The USPTO Adopts New Rules of Professional Conduct

Article co-written by Yuri Levin-Schwartz, Ph.D., a law clerk at MBHB.

On May 3, 2013, the United States Patent and Trademark Office (“USPTO” or “Office”) Rules of Professional Conduct (“USPTO Rules”) went into effect to govern the ethical obligations for representing others before the Office. These new rules are based on the ABA Model Rules for Professional Conduct, and replaced the USPTO Code of Professional Responsibility, which dated back to 1985. Because almost every other U.S. jurisdiction had already adopted some form of the ABA Model Rules, this resulted in a harmonization of ethical standards.

The adoption of the USPTO Rules was a significant event for every patent practitioner. The updated rules were welcome news for patent attorneys, as such individuals are also required to know and abide by the ethics rules of the state or jurisdiction in which they practice. Because the USPTO had been operating under the USPTO Code of Professional Conduct, which itself was based on the former ABA Model Code from 1980, patent attorneys were required to maintain adherence to two different sets of ethical obligations. However, the adoption of these new rules might not be treated as welcome news by non-lawyer patent practitioners (patent agents), because they are also subject to the USPTO ethical guidelines, but they might not yet be aware of the differences and subtleties of the ABA Model Rules. Such individuals will need to transition from the previous set of legal ethics, the USPTO Code, which was for many their only real exposure to legal ethics. It is therefore essential that patent agents become accustomed to the new USPTO Rules, especially where they differ from the previous USPTO Code. Links to the new rules, as well as other related useful information, can be found at

Confidentiality of Information

It is certain that every patent practitioner needs to review and become familiar with the new USTPO Rules. However, particular attention should be paid to what is probably the most significant practical difference between the USPTO Rules and the ABA Model Rules: when can or cannot a patent practitioner disclose a client’s confidential information? This issue generated the greatest number of comments from individuals and organization after the proposed rules were promulgated on October 18, 2012. ABA Model Rule 1.6 states that a practitioner shall not reveal a client’s confidential information without informed consent, implied authorization, or permission under the rules. USPTO Rule § 11.106, which is based on ABA Model Rule 1.6, reads as follows:

§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:

(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.

(c) A practitioner shall disclose to the Office information necessary to comply with applicable duty of disclosure provisions.

Both the new USPTO Rules and the ABA Model Rules include circumstances in which a practitioner “may” reveal such confidence, such as disclosing information that may prevent death, bodily harm, or fraud. However, even in the cases where death, bodily harm, or fraud may result, the practitioner is still not required to reveal such information under the ABA Model Rules, but rather has permission to do so. The new USPTO Rules diverge in one important respect: section (c) includes a type of information that is mandatory to reveal: “A practitioner shall disclose to the Office information necessary to comply with applicable duty of disclosure provisions.” In other words, under this rule, a finding that relevant information was intentionally withheld by a practitioner involved in the prosecution of an application will not only subject a patent to becoming unenforceable, it will result in an ethical violation by the practitioner.

The main reason that patent practitioners should be concerned is that this requirement has the possibility of creating a trap between two ethical obligations – a proverbial rock and a hard place. This is because this new obligation is not limited to the confidential information from the particular client in question, but instead extends to any confidential information belonging to any other client that is also material to the first client’s application. To be fair, a similar ethical quandary probably already existed, because if a patent attorney was aware of such third-party confidential information, they already had a duty to disclose it in order to prevent the patent from becoming unenforceable. But, because that attorney would have been subject to the ethical obligations of the state in which they practice, they would have at the same time been prevented from disclosing that same information. Moreover, most clients would prefer that their confidential information not be made publically accessible in another client’s patent file. It is of little concern to them that the practitioner has an ethical obligation to his or her other client. As a result, an attorney in such a quandary would have needed to discharge that duty by withdrawing from the case. See, e.g., Molins PLC v. Textron, Inc., 48 F.3d 1172 (Fed. Cir. 1995).

It is not surprising, therefore, that most of the comments received on this issue questioned whether, under the new rules, an attorney in such an ethical quandary would be able to withdraw from such a case, and thereby discharge the ethical obligation. In the published Final Rules, the USPTO addressed these comments, but did not change the proposed rule. The USPTO’s response provided some justification for the rule as drafted. For example, the USPTO appeared to suggest that such an ethical quandary is unlikely because the restrictions on current client conflicts of interest “would generally prevent a practitioner from accepting clients who may have potentially adverse interests.” Unfortunately, this is not the test for whether there is a conflict of interest under ABA Model Rule 1.7 or USPTO Rule 107. Instead, a concurrent conflict of interest exists where the representation of two clients would be directly adverse, or where there would be a significant risk that the representation of either client would materially limit the representation of the other. Indeed, this requirement to disclose confidential information can arise when a current client discloses information to a practitioner that just so happens to be material to the patentability of another client’s application. Conflict screening will generally not prevent this.

This does, however, bring up another interesting issue regarding the interplay between the duty to disclose and the rules on whether a conflict exists. Just like ABA Model Rule 1.10, the USPTO Rules provide that the existence of a conflict of interest is imputed to everyone at a firm. In other words, if another attorney at a firm is performing legal services for a client, then every attorney at that firm is thought to be working for that client, even if the other attorneys at the firm have no knowledge of that client and are not exposed to that client’s confidential information. In addition, it is generally not possible to “screen” or “wall” those attorneys off to avoid such a conflict. Instead, in such circumstances where a conflict arises, the firm is forced to decline the work that would cause the conflict. This imputation rule, however, does not apply to the duty of disclosure. Whether a practitioner is aware of a reference that is material to the patentability of an application is personal to that patent attorney or agent. Knowledge of a material reference is not imputed, so different attorneys representing different clients in similar spaces could be aware of art that would be material to the other client’s application and not be required to disclose it. This is because that attorney needs to have actual knowledge of the reference.

Nevertheless, whether those attorneys had actual knowledge of such a reference is a factual matter, and the consequences of a Court finding such knowledge can be detrimental to a client. Therefore, firms can take precautions to avoid even the appearance of impropriety. For example, firms can obtain USPTO customer numbers for use with specific clients. That way, if one client’s reference becomes relevant to another client’s application, as long as the attorneys of the second client are not associated with the first client’s customer number, it might be easier to establish that they never had knowledge of the reference in the first place. The only problem with such an approach is that in real-world practice, clients often hire firms because of that firm’s particular experience prosecuting applications in a particular technological space. It is exactly because of this experience that these conflicts may potentially arise, and it is unlikely that all attorneys at a firm will be partitioned appropriately to discrete USPTO customer numbers. Nevertheless, use of client-specific customer numbers may work in certain situations to avoid this problem.

Ultimately, the USPTO did respond to the concerns expressed by the commenters by noting that a practitioner in such an ethical quandary might be able to withdraw from representation. For example, the USPTO pointed specifically to Rule § 1.116, which provides that in certain situations, such as when “[t]he representation will result in violation of the USPTO Rules of Professional Conduct or other law,” a practitioner may seek to withdraw to avoid the conflict of interest. Moreover, in the “Discussion of Specific Rule” section of the Federal Register notice, see 78 Fed. Reg. 20180, 20183 (April 3, 2013), the USPTO specifically stated that “if a practitioner has a conflict of interest in a given matter, arising from a different client, timely withdrawal by the practitioner from the given matter would generally result in OED not seeking discipline for conflicts of interest under part 11.” Even though the use of the word “generally” is troubling in this explanation, this is probably the best practical solution. As a result, if a patent practitioner remains vigilant and takes all necessary precautions, it is unlikely that he or she will fall victim to this ethical quandary.

© 2013 McDonnell Boehnen Hulbert & Berghoff LLP

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