Decision CD 07/2012 of the Disciplinary Committee
Facts: The member provided opinions in support of an alleged infringer, under national court seizure procedures for patent infringement. The member had drafted the patent in question for a different entity, at a time when his current client was a co-inventor and owner of that entity. The patent had been sold to a new entity with part of the business. The complainant was also a co-inventor of the patent and R&D manager of the new entity. The complainant felt that the member breached his professional duty under CC Rule 4(f), by advising against the interests of his former client. The member in his defence considered that his client was always the same, and that the current proprietor had never been his client and was owed no duty of confidence. The member submitted that it would have been unreasonable of him to withhold assistance for his client, in the emergency situation created by the seizure. Furthermore, the case for infringement was so weak that any patent attorney could see non-infringement and the seizure action was clearly malicious.
Decision: A member should not give advice against the interests of a patent proprietor on a patent he himself has drafted and/or prosecuted. The member's actions were based on a subjective desire to advise his personal client, overlooking his professional duty to the new entity, the proprietor of the patent he had drafted. Within the terms of RD Article 3(2), (i) a patent or patent application constitutes "a particular matter" with which a member may deal, and (ii) the status of being "another client" is effectively inherited by each owner when the patent is transferred. Even if the drafting attorney and the current owner have never met, patents are by their very nature transferable property. In the present case, the patent was effectively transferred as part of an on-going business, and former colleagues found themselves in dispute. Other aspects of the defence were incompatible with one another and/or insufficient to override the fundamental duty. The Chamber issued a Reprimand to the member.
Handling of the complaint is being conducted under the Regulation on Discipline for Professional Representatives before the European Patent Office of 21 October 1977 (hereinafter called the "Regulation on Discipline" or "RD"), and the Additional Rules of Procedure of the Disciplinary Committee adopted under RD Article 25 (hereinafter "Rules of Procedure" or "RPDC").
Summary of Facts
The Respondent's submissions
The Complainant's submissions
The Chamber is to decide whether the conduct complained of constitutes a breach of the Rules of Professional conduct that are set out in the RD Articles 1, 2 and 3, with reference also to the recommendations made in the Code of Conduct. The complaint refers specifically to Article 4(f) of the Code, which is supplementary to RD Articles 2 and 3. According to RD Article 25(1), the Chamber is to examine the facts of its own motion, and shall not be restricted in this examination to the facts, evidence and arguments provided by the complainant and the relief sought. The following provisions have been identified in the written procedure as particularly relevant to the present case:
RD Article 1(2): A professional representative shall conduct himself in such a manner as not to prejudice the necessary confidence in his profession.
RD Article 3 (1): A professional representative who is unwilling to accept a call upon his professional services or who withdraws his services shall forthwith inform the client. In the latter case, he shall take appropriate measures to enable the client to avoid detriment.
RD Article 3(2): A professional representative shall refuse or withdraw his services if acceptance or continuation would necessitate his dealing with a particular matter on which he has represented or advised another client with opposing interests and the conflict has not been resolved.
Code of Conduct Article 4(f): Supplementary to Articles 2 and 3 of the Disciplinary Regulation, a member shall not take any action against a particular matter which is being handled or has been handled by the Member or another person in his office, unless the client in the matter agrees to this action or unless the Member has no cognizance of the matter and is no longer in a position to take cognizance of it. The Member is not permitted to make use in the action of information obtained during the time the matter was previously handled, unless the information is public.
In view of the large number of issues presented by the Respondent in his defence, the Chamber considered the following questions helpful in reaching a decision in the present case:
- Would a professional representative ordinarily be in breach of his professional obligations, in providing an opinion on infringement of a patent, of which he has handled the drafting and/or prosecution, without consent of the owner of that patent?
- If the answer to the first question is yes, then which circumstances, if any, create an exception in the present case?
Concerning the first question, the Chamber considers it beyond doubt that a professional representative is ordinarily in breach of the Code and also Article 3 (2) of the Regulation, in giving any advice on the scope of the patent that he has drafted, to anyone other than the owner. The question was raised, whether providing an opinion on non-infringement constitutes "acting against" the patent? In the correspondence the Respondent had drawn a distinction between acting "against" a patent by challenging its validity in a position of revocation proceedings, and merely giving an opinion of non-infringement. In the view of the Chamber, this distinction is false. The appreciation and presentation of arguments concerning infringement is just as subjective and potentially informed by "inside knowledge" as any presentation of arguments concerning validity. The author of the patent claim and description makes many fine judgements as to the precise wording and intended scope, leaving the claim with certain strengths and certain weaknesses that are not necessarily apparent to the outside reader.
As an aside at this point, the Chamber has no reason to doubt that the amendments made by the Respondent during the prosecution of the patent application were made in good faith, with the best interests of the applicant in mind. The Chamber agrees with the Respondent that it is a common part of the representative's function to restrict the scope of protection claimed, in order to overcome prior art and obtain grant of a patent. The Chamber agrees with the Respondent that the Complainant may exhibit a "biased view" in suggesting that the limitations were "urged" upon them by the Respondent. However the Chamber considers that it is a fact of life that clients and members of the public will form biased views from time to time. The rules of professional conduct have been designed so that members can avoid situations where clients can even begin to form such views, however unjustified those view may be.
Even if one were to concede that there are cases where determination of infringement is so clear on the face of the claim wording and the accused product that no reasonable patent attorney could conclude that infringement exists, the code forbids embarking on such an opinion. The Chamber believes that there are many cases where the scope of protection, when reviewed in the light of a certain accused product, has a surprising breadth. The attorney embarking on infringement advice has no way of knowing at the start whether such revelations will emerge. Therefore there can be no assessment before beginning the task, whether it is trivial or not. For this reason, the Articles of the regulation and the code of conduct are absolute: the representative "shall not take any action...; the representative "shall refuse..." (emphasis added).
As a matter of common sense, the Chamber finds that a particular patent application or patent in itself must constitute "a matter" within the meaning of CC Article 4(f). Given that the primary function of qualified representatives is to prepare and prosecute patent applications, it would be strange if those items were outside the definition of "matter" in the rules on discipline. Similarly, when a defendant can escape a patent either by proving non-infringement or by proving invalidity, it would be strange if the activities of the drafting attorney were restricted on one of these counts, but not on the other. In most jurisdictions within the EPC states, trial of infringement and validity issues is joined together in a single proceeding. Even in those countries with "bifurcated" proceedings, the legal and commercial advice behind-the-scenes will be integrated. It is noted that infringement generally arises as a question in national proceedings, and the Respondent in this case was acting primarily as a [...] national patent attorney, in providing his opinion to the court. Provided that he is acting in relation to a European patent, however, the conduct of a professional representative are governed by the rules and code. Moreover, it is noted that in the opinion document, the representative mentions his European patent attorney qualification, and not only his national one.
Turning to the second question posed above, numerous additional factors were thrown up by the Respondent in his defence, and these have all been considered carefully by the Chamber. Certain of these have been covered in the above reasoning already, for example the distinction between infringement and validity, and the distinction between an infringement problem generally, and one that is trivial to assess. Two of the factors potentially carry weight, and are considered now in more detail.
The first potentially distinguishing factor is that the party for whom the matter was previously handled, that is to say the patent applicant on whose behalf the drafting and prosecution were done, subsequently sold the patent application to another party, presently the Complainant. The Chamber finds that, on the evidence, the [new entity] was indeed for some time fully a client of the Respondent representative. If [the Respondent] intended otherwise, he would have to have taken specific steps to inform the Complainant for example at the time of [...]. This is true not only objectively, but importantly also from the perspective of the public, who see the respondent's name clearly on the patent application and patent as granted. However, the fact that [the new entity] was a client of the Respondent at this later stage of the application is not the main source of the bar arising under the cited Articles. Rather, it is the history of the Respondent in the drafting and prosecution of the application that creates the bar.
In the course of preparing a patent application, the drafting attorney, the inventors and management at the applicant company are all involved in confidential and privileged discussions, within a "circle of trust". RD Article 3 (2) and CC Article 4 (f) imply that working once within that circle of trust bars the representative from ever acting against the patent. The Chamber considers that the benefit of this protection inevitably must transfer with the patent right, when it is bought and sold, and that this must be true even when the party later seeking advice of the representative is the one that originally obtained and sold the patent. A patent right is, by its very nature, an item of legal property that can be bought and sold as a business asset. If it were to be the case that the purchaser of a patent or patent application should expect that the original drafting attorney, (with or without the assistance of the Seller) may turn up in public or in court one day criticising the patent and arguing against its scope or validity, the value of such property would go down, and public confidence in the profession would be undermined.
Within the terms of Article 3(2), the Chamber believes that the status of being "another client" is effectively inherited by each owner when the patent is transferred, even if the drafting attorney and the current owner have never met. While this is not explicit in the wording of the rules and code of conduct, for reasons argued above the alternative interpretation would not be compatible with the overall aims of the Regulation and the patent system.
In the present case, it seems clear from the evidence that the patent was indeed transferred as part of an on-going business activity, namely activities using the [...] technology, with associated brand names and personnel. The fact that, legally, the entity carrying on the business is not the same as the entity that created it is just a normal part of the structure of such transactions.
The second factor which the Chamber considered in detail as a possible exception to the general principle set out in question 1 above, was that of the requirement for urgent assistance in the context of the seizure procedure in [...]. It is difficult to reconcile the Respondent's position that he found the opinion of non-infringement to be trivially easy, such that any competent patent attorney would give the same opinion, yet he was not content to leave that assessment to the expert in the seizure procedure, and he was considering himself as the only qualified and available patent attorney to do the work. Clearly an awkward situation is created for the representative, when he has to refuse an instruction from a long-standing, personal client. Nevertheless, the rules are clear that refuse he must. There is an Article in the code of conduct, namely Article 4 (d) that permits an attorney to take necessary action to preserve the interests of the client, even if acting in a matter would conflict with the attorney's interests. This Article does not benefit the Respondent in the present case, however, because it creates an exception only when there is a conflict with the attorney's own interests, and not with the interests of a former client. Another reason why the Respondent cannot avail himself of CC Article 4 (d) is that the Article goes on to require that the representative take only the minimum action necessary to preserve the situation, and thereafter withdraws. From March 2011 to November 2012, the Respondent made no efforts to withdraw.
It is also far from clear that the giving of the non-infringement opinion was necessary to preserve rights in the seizure procedure. The Respondent explained at oral proceedings that the information sought in the procedure was information already available on [his client's] website, and that the seizure order should not be used to go "fishing" for other, commercially-sensitive information. However, none of his submission in the legal proceedings seems to have been directed to this point. Also, the Chamber finds a contradiction in the position of the Respondent that, on the one hand, he was the only person with the knowledge of the field necessary to assist [his client] in proving non-infringement, while at the same time, [the representative of the Complainant] should have been able to tell immediately from the website information and the wording of the claims that there was no infringement. Rather, it seems from the papers that the seizure procedure was made properly in order to obtain information about a product, in order to determine whether there was or was not infringement of the claims. The evidence shows that the expert who performed the seizure correctly identified the absence of two limitations, so that one may assume that the outcome of the seizure procedure would have been confirmation by all parties that there was no infringement. The motivation for the Respondent's intervention seems to have been only an instinct to help his client [...], which must not be allowed to override professional obligations.
The Chamber notes that, even in cases of emergency, the Institute provides for members to seek confidential advice as to any cause of action they may be considering [...]. In the present case, it appears rather that the Respondent never considered that he may have a conflict situation, or considered that the interests of his previous client could be overridden by obligations to a current client.
In addition to the Articles mentioned above, the Chamber considered whether the Respondent was in breach of RD Articles 1 (1), 1(2) and CC Articles 1(c) and 3(a).
The Chamber finds by unanimous opinion that the Respondent [..] has breached Article 3(2) of the Regulation on Discipline and Article 4(f) of the Code of Conduct for Professional Representatives before the European Patent Office. By a majority, the Chamber finds no breach of Article 1(2) of the Regulation on Discipline.
The Chamber issues a reprimand to [...].
Possibility of Appeal
Communication to Complainant