IP: Subject Matter Conflicts of Interest in Patent Prosecution - The Practical First Step

more+
less-

Inside Counsel - February 11, 2014

Part 3 of a 6 Part Series

This article series is focusing on subject matter conflict of interest issues are a significant concern for attorneys. Patent practitioners have an additional layer of concern with respect to subject matter conflicts of interest. This type of additional conflict search is not related to the inventors, assignee or research team, but is directly related to the patent application disclosure.

The first article introduced the topic and discussed generally why it is an important consideration. The second (and last) article reviewed in depth a recent case brought by a former client against a firm that involved this type of conflict, how it developed and the complications that exist in this area of conflicts.

It is clear that a simple conflict search of individual or company names is insufficient to determine if there is a patent subject matter conflict of interest. The question, then, is what system is effective to drill down on the subject matter of patent applications being handled by the firm?

It would be easy to say that a keyword database should be added to a firm’s conflict searching system, so that when patent matters are brought in, keywords are searched along with individual and company/entity names. And while this is a great first-step, it should not be the final step in a complete conflicts system. As most patent practitioners know, key words are only good if everyone is using the same word to describe something. One patent attorney might describe something as a “wheel” and another might describe the same thing as a “rotatable assembly”. In addition, given that the final filed patent application can sometimes look a lot different from the initial disclosure, key words entered initially may be ineffective after the patent application is filed. Another more effective option, given the technology available now for quickly searching document content, may be to base the keyword search on documents saved in the system and not on key words that may have been added to a conflict form when a matter or client was first opened.

Another good system to overlay with or use prior to a keyword search is to use business codes or technology codes. In this system, a pharmaceutical company may have 14000 as a business code. If an attorney is interested in finding out which pharmaceutical companies are represented by the firm, then running a report of all of the companies having a business code of 14000 will find that information. The attorney can then determine if there are any competitors to the prospective client already working with the firm. Business code identifies are especially useful if the companies are then subdivided. So, all of the pharmaceutical clients are listed under 14000, but those developing drugs for cardiovascular systems would be labeled with subcode 14100, while those developing drugs for nutrition would be labeled with subcode 14200. If a company develops drugs in several classes, it may have several associated subcodes.

As inside counsel to the companies who are retaining outside counsel to handle patent drafting and prosecution, it is important that you find out what kind of subject matter conflict system the proposed attorney or firm has in place and how to best supply the information necessary for a robust and complete search. If you believe that your company’s drug products are not only useful as cardiovascular drugs but could potentially be useful (and patentable) for skin disorders, this information is most useful and helpful if provided upfront or as soon as possible after learning of the additional benefits. It is also important, as inside counsel, to continually update outside counsel as to new uses, embodiments or benefits, along with new competitors. Finally, inside counsel should ensure that they discuss subject matter conflicts and any potential concerns with outside counsel on a regular basis, especially when new partners or associates are brought in on client matters. It is key to remember that, while the ethical responsibility rests with outside counsel, inside counsel cannot assume that they have no or little role in ensuring that the process is complete and up-to-date.

If outside counsel discloses that a potential or actual subject matter conflict exists, you, as inside counsel, should understand completely and in advance how the firm intends to handle that conflict. While the firm may not be able to tell you what clients or specific matters are creating the conflict, the firm should be prepared to put — in writing — the general subject matter issues so that you can be fully informed. This information is usually presented as a supplement to the initial engagement agreement that inside counsel or a company representative must review and execute. California Rule 3-310 of Professional Conduct states that the attorney must seek “informed written consent” of each client, which includes the current client of the firm and the prospective client. Therefore, it is important to check the state’s professional rules and then ask whether the current client having potentially conflicting subject matter has been notified and consents.

The next article in this series will focus on how you or your technology teams can disclose inventions to potential new counsel without giving away proprietary information, and what kind of training programs should be in place on the side of the company.

Topics:  Conflicts of Interest, Keyword Search, Patent Applications, Patent Prosecution, Patent-Eligible Subject Matter, Patentability Search

Published In: Civil Procedure Updates, Intellectual Property Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Buchalter Nemer | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »