Previously, we detailed the incident involving 3100 U.S. patents that were invalidated due to forged signatures. As one of the involved applicants, Diamond Art Club (DAC) filed a lawsuit against the USPTO in February 2025, becoming the first counterattack case（link: Can the U.S. Patent Crisis Be Revived?）. Recently, there have been new developments in this showdown!
The USPTO submitted a defense memorandum on July 9, directly challenging DAC’s “innocence argument.” This seemingly simple procedural dispute is, in fact, an ultimate test of the baseline rules of the entire patent system—Can ignorance truly be a golden ticket for exemption??
01
Case Review: Signature Forgery Ignites Patent Crisis
The patent application for DAC’s “Diamond Art Project” (a process involving the application of resin rhinestones on color-coded canvases) was originally a model for patent protection in the creative industry, but it fell into dire straits due to the actions of the agency Wayne & King (W&K):
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W&K unlawfully used the electronic signature of registered patent agent Jie Yang to submit multiple documents, including DAC’s patent application;
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Upon discovery, the USPTO directly terminated the application, prohibited its restoration, and deleted all documents related to the forgery;
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DAC claimed innocence, stating they were unaware of the forgery, and filed a counter lawsuit in February 2025, while the USPTO’s defense stance was firm—”Ignorance is not a shield before the rules.”
02
Four Core Arguments from the USPTO: A Closed Loop Logic from Rules to Responsibility
1. Integrity is the Lifeline of the Patent System
The USPTO emphasizes that regulations such as 37 C.F.R. § 1.56 clearly require all participants to adhere to integrity, and registered practitioners must personally sign documents. W&K’s forgery not only infringes on individual rights but also undermines the credibility of the entire patent examination system—this is the underlying logic for the USPTO’s punitive actions.
2. Clients Must Bear Responsibility for Their Agents’ Actions
According to agency law principles, DAC as the rights holder, must be responsible for W&K’s actions within the scope of authorization. Even if DAC claims ignorance, it cannot exempt them from responsibility—otherwise, it may lead to an industry phenomenon of “willful ignorance of agent violations.”
3. The Authority to Sanction is Backed by Clear Legal Support
Under regulations such as 35 U.S.C. §§ 3, the USPTO is granted broad regulatory authority by Congress, including the termination of non-compliant applications. The court’s review standards for administrative agencies are strict, and the USPTO’s sanctions are both legal and within its authority.
4. Severe Penalties are to Uphold Industry Standards
W&K’s fraud is large-scale and intentional, and if not strictly punished, it could trigger a chain reaction of “forged signatures becoming the norm.” Tolerating violations is essentially unfair to compliant applicants and will ultimately destroy the seriousness of patent examination.
03
Focus of the Dispute: Innocents vs. Guardians of the Rules
DAC considers itself an innocent victim caught in the crossfire, claiming that the USPTO’s blanket termination of applications punishes the innocent.
However, the logic of the patent office is more pragmatic: the patent system cannot verify whether each client is truly “unaware”; if the door to “ignorance exemption” is opened, the rules will become meaningless.
04
Impact of the Case: More than Just a Litigation Industry Warning
This dispute has transcended individual case significance and has become a typical reference for patent agency compliance:
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For applicants: Strengthen “compliance due diligence” when choosing an agency to avoid joint liability due to third-party errors;
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For the agency industry: Compliance details such as electronic signature management and operational traceability will become regulatory focuses;
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For the patent system: The USPTO’s tough stance indicates that future sanctions for “procedural violations” may continue to escalate.
The final judgment of this case has yet to be issued. Will the court recognize the “ignorance exemption”? How will the court balance “rigidity of rules” with “justice in individual cases”? We will continue to track the answers.
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