24(f) should be rewritten to make clear that nunc pro tunc treatment is unavailable when a practitioner receives a fully-stayed suspension.

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