Argument Preview

As we mentioned yesterday, three cases being argued in December at the Federal Circuit attracted amicus briefs. One of those cases is In re Chestek PLLC. In this case, the Federal Circuit will review a judgment of the Trademark Trial and Appeal Board rejecting Chestek’s trademark application. The Board based on its judgment on non-compliance with the domicile address disclosure requirement. This is our argument preview.

Chestek argues in its opening brief that the Patent and Trademark Office’s “denial of Chestek’s trademark application was arbitrary, capricious, and contrary to law because the denial was based on an invalid and unenforceable regulation.” First, it contends, the PTO “failed to provide notice . . . and an opportunity for public comment” when creating the domicile address disclosure requirement. Chestek argues that, since “there is no dispute that the Proposed Rule did not include a domicile address [disclosure] requirement,” the only question is “whether the requirement is a logical outgrowth” of the proposed rule. Chestek argues it is not. In fact, according to Chestek, the Proposed Rule “specifically disclaimed any impact on U.S. applicants and any new reporting requirements.” Furthermore, Chestek argues, if notice of the domicile address disclosure requirement had been given to public comment, the PTO would have been “alerted” to the requirement’s likelihood to lead to the “public disclosure of hundreds of thousands of home addresses per year.” Second, Chestek asserts, the domicile address disclosure requirement is arbitrary and capricious “because the final rule fails to offer a satisfactory explanation for the requirement”–only that it was added “‘[f]or consistency’ with the U.S. counsel requirement.” Chestek contends, moreover, the government failed to consider the rule’s “impact on trademark applicants” and their privacy. Chestek asks for the Federal Circuit to set aside the requirement as invalid and vacate the TTAB’s judgment.

In its response brief, the PTO points out “Chestek’s sole challenge to the Board’s decision rests on perceived deficiencies in the notice-and-comment rulemaking procedures that are not applicable to a rule of agency procedure such as the U.S. Counsel Rule.” Moreover, it contends, Chestek’s arguments regarding its “procedural complaints” are misplaced. In particular, the government maintains, “the relevant rules are exempt under the [Administrative Procedure Act] from the notice-and-comment rulemaking procedures.” The government argues, alternatively, that, “[e]ven if the USPTO had been required to engage in notice-and-comment rulemaking, it complied with those requirements in promulgating the rules.” In particular, it contends, the final rule differed from the proposed rule only in “minor ways” and the “stated focus and purpose . . . as well as the relevant definitions . . . remained unchanged.” The government argues the purpose of the rule was to adopt “a requirement for foreign-domiciled trademark applicants to be represented by U.S. counsel” in order to limit “abusive” or “improper” filings. Additionally, the government asserts, the notice of proposed rulemaking “provided ample notice to the public” and that the only changes made were made for “clarification and consistency but did not substantively change the requirements proposed.” And if Chestek wanted to comment on the proposed rule, the government argues, “it was on notice and free to do so during the rulemaking process.” Finally, the government contends, the “Final Rule was closely connected to the requirements announced . . . and thus easily clears the ‘logical outgrowth’ requirement” because it was “consistent” with the rule’s “stated purpose.” Finally, the government maintains, because Chestek “failed to comply with the domicile address [disclosure] requirement,” the Federal Circuit should affirm the Board’s decision.

In its reply brief, Chestek argues the PTO’s “claim that all of its rulemaking activities are exempt from notice-and-comment requirements . . . conflicts with both the Administrative Procedure Act and the Patent Act.” Furthermore, it contends, the government’s arguments ignore the “proposed rule’s express disclaimers that the rulemaking would ‘impose no new reporting or recordkeeping requirements’ and ‘would not impact individuals or large or small entities with a domicile or principal place of business within the U.S.'” Chestek rejects the government’s argument that the change was made to “simplify and clarify” the final rules, given that it imposed “an entirely new requirement for applications, as well as an entirely new ongoing reporting obligation.” Chestek argues the government’s assertion that it was not obligated to “undertake notice and comment rulemaking” is incorrect for two reasons. First, it maintains “the domicile address requirement is a substantive rule imposing a new Requirement . . . not a rule of agency procedure exempt from notice and comment under the Administrative Procedure Act.” Second, it continues, “the Patent Act expressly requires the PTO to undertake notice-and-comment rulemaking when establishing regulations.”

A patent attorney, David E. Boundy, filed an amicus brief in support of Chestek and reversal. Boundy asserts the “‘ domicile address’ rule violates multiple rulemaking laws, in addition to APA notice-and-comment” requirements, including the Paperwork Reduction Act and the Regulatory Flexibility Act. His brief expresses concern that the “PTO’s other recent rulemakings exhibit a repeat pattern of evading rulemaking and administrative law.”

This case will be argued on Thursday, December 7. We will report on any developments.