Nearly 1,000 U.S. Patent Applications Terminated – A Cross-Border Compliance Crisis and the Lessons to Be Learned

The USPTO has terminated the proceedings of nearly 1,000 patent applications after discovering serious irregularities in filings handled through a cross-border “intermediary” model. The matter was triggered when a U.S. agency was found to have submitted documents using unauthorized electronic signatures of registered practitioners and/or applicants, prompting the USPTO to issue Show-Cause Orders across the portfolio.

The core of this legal scandal lay in fundamental breaches of integrity: the U.S. attorney acted merely as a “signatory of convenience”, had no direct engagement with the ultimate client, and failed to verify the authenticity of the submitted filings.

As a consequence, nearly 1,000 patent applications were procedurally invalidated, the U.S. attorney was subjected to public reprimand, and the longstanding model of “draft domestically – sign in the United States” has now come under heightened regulatory scrutiny.

The USPTO is effectively bringing an end to the era of “low-cost signature outsourcing”. IP firms, whether Chinese or Vietnamese, should move to a transparent cooperation structure in which U.S. counsel is substantively involved in client communications, independently verifies signatures and key submissions, conducts systematic conflict screening, and exercises genuine oversight and quality control over the preparation and filing of applications, thereby ensuring legal compliance, procedural integrity, and risk mitigation for their clients.

I. Background

In 2022–2023, AlphaTech (China) (anonymized for this example) accelerated its global patent expansion strategy. Within a period of approximately 18 months, the company filed nearly 1,000 U.S. patent applications, the majority of which entered the United States through the PCT national phase.

AlphaTech authorized:

Agency B (China) to manage and coordinate prosecution matters;
Agency B, in turn, collaborated with Agency C (United States) to file and prosecute the applications before the USPTO.

Due to the high volume of filings, compressed deadlines, and cost-sensitive service arrangements, Agency C adopted what was internally viewed as an “optimized workflow” model. Under this structure: Substantive drafting, document preparation, and client communications were conducted almost entirely in China; The U.S. practitioner performed only a formal review and affixed his or her electronic signature for filing.

This “prepared domestically – signed in the United States” model was designed to maximize efficiency and minimize cost. However, it effectively reduced the role of U.S. counsel to that of a nominal signatory, rather than an independently responsible practitioner exercising substantive supervision, verification, and professional judgment.

At the time, the arrangement was viewed as commercially practical. In retrospect, it exposed significant vulnerabilities in terms of regulatory compliance, signature authentication, practitioner oversight, and ethical accountability – risks that would later crystallize into systemic consequences.

II. The Violation – Improper Use of Electronic Signatures

During the filing process, an employee at Agency C – who was not a registered patent practitioner – used the electronic signature account of a registered U.S. patent attorney to submit Patent Applications, Powers of Attorney, and Responses to Office Actions.

The practitioner of record did not personally access the USPTO system, nor did he conduct an individual review of each submission.

Under USPTO regulations, the electronic signature of a registered practitioner constitutes a personal professional certification. It may not be delegated to, or used by, individuals who are not authorized to practice before the Office. The signature represents the practitioner’s independent responsibility for the filing and for compliance with applicable ethical and procedural standards.

After identifying irregularities – through internal compliance review and analysis of system access logs – the USPTO initiated a formal investigation.

The result was decisive. The USPTO issued a Show Cause Order covering nearly 1,000 patent applications, requiring formal explanation as to: Who actually filed the applications; Whether the practitioner of record exercised genuine supervisory control; Whether the submitted documents were procedurally valid and properly authorized.

The issue was no longer the patentability of the inventions. The issue had become one of procedural integrity and practitioner accountability.

III. The “Rescue Phase” – Appointment of New U.S. Counsel

As Agency C’s credibility deteriorated, Agency B (China) retained another U.S. patent attorney – referred to here as Attorney D – to manage the crisis.

Attorney D was tasked with: Establishing new representation before the USPTO; Responding to the Show Cause Order; Persuading the USPTO that the patent applications should remain valid.

The Approach Taken by Attorney D:

Agency B transmitted to Attorney D, via email: A pre-drafted explanation, Applicant declarations, and Powers of Attorney bearing scanned signatures.

Attorney D:

Did not establish direct communication with AlphaTech;
Did not independently verify whether the signatures were executed by an authorized corporate representative;
Did not request identity authentication or supporting verification;
Did not conduct a comprehensive conflict-of-interest review across the large portfolio of applications.

He conducted only a cursory review, affixed his signature, and submitted the response to the USPTO.

From a purely operational perspective, this may have appeared efficient. From a regulatory standpoint, however, it exposed further deficiencies in independent professional oversight, signature authentication, client communication, and conflict management.

What began as a signature misuse issue was now evolving into a broader inquiry into whether U.S. counsel had exercised substantive professional responsibility, or merely acted as a formal intermediary without independent control.

IV. How Did the USPTO Assess the Matter?

The USPTO did not limit its review to the substance of the written response. Instead, it evaluated the entire course of professional conduct of Attorney D.

The Office identified three serious deficiencies.

[i] Lack of Substantive Oversight: Attorney D was unable to demonstrate that the submitted signatures were authentic; the client had been fully informed of the procedural risks; and he had exercised genuine supervisory control over the representation.

Under 37 C.F.R. Part 11 (USPTO Rules of Professional Conduct), a registered practitioner bears personal responsibility for filings made under his or her signature. This includes duties of competence, diligence, candor, and supervision.

[ii] Failure to Communicate Directly with the Actual Client: Throughout the entire process, all communications were conducted exclusively through Agency B and Attorney D did not transmit any direct notice or explanation to AlphaTech, the ultimate applicant.

Under U.S. professional responsibility standards, an attorney must ensure that the client is reasonably informed of material developments, particularly when those developments involve the risk of mass procedural termination.

[iii] Inadequate Conflict-of-Interest Review: The investigation further revealed that Attorney D had encountered at least two conflict-of-interest situations:

In one instance, approximately eight months apart, he filed the same industrial design on behalf of two different applicants. The earlier application had already been granted, yet he failed to recognize the duplication when filing the later case.
In a more serious instance, he filed identical industrial design applications on the same day for two separate applicants.

In both cases, the duplication was first identified by the USPTO examiner, not by Attorney D. Attorney D explained that, due to the large volume of cases, he relied primarily on memory and did not employ a systematic conflict-checking mechanism or professional conflict management software.

The USPTO characterized this as a systemic failure of conflict management, rather than an isolated oversight.

V. Consequences

In October 2024, the USPTO concluded that there was no basis to remedy the initial violations, and therefore all nearly 1,000 patent applications were terminated.

In February 2026, the USPTO completed its disciplinary investigation against Attorney D. The parties reached a settlement agreement. The form of discipline imposed was a public reprimand.

Mandatory corrective measures included: Implementation of conflict-of-interest checking software; Establishment of a signature verification mechanism; A requirement that Attorney D be copied (cc’d) on all material communications with the client.

Conclusion

The mass termination of applications at the USPTO was not merely an isolated technical error; it represented a systemic failure in cross-border compliance governance. For individuals and enterprises in Vietnam and China seeking patent protection in the United States, this case serves as a clear warning about the fragility of intellectual property assets when misplaced trust is placed in operational models that lack professional standards.

Upon reviewing the chain of causes leading to this legal disaster, a familiar pattern emerges: pressure to pursue volume + low service fees, resulting in an extreme separation of responsibility between the “drafting” and the “signing and filing” stages. In the absence of direct communication with the client, without a structured conflict-checking system, and with weakened control over signature authentication, representative firms effectively placed themselves – and their clients – in direct confrontation with regulatory authorities.

Within the U.S. legal system, the following core principles remain unchanged:

Signature = Personal Responsibility: There is no concept of “harmless proxy signing” or “signing on behalf of another” without accountability.
Representation = Independent Professional Duty: The attorney must personally evaluate and assume responsibility for the content of the filing, rather than serving as a mere instrument of a third party.
Compliance = A Condition for the Survival of the Application: A single breakdown in the compliance chain can result in the immediate forfeiture of the applicant’s rights.

The era of legal “gray zones” is closing as the USPTO strengthens its oversight and enforcement mechanisms. Once U.S. attorneys are no longer viewed as “signature contractors,” but as independently accountable professionals, the entire structure of international cooperation must be fundamentally redesigned.

Patent representation is, by nature, a high-level legal service, not a low-cost industrial production process. For cross-border intellectual property practitioners, strengthening compliance and elevating the substantive quality of services is not merely a matter of professional ethics – it is a guiding principle for sustainable practice. To protect patent assets in a durable and legally secure manner, applicants must demand transparency and a clear assumption of responsibility at every stage of the protection value chain.

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