Guest Post: New USPTO Professional Conduct Rules Will Take Effect on May 3

Guest Post by Lisa Dolak, Angela S. Cooney Professor of Law at Syracuse University College of Law. Professor Dolak has written extensively on professional responsibility issues in the patent law context.

Effective May 3, 2013, the USPTO has adopted new professional conduct rules and has modified some existing rules governing the conduct of disciplinary investigations. The Final Rule is published in today's Federal Register. See Changes to Representation of Others Before The United States Patent and Trademark Office, 78 Fed. Reg. 20179 (April 3, 2013). As discussed in my previous post relating to the corresponding Notice of Proposed Rulemaking, the new professional conduct rules will replace the current ABA Model Code-based USPTO ethics rules with a version of the ABA Model Rules, versions of which have been adopted in 50 jurisdictions (49 states and the District of Columbia).

According to the USPTO, its goal is to "bring standards of ethical practice before the Office into closer conformity with the professional responsibility rules adopted by nearly all States and the District of Columbia, while addressing circumstances particular to practice before the Office." In addition to greater harmonization with state ethics rules, the USPTO indicates that practitioners will benefit from being able to reference interpretive sources applying the corresponding Model Rules, such as the Comments to the Model Rules and state bar opinions and disciplinary decisions (although it notes that "[s]uch decisions and opinions are not binding precedent relative to USPTO rules").

The USPTO reports that it received 19 responses commenting on the October 18, 2012 Notice of Proposed Rulemaking (some of which did not relate to the proposed changes), including "[m]any" that "supported the new rules and their alignment with State bar standards." Several comments related to new USPTO Rule 11.106(c), which expressly reinforces a practitioner's duty of disclosure, notwithstanding his or her confidentiality obligations ("A practitioner shall disclose to the Office information necessary to comply with applicable duty of disclosure provisions."). In particular, according to the Final Rule, "the comments raised concerns about the balance between the practitioner's duty to disclose information to the Office and the duty to protect confidential information of third parties, including that of other clients."

In response, the USPTO noted that ABA Model Rule 1.6 cmt. 12 (2012) states that "If. . . other law supersedes this Rule and requires disclosure, [Rule 1.6](b)(6) permits the lawyer to make such disclosures as are necessary to comply with the law." (Note, though, that the Comment also acknowledges that "[w]hether such [other] law supersedes Rule 1.6 is a question of law beyond the scope of these Rules."). The implication is that the applicable "other law" here is the practitioner's duty of disclosure. By analogy, the USPTO also cites to a North Carolina Ethics Opinion (N.C. Ethics Op. 2005-9 (2006)) for the proposition that a "lawyer for [a] public company may reveal confidential information about corporate misconduct to [the] SEC under [a] permissive-disclosure regulation authorized by [the] Sarbanes-Oxley Act, even if disclosure would otherwise be prohibited by [a] state's ethics rules." The USPTO also emphasizes that the primacy of the practitioner's disclosure obligation is "not a new requirement" (citing current 37 C.F.R. § 10.23(c)(10) and Manual of Examining Procedure, 8th Ed., Rev. 9 (Aug. 2012) Ch. 2000), and states that the express inclusion in new Rule 11.106(c) of the practitioner's obligation to comply with his or her disclosure obligations notwithstanding the duty of confidentiality "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."

Regarding the possibility that the potential conflict between the duties of confidentiality and disclosure could lead to a prohibited "direct adversity" client conflict, the USPTO cited the client conflicts rules, which, it noted, "would generally prevent a practitioner from accepting clients who may have potentially adverse interests." Finally, it pointed to withdrawal as the ultimate solution ("[i]n certain situations a practitioner may seek to withdraw from representation under § 11.116 to avoid a conflict of interest"). Notably, the Final Rule includes this additional statement on withdrawal as a solution to the potential disclosure-confidentiality conflict:

Solely for the purposes of enforcement under 37 C.F.R. Part 11 (Representation of Others Before The United States Patent and Trademark Office), 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.

In response to other comments, the USPTO:

  • Declined to institute a mandatory CLE reporting requirement, notwithstanding the fact that patent agents are not subject to state bar CLE requirements.
  • Declined to designate a "default jurisdiction" that would provide a single body of case law for guidance, since the USPTO "is its own jurisdiction", and noted (again) that "State case law and opinions are not binding precedent on the" USPTO.
  • Declined to adopt ABA Model Rule 6.1 (Voluntary Pro Bono Publico Service) and ABA Model Rule 6.5 (Nonprofit and Court Annexed Limited Legal Services Program), citing the USPTO's Patent Ombudsman Program, its cooperation with local bar associations to develop a pro bono services "clearinghouse" operated by the Federal Circuit Bar Association, and the USPTO Law School Clinic Certification Pilot Program as examples of the USPTO's "broad[] support[] and encourage[ment of] pro bono services."
  • Adopted the suggestion that new Rule 11.108(e) be revised to include "proceedings before the Office" (and not just "pending or contemplated litigation"), "ensur[ing] that a practitioner may advance fees to prevent or remedy abandonment attributable to the practitioner."
  • Adopted the suggestion that proposed § 11.108(i)(3) (authorizing a practitioner to take an interest in a patent as part or all of his or her fee) be expanded to include an express authorization to (as part or all of a practitioner's fee) take an interest in a "patent or patent application."
  • Noted that although "a practitioner is prohibited from representing a client if the representation will be materially limited by the practitioner's own interests, unless the practitioner reasonably believes that the representation will not be adversely affected and the client provides informed consent," owning shares in "a diversified mutual fund [which includes stock in a company that competes with the practitioner's client] would ordinarily not be considered [taking] an interest adverse to a client under the USPTO Rules."
  • Adopted a suggestion that § 11.201, like ABA Model Rule 2.1, authorize a practitioner to "refer not only to law but to other considerations such as moral, economic, social and political factors that may be relevant to the client's situation" "[i]n rendering advice."
  • Clarified that § 11.305 (relating to prohibited ex parte communications with, e.g., judges, administrative patent and trademark judges, and "employee[s] or officer[s] of the Office") does not "prevent ex parte communication that is authorized by law, rule or court order, in an ex parte proceeding."
  • Adopted ABA Model Rule 3.6 as § 11.306 relating to trial publicity (except for the provisions relating to criminal cases).
  • Emphasized that the "duty to cooperate with the Office of Enrollment and Discipline" pursuant to § 11.801(b) (which does not appear in the Model Rules) is not a new requirement (having previously been housed in 37 C.F.R. § 10.131), and noted that "there are at least seven jurisdictions that adopted the ABA Model Rules and that have ethics rules regarding cooperating with the respective jurisdiction's disciplinary authority."
  • Affirmed its power to pursue reciprocal discipline against practitioners.

Note that the numbering of the new USPTO rules generally tracks the numbering of the corresponding ABA Model Rules. For example, USPTO Rule 11.107 parallels Model Rule 1.7, USPTO Rule 11.201 parallels ABA Model Rule 2.1, etc. The Final Rule notes that the USPTO has (thus far) decided not to adopt the substantive changes made to the ABA Model Rules in the latest (August 2012) ABA revision, as "most States have not yet done so," but that it "will continue to evaluate the ABA Model Rule changes and adopt them as appropriate."

6 thoughts on “Guest Post: New USPTO Professional Conduct Rules Will Take Effect on May 3

  1. Attorney is asked by Company A to file an IPR with respect to a a patent. Company A is supplying parts to company B. B was sued two years ago by the patent owner because of its use of Company A parts. Company A has not sought to intervene. However, company B has sent a request for indemnity to Company A.

    What are the attorney’s obligations?

  2. The USPTO piggybacked the final rules with changes in Rule 11.9(b), without notice-and-comment, which is a clear violation of Sec. 553 of the APA.

    So sad that the USPTO could not make this a cleaner rulemaking process.

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