Actions of USPTO Officials Performing the Director’s Functions and Duties During Director Vacancy are Void

“[While] the overwhelming majority of actions of the Office remain valid despite a vacancy in the Director’s office,…a few key non-delegable actions taken by Commissioner Hirshfeld ‘have no force or effect,’ void ab initio, and as such ‘may not be ratified’ by the next Director or any court.” the U.S. Constitution’s Appointments Clause, “Officers of the United States” generally are required to be nominated by the President “by and with the Advice and Consent of the Senate.”  This rule applies equally to the Director of the U.S. Patent and Trademark Office (USPTO), who has an important executive role with political accountability and therefore, by statute, must be Presidentially-Appointed and Senate-Confirmed (PAS). The Vacancies Reform Act of 1998 (VRA) provides that the President (and only the President) may direct an “acting” official to temporarily perform the functions and duties of the vacant PAS office. The VRA states that its mechanisms are “exclusive” of all other mechanisms for temporarily filling a vacant PAS office.

On several occasions since 2013, including most recently with Commissioner Andrew Hirshfeld, the USPTO has adopted a modality for filling a vacancy in the office of the Director, not with an Acting Director as the VRA requires, but with a non-PAS official “designated” to “perform the functions and duties” of the Director.

Why does the USPTO employ this unusual modality while going out of its way to avoid having the President direct such official to temporarily serve as Acting Director? I answer the “why” and “how” of this question in an article I recently published, in which I analyze new information and results that have not previously been described in the literature. I reach the conclusion stated in the title of the article, a conclusion that is not arrived-at lightly, as it has serious consequences.

The Flawed Theory Revealed

First, the USPTO recently produced documents under the Freedom of Information Act (FOIA) that reveal the succession plans and related legal theory underlying its “designation” modality. These FOIA documents reveal that the USPTO’s legal theory for this modality is the same as that used in three previous “designation” instances since 2013. Such a USPTO “designee” is therefore not the Acting Director but is “Acting as Director.”  Further analysis shows it to be a tactic for subverting the VRA, creating acting officers in all but name, who can hold their office indefinitely and wield substantial powers of the Director without Senate consent.

Since 2013, the USPTO has predicated this vacancy-filling modality on the notion that it need not comply with the VRA if the statute permits the delegation of the “functions and duties” of the Director to non-PAS subordinates. In a recent oral argument in the Arthrex case before the Federal Circuit, counsel for the USPTO argued, without reference to any pertinent statutes, that all the Director’s functions and duties are delegable to non-PAS officers and therefore the USPTO is not bound by the VRA. In other words, the USPTO contends that it can run the agency indefinitely by “self-help” without a Presidential appointment or Senate consent. It therefore deems superfluous Congress’ statutory requirement in 35 U.S.C. § 3(a) for the USPTO to be managed, supervised, and directed by a PAS Director, who can only be fired by the President. My detailed article shows that the USPTO is wrong.

Second, a central authority for my results comes from a less-known act of Congress—the Patent and Trademark Office Efficiency Act of 1999, (PTOEA), enacted as Subtitle G within the better-known American Inventors Protection Act of 1999. What used to be merely an “office” fully subordinated to, and operated by, the Department of Commerce, was reestablished by the PTOEA as of March 29, 2000 as an independent Executive agency within the Department of Commerce. The PTOEA reenacted sections of the Patent Act in 35 U.S.C. §§ 1-13, and also included other non-codified statutes that, in combination, transferred all the powers, functions, and duties related to operation of the USPTO from the Department of Commerce and the Secretary of Commerce to the reestablished USPTO and to its Director. Congress thus (i) transferred to the reestablished “Office” the powers and duties that were previously vested in the Commissioner for Patents, and added to those new additional enumerated powers, and (ii) transferred to, and vested in, a newly-created position of the Under Secretary of Commerce for Intellectual Property and Director of the USPTO most of the powers and duties that were previously vested in the Secretary of Commerce. In this way, Congress separated and distinguished the functions and duties of the “Office” in 35 U.S.C. § 2 (2000) from those of its executive leadership including the Director, which the PTOEA provided in other sections, predominantly in 35 U.S.C. § 3 (2000).

Delegable and Non-Delegable Functions

The analysis in my article shows that all powers and duties of the Office (enumerated in § 2) are delegable, including all functions required “for the granting and issuing of patents and the registration of trademarks.” § 2(a)(1). In addition, some powers of the Director are also delegable, although the Director is clearly vested with specific non-delegable functions and duties. Of particular importance is the non-codified statute in PTOEA § 4745 which authorizes the delegation of only some of the Director’s functions to subordinates, but requires the Director to retain “responsibility for the administration of the function.” My article shows that such delegated authorities terminate when a PAS Director (or Acting Director) is not in government service, has left the PAS office vacant, and has lost the capacity to exercise the “responsibility for the administration of the function.”

As further explained in my article, the flowchart below depicts the statutory scheme that partitions the functions and duties of the Office, which are delegable, from those of the Director, of which some may or may not be delegable.


Third, this article considers six other agencies whose delegation statutes are essentially identical to that in PTOEA § 4745. These other agencies uniformly embrace the VRA for temporarily filling vacancies in their agency head’s office with officials serving in acting capacity; none use the USPTO’s “designation” modality that essentially disposes of the clear delineation between delegating to another, and divesting oneself of final review and reversal power.

Why Would the USPTO Circumvent the VRA?

Fourth, my article exposes the most likely potential beneficiaries from this USPTO bypass of the VRA, which may explain the reason the USPTO insists on using this modality. The VRA prohibits a Presidential nominee to a PAS office from performing the duties of that office in an acting capacity while also being considered by the Senate for confirmation to serve in that office. The career-enhancing preference of top USPTO officials to merely perform the “functions and duties” of the Director, while still being eligible for a Presidential nomination as Director is obvious: had they opted instead to be Acting Director, they would have forfeited their opportunity to be considered candidates for the Presidential nomination to the Director position. My article discusses the apparent conflict of interest created by such personal career-advancing tactics in attempting to remain eligible for a Presidential nomination.

The USPTO’s tactic for avoiding the appointment of an Acting Director apparently extended to having Secretaries of Commerce on three separate occasions in 2012, 2014, and 2017, “designate” or “name” a non-PAS designee as performing the “functions and duties” of the Director, despite the fact that the PTOEA stripped the Secretary of Commerce of all powers and authority to do so, provisions in uncodified statutes that apparently eluded the government lawyers.

Finally, this article explains how the overwhelming majority of actions of the Office remain valid despite a vacancy in the Director’s office, but a few key non-delegable actions taken by Commissioner Hirshfeld “have no force or effect,” void ab initio, and as such “may not be ratified” by the next Director or any court. These void actions include Director supervision of actions in America Invents Act (AIA) trials and performing Director Review of final decisions in such trials pursuant to the Supreme Court’s decision in Arthrex. Depending on the statutory deadlines, these actions will have to be re-analyzed and decided de novo by Director Vidal, or otherwise expunged.

To learn more, download my article, which is the first of two parts. Part II will discuss implications of the analysis in Part I to the performance of other exclusive functions and duties of the Director, including in the conduct of AIA trials, appointments of Administrative Patent Judges, and consequences of invalid delegation of authority to perform these duties.

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Author: Aquir014b
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Join the Discussion

9 comments so far.

  • [Avatar for Anon]
    April 22, 2022 09:59 am

    A thunderous echo (and certainly to be applauded) of what I (even if somewhat immodest) was the very first to put forth — even as I have not been the only one to do so, as this lands squarely in the pet peeve area of the renowned David Boundy.

    Kudos Dr. Katznelson for painstakingly connecting the dots.

    Maybe, just maybe, the legal folk within the patent office will take heed — and if not them, then those challenging the patent office will be fully armed.

  • [Avatar for B]
    April 22, 2022 09:06 am

    “[N]on-delegable actions taken by Commissioner Hirshfeld ‘have no force or effect,’ void ab initio, and as such ‘may not be ratified’ by the next Director or any court.”

    If ARTHREX has taught me anything, it’s that the SCOTUS will find some unconstitutional workaround to fix this unconstitutional problem while violating decades of precedent because . . . who really expects government to do all that work to correct problems they created?

    @ Julie Burke, Ph.D – you’re my new hero, but what I really wanted was a GoT analogy

  • [Avatar for Julie Burke]
    Julie Burke
    April 21, 2022 08:23 pm

    Titles matter. See today’s in depth investigation of fake Supervisory Patent Examiners by Epoch Times’ Jackson Elliott. I was once a fake SPE.

  • [Avatar for Josh Malone]
    Josh Malone
    April 21, 2022 07:49 pm

    In the matter of Jim the Inventor v. Dwight Schrute, Performing the Functions and Duites of Assistant to the Regional Manager, the Office finds that the Office granted an unpatententable patent, notwithstanding that the Office did not consult with the Office in the latter matter.

  • [Avatar for Practical Guy]
    Practical Guy
    April 21, 2022 06:54 pm

    So…long story short.

    Accepting this as true, the worst case scenario is the new Director just issues the same paper a few months later, which is exactly what will happen.

  • [Avatar for mike]
    April 21, 2022 05:44 pm

    +1 Julie Burke.
    All—read her comment. It’s priceless. It’s also ironic that practitioners quite often refer to the USPTO as “the Office” in their work product.

  • [Avatar for Pro Say]
    Pro Say
    April 21, 2022 05:13 pm

    Ruh-Roh. Upheaval at the PTO in 3 . . . 2 . . .

    (thanks Ron for yet another superb expose)

  • [Avatar for Julie Burke]
    Julie Burke
    April 21, 2022 04:53 pm

    Thank you, Dr. Katznelson, for your important, analytical deep dive into the USPTO’s latest, unnecessary administrative quagmire. Well done parsing numerous nuances, which I fear may splash right over some heads back at the Office.

    Not meaning to trivial this important discovery in any way, but perhaps USPTO leadership would benefit from carefully reviewing a few episodes of The Office?

    Dwight Schrute’s ongoing quest to twist his actual job title, “Assistant TO THE Regional Manager” into his dream job title “Assistant Regional Manager” may serve as relevant introductory material.

    Titles matter. Dr. Katznelson’s analysis illuminates real world differences between “Acting AS Director” of the USPTO versus “Acting Director” of the USPTO.

    Looking forward to Part II.

  • [Avatar for truthteller]
    April 21, 2022 03:56 pm

    The authoritative voice of Dr. Katznelson here to enlighten us all.
    Much respect.