“[USPTO-certified] CLE may or may not be a good idea. However, as proposed in the Proposed CLE Guidelines, it can’t work.” – David Boundy
Today, the Federal Register published a final interim rule submitted by the U.S. Patent and Trademark Office (USPTO) that will eliminate provisions within the agency’s rules of practice establishing a voluntary program for certifying the completion of continuing legal education (CLE) credits by registered patent practitioners and those granted limited recognition to practice in patent matters before the USPTO. The elimination of the voluntary CLE program follows a series of criticisms raised over the agency’s lack of compliance with federal administrative law statutes meant to objectively quantify the burden of agency rulemaking on stakeholders.
August 2020 Final Rule Imposes Biennial Registration Statement Requirement
At the end of July 2019, the USPTO issued a notice of proposed rulemaking (NPRM) in the Federal Register on patent fees for the 2020 fiscal year (FY2020) in which the agency announced its plans to create a CLE program. In exchange for certifying to completing a certain number of CLE credits, patent practitioners would enjoy recognition of the certification in the agency’s online practitioner directory and a $100 discount on annual active practitioner fees. Practitioners could qualify for those benefits after completing five hours of patent law CLE and one hour of ethics CLE in the previous 24-month period. “Ideally, when practitioners are well-trained and well-educated in patent law and practice, higher quality applications are filed, prosecution is more efficient, and patent grants become stronger, more reliable, and more predictable,” the agency’s NPRM explained.
In a final rule on FY2020 patent fees published in the Federal Register in August 2020, the USPTO indicated that the agency would also implement a biennial registration statement requirement for patent practitioners, which was not discussed in the July 2019 NPRM. Practitioners failing to timely file a registration statement would face administrative suspension as well as pay a delinquency fee. The August 2020 final rule also indicated that the agency’s CLE program would remain voluntary. The agency then published a request for comments (RFC) on the voluntary CLE program in October 2020. The RFC also included proposed guidelines on the subject matter of patent law and ethics courses that would qualify for CLE credit, as well as procedures for approving courses to qualify for CLE credit at the USPTO.
Past USPTO CLE Proposals
In the interim final rule, the USPTO acknowledged that “[m]any reputable organizations… provide CLE related to practice before the USPTO and the relevant case law,” and that CLE is typically monitored by state bar associations. “The USPTO’s decision is intended to reflect the Office’s focus on the most impactful ways to positively affect the issuance of robust and reliable patents,” the Federal Register notice reads.
The interim final rule also states that the USPTO may reconsider CLE reporting for patent practitioners at some point in the future. Indeed, this is not the first time that the USPTO has considered implementing a CLE program for patent practitioners. Federal Register notices published as early as 2003, during the administration of former USPTO Director Jon Dudas, indicate the agency has considered mandatory CLE certifications in the past.
The agency’s October 2020 RFC on the proposed CLE guidelines elicited about two dozen comments, including several that were critical of the agency’s efforts to establish a CLE program. “CLE may or may not be a good idea,” wrote David Boundy, Partner at Potomac Law Group, in a comment submitted in January 2021. “However, as proposed in the Proposed CLE Guidelines, it can’t work.” Boundy, who has written extensively on the application of administrative law on the USPTO, called the proposed guidelines “classic subject matter” for a legislative rule requiring consultation with the public under the provisions of the Paperwork Reduction Act (PRA), which requires federal agencies to make an objective determination of the financial burden posed by new information collections imposed by agencies. Boundy also criticized the agency’s promulgation of the CLE guidelines by shortcutting notice-and-comment rulemaking procedures mandated by the Administrative Procedures Act (APA).
Patent Practitioners Question USPTO’s Low Financial Burden Figures
Boundy’s concerns were reiterated in a pair of letters sent to federal officials in early 2021. In February of that year, Boundy and 108 other patent practitioners wrote to the USPTO’s Office of the Chief Administrative Officer and the Director of the USPTO’s Office of Enrollment and Discipline (OED) arguing that the USPTO did not properly estimate the burden posed by the biennial registration statement and the certification of CLE completion. The February 2021 letter argued that the USPTO failed to account for the burden on patent practitioners to identify and attend courses eligible for CLE credit on top of CLE requirements by state bar associations, as well as the burden on CLE providers to obtain USPTO approval to offer courses for CLE certification.
In March 2021, Boundy and 84 other patent practitioners sent another letter to the Office of Management and Budget’s (OMB) Office of Information and Regulatory Affairs (OIRA) and the USPTO’s Chief Administrative Officer Kimberly Hardy. The practitioners asked OIRA to disallow the USPTO’s information collections relevant to biennial registration statements and CLE certification, noting that the USPTO’s estimate of $1.6 million in financial burden from the information collections fell far below the practitioners’ estimates of $120 million to $150 million per year. While the USPTO supporting statement to OIRA indicated that the information collections are “not currently being implemented,” the March 2021 letter points out that the USPTO had already set a date in March 2022, by which time the biennial registration requirement would be effective.
The USPTO’s Omission of Rulemaking Impact Analyses
This is not the first time that the USPTO has had to reverse course on planned changes to rules of agency practice after issues with PRA requirements have been pointed out. In November 2010, the USPTO issued an NPRM eliminating certain proposed rules related to ex parte appellate practice at the agency. This particular rulemaking process had become “horribly convoluted,” in the words of IPWatchdog CEO and President Gene Quinn, after the USPTO had misrepresented to the OMB that the financial burden of the new appellate practice rules “was essentially zero (which everyone knew was simply untrue).”
The USPTO’s recent final interim rule makes no mention of the biennial registration statement requirement that the agency will begin to collect in November 2024. While the financial burden related to filing such statements would likely be much lower than the burden needed to complete several hours’ worth of USPTO-certified CLE credits, the requirement highlights the USPTO’s continued willingness to omit rulemaking impact analyses required by the PRA and other federal statutes, a point raised by Boundy in a September 2022 amicus filing in a case involving the USPTO’s domicile address rules.
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