Part 5 in a series
In the pantheon of poky and inefficient government bureaucracies, the U.S. Patent and Trademark Office is the exception, a kind of hero of mine. This government office with a payroll of 13,000 workers has an annual budget of $3.5 billion, and not one dollar of it comes from taxpayer funding. The USPTO funds itself from the fees it collects from businesses, lawyers and inventors.
My law firm and website send some 8,000 trademark applications to the patent office for its approval every year, so I know its work—and its workers. My admiration for many members of its staff always has been high. They hire people who worked for me, I hire people who worked for them. Also, I am a USPTO client: as an electrical and software engineer I am the holder of 30 utility and design patents (five of them owned by Google) in software, neighborhood social networking, robotics, drones, autonomous vehicles and communications engineering.
It also is true that my business relies on the USPTO’s blessing and its good will.
That is why it has been such a difficult decision for me to include the U.S. Patent and Trademark Office as a defendant in the groundbreaking case my law firm has filed against LegalZoom. We are questioning the legality and legitimacy of LegalZoom’s entire business model and accusing it of the unending, unauthorized, unlicensed practice of law. See Case No. 3:17-cv-07194 Second Amended Complaint. (You can view the complaint here: https://www.scribd.com/document/374586901/Second-Amended-Complaint-LegalForce-v-LegalZoom-USPTO).
While dropping the California state bar as a defendant in the fresh complaint we filed late Wednesday night, we have redoubled our efforts to challenge the patent office. Thus, the new complaint alleges USPTO (it is an awkward acronym) is guilty of unequal enforcement of the law for its role in abiding and enabling Legal Zoom’s illegal behavior. That is, its violation of rules that ban the practice of law by non-lawyers, given that LegalZoom is unlicensed to practice law anywhere in the U.S.—it isn’t a law firm at all.
You’d never know that from LegalZoom’s ads. The deception is so ingrained and longstanding we barely notice the contradiction anymore.
This is one reason my law firm, LegalForce, which owns the Trademarkia trademark-registration website, has taken the taboo step of filing lawsuits against two dozen of my fellow lawyers (When Lawyers Sue Lawyers), accusing them of A Sneaky Shell Game, and why we have sued LegalZoom (Taking On LegalZoom), setting up the next Trial of the Century.
Yet, the USPTO, while looking the other way as LegalZoom runs wild, simultaneously has imposed stiff restrictions and information demands on my firm, to a degree that borders on harassment. Our complaint accuses the USPTO of “disparate enforcement” and “repeated and harassing acts,” which have “deprived (LegalForce) of the fundamental right to engage in (its) chosen occupation.”
At LegalForce, we have endured “onerous and excessive requests” for information on matters based on “threadbare or unsupportable reasons,” our lawsuit declares. Last year, my firm spent more than $100,000 on external counsel plus eighty hours of internal management time to prepare responses to these requests. One issue involved an inappropriate relationship between an associate of my law firm (who was fired later) and her boyfriend, a lawyer at the patent office—and USPTO was more interested in whether my firm violated confidentiality rules than in the behavior of its employee.
At another point, the office demanded the “names and home contact information for all non-practitioner legal assistants employed by LegalForce.” When we responded that it would “impose undue fear on legal assistants who have done nothing wrong,” the office stood fast.
Yet our nemesis, LegalZoom, one of the world’s great corner-cutters and rule-breakers, faces no such scrutiny from the U.S. Patent and Trademark Office. “Indeed, it allows LegalZoom to give legal advice and file trademark applications on behalf of others many times per hour of each day,” our lawsuit points out. “USPTO’s regulations are arbitrary, capricious, and not rationally related to legitimate business models like LegalForce’s and disadvantage their ability to compete with LegalZoom.”
Ultimately, this will only “increase the likelihood that consumers will use lower quality, unqualified providers like LegalZoom with few consumer protections in place when they do,” our lawsuit states. And LegalForce “will continue to suffer great and irreparable harm.”
Still, the question lingers: why is USPTO so favorable in its treatment of LegalZoom, so lax in its oversight of this rule-violator even as it takes such a stern, disciplinarian approach in riding herd over my law firm and lawyers in general?
Maybe one answer lies in the patent office’s capitalistic ways. Recall that it is self-funding, collecting up to $400 for each trademark registration. LegalZoom boasts that is has filed more than 250,000 trademark applications, which may make it the biggest revenue source of all for the USPTO, paying the agency as much as $100 million in recent years. No wonder this customer is always right.
Part 1: When Lawyers Sue Lawyers
Part 2: A Sneaky Shell Game
Part 3: Taking On LegalZoom
RAJ ABHYANKER, is the founding partner of LegalForce RAPC Worldwide. Raj is a winner of the American Bar Association Legal Rebel award, and the Fastcase 50 Legal Innovation Award. In addition, Raj was an economic policy adviser to the Chief Technology Officer of the United States White House for the America Invents Act, and invited speaker at the Association of California Bar Associations conference, and an invited speaker at the U.S. District Court (9th district) Judge Aiken conference on Innovations in Law, Science, & Technology. He has been quoted in the ABA Journal, New York Times, Bloomberg, Fox News, and Fast Company magazine.