[00:00:00] Speaker 01:
Our next case is N. Ray Chastek, 2022, 1843.

[00:00:05] Speaker 01:
Mr. Grossman.

[00:00:09] Speaker 01:
Good morning.

[00:00:11] Speaker 00:
And may it please the court, Andrew Grossman, for the appellant Chastek PLLC.

[00:00:16] Speaker 00:
In 2019, the PTO issued a rule requiring all trademark applicants to disclose for the first time ever what it calls their domicile address, that is, the physical location of the applicant.

[00:00:28] Speaker 00:
For individuals and owners of many small businesses, that address is their home, the place where they sleep at night, as many in the trademark community observed.

[00:00:38] Speaker 00:
An agency's power to promulgate rules comes with the responsibility to engage in reasoned rulemaking.

[00:00:44] Speaker 00:
The PTO shirked that responsibility here in two respects.

[00:00:47] Speaker 00:
First, the PTO's decision to adopt the domicile address requirement is arbitrary and capricious because it provided no reasoning whatsoever for that decision, while ignoring the obvious.

[00:00:58] Speaker 01:
Wasn't it a logical outgrowth of the earlier proposal to indicate that it had counsel?

[00:01:07] Speaker 00:
Your Honor.

[00:01:08] Speaker 00:
This refers to our arbitrary and capricious argument that the agency didn't provide any rationale for the decision that it made in the final rule, and that's separate from our logical outgrowth argument.

[00:01:17] Speaker 00:
We don't think it was the logical outgrowth of what was in the proposed rule, given that the proposed rule provided no notice whatsoever that the agency intended to collect this information, and in fact specifically disclaimed that the agency was imposing any kind of reporting requirement whatsoever

[00:01:33] Speaker 00:
and also stated that it would not impact domestic filers whatsoever.

[00:01:38] Speaker 00:
So when the agency specifically says, we're not doing something, and then it turns around in the final rule and does it, I don't think any court has ever held that to be a logical outgrowth.

[00:01:49] Speaker 03:
Can I ask you why?

[00:01:51] Speaker 03:
I just want to respond to that and ask you.

[00:01:53] Speaker 03:
I mean, under the proposed rule changes, one of the things that was said is that the proposed requirement is similar to the requirement

[00:02:01] Speaker 03:
that currently exists in many other countries, identifies those countries.

[00:02:05] Speaker 03:
And it's my understanding that those countries do require trademark applicants to indicate their domicile address.

[00:02:13] Speaker 03:
Is that correct?

[00:02:14] Speaker 00:
What that discussion in the proposed rule was referring to was the requirement of domestic council representation within those countries.

[00:02:23] Speaker 03:
I understand, but as you read the rule, and I just want to have a...

[00:02:28] Speaker 03:
Discussed with you, my question was, is it true, I guess, that those countries require indication of the trademark applicant's address?

[00:02:38] Speaker 03:
Let me start with that.

[00:02:39] Speaker 00:
I don't believe that's reflected in the record, Your Honor.

[00:02:43] Speaker 03:
But I'm asking if you don't know.

[00:02:45] Speaker 00:
I don't know, but I also think that if that was something that was relevant to the agency's decision making, it would have to be in the record.

[00:02:51] Speaker 00:
So I don't mean that as just a technical.

[00:02:52] Speaker 03:
Did you ever think that they had to have a way?

[00:02:53] Speaker 03:
I guess my thought is I'm looking at that.

[00:02:55] Speaker 03:
And I'm looking at the whole rule, and I think to myself, don't they have to have a way to implement the rule that they're indicating?

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In other words, they have to figure out who needs counsel and who doesn't.

[00:03:09] Speaker 03:
And there's also a problem of applicants not necessarily indicating buying non-parliamentary issues to the back and front office.

[00:03:20] Speaker 03:
So they need to have some way to ask for this information, right?

[00:03:25] Speaker 03:
They can't just say, check a box.

[00:03:27] Speaker 03:
I mean, I guess they could have, maybe.

[00:03:28] Speaker 03:
Check a box in US, out US.

[00:03:31] Speaker 03:
But it seems like by asking for the address, it's just not surprising to me, which sounds like a logical outgrowth.

[00:03:38] Speaker 03:
How would you respond to that?

[00:03:40] Speaker 00:
Well, I think this relates more to the arbitrary and capricious than logical outgrowth.

[00:03:45] Speaker 00:
But that said,

[00:03:46] Speaker 00:
I think your question kind of highlights the problem here, is that there are multiple ways the agency could have done this.

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One thing was to ask for the domicile address as it did.

[00:03:57] Speaker 00:
It could have simply said, check the box.

[00:04:00] Speaker 00:
Many regulatory schemes, including, for example, our tax code, rely on self-reporting and, at least as an initial matter, trust the honesty of people to follow what the rules are.

[00:04:10] Speaker 00:
That's generally how things work in most administrative procedures.

[00:04:13] Speaker 00:
So yes, that was an option for the agency.

[00:04:15] Speaker 00:
The agency could have imposed address requirements of different scopes that wouldn't necessarily apply to all applicants.

[00:04:26] Speaker 00:
It could have required notarized proof of address if it thought that there was some problem with fraud.

[00:04:30] Speaker 00:
In other words, the agency had a lot of- Isn't this procedural?

[00:04:33] Speaker 03:
The way we're talking about it, there's a lot of different procedural ways in which they could have implemented the rule that they were proposing.

[00:04:43] Speaker 03:
And so why does any rulemaking have to occur at all with this?

[00:04:47] Speaker 03:
Why does it have to be in the notice at all, since it's procedural?

[00:04:50] Speaker 00:
Well, I want to be clear that that only goes to the notice argument.

[00:04:53] Speaker 00:
It does not go to the arbitrary and capricious argument.

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Because even if a rule is procedural, an agency still has to be rational in its rulemaking and explain what it's done, which the agency here didn't do.

[00:05:05] Speaker 00:
We don't think the rule here is properly viewed as procedural, because the procedural rule exception in section 553 of the APA has been interpreted by the courts narrowly to refer to the internal housekeeping measures of the agency.

[00:05:19] Speaker 00:
And so what the agency does with the information that an applicant provides, that's a procedural rule.

[00:05:26] Speaker 00:
If an agency is imposing a new condition that is never imposed previously on, say, the receipt of a government benefit or participation in a government program, that's necessarily going to be a substantive requirement of law.

[00:05:40] Speaker 00:
If the IRS were, for example, to ask you to report all the books you've read over a period of time or something of that sort,

[00:05:45] Speaker 00:
You know, the fact that the agency is merely requesting information doesn't make that procedural in some sense.

[00:05:51] Speaker 00:
And indeed, the PTO has new information.

[00:05:54] Speaker 03:
That's your argument, is any time an agency asks for new information that it never previously asked for, that must be substituted?

[00:06:02] Speaker 00:
I think there's a possibility of that, but I think the answer is definitely yes when it is a new condition for receipt of a government benefit or participation of the government.

[00:06:11] Speaker 02:
The prior rule said you have to give us your first name and last name.

[00:06:16] Speaker 02:
And then they wanted to do a new rule and said, well, we also want your middle name.

[00:06:21] Speaker 02:
But if you don't give us your middle name, we're not going to register your trademark application.

[00:06:26] Speaker 02:
Would you say, oh my goodness, that's a substantive rule?

[00:06:30] Speaker 02:
Well, I mean, I think that that's not the type of situation that would typically arise for the reason that the applicable regulation- Could that be a question, trying to figure out what is the scope of your understanding of where a rule that looks very procedural actually is secretly substantive?

[00:06:52] Speaker 00:
Well, I mean, I think you could argue that even a rule like that that would seem minor might well have substantive content because, of course, many people don't have middle names.

[00:06:58] Speaker 02:
And so I guess if the agency was saying everybody name, we want the middle name.

[00:07:02] Speaker 00:
Right.

[00:07:03] Speaker 02:
I mean, that would be a procedural rule.

[00:07:06] Speaker 02:
Nobody would say, holy cow, you've changed the substantive criteria of whether you're going to get a trademark right granted, or now we've

[00:07:15] Speaker 02:
Now the agency has changed what the scope of your trademark right can be, because we now want your middle name.

[00:07:25] Speaker 02:
So that's kind of the same situation we are here, where they said, well, instead of your mailing address, we want your domicile address.

[00:07:33] Speaker 02:
And we feel like we need everyone's domicile address so people don't circumvent this US council rule.

[00:07:39] Speaker 00:
Well, that's interesting, but the final rule actually doesn't say that.

[00:07:43] Speaker 00:
The final rule simply imposes that requirement without any explanation whatsoever.

[00:07:49] Speaker 00:
And that's kind of the heart of the problem here, because the most basic requirement of reasoned rulemaking is for an agency to provide reasons.

[00:07:57] Speaker 00:
And if you look at the Encino Motor Cars case, for example, it repeats longstanding case law recognizing that when an agency is changing a rule, in other words, if it's shifting its policy from one thing to another, its practices,

[00:08:09] Speaker 00:
It has to acknowledge that and explain why it's making the change.

[00:08:13] Speaker 00:
I mean, that is the baseline of what is required for an agency for its action not to be arbitrary and capricious.

[00:08:19] Speaker 00:
And in this instance, the agency didn't acknowledge that it was making any change in the preamble and in its explanations, and then provided no explanation whatsoever for the shift.

[00:08:28] Speaker 00:
And it was a system.

[00:08:28] Speaker 02:
What if, hypothetically, we could read

[00:08:31] Speaker 02:
The proposed rule making the comments and then the final rule and see from all of that context we understand why they did the alteration in the final rule to ask for everybody's domicile address and not just foreign applicants because it was

[00:08:49] Speaker 02:
more than reasonably discernible that they felt like they needed this in order to ensure that people did not circumvent the US Council rule.

[00:08:57] Speaker 02:
Just take that as a hypothetical.

[00:08:59] Speaker 02:
Then wouldn't we say that's enough in terms of understanding the reasons for the agency's choice to make this particular rule?

[00:09:08] Speaker 00:
I mean, if you want to assume that what the agency did was reasonable and explained, then sure.

[00:09:13] Speaker 00:
I mean, I guess you could conclude that it was reasonable and explained.

[00:09:16] Speaker 02:
Well, reasonably discernible as to the rationale for why they made the choice that they made at the end.

[00:09:21] Speaker 02:
So therefore, we're not necessarily in the situation you're proposing, which is there's just lack of any explanation.

[00:09:29] Speaker 02:
And so it's an utter mystery for why they made the final rule the way they did.

[00:09:33] Speaker 00:
I mean, the reason that

[00:09:34] Speaker 00:
Agencies are required to set forth their reasons is so that courts can actually review what those reasons what the actual reasons motivating a change are And so I think it is a step too far and not something that's fairly reflected in the case law for the court to Effectively apply what would be rational basis review and say well if we can think of something and if we squint and perhaps could read it between the lines and

[00:09:56] Speaker 00:
We could infer what the agency might have been thinking, and here's maybe why it did this.

[00:10:00] Speaker 00:
That's never how this has worked, because the burden on an agency here is relatively low in the sense that it simply has to set forth what it's doing and explain why it is doing it.

[00:10:09] Speaker 00:
This isn't the world's most overwhelming standard for a burden on an agency when it's undertaking a rulemaking.

[00:10:16] Speaker 00:
But the agency here failed to accomplish that.

[00:10:19] Speaker 00:
As I stated, the final rule has no rationale whatsoever for why the agency decided to apply this requirement.

[00:10:26] Speaker 00:
It doesn't acknowledge the change in a PTO requirement that has existed for, let's say, 70 years of administration of the Lanham Act.

[00:10:35] Speaker 00:
For 70 years, an applicant could submit a mailing address and be assured that they would not be at risk of being stalked, being harassed,

[00:10:44] Speaker 00:
having that address published, which the PTO's regulations required, and then would be injured by the public disclosure of that information.

[00:10:54] Speaker 00:
The PTO changed that without any consideration whatsoever of really what would be the most obvious factor for an agency to consider in making that type of decision, which is the impact on applicants and prospective applicants.

[00:11:06] Speaker 00:
I think it's pretty obvious how somebody who has been, for example, a victim of domestic violence might be reluctant to provide their personal home address

[00:11:14] Speaker 00:
to an agency, particularly when the agency's regulations require that it be published.

[00:11:18] Speaker 02:
There was nothing in the comments in response to the notice of proposed rulemaking that obviously required some applicants to come forward with their domicile address, that there was some notions of privacy concerns.

[00:11:30] Speaker 00:
The proposed rule did not provide any requirement that anybody come forward with their domicile address.

[00:11:36] Speaker 00:
What the proposed rule said

[00:11:38] Speaker 00:
was that applicants could continue to provide just an address, the same sort of mailing address that they'd been providing previously.

[00:11:45] Speaker 00:
And then it stated that in some instances, the examiner might engage in some type of investigation and request further information if there was concern of fraud with respect to the application.

[00:11:57] Speaker 00:
But no, it didn't require anybody to come forward with any type of home address or anything of that sort.

[00:12:07] Speaker 03:
Does that factor into our analysis at all in your view?

[00:12:18] Speaker 00:
Two comments on that, Your Honor.

[00:12:20] Speaker 00:
First is that they are not relevant for assessing the rationality of the rule.

[00:12:23] Speaker 00:
In other words, the agency is limited to what is in the final rule.

[00:12:28] Speaker 00:
That's the chennery doctrine that this court has applied in, gosh, dozens of cases at this point.

[00:12:32] Speaker 00:
So if it's not in the final rule, the court can't consider, well, they said this stuff later or they took some mitigating measures or something like that.

[00:12:40] Speaker 00:
Second, I think it does underscore how important this issue is and how it's not just some kind of minor thing that who really cares?

[00:12:49] Speaker 00:
It's not worth the candle.

[00:12:51] Speaker 00:
The agency, when it released this rule, faced a massive public backlash and spent the next year scrambling to accommodate the privacy interests that it hadn't even considered during the rulemaking process.

[00:13:04] Speaker 00:
And it's tried to patch things up without going through another rulemaking and without soliciting public comments on any of this.

[00:13:10] Speaker 00:
We think that's a mistake.

[00:13:11] Speaker 00:
We think that the agency

[00:13:13] Speaker 00:
had it been forthrighted in its intentions from the outset, had it provided notice to the public, and then had it engaged in reasoned rulemaking, thinking through the issues, weighing the evidence, and explaining what it was that it did, could have avoided this imbroglio, and at the end of the day, still could wind up with a better and sounder policy than what it currently has on the books.

[00:13:32] Speaker 01:
Counsel, you're well into your rebuttal time.

[00:13:35] Speaker 01:
David, we'll give you two minutes for rebuttal.

[00:13:37] Speaker 00:
Thank you, Your Honor.

[00:13:39] Speaker 01:
Ms.

[00:13:39] Speaker 01:
Walker.

[00:13:51] Speaker 04:
Good morning.

[00:13:52] Speaker 04:
May it please the court.

[00:13:54] Speaker 04:
We are here today because Appellant, a corporate entity that has expressly disavowed any privacy or other personal interest in not providing its domicile address to the USPO, did not comply with a requirement for a complete application.

[00:14:10] Speaker 04:
The board affirmed the refusal to register the trademark in this case because Appellant

[00:14:18] Speaker 04:
declined to provide a domicile address as required by the rules.

[00:14:22] Speaker 04:
It also failed to avail itself of the available petition process to request relief from the environment, instead using that process to expressly disclaim any extraordinary circumstance that would exempt it from providing its domicile address to the USPTO in this case.

[00:14:43] Speaker 02:
Is it appropriate for an applicant to challenge the validity of a regulation through a trademark board appeal of a denial of an application, and then come up here to the Federal Circuit to challenge the validity of that regulation for procedural errors, as opposed to going to a customary APA action?

[00:15:09] Speaker 04:
Right, Your Honor.

[00:15:10] Speaker 04:
So we do not challenge.

[00:15:12] Speaker 04:
the jurisdiction of this court or the procedure in bringing the action before this court.

[00:15:19] Speaker 04:
We do believe that there may be an additional basis to go to district court, that they wouldn't be foreclosed from going to district court on the procedural challenge, but that the appellant here can be here and raise the procedural concerns that it's raising with respect to the rule, at least as a jurisdictional matter.

[00:15:41] Speaker 04:
I do think that there is a consideration that this court should take into account, though, that all of the injury or concerns that appellant raises with respect to the process by which the rules were promulgated are injuries that don't impact appellant.

[00:16:02] Speaker 04:
All of those injuries that appellant claims flow from the rulemaking process relate to- What impact would that have on our analysis, if any?

[00:16:12] Speaker 04:
I do think that it makes the analysis here more speculative.

[00:16:17] Speaker 04:
And I think, in particular, what we have here, or one thing to consider here, is that the way in which this came up through the board and to this court is through a failure to comply with rules 2.189 and 2.32.

[00:16:34] Speaker 04:
Those are the ones that expressly require

[00:16:38] Speaker 04:
an applicant to provide domicile address.

[00:16:41] Speaker 04:
But what was clear in both the proposed rulemaking and the final rule is that the agency may request that information of any applicant.

[00:16:50] Speaker 04:
And so the effect would have been the same.

[00:16:53] Speaker 04:
If applicant hadn't provided a domicile address and the rules had said something, it didn't specify in the initial application, it's clear that the agency could have asked appellant at any time for that domicile information.

[00:17:07] Speaker 04:
And so the impact of the rulemaking matters in the sense that the claim of injury here just doesn't flow from the rulemaking itself, at least with respect to the particular rules that appellant is arguing about here.

[00:17:31] Speaker 02:
What would that opinion look like from this court?

[00:17:34] Speaker 02:
So we would affirm because they can't really make a case for challenging the validity of the regulation in this instance because they can't show an injury?

[00:17:43] Speaker 04:
Well, I think that the court could affirm on the basis that the board properly applied the regulation to the applicant and the applicant failed to apply with that regulation.

[00:17:56] Speaker 04:
If the court wants to further engage on

[00:17:59] Speaker 04:
the validity of the procedural process by which the rules were enacted, it can do so.

[00:18:06] Speaker 04:
But part of what I was addressing or suggesting is that the court should consider in its analysis how speculative some of those arguments are.

[00:18:21] Speaker 03:
Two questions.

[00:18:22] Speaker 03:
What case law do you have to support this theory that you're presenting?

[00:18:27] Speaker 03:
What evidence would we rely on to say it's speculative?

[00:18:31] Speaker 03:
I think you're saying maybe speculative as to the particular appellant.

[00:18:37] Speaker 03:
Well, it's speculative in the sense that- I'm just trying to figure out how we can avoid the issues that they're relying on on appeal based on the theory that you're presenting.

[00:18:47] Speaker 03:
And really start maybe with what case law you're relying on.

[00:18:50] Speaker 04:
So I'm not relying on particular case law here.

[00:18:55] Speaker 04:
And I want to be clear about that.

[00:18:56] Speaker 04:
And I also want to be clear that we think that the rulemaking was entirely proper.

[00:19:01] Speaker 04:
And if the court wants to affirm on that basis, we have no concern with that as well.

[00:19:06] Speaker 04:
I do think that there is a theory on which the court could affirm essentially as harmless error, right?

[00:19:14] Speaker 04:
That there is no harm here because the impact would have been the same if this had come under 2.11, a regulation

[00:19:25] Speaker 04:
that appellant is not challenging here.

[00:19:27] Speaker 04:
And so that was the point that I was making.

[00:19:35] Speaker 04:
I did want to address in particular both the argument that was made in reply and this morning with respect to 2.11 and the idea that that is 2.11b, which is the regulation that says that the office may require

[00:19:53] Speaker 04:
an applicant to provide information that may reasonably be necessary to the proper determination of whether the party is subject to the requirement in paragraph A. And paragraph A then references the domicile of the applicant.

[00:20:10] Speaker 04:
The appellant has made the argument that that regulation means that the office can only ask in some instances or on a case-by-case basis.

[00:20:19] Speaker 04:
But that regulation says nothing about

[00:20:22] Speaker 04:
case by case or in particular instances.

[00:20:26] Speaker 04:
And again, this ties into the earlier argument, which I was making, which is that there's nothing that would suggest that that requirement wouldn't apply to any particular applicant, including the applicant that we have in this case.

[00:20:42] Speaker 04:
If the court has no further questions, I would ask that they affirm.

[00:20:48] Speaker 03:
I want to ask a question.

[00:20:51] Speaker 03:
What is your argument about whether this is procedural or not?

[00:20:56] Speaker 03:
Appellate made an argument for why it's not procedural.

[00:20:59] Speaker 03:
Would you like to respond to that?

[00:21:01] Speaker 04:
Yes.

[00:21:01] Speaker 04:
This is a procedural rule.

[00:21:03] Speaker 04:
This is not a rule that alters the rights or interests of the parties.

[00:21:07] Speaker 04:
For the reasons that Chen was offering earlier, this is not a rule that changes the substantive trademark analysis

[00:21:17] Speaker 04:
that goes into the examination of a trademark application.

[00:21:21] Speaker 04:
And courts have been clear that even when a procedural rule has a substantive effect, for example, in denying an application, and that's in the GEM broadcasting case, that doesn't transform an otherwise procedural rule into one that is substantive.

[00:21:38] Speaker 04:
So this is clearly a procedural rule, both because the rule itself, the actual rule

[00:21:46] Speaker 04:
context in which this rulemaking was done was one for US council representation, right?

[00:21:51] Speaker 04:
That is not something that impacts the substantive trademark analysis.

[00:21:55] Speaker 04:
And because the particular requirement for an address is not one that impacts the substantive requirements.

[00:22:00] Speaker 03:
Thank you.

[00:22:00] Speaker 03:
What about the argument that the rule was arbitrary and confused because other ways could have been used to determine whether somebody was a foreign applicant that thus needed an attorney?

[00:22:12] Speaker 04:
Yes, Your Honor.

[00:22:13] Speaker 04:
And I want to be clear.

[00:22:15] Speaker 04:
Because the reply perhaps raised some questions about this, we make an arbitrary and capricious that the rule is not arbitrary and capricious in the context of notice and comment rulemaking.

[00:22:27] Speaker 04:
That's the way our brief is structured.

[00:22:29] Speaker 04:
Because the opening brief framed the arbitrary and capricious arguments in terms of logical outgrowth.

[00:22:39] Speaker 04:
And logical outgrowth then is one that only applies in the notice and comment rulemaking process.

[00:22:45] Speaker 04:
But the arguments are the same, whether it's in that part of our brief or just as a standalone section of the brief, which is that the rulemaking here is not arbitrary and capricious.

[00:22:57] Speaker 04:
And there are reasons provided for why the office is requiring domicile.

[00:23:06] Speaker 04:
And that is because it has seen a huge influx in improper and likely fraudulent applications

[00:23:14] Speaker 04:
more often than not from foreign applicants.

[00:23:18] Speaker 04:
And so it was looking for a way to provide U.S.

[00:23:21] Speaker 04:
counsel to those requirements or to those applicants.

[00:23:25] Speaker 04:
And to do so, it needed to know the domicile, right?

[00:23:28] Speaker 04:
And it needs to know the domicile of every applicant to determine whether or not they are subject to the rule that was the subject, the overall subject of this rulemaking process.

[00:23:40] Speaker 04:
It was not arbitrary capricious, both the proposed rule and the final rule.

[00:23:44] Speaker 02:
You just said, though, I mean, I wouldn't be able to find those words in the final rule in the Federal Register, right?

[00:23:51] Speaker 02:
In the narrative.

[00:23:53] Speaker 02:
I didn't see a connection in the final rule.

[00:23:56] Speaker 02:
Or maybe you can show me where in the Federal Register the PTO said, OK.

[00:24:02] Speaker 02:
We didn't ask for it before, but now we've concluded we need everybody's domicile address.

[00:24:09] Speaker 02:
And here's why we need everybody's domicile address.

[00:24:12] Speaker 02:
It's because after thinking this through, we realized that people could be kind of shady and sneaky and not really accurately identify themselves as foreign applicants.

[00:24:25] Speaker 02:
So everyone needs to cough up their domicile address, including innocent US applicants.

[00:24:34] Speaker 02:
Where does it say that?

[00:24:36] Speaker 04:
It does not say that exactly, Your Honor.

[00:24:38] Speaker 02:
I don't remember it saying what you said either.

[00:24:41] Speaker 04:
But it was clear.

[00:24:42] Speaker 04:
And I'm looking at the proposed rule on 4396.

[00:24:45] Speaker 04:
And I will find the citation in the final rule in just a minute.

[00:24:50] Speaker 04:
But the language was the same.

[00:24:52] Speaker 04:
So this is under the heading Proposed Rule Changes, Roman numeral 3.

[00:24:58] Speaker 04:
And this is the language that the court was earlier discussing with respect to

[00:25:03] Speaker 04:
the conditioning the requirement on domicile, right?

[00:25:08] Speaker 04:
So it's about halfway down in the middle column.

[00:25:11] Speaker 04:
It says the majority of countries with a similar requirement condition this requirement on domicile, and the USPTO intends to follow this practice.

[00:25:20] Speaker 04:
And then the USPTO, in both the proposed rule and in the final rule, defines domicile and principal place of business.

[00:25:28] Speaker 04:
And that definition does not change

[00:25:32] Speaker 04:
from the proposed rule to the final rule in any substantive way.

[00:25:35] Speaker 04:
There's some structural change, but no substantive change to the definition.

[00:25:41] Speaker 04:
So the PTO was clear that it was conditioning the requirement on domicile.

[00:25:47] Speaker 04:
And it provided definitions for domicile and principal case of business.

[00:25:51] Speaker 03:
Can you tell me what those definitions are?

[00:25:52] Speaker 04:
Yes, Your Honor.

[00:25:53] Speaker 04:
So those are in 2.20, which in the final rule is on 31510.

[00:26:03] Speaker 04:
O and P are the definitions.

[00:26:06] Speaker 04:
And they're also in 2.2 O and P in the proposed rule as well.

[00:26:12] Speaker 01:
But most of the reasoning is that they're copying other countries.

[00:26:21] Speaker 04:
Well, the reasoning for why they're requesting domicile in this form or they're requesting domicile is to determine who is subject

[00:26:31] Speaker 04:
to the local council role.

[00:26:34] Speaker 04:
And they're clear.

[00:26:36] Speaker 04:
And the point that I was making earlier in response to Judge Chen's question was that the rules are clear, that the PTO is going to be looking to domicile, which it defines as a location.

[00:26:50] Speaker 04:
So we know it's a particular location and not a PO box, for example, in both the proposed role and in the final role.

[00:27:04] Speaker 01:
Thank you, counsel.

[00:27:05] Speaker 04:
Thank you.

[00:27:06] Speaker 04:
And we'd ask that the court affirm the board.

[00:27:09] Speaker 01:
Mr. Goldstein has two minutes for a bottle.

[00:27:16] Speaker 00:
Thank you, Your Honor.

[00:27:17] Speaker 00:
Just a few points.

[00:27:18] Speaker 00:
First, it is common that parties challenge rules that are enforced about them in the context of those proceedings.

[00:27:25] Speaker 00:
I would direct the court to the Supreme Court's decision in Abbott Labs, which says that's the normal way of doing it.

[00:27:29] Speaker 00:
This court has done that in Aqua Products versus Matal and GHS Health, among others.

[00:27:34] Speaker 00:
Second, we did suffer an injury.

[00:27:37] Speaker 00:
The rule that we contend is invalid was enforced against us, and our application was denied on that basis.

[00:27:43] Speaker 00:
So I don't think there is no harm here.

[00:27:45] Speaker 00:
Third, on arbitrary and capricious review, it doesn't matter whether the rule is procedural or not.

[00:27:51] Speaker 00:
That's why I started off by saying I think that's the easiest basis for the court to decide this case is simply to say the agency didn't explain what it was doing and that this requirement is invalid for that reason.

[00:28:02] Speaker 00:
Even if you could infer from the record or from whatever you might read in between the lines of the proposed rule and the final rule, which we still don't think gets you there, but even if you could infer that there might be some basis for the agency to have done this, what the agency had to do was think about, here are the potential benefits of this course of action, here are the potential costs, like the impact on applicants, and then try to balance those things in some fashion, in other words, acknowledge what the problem is, and then just have some type of reasoned explanation.

[00:28:30] Speaker 00:
Again, this isn't difficult, but that's what the agency had to do and what it didn't do here.

[00:28:34] Speaker 00:
I would also note that on its base, this particular requirement doesn't make any sense in terms of its scope.

[00:28:40] Speaker 00:
Why would the agency need the domicile address if people already have domestic counsel and are represented by domestic counsel already?

[00:28:48] Speaker 00:
Why would it need that information from people who concede their foreign entity status?

[00:28:52] Speaker 00:
And why would it expect, by the way, that parties that the agency says are engaging in fraud in their applications wouldn't simply go onto Google Maps and pull up a fraudulent address and stick that on their applications?

[00:29:05] Speaker 00:
You know, look, maybe the agency would think, notwithstanding all these things, that the policy that it arrived at was the right one.

[00:29:10] Speaker 00:
but the agency had to explain that and do that while taking into account the costs of what it did.

[00:29:15] Speaker 00:
It didn't do that.

[00:29:16] Speaker 00:
And for that reason, we asked the court to vacate the decision below.

[00:29:19] Speaker 00:
Thank you.