USPTO Suspends Ethically-Challenged Patent Attorney

Michael E. McCabe, Jr.Client Funds, Communications, Competence, USPTO Director Decisions0 Comments

canstockphoto12464394On August 19, 2014, the USPTO Director issued a final order suspending a patent attorney for 20-months based on three separate suspensions issued by the Supreme Court of California. The USPTO added an additional six-month period to the suspension—for a total suspension of 26 months—based on the attorney’s failure to cooperate with the OED’s disciplinary investigation. In re Donrad, No. D2014-33.

Attorney Sean Donrad was admitted to the state bar of California in 2006. His ethical problems started soon thereafter and have been ongoing ever since, resulting in multiple orders of public discipline entered against him in California. His conduct evidences a pattern of repeating the same ethical violations, including: (1) failure to provide competent representation; (2) failure to communicate with clients; (3) failure to provide legal services; (4) failure to return client property or unearned fees; (5) unauthorized practice of law; and (6) failure to cooperate in bar investigations.

Suspension No. 1- In re Donrad, 10-O-05018-PEM (Cal. Bar Ct. Mar. 21, 2011)

Mr. Donrad’s problems began in June 2008, when he was retained by an individual to represent her in a patent infringement lawsuit. Mr. Donrad accepted $5,000 to conduct research, send a demand letter, and seek waiver of immunity from the putative infringer, a state entity. Mr. Donrad received documents from, and met several times with, the client. He failed, however, to take any substantive action on the client’s behalf. In February 2009, the client terminated the engagement and demanded a return of her files and a refund of the $5,000 payment. Despite repeated promises, Mr. Donrad failed to return the client’s files or refund her money.

In October 2010, the State Bar Court of California filed a disciplinary complaint against Mr. Donrad alleging three claims under the Rules of Professional Conduct of the State Bar of California: (a) failure to perform legal services with competence; (b) failure to return client property; and (c) and failure to refund unearned fees. Mr. Donrad failed to respond to the ethics complaint, leading to entry of a judgment by default and thus all allegations in the State Bar complaint were deemed admitted.

The State Bar Court found no mitigating factors and three aggravating factors — multiple acts of misconduct, significant harm to the client, and failure to cooperate in the disciplinary proceedings. The State Bar requested an actual suspension of six months. The State Bar Court instead recommended to the Supreme Court of California that Mr. Donrad receive a one-year suspension, stayed, with a minimum “actual suspension” period of sixty (60) days, with the term of the actual suspension continuing until the court grants a motion to terminate the suspension and full restitution is made to the former client. In September 2011, the Supreme Court of California entered the recommendation of the State Bar Court.

In March 2012, Mr. Donrad filed a motion with the State Bar Court to terminate his actual suspension and extend the time to pay disciplinary costs (unrelated to the client restitution) to the California Supreme Court. On April 12, 2012, the State Bar Court entered an Order denying the motion to terminate suspension because Mr. Donrad had failed to make restitution to his former client, which was a condition for lifting the suspension. The State Bar Court granted Mr. Donrad additional time to pay the Supreme Court disciplinary costs. See In re Donrad, Case No. 10-O-05018-PEM (Cal. Bar Ct. Apr. 12, 2012).

After Mr. Donrad finally made restitution to his former client, in September 2012, the State Bar Court entered an Order granting his motion to terminate the suspension. See In re Donrad, Case No. 10-O-05018-PEM (Cal. Bar Ct. Sept. 6, 2012). Mr. Donrad was placed on probation for two years and was ordered to report regularly to the Office of Probation and pass the State Bar’s Ethics School.

iu - Marvin Baxter - Ming Chin - Kathryn Werdegar - Joyce Kennard - Carol Corrigan - Tani Cantil-Sakauye - Sacramento Superior Court - 3rd District - CopySuspension No. 2- In re Donrad, 10-O-07779, 11-O-12670 (Cal. Bar Ct. Apr. 15, 2013)

Mr. Donrad’s ethical challenges continued. In 2012, the State Bar filed two complaints alleging a total of 12 counts of misconduct in four client matters between 2009 and 2011. A hearing judge found Mr. Donrad culpable of nine counts in three client matters.

In the first client matter, Mr. Donrad and a client signed a retainer agreement in which the client agreed to pay $3,800 for legal services, which included filing an opposition to a motion to vacate a default judgment. Mr. Donrad failed to provide any legal services on behalf of the client. The client terminated the representation in October 2009 and demanded an accounting and a refund of any unearned fees, but Mr. Donrad never responded. A hearing judge found Mr. Donrad violated California’s ethics rules regarding competence, failure to refund unearned fees, and failure to provide an accounting.

In the second client matter, Mr. Donrad filed a civil complaint in June 2010 on behalf of a client against a homeowner’s association. As a result of the first suspension, however, Mr. Donrad soon became ineligible to practice law. The hearing judge found that Mr. Donrad was aware of his ineligibility yet failed to communicate this fact to the client. In March 2011, the court in the civil action held a hearing on a defense motion to strike the complaint. Mr. Donrad failed to appear at the hearing or arrange for another attorney’s appearance. The client ultimately dismissed the complaint. In the ethics proceeding, a hearing judge found Donrad culpable for violating California’s ethics rules because he failed to communicate with his client about a significant fact – i.e., his ineligibility to practice law.

In the third client matter, Mr. Donrad agreed, in December 2010, to represent a client in a civil matter against a title company. The client paid Mr. Donrad an advanced fee of $2,500. Although he was ineligible to practice due to his first suspension, Mr. Donrad appeared at a superior court hearing in February 2011. He later appeared before the same court and admitted his ineligibility to practice. In the subsequent ethics proceeding, the hearing judge found Mr. Donrad made misrepresentations to the court, engaged in the unauthorized practice of law, misled a judicial officer, failed to provide an accounting to the client, and failed to communicate important information to the client.

In the penalty phase, the hearing judge found four separate factors in aggravation. First, Mr. Donrad’s prior record of recent discipline involving misconduct similar to the matters in the present action. Second, multiple acts of misconduct were committed affecting multiple clients. Third, clients were harmed. Fourth, Mr. Donrad failed to demonstrate any remorse or acknowledge his misconduct.

The State Bar Court recommended a two year suspension, stayed, and that Mr. Donrad remain actually suspended for a minimum period of one year, with the suspension in place until various conditions of probation were satisfied, including making full restitution to one client, filing periodic status reports with the Office of Probation, and remaining on probation for two years following the end of his actual suspension. On August 14, 2013, the Supreme Court of California issued an order adopting the recommendations of the State Bar Court.

Suspension No. 3- In re Donrad, 12-O-14753-PEM (Cal. Bar Ct. Jan. 28, 2014)

On November 8, 2012, the State Bar filed yet another complaint against Mr. Donrad for disciplinary charges alleging seven counts of misconduct in two client matters. Mr. Donrad was charged with: (a) unauthorized practice of law; (b) charging an illegal fee; (c) failing to refund unearned fees; (d) failing to communicate with clients; (e) failing to provide competent legal services; and (f) failing to cooperate in a disciplinary investigation.

In the first matter, Mr. Donrad accepted fees to assist a client in an immigration matter when he was not authorized to practice – a fact he failed to communicate to the client. After accepting the client’s payment, Mr. Donrad failed to perform any services, failed to respond to the client’s inquiries, and failed to return the client’s fees for over two years.

In the second matter, Mr. Donrad filed suit in state court on behalf of a client. Mr. Donrad failed to appear at court conferences and failed to file an amended complaint after a motion to dismiss the complaint was granted. In February 2011, the state court dismissed the case. At no time did Mr. Donrad inform the client of his failure to file the amended pleading.

The State Bar sought Mr. Donrad’s disbarment. Mr. Donrad requested a sixty (60)-day suspension. On January 28, 2014, the State Bar Court recommended a three (3) year suspension period, staying the execution of that period, and placing Mr. Donrad on probation for three years, including a six-month period of actual suspension. The Supreme Court of California adopted the State Bar Court’s recommendation on July 26, 2014.

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On August 13, 2014, the OED Director initiated an investigation into Mr. Donrad’s conduct in the California disciplinary proceedings. The OED mailed a Request for Information (“RFI”) pursuant to 37 C.F.R. § 11.22. Despite actual service of the RFI, Mr. Donrad failed to respond. On June 16, 2014, the OED Director convened a panel of the Committee on Discipline, which found probable cause that Mr. Donrad had violated the USPTO’s ethics rules.

On August 19, 2014, the USPTO and Mr. Donrad entered into a settlement agreement pursuant to 37 C.F.R. § 11.26. The parties agreed that Mr. Donrad’s suspensions in California on ethical grounds violated USPTO Code of Professional Responsibility 37 C.F.R. § 10.23(c)(5) (for the pre-May 2013 California suspension) and Rule of Professional Conduct 37 C.F.R. § 11.804(h) (for the post-May 2013 California suspensions). In addition, the parties agreed Mr. Donrad failed to cooperate in the OED’s investigation, in violation of 37 C.F.R. § 11.801(b).

The USPTO and Mr. Donrad agreed that he should be suspended from the practice of patent, trademark, and non-patent law before the Office for 26 months. This suspension period was calculated based, in part, on the minimum “actual suspension” periods imposed in California, which were: (1) 60 days for the first minimum “actual suspension” period; (2) one year for the second minimum “actual suspension” period; and (3) six months for the third minimum “actual suspension” period. The USPTO tacked on an additional six-month suspension based on Mr. Donrad’s failure to cooperate with the OED’s disciplinary investigation.

Considering the sheer number of ethics violations committed in a relatively short period of time, Mr. Donrad should consider himself lucky. By the time he was found liable in his third state bar disciplinary complaint, many jurisdictions would have disbarred him or, at the very least, punished him with a longer suspension.  Time will tell whether Mr. Donrad will be able to conform his conduct to the USPTO’s and California’s respective rules of ethics.

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