Following a recent report issued by the Department of Commerce, Office of Inspector General, as well as a plethora of recent disciplinary actions published by the USPTO’s Office of Enrollment and Discipline, many practitioners have done a retrospective analysis of their trademark practices with clients and agencies in China. But is it time to give up on representing Chinese applicants, or can you fix the problem?
According to a recent USPTO report, “[t]he volume of trademark and patent applications in China is the highest in history.” The USPTO has seen a large increase in Chinese applicants as well, seemingly related to the Amazon Brand Registry program, as well as alleged subsidies. However, practitioners continue to be disciplined for alleged violations of the U.S. Counsel Rule, signature practices, and violations of the unauthorized practice of law provisions of the USPTO Rules of Professional Conduct.
For instance, this year alone, a number of practitioners have been disciplined for their conduct in working with foreign associates:
In In re Di Li, Proceeding No. 2021-16 (USPTO, October 7, 2021), the Southern California-based practitioner was reprimanded and placed on probation, on consent, for what appears to be her providing authorization to a Chinese company called Seller Growth to file trademark applications on her behalf. Li allegedly also allowed Seller Growth to place her signature on trademark filings, over 1,000 times.
In In re Benner David, Proceeding No. 2021-08 (USPTO, September 24, 2021), the Massachusetts-based practitioner was also reprimanded and placed on probation, on consent, for working with an individual named “Wen.” Briefly, Mr. David and Wen met on Fiverr, a platform common for connecting attorneys (and others) with potential clients, though it may be potentially violative of many other USPTO Rules of Professional Conduct. David was paid about $30 per trademark application, and allowed Wen or his associates to file the same with the USPTO—all without any review or approval. Mr. David did not personally sign at least 45 of these filings. Importantly, it was alleged in the Final Order that Mr. David made a false or misleading statement, and filed the same through a false declaration with the USPTO, specifically by claiming he did not authorize the filings when he in fact did.
In In re Devasena Reddy, Proceeding No. 2021-13 (USPTO, September 9, 2021), the Bay area attorney was also reprimanded and placed on probation, on consent, for her work with India-based KA Filing. Here, it was alleged that Ms. Reddy did personally sign the 2,300 or so filings with the USPTO; however, she did not carefully or adequately review them.
In In re Yiheng “Roy” Lou, Proceeding No. 2021-04 (USPTO, May 12, 2021), the Bejing-based attorney was suspended from practice for three months, and placed on probation, on consent, for his relationship with Shenzhen Dingji Intellectual Property Company. The Final Order alleges that Mr. Lou had a tired fee schedule, but generally was paid $20.00 per trademark application. Over the course of the relationship, he was paid up to $10,000 per month for 500 applications per month. The strongly worded Final Order stated that Mr. Lou “…knowingly and intentionally caused thousands of trademark application documents to be prepared, signed, and filed with the USPTO on behalf of the Dingji Trademark Applicants [and] Respondent knowingly and intentionally became attorney of record for thousands of Dingji Trademark Applicants at the USPTO.”
While the USPTO sanction may not be seemingly harmful to many, the risks of reciprocal discipline are high. Indeed, it appears many more actions are in the pipeline, but what can practitioners do to avoid the ire and discipline of the USPTO? While we addressed the top three issues that we have seen in a prior post, it bears repeating that if it sounds too good to be true, it probably is. Before entering into a relationship with any client or agency, practitioners should at least consider the following:
Responsibilities to the Tribunal – As a practitioner, I will be submitting documents to the best of my knowledge, after a reasonable inquiry (See 37 CFR 11.18). How do I perform such an inquiry without ever speaking to the client? Who will sign the document, after all, some of these filings are declarations under penalty of perjury?
Responsibilities to the Client – If I am paid a flat fee of $20 to file a trademark application, how does that compare to my standard legal fees? What is the follow-up required? Who will respond to the Office Action? What If I need to withdraw? When is my engagement over?
Communications with the Client – Who will I counsel regarding the type of filing, specimens, etc? If I speak with a foreign agent, do they need to be an attorney? Do I need written authorization or some other understanding that they are actually authorized?
General issues – Do I perform a conflicts check? How do I know the applicant actually exists? Who is the client (hint – it probably is not the foreign agency or liaison)?
While the above points are not the only questions to ask, they are tools to perform a prospective (or retrospective) analysis of whether your conduct might be violative of the USPTO Rules of Professional Conduct, or the substantive trademark rules. Indeed, while it is not per se unethical to work with such agencies, care should be taken to ensure it is done appropriately.