USPTO Proposes Update to Code of Professional Responsibility

[author: Andrew Williams]

USPTO SealLast month, on October 18, 2012, the U.S. Patent and Trademark Office published a notice of proposed rulemaking (77 Fed. Reg. 64190) to finally update its rules of professional conduct by conforming them to the ABA Model Rule of Professional Conduct.  The ABA Model Rules have been adopted in some form by every state (except California) and the District of Columbia.  These USPTO proposed rules are welcome news for patent practitioners that are also attorneys, because currently, such individuals are required to know and abide by the ethics rules of the state in which they practice, as well as the Patent and Trademark Office Code of Professional Conduct, which is based on the former ABA Model Code from 1980.  Of course, there are differences between the ABA Model Rules and the proposed USPTO Rules, just are there are differences between the current USPTO Code and the proposed Rules of professional.  In highlighting any differences, this post will refer to the ABA Model Rules and not to the specific rules of any particular jurisdiction, because to do so would be too onerous (in other words, if you are an attorney licensed in a U.S. jurisdiction, do not rely on any statements found below regarding what ethical rules are required in your jurisdiction, but instead please consult the particular rules of the state in which you practice).  If you would like to provide any comments to the Patent Office regarding these proposed rules, they must be submitted to the Office on or before December 17, 2012.

The Patent Office detailed its reasoning for proposing these rules at this time in the Federal Register notice, and these reasons were reiterated by David Kappos on his Public Blog.  The Office recognized that adopting harmonized rules of ethical and professional conduct is consistent with the mandate of the Leahy-Smith America Invents Act of 2011.  There are almost 42,000 registered patent practitioners, and at least 75% of them are attorneys.  Without the new rules, these patent attorneys are required to go back and forth between the old Model Code and the newer Model Rules.  More importantly, the amount of authority referring to or interpreting the Model Code is, at best, limited.  Instead, a practitioner has the benefit of comments, annotations, and case law interpreting the Model Rules which, even if not binding on the Patent Office, will be useful until a larger body of USTPO-specific precedent is established.  Finally, the Office pointed out that the new rules do not deviate significantly from the current rules of professional conduct, and largely codify obligations or professional and fiduciary duties that already exist.

The differences between the current PTO Code of Professional Conduct, the ABA Model Rules of Professional Conduct, and the proposed USPTO Rules are highlighted in the Federal Register notice, as well as on the Patent Office website.  One of the more significant changes from the current Patent Office rules is the removal of the ability of the Patent Office to collect an annual practitioner maintenance fee, and the removal of the ability of the Patent Office to require continuing legal education reporting of all registered agents or attorneys.  Of course, these provisions were never enforced, but the new rules remove any threat of potential enforcement in the future.  There are also examples of differences between the ABA Model Rules of Professional Conduct and the proposed USPTO Rules that include the inclusion of ex parte proceedings in the section that requires candor towards the tribunal (proposed § 11.303) and the removal of the sections in the ABA Model Rules that deal exclusively with criminal proceedings.  However, probably the most important section to which patent attorneys need to pay attention is proposed § 11.106, dealing with the confidentiality of information.

Confidentiality of Information

One of the most significant changes found in the proposed USPTO Rules in terms of what is currently required by the Patent Office, and in terms of how it differs from the ABA Model Rules, is that relating to the handling of a client's confidential information.  This new rule differs from that currently in place by changing what is defined as confidential information.  The current USPTO Code defines "Confidence" as "information protected by the attorney-client or agent privilege under applicable law," and "Secret" as "other information gained in the professional relationship that the client had requested by held in inviolate of the disclosure of which would be embarrassing or would be likely to be detrimental to the client."  USPTO Code § 10.57(a).  As can be seen, and has been noted by commentators for years, this definition is somewhat limiting.  Most confidential information of a client does not fall under this definition of confidence, and information is only secret under this definition if the client has expressly stated that it is so (or if its disclosure would be embarrassing or detrimental).  Instead, the ABA Model Rules and the proposed USPTO Rules expand the scope of this term, defining confidential information as any "information relating to the representation of a client . . . ."  See, e.g., Proposed USPTO Rule § 11.106(b).  Of course, this definition is provided in the context of what information a practitioner can or cannot (technically may or shall not) reveal, and it is important to note that this information can include information that is publically available.  In fact, the ABA rules have been interpreted to mean that it is possible for an attorney to be prohibited from revealing information related to his or her representation of a client even though such information could have otherwise been obtained from a publically available source.  As a result, it can be a difficult question figuring out whether something is truly "confidential" under this Rule.  Thus, this is a perfect example of a rule for which there is a lot of non-USPTO commentary, and hopefully the Patent Office will either provide its own guidance of the extent of "confidential" information, or will accepted this preexisting (and future) commentary as persuasive on the issue.

The more troubling aspect of the proposed rule is where it deviates from the ABA Model Rules.  As with the Model rule, the proposed USPTO Rule explains what information a practitioner "shall not" reveal without informed consent, implied authorization, or permission under rules.  In addition, both sets of rules explain what information a practitioner "may" reveal, including such things as information that may prevent death, bodily harm, or fraud.  Of note, however, even in the cases where death, bodily harm, or fraud may be result, the practitioner is not required to reveal such information, but rather the practitioner has permission to do so.  The proposed USPTO Rules and the ABA Model Rules nevertheless diverge in one important respect:  the proposed USPTO Rules include 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 proposed rule, a finding that relevant information was intentionally withheld by a practitioner involved in the prosecution of an application will not only cause a patent to become unenforceable, it will result in an ethical violation by the practitioner.

This requirement to disclose information even though it may be confidential also has the possibility to trap a patent practitioner between two ethical obligations.  Importantly, this obligation to disclose information necessary to comply with the duty of disclosure is not limited to confidential information from that particular prosecution client.  Instead, it is possible under the rule that a patent attorney could be aware of confidential information belonging to another client that is nevertheless relevant, and he would therefore be ethically required to submit it with the prosecution client's application.  The Patent Office apparently considered this potential ethical quandary, and as a result, removed this type of disclosure from the types of information that are prohibited from being revealed.  Of course, try explaining to your other client why you revealed its confidential information and made it publically accessible in another client's patent file.  Moreover, any patent attorney in a jurisdiction that has adopted some form of the ABA Model Rules is subject to rules of professional conduct that do not have such a permissive cut-out.  Therefore, such a patent attorney would be required by the proposed USPTO Rules to reveal such third-party confidential information to satisfy the duty of disclosure, but would be prohibited from doing so by the professional rules of conduct of their state.

To be fair, a similar quandary probably already exists, because if a patent attorney is aware of such third-party confidential information, that attorney is already required to disclose it to prevent the patent from becoming unenforceable (and therefore withholding it would violate the duty to act competently for your client).  Nevertheless, the proposed rules would explicitly make such action unethical, and subject to potential disciplinary proceedings.  What is unclear from the proposed USPTO rules is whether an attorney in such an ethical quandary could noisily withdraw from the case, thereby removing the problem.  However, if not, such an attorney would face certain disciplinary proceedings (either in their state or at the Patent Office), because it is impossible to "not reveal" information and, at the same time, submit it to the Patent Office in an information disclose statement.  Yet, this is what the proposed rule, in conjunction with the ABA Model Rules would require.

Anyone wishing to provide comments regarding the new rules regarding confidential information, or provide comments to any other of the proposed rules, can do so by submitting them by e-mail to ethicsrules.comments@uspto.gov; by regular mail addressed to:  Mail Stop OED-Ethics Rules, United States Patent and Trademark Office, P.O. Box 1450, Alexandria, VA 22313–1450, marked to the attention of William R. Covey, Deputy General Counsel for Enrollment and Discipline and Director of the Office of Enrollment and Discipline; or via the Federal eRulemaking Portal.  Again, the deadline for submitting comments is December 17, 2012.  Additional information regarding the submission of comments can be found in the Office's Federal Register notice (77 Fed. Reg. 64190).