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Lawsuit Challenging Qualifications of Deputy Patent & Trademark Office Director Rejected:

I blogged about this suit in July:

The complaint ... alleges that Deputy PTO Director Margaret Peterlin lacks the statutorily required "professional background and experience in patent or trademark law."

I can't speak to whether the deputy director in fact lacks such background and experience.... I'm more interested in the institutional question here: What should courts do with vague criteria such as "shall ... [have] a professional background and experience in patent or trademark law," criteria that give no instructions about the level of background and experience required? I'm not an administrative law expert, but I'm inclined to say that this is the sort of judgment that is left to the Director (and, indirectly, to the Secretary of Commerce and the President, who can decide to remove the Deputy Director), not to courts. But I'd love to hear what administrative law experts have to say about this, and about other procedural questions that this lawsuit raises.

Last week, a federal district court rejected the lawsuit, reasoning in relevant part:

Two of plaintiffs’ three claims appear to be brought directly under 35 U.S.C. § 3(b), the statute which structures the United States Patent and Trademark Office (USPTO) and creates the office of the Deputy Director which is held by Ms. Peterlin. Defendant argues that there is no private cause of action under this statute, and plaintiffs have functionally conceded this argument by failing to respond. Nor would a response have made much difference: neither the text nor the legislative history of the statute evinces anything approaching the congressional intent required to establish a private cause of action -– that is, intent to create both a private right and a private remedy.

One of plaintiffs’ three claims invokes Administrative Procedure Act (APA), which ... does provide a cause of action for persons aggrieved by final agency decisions that are arbitrary, capricious, or contrary to law. A claim alleging violation of the standard in 35 U.S.C. § 3(b) is unreviewable under the APA, however, because 35 U.S.C. § 3(b) lacks standards that a court could meaningfully use in evaluating this type of high-level personnel decision. Because the only statutory standard is vague and highly subjective, the decision whom to appoint Deputy Director must be considered “committed to agency discretion by law.”

The presumption must be that decisions involving high-level policymaking personnel are left primarily to the executive. In such a situation, one would expect Congress to speak in precise terms if it intended the courts to monitor the minimal qualifications for agency officers. Here, Congress has given only the broadest of instructions -– that the Deputy Director should have “a professional background and experience in patent or trademark law.” The statute is silent as to the content of those terms. Were the decision subjected to APA review, the Court -– not Congress -– would be the ultimate source of the standards by which the qualifications of Ms. Peterlin would be judged: Is a law degree necessary? Is it sufficient? Are law school courses in intellectual property a requirement? Is certification to practice before the USPTO? Is law firm experience? How many years? If Congress had intended the extraordinary situation in which judicial review would reach to the very qualifications of agency officers for their policymaking positions, its statute would not be drawn “in such broad terms that ... there is no law to apply.”

Thanks to reader Michael Hall for the pointer.

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Pub Editor:
My impression is that this is the right decision. Determining whether a nominee has the "statutorily required professional background and experience" for the job is a function that the President should do in selecting a nominee and that the Senate should do in the confirmation process.

Still, as it currently stands, both the Director (Jon Dudas) and the Deputy Director (Peterlin) of the Patent and Trademark Office come to their positions with no experience in drafting patent applications or examining applications. Both came to their current positions because by way of staff positions in the House of Representatives.

The PTO is currently revising the procedures for filing patent applications; Congress seems ready to pass soon an act with the most sweeping changes in patent law in at least 20 years; and in the past five years the Supreme Court has begun taking a more active role in patent cases than at any time Congress created the Federal Circuit. Given the state of flux in which patent law finds itself, it might be nice, under the next president, to have at least one person in the #1 or #2 spot at the PTO who has actually filed or examined one patent application in his or her career.
12.12.2007 1:17pm
Pub Editor:
Incidentally, so far the only presidential candidates who have spoken directly on patent reform are Mitt Romney and Barack Obama.
Romney has said in a letter that he would:

1. Ensure that the Undersecretary of Commerce and Director of the PTO will be a distinguished U.S. patent lawyer with many years of experience.
2. Propose to Congress and/or support only such patent reform legislation as will strengthen the U.S. patent system; and
3. Carefully consider appointing to the United States Court of Appeals for the Federal Circuit, as vacancies arise, excellent lawyers who have experience practicing U.S. patent law, particularly since all decisions in patent cases by the United States district courts are appealable to the Federal Circuit.

According to Dennis Crouch over at Patently-O, "Romney also praised the October 31 injunction against the PTO Rules as an appropriate way to stop this 'anti-innovation governmental meddling.'"

Obama, for what it's worth, has said the following (without much in the way of specifics):


I know that it is essential we have a system that produces timely, high-quality patents. By improving predictability and clarity in our patent system, we will help foster an environment that encourages innovation. Giving the Patent and Trademark Office (PTO) the resources to improve patent quality and opening up the patent process to citizen review will reduce the uncertainty and wasteful litigation that is currently a significant drag on innovation. With better informational resources, the Patent and Trademark Office could offer patent applicants who know they have significant inventions the option of a rigorous and public peer review that would produce a "gold-plated" patent much less vulnerable to court challenge. Where dubious patents are being asserted, the PTO could conduct low-cost, timely administrative proceedings to determine patent validity. As president, I will ensure that our patent laws protect legitimate rights while not stifling innovation and collaboration.


(HT: http://www.patentlyo.com/)
12.12.2007 1:27pm
alias:
all well and good, but what does Hanah think of this?
12.12.2007 1:43pm
Bruce Hayden (mail) (www):
Sorry, Obama, but you don't have a clue here. I do think that Romney does. He may not get anyone else's vote, but so far, he seems to be way out ahead with this with the patent bar.
12.12.2007 1:48pm
Antares79:
I agree that this suit had little chance on the merits, but the court's reasoning here seems strange. They effectively say that what qualifications are required for the position are dedicated to agency/executive discretion, due to the lack of (more) specifics in the statute. That is, Ms. Peterlin's qualifications and their compliance with the statutory requirements may never be reviewed by a court, because of the form of the statute alone.

Such reasoning seems to indicate that a court would never entertain a suit of this nature. If Ms. Peterlin were a non-English speaking child, the order's reasoning would still preclude her removal on qualification grounds because a court would never analyze her qualifications in the first place. This seems to read the qualifications (brief as they are) out of the statute.

I think it would be just as easy, and more jurisprudentially sound, for the court to have reached the question of whether Ms. Peterlin's qualifications complied with those written in the statute, and finding that they did so comply, based on how general the qualifications are.
12.12.2007 1:49pm
Adam J:
Pub Editor- what confirmation process? All that's done is nomination by the director and appointment by the commerce secretary. Apparently, the court has held that congress wanted to create a unenforceable requirement, so long as the commerce secretary and USPO director are both willing to ignore the statutory requirements they are irrelevant and unenforcible. That the executive can disregard statutory requirements and be completely insulated from judicial review is quite disconcerting to me.
12.12.2007 2:05pm
KeithK (mail):
I'd rather have the courts never consider such suits than have them decide who is or is not qualified based on vague qualifications like those specified in this law. If you want judicial review make the qualification specific and objective.

Antares, I do suspect that if a non-English speaking child were appointed a court might indeed take action since such an individual very clearly is not qualified even under the vague requirements. But I bet the kid would be thrown out (along with his boss) long before the case ever got to court due to public outcry.
12.12.2007 2:13pm
Pub Editor:

Pub Editor- what confirmation process? All that's done is nomination by the director and appointment by the commerce secretary. Apparently, the court has held that congress wanted to create a unenforceable requirement, so long as the commerce secretary and USPO director are both willing to ignore the statutory requirements they are irrelevant and unenforcible. That the executive can disregard statutory requirements and be completely insulated from judicial review is quite disconcerting to me.


How careless of me! The Director of the PTO (Mr. Dudas) is subject to Senate confirmation (35 U.S.C. 3(a)(1)), but the Deputy Director (Ms. Peterlin) is not subject to Senate confirmation:

The Secretary of Commerce, upon nomination by the Director, shall appoint a Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director of the United States Patent and Trademark Office who shall be vested with the authority to act in the capacity of the Director in the event of the absence or incapacity of the Director. The Deputy Director shall be a citizen of the United States who has a professional background and experience in patent or trademark law.

35 U.S.C. 3(b)(1).

Adam J., thank you for pointing to my error. However, I stand by first point: as a general matter, the judiciary should not be evaluating the professional qualifications of political appointees. I agree with KeithK.

The better "solution" is to make Ms. Peterlin's position also subject to Senate Confirmation, although that too has downsides.
12.12.2007 2:28pm
Bruce Hayden (mail) (www):
I do understand the way that the cases came down, but am as frustrated as much of the patent bar with the present USPTO leadership. At least Bruce Lehman had copyright experience, and so wasn't clueless, as the current top management at the agency is.

The problem is that the court calling them competent because the Administration called them competent doesn't make it so. They aren't. And the amazing thing is that they couldn't find anyone with a registration number with 50k+ of us out there with that qualification.

I think that the abject inability to understand the reality of the patent system by the current USPTO top management is part of what is leading to the system's breakdown. Examiners are fleeing, and the agency is trying to fix the problems with backlog, etc. by misguided solutions.

In particular, the agency has (at least) three sets of new rules somewhere in the pipeline. The first, concerning claim numbers, continuations, searching, etc., was preliminarily enjoined on Halloween. What was amazing with those rules is that they clearly came from a group of people who had no concept of why things happened in the patent system. Not a clue. And sorry, Prof. Lemley, but it was the blind leading the blind here. Most of the provisions were bad, but probably the worst was the requirement for applicants to provide a search report in some situations. Looks good on the surface, until you realize that all that it would take to open up a Fraud on the Patent Office claim is the USPTO picking a different class and subclass than was picked by the applicant, or, indeed, the applicant not finding some prior art reference ultimately found by a court to be closer than those found.

The other two sets of rules are not much better. One puts strict limits on Information Disclosure Statements. On the surface, it doesn't look too bad - if you are going to file too many references, you have to specifically point out ther relevance. Fine, except that IDSs are filed to protect against Fraud on the Patent Office claims during prosecution, and this opens up the floodgates.

The third set of proposed rules involve appeals. Why would someone want to appeal an examiner's conclusions? Many reasons, but mostly in my experience because the examiner didn't understand the invention as claimed (or the invention in some cited reference). I don't know any patent attorneys who want to draft the bloody things, and the proposed rules would have made it 10X as difficult, flushing them if a comma is out of place. And why the rush to amend those rules? Because the continuation limitations (enjoined 10/31) would force many more applications into appeal.

My point with all this detail is that most of this could have been avoided if the top management at the agency had truly understood the patent system, esp. from the view of those working in it, and esp. from the patent attorneys involved. For one thing, they didn't understand the absolute paranoia we have about Fraud on the Patent Office claims. And for good reason - a significant number of patent cases in litigation involve such a claim aimed at invalidating the patents being litigated. So, for example, the proposed IDS rules, if enacted, would result in automatic Fraud claims in many cases, since you are dammed if you don't cite enough references, but also dammed if you do, cross over the number of references line, and then fail to point out the most relevant part of each, as determined by a court years later. You have the same sort of Fraud on the Patent Office paranoia with Examination Support Documents (i.e. search reports) required if you have too many claims (and, worse, if the claims are attributed to an application because they were filed about the same time and have common inventorship).

In other words, if the top management had actually practiced in the field, they would have understood the consequences of their rule changes. They hadn't, and so they didn't.
12.12.2007 2:32pm
Westie:
Keith K,
The qualification IS specific and objective, and the court ignored it:
35 USC 3(b)
The Deputy Director shall be a citizen of the United States who has a professional background and experience in patent or trademark law.

Peterlin does not.
12.12.2007 2:50pm
PersonFromPorlock:

My point with all this detail is that most of this could have been avoided if the top management at the agency had truly understood the patent system, esp. from the view of those working in it, and esp. from the patent attorneys involved.

If the patent system existed "...to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries" then it might be useful for the top management to understand it from the inventors' standpoint.

Fortunately, it exists for the convenience of the Patent Office itself, the aforementioned patent attorneys and those established companies which would be threatened by novelty, so the fact that its practices simply price most inventors out of the market doesn't matter.
12.12.2007 3:05pm
David M. Nieporent (www):
The qualification IS specific and objective, and the court ignored it:
35 USC 3(b)
The Deputy Director shall be a citizen of the United States who has a professional background and experience in patent or trademark law.

Peterlin does not.
Sure she does. Quoting from Eugene quoting from the patent office: "Peterlin has 'had direct involvement in oversight of the USPTO and every piece of patent, trademark and copyright-related legislation considered on the House floor over the past five years.'"

That's certainly a professional background and experience in patent and trademark law. It may not be the kind you like, but isn't that the point? The statute doesn't give any guidance as to what type of experience is required. A practicing patent lawyer, a practicing trademark lawyer, and an IP professor at a law school would all qualify despite having very different experience.


Such reasoning seems to indicate that a court would never entertain a suit of this nature. If Ms. Peterlin were a non-English speaking child, the order's reasoning would still preclude her removal on qualification grounds because a court would never analyze her qualifications in the first place. This seems to read the qualifications (brief as they are) out of the statute.
It does no such thing. Deciding that a question is not justiciable is not the same as saying that the statute doesn't exist. Why do people worship at the altar of judicial supremacy? What's wrong with giving final say on the interpretation and enforcement of a statute to the executive in some situations? (Note that Congress always has final say; it has the power of the purse and can even impeach executive branch officials who it feels violate statutes.)
12.12.2007 3:42pm
OrinKerr:
Nice opinion, I thought.
12.12.2007 3:43pm
Adam J:
Pub Editor- Why use senate confirmation? Congress pretty clearly from the statute doesn't care enough about the post to want to deal with confirmation. Instead all they want is that a couple job qualifications are met. It's not like a deluge of lawsuits would occur because of a private right of action. If there was a private right of action, the only thing that would happen is the executive would follow the qualifications instead of ignoring them as "toothless tigers".
12.12.2007 3:57pm
Adam J:
David M. Nieporent - "What's wrong with giving final say on the interpretation and enforcement of a statute to the executive in some situations?" Because the executive can redefine its own jurisdiction. If the executive not only enforces the statute, but also decides what the statute says, and decides when the statute is violated, you're pretty much giving the executive a blank check to do whatever it wants.
12.12.2007 4:00pm
Westie:
Mr. Nieporent,
Are you serious? "experience in" is synonymous with "oversight?" Then I've got experience in childbirth, because I watched my wife have a baby. And I've got experience in making a burger, because I told the local burger joint to hold the onions. Let's use a little common sense in our parsing of the text, shall we?
"Experience" is "practical knowledge, skill, or practice." Peterlin doesn't have it. For that matter, neither do most IP professors, which is why the ones being promoted to the courts have made such a hash of the field.
12.12.2007 4:14pm
David M. Nieporent (www):
you're pretty much giving the executive a blank check to do whatever it wants.
Congress made the position non-confirmable. That pretty strongly implies that it didn't see the need for oversight for this appointment. What's wrong with a "blank check" for an executive branch appointment?

But as I said earlier, Congress always has the ultimate say. If it's unhappy, it has remedies. It's not actually a blank check at all.
12.12.2007 4:23pm
David M. Nieporent (www):
Westie, you're entitled to your opinion, even though you're wrong.

Yes, use common sense. They didn't say that the person had to have prepared patent applications. They didn't say that the person had to be a patent litigator. (In fact, they didn't even say the person had to know the difference between a patent and a groundhog; it's patent or trademark experience that's required.) All they said was that the person had to have a professional background. Does an IP professor? Yes. Does Peterlin? Yes. If Peterlin actually did what they said, she's got a lot more experience with the patent system than most trademark lawyers do. Your prejudices here are irrelevant.
12.12.2007 4:31pm
trademark registration (mail) (www):
The standard set out in the statue is pretty broad. I agree with the court's decision.
12.12.2007 5:39pm
Adam J:
David M. Nieporent- Nothing is wrong with a blank check executive appointment, however that is doesn't seem to be what Congress intended to give. They included a requirement, a qualifier, if you will, on the check. It just seems illogical to me that Congress would include a requirement that in fact is not a requirement at all because the people who have to follow the requirement also get to decide whether or not it has been followed.
12.12.2007 6:01pm
Adam J:
David M. Nieporent- what remedy do you refer to? Drafting new legislation is not what I would call a remedy to nonenforcement of a statute, it's creating a new statute all together.
12.12.2007 6:02pm
Westie:
Mr. Nieporent,
You're ignoring the plain text of the statute. You can harp on "professional background" all you want; I'll give it to you.
But the very next phrase is "and experience."
"Experience" means patent litigator, or patent prosecutor, etc. Down in the trenches is what it means. Feel free to consult the plain meaning of the words if you must.
"Professional background" gets Peterlin to the door if you want to count her Congressional acts, but "and experience" closes that door because she hasn't a lick of practical knowledge of the patent and trademark laws. And neither do most law professors (mine didn't, and it showed).
12.12.2007 7:09pm
Bruce Hayden (mail) (www):
As is obvious from my diatribe earlier, I agree with those who consider Peterlin totally lacking in relevant credentials and qualifications. She and Dudas have shown with their recent proposed and now enjoined rule changes why having an attorney experience in either prosecution or litigation of patents for at least one of those positions is important. And, apologies in advance to Mark, but Prof. Lemley has shown by his research that they used as a foundation for the rules changes, why an unlicensed (by the USPTO) law professor would be no better qualified.

The problem with Peterlin's expertise is that a 20,000 foot view of the patent system misses many of the important details of how the pieces fit together. And some of those pieces involve 200 years of case law. Working on IP legislation is not going to teach you any of that.
12.12.2007 7:46pm
David M. Nieporent (www):
"Experience" means patent litigator, or patent prosecutor, etc.
No, it doesn't. You can hold your breath until you turn purple, and it still won't be true. Indeed, as I pointed out, no matter how ridiculously narrowly one chooses to read the statute, one doesn't have to know anything about patents, because it says patents or trademarks, not patents and trademarks.
12.12.2007 9:27pm
MLS (www):
Dudas and Peterlin are both graduates of the University of Chicago Law School, which automatically qualifies them as experts on all subjects known to man. If you don't believe me (and you should, because I also graduated from U of C), just consult any book or opinion authored by Judge Posner.
12.13.2007 1:14pm