Minnesota Imposes Discipline Based On Patent And Trademark Office Sanction

The Minnesota Supreme Court has imposed  a sanction as reciprocal discipline for a sanction ordered by the PTO.

This case presents the question of whether we should impose reciprocal discipline on respondent Alan Richard Stewart. The U.S. Patent and Trademark Office (USPTO) imposed on Stewart what its regulations call “exclusion from practice” for misappropriating $8,000 in unearned fees, neglecting a client matter, failing to communicate with a client, engaging in the unauthorized practice of law, and failing to cooperate with the disciplinary proceedings. The Director of the Office of Lawyers Professional Responsibility (Director) petitioned to impose reciprocal discipline in Minnesota, arguing that the identical Minnesota discipline is disbarment.

We hold that, in a reciprocal discipline case, the identical discipline to “exclusion from practice” before the USPTO is an indefinite suspension from the practice of law with no right to petition for reinstatement for a minimum of 5 years. We further hold that the USPTO’s discipline procedures were fundamentally fair and that a 5-year suspension would not be unjust or substantially different from the discipline warranted in Minnesota. We therefore indefinitely suspend Stewart with no right to petition for reinstatement for a minimum of 5 years.

The original matter

In February 2016, the USPTO notified the Director that it had excluded Stewart from practice. According to the USPTO, Stewart engaged in multiple forms of professional misconduct in proceedings before that agency. First, the USPTO found that Stewart neglected the patent application of his client, F.W; failed to communicate with her; and misappropriated $8,000 in unearned fees. Stewart told F.W. that he would file her patent application within 2 or 3 weeks of receiving her paperwork. F.W. provided Stewart her notes and drawings and then checked on the status of her application 3 weeks later. Stewart told F.W. that he had not yet worked on her application, attributing the delay to family medical issues and injuries he had suffered from a bicycle accident. He never completed the patent application and stopped responding to F.W.’s communications. Nonetheless, Stewart cashed F.W.’s two advance-fee checks totaling $8,000 and failed to return these unearned fees even after F.W. terminated the representation and demanded a refund. Stewart cashed F.W.’s second check on the same day that F.W. terminated the representation.

Second, the USPTO found that Stewart engaged in the unauthorized practice of law. Stewart has been ineligible to handle USPTO matters since February 2015, when he was
no longer an active member of any state bar. But between March 2015 and June 2015, Stewart filed multiple trademark matters on behalf of clients as “attorney of record” and as a purported member of the Wisconsin bar. 

He also failed to cooperate in the PTO investigation.

One issue was the meaning of the PTO order “excluding” the attorney

We…hold that, in a reciprocal discipline case, the identical discipline in Minnesota to “exclusion from practice” before the USPTO is an indefinite suspension from the practice of law with no right to petition for reinstatement for a minimum of 5 years.

Bottom line

Finally, although the question is a close one, an indefinite suspension with no right to petition for reinstatement for a minimum of 5 years is not substantially different from the discipline warranted in Minnesota. The Director argues that disbarment is appropriate because we would have disbarred Stewart had his disciplinary action originated in Minnesota. But that is not the question before us in a reciprocal discipline case. Overboe, 867 N.W.2d at 487. Rather, we will impose the identical discipline if it is not “substantially different” from the discipline warranted in Minnesota. Rule 12(d), RLPR (emphasis added).

A dissent of Chief Justice Gildea

I respectfully dissent. The U.S. Patent and Trademark Office (“USPTO”) excluded respondent Alan R. Stewart from practice for misappropriating $8,000 in client funds, neglecting a client matter, failing to communicate with a client, engaging in the unauthorized practice of law, and failing to cooperate with the disciplinary proceedings. I agree with the majority that the discipline in Minnesota identical to exclusion before the USPTO is an indefinite suspension with no right to petition for reinstatement for 5 years (“5-year suspension”). I also agree with the majority that the discipline warranted in Minnesota for Stewart’s misconduct is disbarment. I disagree with the majority on whether a 5-year suspension is substantially different than disbarment. Because a 5-year suspension is substantially different than disbarment, I would not impose reciprocal discipline and instead would disbar Stewart.

Justice Hudson joined the dissent. (Mike Frisch)