Review of IL Ethics Rules and the USPTO Rules of Professional Conduct Richard Linn Inn of Court...
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- Slide 1
- Review of IL Ethics Rules and the USPTO Rules of Professional
Conduct Richard Linn Inn of Court February 13, 2014
- Slide 2
- Conflict of Interest and Duty of Candor
- Slide 3
- Scene 1: New Business!! An associate attorney tells a partner
that has the potential for a big new client....
- Slide 4
- Correspond to ABA Rules The new USPTO ethics rules correspond
to the ABA Model Rules ABA Model Rule 1.7 (Conflicts of Interest)
corresponds to USPTO Rule 11.107 ABA Model Rule 3.2 corresponds to
USPTO Rule 11.302
- Slide 5
- Interpretive Guidance 1. The ABA Model Rule Comments and
Annotations. 2. Opinions and case law from adopting jurisdictions,
but State case law and opinions are not binding precedent on the
Office 3. PTO precedent under the old rules 78 Fed. Reg. 20189
response to Comment 8 (Apr 3, 2013) and 77 Fed. Reg. 64190 (Oct 28,
2012)
- Slide 6
- 11.107 Conflict of interest; Current clients. Part a (a) Except
as provided in paragraph (b) of this section, a practitioner shall
not represent a client if the representation involves a concurrent
conflict of interest. A concurrent conflict of interest exists if:
(1) The representation of one client will be directly adverse to
another client; or (2) There is a significant risk that the
representation of one or more clients will be materially limited by
the practitioners responsibilities to another client, a former
client or a third person or by a personal interest of the
practitioner.
- Slide 7
- Scene 2: Similar Areas The next day, after conflicts had
run....
- Slide 8
- 11.107 Conflict of interest; Current clients. Part a (a) Except
as provided in paragraph (b) of this section, a practitioner shall
not represent a client if the representation involves a concurrent
conflict of interest. A concurrent conflict of interest exists if:
(1) The representation of one client will be directly adverse to
another client; or (2) There is a significant risk that the
representation of one or more clients will be materially limited by
the practitioners responsibilities to another client, a former
client or a third person or by a personal interest of the
practitioner.
- Slide 9
- 11.107 Conflict of interest; Current clients. Part b (b)
Notwithstanding the existence of a concurrent conflict of interest
under paragraph (a) of this section, a practitioner may represent a
client if: (1) The practitioner reasonably believes that the
practitioner will be able to provide competent and diligent
representation to each affected client; (2) The representation is
not prohibited by law; (3) The representation does not involve the
assertion of a claim by one client against another client
represented by the practitioner in the same litigation or other
proceeding before a tribunal; and (4) Each affected client gives
informed consent, confirmed in writing.
- Slide 10
- Scene 3: Current Clients An associate tells a partner that one
of the firms existing clients has acquired a patent portfolio that
encroaches on another of the firms existing clients...
- Slide 11
- Between Rock and HardPlace What should the attorneys do?
Withdraw from representing HardPlace on the patent application?
Withdraw from representing Rock entirely? Ethical wall?
- Slide 12
- Later that day....
- Slide 13
- Hypothetical for OED Law firm is prosecuting a patent for
client A; client Bs patent is cited by the Examiner as a basis for
a rejection in the prosecution for client A; law firm needs to
argue that client Bs patent does not disclose some things; that
argument might hurt client B on 112 or infringement in subsequent
litigation. What should law firm do?
- Slide 14
- Scene 4: Previous Clients An associate enters a partners office
to discuss some potential new work for an existing client on an
inter partes review proceeding.
- Slide 15
- Scene 4: Previous Clients A law firm currently represents DIY
Company, who wants to file a petition for inter partes review of a
patent owned by HammerTime, a division of Massive Corporation. The
patent relates to metals. The law firm used to perform patent
prosecution for Car Talk, a different division of Massive
Corporation. The prosecution related to metals. Section 11.109
covers a practicioner's duties to former clients.
- Slide 16
- Section 11.109(a) A practitioner who has formerly represented a
client in a matter shall not thereafter represent another person in
the same or a substantially related matter in which that person's
interests are materially adverse to the interests of the former
client unless the former client gives informed consent, confirmed
in writing.
- Slide 17
- Questions Is HammerTime a former client of the law firm? Is
this potential inter partes review "the same or a substantially
related matter" to the prosecution the law firm conducted for Car
Talk?
- Slide 18
- Section 11.109(b) A practitioner shall not knowingly represent
a person in the same or a substantially related matter in which a
firm with which the practitioner formerly was associated had
previously represented a client: (1) Whose interests are materially
adverse to that person; and (2) About whom the practitioner had
acquired information protected by 11.106 and 11.109(c) that is
material to the matter; unless the former client gives informed
consent, confirmed in writing
- Slide 19
- Section 11.109(c) A practitioner who has formerly represented a
client in a matter or whose present or former firm has formerly
represented a client in a matter shall not thereafter: (1) Use
information relating to the representation to the disadvantage of
the former client except as the USPTO Rules of Professional Conduct
would permit or require with respect to a client, or when the
information has become generally known; or (2) Reveal information
relating to the representation except as the USPTO Rules of
Professional Conduct would permit or require with respect to a
client.
- Slide 20
- Questions Did the law firm acquire information relating to the
representation of Car Talk? Would the law firm risk using that
information relating to the representation to the disadvantage of
Car Talk in the potential inter partes review?
- Slide 21
- Scene 5: Duty of Disclosure The associate and partner continue
discussion on the Rock and HardPlace applications....
- Slide 22
- Comment 22 Comment 22: Several commenters raised concerns about
the interaction of the duty of disclosure provisions, such as 37
CFR 1.56, and a practitioners duty of confidentiality under 11.106.
Specifically, the comments raised concerns about the balance
between the practitioners duty to disclose information to the
Office and the duty to protect confidential information of third
parties, including that of other clients.
- Slide 23
- Response to Comment 22 Response to Comment 22: The Office
appreciates the comment. Sections 11.106(a) and (b) generally
permit a practitioner to reveal confidential information under
certain circumstances. [Citations omitted.] Additionally, Section
11.106(c) states that ``[a] practitioner shall disclose to the
Office information necessary to comply with applicable duty of
disclosure provisions'' and is provided to make clear that the duty
of disclosure is mandatory, not optional. ** *
- Slide 24
- Section 11.106(a) A practitioner shall not reveal information
relating to the representation of a client unless the client gives
informed consent, the disclosure is impliedly authorized in order
to carry out the representation, the disclosure is permitted by
paragraph (b) of this section, or the disclosure is required by
paragraph (c) of this section.
- Slide 25
- Section 11.106(b) A practitioner may reveal information
relating to the representation of a client to the extent the
practitioner reasonably believes necessary: (1) To prevent
reasonably certain death or substantial bodily harm; (2) To prevent
the client from engaging in inequitable conduct before the Office
or from committing a crime or fraud that is reasonably certain to
result in substantial injury to the financial interests or property
of another and in furtherance of which the client has used or is
using the practitioner's services; (3) To prevent, mitigate or
rectify substantial injury to the financial interests or property
of another that is reasonably certain to result or has resulted
from the client's commission of a crime, fraud, or inequitable
conduct before the Office in furtherance of which the client has
used the practitioner's services; (4) To secure legal advice about
the practitioner's compliance with the USPTO Rules of Professional
Conduct; (5) To establish a claim or defense on behalf of the
practitioner in a controversy between the practitioner and the
client, to establish a defense to a criminal charge or civil claim
against the practitioner based upon conduct in which the client was
involved, or to respond to allegations in any proceeding concerning
the practitioner's representation of the client; or (6) To comply
with other law or a court order.
- Slide 26
- Section 11.106(c) A practitioner shall disclose to the Office
information necessary to comply with applicable duty of disclosure
provisions.
- Slide 27
- Response to Comment 22 N.C. Ethics Op. 20059 (2006) (lawyer for
public company may reveal confidential information about corporate
misconduct to SEC under permissive-disclosure regulation authorized
by Sarbanes-Oxley Act, even if disclosure would otherwise be
prohibited by states ethics rules).
- Slide 28
- Response to Comment 22 Additionally, Section 11.106(c) states
that [a] practitioner shall disclose to the Office information
necessary to comply with applicable duty of disclosure provisions
and is provided to make clear that the duty of disclosure is
mandatory, not optional. Section 11.106(c) merely continues the
current duty of disclosure provision set forth in 37 CFR
10.23(c)(10). See, e.g., Manual of Patent Examining Procedure, 8th
Ed., Rev. 9 (Aug. 2012) Ch. 2000. While paragraph (c) does not
impose a new requirement, the express provision may be helpful in
responding to any allegation of an ethical violation before a State
bar in a situation where the practitioner engaged in particular
conduct to comply with this USPTO Rule.
- Slide 29
- Response to Comment 22 The comments also suggest that a
practitioners representation of one client could be directly
adverse to another client in some circumstances. However, the
restrictions on conflicts of interest that may appear between
clients would generally prevent a practitioner from accepting
clients who may have potentially adverse interests. See 11.107,
11.108. In certain situations a practitioner may seek to withdraw
from representation under 11.116 to avoid a conflict of
interest.
- Slide 30
- Later that day....
- Slide 31
- Question to OED Law firm is preparing IDS for client A; through
work for client B, law firm becomes aware of published and
unpublished applications that it needs to disclose in the IDS. How
does the law firm handle that situation? Knowledge of Bs
applications is confidential. How can law firm raise the issue with
client A without client Bs permission? Client As prosecution is
confidential; how can law firm ask permission from client B without
client As permission?
- Slide 32
- Inventorship
- Slide 33
- Linn Inn Meeting Feb. 13, 2014 Application names Alice and Bob
as inventors. Alice tells the attorney in confidence that Bob was
named as an inventor as a result of deception. What should Attorney
say? A. Dont worry. Its not a problem. Your secret is safe with me
until the end of time. B. Unfortunately, my client is your
employer, not you, and I have a duty to tell their management,
including Bob, about our conversation. Moreover, you have admitted
to misrepresentation of inventorship with deceptive intent, which
cannot be corrected. Is there anything else I can help you with
right now? C. I dont have all the answers at present, but
fortunately, I have a Linn Inn meeting this evening at which the
best legal minds in Chicago will be gathered, and I can tap into
the collective wisdom. Ill give you an answer in the morning.
Hypothetical
- Slide 34
- Linn Inn Meeting Feb. 13, 2014 Can the attorney ethically
ignore the inventorship issue? If the patent application proceeds
with both Bob and Alice named as inventors, and if Alice is correct
in stating that Bob was not telling the truth, will this affect
validity and/or enforceability of any patent that issues? Feb. 13,
2014 Questions
- Slide 35
- Linn Inn Meeting Feb. 13, 2014 Larson filed a patent
application falsely claiming to be the inventor, when in fact the
inventor was an Automotive employee. The truth came to light in an
interference with Automotive. The interference was settled. The
Larson application was assigned to Automotive as part of the
settlement. Automotive sought to enforce the Larson patent and two
others. Relief denied due to unclean hands. Feb. 13, 2014 Precision
Instrument Mfg. Co. v. Automotive Maintenance Machinery 324 U.S.
806 (1945)
- Slide 36
- Linn Inn Meeting Feb. 13, 2014 (a) Correction. Whenever through
error a person is named in an issued patent as the inventor, or
through error an inventor is not named in an issued patent, the
Director may, on application of all the parties and assignees, with
proof of the facts and such other requirements as may be imposed,
issue a certificate correcting such error. (b) Patent Valid if
Error Corrected. The error of omitting inventors or naming persons
who are not inventors shall not invalidate the patent in which such
error occurred if it can be corrected as provided in this section.
The court before which such matter is called in question may order
correction of the patent on notice and hearing of all parties
concerned and the Director shall issue a certificate accordingly.
Feb. 13, 2014 35 U.S.C. 256 CORRECTION OF NAMED INVENTOR
- Slide 37
- Linn Inn Meeting Feb. 13, 2014 What should the attorney do now?
Are there any ethical issues with the attorney telling Bob or
others what Alice told him? Does the attorney owe a duty of
confidentiality to Alice with respect to what she told the
attorney? If the attorney determines that inventorship is presently
incorrect, and that Bob represented himself as an inventor with
deceptive intent, can attorney correct inventorship now? Feb. 13,
2014 Questions
- Slide 38
- Confidentiality
- Slide 39
- Scene 1 A brand new attorney meets his attorney mentor who has
been working for a few years Confusion ensues
- Slide 40
- Slide 41
- What issues does this situation raise? Did the young attorney
violate client confidentiality with his advertisement?
- Slide 42
- May 2013 Changes to Disclosure of Client Information Pre-May
2013 change Section 10.57(b) [A] practitioner shall not knowingly
[r]eveal a confidence or secret of a client. Confidence refers to
information protected by the attorney-client or agent-client
privilege under applicable law. Secret refers to other information
gained in the professional relationship that the client has
requested be held inviolate or the disclosure of which would be
embarrassing or would be likely to be detrimental to the client.
May 2013 change Section 11.106(a) Confidentiality of Information A
practitioner shall not reveal information relating to the
representation of a client unless the client gives informed
consent, the disclosure is impliedly authorized in order to carry
out the representation, the disclosure is permitted by paragraph
(b) of this section, or the disclosure is required by paragraph (c)
of this section.
- Slide 43
- Illinois Rule 1.6: Confidentiality of Information (a) A lawyer
shall not reveal information relating to the representation of a
client unless the client gives informed consent, the disclosure is
impliedly authorized in order to carry out the representation, or
the disclosure is permitted by paragraph (b) or required by
paragraph (c). .. (6) to comply with other law or a court
order.
- Slide 44
- Scene 2 A client and their defense attorney discuss a possible
infringement lawsuit Things do not look promising
- Slide 45
- What issues does this situation raise? Are the attorneys client
names confidential? May an attorney be forced to over his client
list?
- Slide 46
- 37 CFR 11.106 Confidentiality of Information (a) A practitioner
shall not reveal information relating to the representation of a
client unless the client gives informed consent, the disclosure is
impliedly authorized in order to carry out the representation, the
disclosure is permitted by paragraph (b) of this section, or the
disclosure is required by paragraph (c) of this section. (b) A
practitioner may reveal information relating to the representation
of a client to the extent the practitioner reasonably believes
necessary: (6) To comply with other law or a court order.
- Slide 47
- Illinois Rule 1.6: Confidentiality of Information (a) A lawyer
shall not reveal information relating to the representation of a
client unless the client gives informed consent, the disclosure is
impliedly authorized in order to carry out the representation, or
the disclosure is permitted by paragraph (b) or required by
paragraph (c). (6) to comply with other law or a court order.
- Slide 48
- Unintentional Delay in Paying Maintenance Fees
- Slide 49
- Time for payment of maintenance fees. (a) Maintenance fees as
set forth in 1.20 (e) through (g) are required to be paid in all
patents based on applications filed on or after December 12, 1980,
except as noted in paragraph (b) of this section, to maintain a
patent in force beyond 4, 8 and 12 years after the date of grant.
(b) Maintenance fees are not required for any plant patents or for
any design patents. Maintenance fees are not required for a reissue
patent if the patent being reissued did not require maintenance
fees. (c) The application filing dates for purposes of payment of
maintenance fees are as follows: (1) For an application not
claiming benefit of an earlier application, the actual United
States filing date of the application. (2) For an application
claiming benefit of an earlier foreign application under 35 U.S.C.
119, the United States filing date of the application. (3) For a
continuing (continuation, division, continuation-in-part)
application claiming the benefit of a prior patent application
under 35 U.S.C. 120, the actual United States filing date of the
continuing application. (4)-(5) * * * (d) Maintenance fees may be
paid in patents without surcharge during the periods extending
respectively from: (1) 3 years through 3 years and 6 months after
grant for the first maintenance fee, (2) 7 years through 7 years
and 6 months after grant for the second maintenance fee, and (3) 11
years through 11 years and 6 months after grant for the third
maintenance fee. (e) Maintenance fees may be paid with the
surcharge set forth in 1.20(h) during the respective grace periods
after: (1) 3 years and 6 months and through the day of the 4th
anniversary of the grant for the first maintenance fee. (2) 7 years
and 6 months and through the day of the 8th anniversary of the
grant for the second maintenance fee, and (3) 11 years and 6 months
and through the day of the 12th anniversary of the grant for the
third maintenance fee. (f) * * * (g) Unless the maintenance fee and
any applicable surcharge is paid within the time periods set forth
in paragraphs (d), (e) or (f) of this section, the patent will
expire as of the end of the grace period set forth in paragraph (e)
of this section. A patent which expires for the failure to pay the
maintenance fee will expire at the end of the same date
(anniversary date) the patent was granted in the 4th, 8th, or 12th
year after grant. 37 CFR 1.362
- Slide 50
- Acceptance of delayed payment of maintenance fee in expired
patent to reinstate patent. (a) The Director may accept the payment
of any maintenance fee due on a patent after expiration of the
patent if, upon petition, the delay in payment of the maintenance
fee is shown to the satisfaction of the Director to have been
unavoidable (paragraph (b) of this section) or unintentional
(paragraph (c) of this section) and if the surcharge required by
1.20(i) is paid as a condition of accepting payment of the
maintenance fee. If the Director accepts payment of the maintenance
fee upon petition, the patent shall be considered as not having
expired, but will be subject to the conditions set forth in 35
U.S.C. 41(c)(2). * * * (d) Any petition under this section must be
signed by an attorney or agent registered to practice before the
Patent and Trademark Office, or by the patentee, the assignee, or
other party in interest. 37 CFR 1.378
- Slide 51
- More than 7 months later
- Slide 52
- It is professional misconduct for a practitioner to: * * * (c)
Engage in conduct involving dishonesty, fraud, deceit or
misrepresentation. USPTO/OED Rule 11.804
- Slide 53
- EFS-WEB Form for Delayed Payment
- Slide 54
- How many in the audience would place your name and registration
number as the undersigned attorney filing the petition on these
facts? AUDIENCE QUESTION
- Slide 55
- How many in the audience would place your name and registration
number as the undersigned attorney filing the petition on these
facts? How many would REFUSE to do so? AUDIENCE QUESTION
- Slide 56
- Reporting professional misconduct. (a) A practitioner who knows
that another practitioner has committed a violation of the USPTO
Rules of Professional Conduct that raises a substantial question as
to that practitioners honesty, trustworthiness or fitness as a
practitioner in other respects, shall inform the OED Director and
any other appropriate professional authority. USPTO/OED Rule
11.803
- Slide 57
- 2-1 split (Clevenger dissenting) allowing revival of patent
where patentee (U.S. Navy) claimed abandonment was unintentional.
State Farm argued the patentee committed inequitable conduct by
intentionally abandoning the patent when it did not appear
commercially beneficial and then reviving the patent after its
licensing value became evident. District Court held on summary
judgment that patentee committed inequitable conduct in claiming
its abandonment was unintentional, rendering the patent
unenforceable. Network Signatures v. State Farm (Fed. Cir. Sept.
24, 2013)
- Slide 58
- Fact Summary Patentee U.S. Navy instructed non-payment of
7.5-year maintenance fee. Network Signatures had inquired before
then about licensing, but was not directed to the IP department
until 2 weeks after the patent had expired due to non-payment of
the maintenance fee. The Navy filed the pro forma petition to
revive based on unintentional abandonment, which was granted
without the PTO requiring any proof. Network Signatures v. State
Farm (Fed. Cir. Sept. 24, 2013)
- Slide 59
- After evaluating the record and considering MPEP 711 (which
addresses the unintentional standard for pending/abandoned
applications, the Federal Circuit (Newman, Wallach) reversed,
finding that the fact that the patentee followed the PTOs
procedures for delayed payment and paid the fees did not provide
clear and convincing evidence of a material misrepresentation.
Network Signatures v. State Farm (Fed. Cir. Sept. 24, 2013)
- Slide 60
- Attorney sticks to her guns and does not file the petition.
Client seems to accept the decision, but the client dries up. Three
years later, Attorney is served with a lawsuit alleging malpractice
under the precedent of Network Signatures (i.e., the attorney
should have advised the client differently and paid the fee) and
seeking damages in the form of lost profits from the $7.1M+ in
revenues that ABC Corp. reported in a shareholder newsletter and
attributed to its product that would have been covered by the
now-expired patent. How should that case turn out, and why?
AUDIENCE HYPOTHETICAL
- Slide 61
- Thank You