When a “Push” to File a Patent Application Turns Into a “Shove”

A patent attorney who was fired for refusing to file patent applications he thought lacked merit continues to have his day in court for wrongful termination.

Patent practitioners are required to adhere to the Rules of Professional Conduct (RPC) set forth in 37 C.F.R. §§ 11.301-309. These RPCs include that:

A practitioner shall not bring or defend a proceeding, or assert or controvert an issue therein, unless there is a basis in law and fact for doing so that is not frivolous, which includes a good-faith argument for an extension, modification or reversal of existing law. ¹
and
A practitioner shall not knowingly: (1) Make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the practitioner.²

While these requirements are well-known to practitioners, and (hopefully) adhered to when writing or arguing on behalf of a client’s invention or against another’s, such requirements may be harder to follow when advising on what inventions to pursue initially.

A recent case from the U.S. Court of Appeals for the Third Circuit, brings these ethical requirements to light as they relate to filing patent applications in the USPTO. In Trzaska v. L’Oreal USA, the Third Circuit reversed a lower court’s decision finding that Appellant had not met the burden required to state a proper claim for retaliatory action by an employer.³

Appellant, Trzaska, a former head of L‘Oréal USA’s regional patent team in Clark, New Jersey, asserted that he was fired after refusing to file what he determined were frivolous patent applications on behalf of his employer. The employer required a yearly quota of 40 patent application filings from his team in Clark, and if this number was not reached “there would be consequences which would negatively impact [the team’s] careers and/or continued employment.”⁴ However, at the same time, an initiative was in place at the company to improve patent quality, resulting in fewer invention disclosures reaching the desk of the patent team. As a result, “there were very few patentable products submitted to [the team] for vetting while L‘Oréal continued to demand that the team meet the annual quota.”⁵ While discussing this issue with his superiors, Trzaska raised the concern that “neither he nor his team would be willing to file any patent applications for products that they in good faith believed were not patentable,” and that doing so would violate the ethical RPC standards of the USPTO.⁶ Following this discussion, the employer presented Trzaska with two severance packages, neither of which he accepted, ultimately resulting in his firing.⁷

At the District Court, “Trzaska alleged he was fired because he refused to participate in an illegal activity by filing frivolous or bad-faith patent applications that would violate the RPCs⁸ and his ethical obligations as a licensed patent attorney” and thus, the firing violated New Jersey’s Conscientious Employee Protection Act (CEPA).⁹

The CEPA protects an employee from retaliatory termination following disclosure of an employer’s violation of law or the employee’s refusal to participate in illegal activity at the request of the employer, including a practice that the employee believes contravenes public policy.¹⁰ The District Court below determined that the RPCs were not an adequate basis on which to maintain a CEPA claim.¹¹

On appeal, however, the Third Circuit reversed this decision. Contrary to the District Court, the Third Circuit determined that “an allegation that an employer instructed, coerced, or threatened its patent attorney employee to disregard the RPCs binding him violates a clear mandate of public policy within the meaning of CEPA.”¹² Moreover the Third Circuit stated that “the abuse of the patent application system and the violation of Rules of Professional Conduct harm the public’s interest – an employer’s policy effecting the disregard of the RPCs contravenes clear mandates of public policy within the meaning of CEPA.”¹³

While the Third Circuit did not determine whether or not Trzaska was instructed to violate the RPCs, as this is to be decided upon remand, Trzaska’s complaint met the CEPA threshold as it asserted “there was a company policy of meeting the patent application quota regardless whether the applications submitted were for products that [Trzaska] did not believe were patentable,” which if true, allege a colorable violation of CEPA.¹⁴

While this case concerns the ethical issues raised in the context of an employer-employee relationship, it is not a stretch to consider them occurring in a traditional law firm practitioner-client relationship. Certainly concerns of “coerced” patent filings may be difficult to raise with “external” clients. More likely, however, are scenarios in which “internal” clients (junior attorneys reporting to partners) may raise such issues. As this case illustrates, these concerns clearly need to be considered and vetted.