In re Matthew Swyers, Proc. No. D2016-20 (USPTO Dir. Jan. 26, 2017)

Michael E. McCabe, Jr.Fail to Cooperate, Misrepresentation, UPL, USPTO

Disposition:  Exclusion on consent.  Final decision here.

Summary:  A trademark practitioner was excluded on consent by the USPTO.  Previously, the practitioner had been the subject of a lengthy ethics investigation, which resulted in him filing a lawsuit in federal court to enjoin the investigation for allegedly violating his Fourth and Fifth Amendment rights.  The practitioner’s federal lawsuit was dismissed without prejudice for failure to pursue and exhaust administrative agency remedies.  See our discussion of the federal court action, and the court’s dismissal of that action, in our blogs posted here and here.

The OED’s ethics investigation led to the filing of a disciplinary complaint before the USPTO.  The disciplinary complaint accused the practitioner of multiple counts of misconduct involving hundreds of trademark matters before the Office, including allowing non-lawyers to practice trademark law for him with little or no supervision, failing to personally review or sign thousands of trademark applications, splitting fees with non-practitioner employees, and causing multiple fraudulent or digitally manipulated specimens of use to be filed with the Office.  The practitioner’s consent exclusion terminated the USPTO disciplinary proceeding.

Related to USPTO Practice?  Yes

Facts:  Matthew Swyers is an experienced trademark lawyer and former USPTO Trademark Examining Attorney.  He established The Trademark Company, PLLC, and through his business, he became a prolific filer of U.S. trademark applications.

He became the subject of the Office of Enrollment and Discipline’s attention starting in 2014.  In 2016, Mr. Swyers filed a lawsuit in federal court in Virginia seeking to enjoin the OED from investigating him.  The complaint alleged that the process employed in conducting the ethics investigation violated his rights under the Fourth and Fifth Amendments.  Matthew H. Swyers v. United States Patent and Trademark Office, et al., No. 16-cv-00015-LO-IDD (E.D. Va. Jan. 6, 2016).

Specifically, Mr. Swyers’ federal court complaint challenged the OED’s process for obtaining information that it uses in determining whether a USPTO practitioner may have engaged in unethical conduct.  Pursuant to 37 CFR Section 11.22(f), the OED Director is authorized to “request information and evidence regarding possible grounds for discipline of a practitioner” by issuing what it refers to as “Requests for Information” (or “RFIs”). The USPTO’s regulations impose no numerical, temporal, or subject matter restriction on the RFIs themselves.

The complaint alleged that the OED overwhelmed Mr. Swyers by issuing multiple RFIs seeking information on as many as 15,000 trademark applications.  The complaint further alleged that “no avenue exists” in the USPTO to challenge OED’s RFIs based on breadth, privilege, vagueness, harassment, or relevance.

The USPTO moved to dismiss Mr. Swyers’ complaint for failure to pursue and exhaust administrative remedies.  The USPTO argued that its regulations afforded two levels of internal agency review–specifically, a petition to the OED Director followed by a petition to the USPTO Director–for any practitioner who seeks to challenge the propriety of an OED ethics investigation.  See 37 CFR Section 11.2(e).  According to the USPTO, Mr. Swyers failed to pursue the agency’s available remedies during the course of the investigation.  In addition, the USPTO argued the case was not ripe for judicial review because shortly after Mr. Swyers’ complaint was filed in federal court, the OED ended its ethics investigation and filed an administrative disciplinary complaint against him pursuant to 37 CFR Section 11.34.

On May 27, 2016, the district court granted the OED Director’s motion to dismiss without prejudice.  The Court held that dismissal of his federal complaint was appropriate because the matters raised in the complaint were currently being adjudicated by the USPTO and the practitioner may raise his constitutional claims in federal court only after the Agency’s administrative process is concluded.  The Court held that the regulatory scheme promulgated by the USPTO for adjudicating ethics charges against patent and trademark practitioners, which includes an administrative adjudication and the availability for review of the ALJ’s decision by the USPTO Director, precludes the exercise of Article III jurisdiction “at this stage” of Mr. Swyers’ case.  A copy of the court’s Opinion is here.

The USPTO disciplinary complaint alleged that Mr. Swyers:

  1. systematically permitted non-attorneys to practice trademark law for him with little or no supervision.
  2. did not personally review or sign thousands of trademark applications and related documents (including statements of use, § 2(f) declarations, and responses to Office actions) prepared by his non-lawyer employees and filed with the USPTO, in violation of USPTO signature and certification rules.
  3. potentially jeopardized the trademarks of his client because his employees had in multiple cases filed fraudulent or digitally manipulated specimens of use.
  4. failed to deposit client funds paid in advance into a client trust account and improperly split legal fees with his nonpractitioner employees.
  5. failed to respond to lawful requests for information or cooperate with the investigation conducted by the Office of Enrollment and Discipline.

In consenting to exclusion, Mr. Swyers acknowledged that he was the subject of a USPTO disciplinary complaint that, inter alia, alleged he had violated some thirty (30) different USPTO ethics rules.  Although Mr. Swyers denied engaging in any wrongdoing, his exclusion on consent concedes that if he ever applies for reinstatement to practice before the USPTO, the OED Director will conclusively presume both: (1) the allegations in the disciplinary complaint are true; and (2) Mr. Swyers could not have defeated those allegations.