Professional Negligence and Liability
Chapter 16
PATENT AND TRADE MARK ATTORNEYS THOMAS JONES
I. GENERAL INTRODUCTION
1. Scope of the chapter
16.1 This chapter is concerned with patent attorneys’ and trade mark attorneys’ negligence1. Reference should be made to chapters 1 and 2 in this work for a detailed discussion on the general principles of negligence. It should also be noted at the outset that there have been very few actions brought in this area of law, and nearly all have settled before trial.22. Patent attorneys
(a) The role of a patent attorney
16.2 The primary role of a patent attorney is to apply for and obtain patents in the United Kingdom on behalf of another or others and to advise on matters relating to patents, including patent infringement. He may also apply for and obtain patents in other jurisdictions, although this is normally done through a foreign attorney. The patent attorney may deal in other aspects of intellectual property, in particular trade marks, designs and copyright, and he is expected to know about these related fields. In addition, he is likely to advise in a wider commercial context, for example, in relation to product licensing, product development and business strategy.(b) Registered patent attorneys3
16.3 Most patent attorneys are registered patent attorneys, that is, they are entered on the register of patent attorneys.4 This is maintained by the Chartered Institute of Patent Attorneys (CIPA)5 and contains inter alia the name, business address and date of registration of all qualified patent attorneys. Qualification for registration is determined by the Intellectual Property Regulation Board (IPReg) and includes both examinations and practical training. 16.4 A registered patent attorney is exclusively6 entitled to use the title “patent attorney” or “patent agent”7 as a description in the course of business.8 He may also call himself a “European patent attorney”9 if his name is entered onto the European list.10 Qualification for entry is by way of a separate examination. 16.5 A registered patent attorney’s rights of audience are governed by the IPReg Rights to Conduct Litigation and Rights of Audience and Other Reserved Legal Activities Certification Rules 2012. No qualification is required to appear in proceedings before the Comptroller.11 Thereafter, there are three levels of qualification that may be attained each granting a different level of audience rights. An Intellectual Property Litigation Certificate12 confer basic rights to conduct appeals in the High Court from decisions of the UK IPO or the Appointed Person, to seek judicial review of such decisions in the High Court, and to conduct litigation and be heard in the Intellectual Property Enterprise Court (IPEC).13 A Higher Courts Litigation Certificate confers broader litigation rights compared to those listed above, including extensive rights of audience in the IPEC, and rights to conduct some litigation and appeals in the High Court, Court of Appeal and Supreme Court. A Higher Courts Advocacy Certificate confer full rights of audience in the High Court, Court of Appeal and the Supreme Court in any proceedings which may be conducted by an attorney holding a Higher Courts Litigation Certificate. Most registered patent attorneys are also qualified to appear before the European Patent Office by virtue of being on the European list. When a registered patent attorney is acting as an advocate he will be exposed to liability in negligence in the same way as barristers or solicitors acting as advocates.14 16.6 Communications which pass between the client and his patent attorney15 or which are made for the purpose of obtaining or supplying information or instructions to the attorney in connection with any matter relating to the protection of any invention, design, technical information or trade mark, or any matter involving passing-off, are the subject of legal professional privilege.16(c) Unregistered patent attorneys
16.7 Any person who is not a registered patent attorney (often called an unqualified person) is permitted to carry on the business of a patent attorney for the purposes of applying for or obtaining patents in the United Kingdom or elsewhere or for the purpose of conducting proceedings before the comptroller in connection with patents or patent applications.17 For this purpose, the unqualified person is entitled to appear before the comptroller.18 However, he cannot work under the title “patent attorney” or “patent agent”, nor can he appear in any other forum. Further consideration in this chapter is limited to registered patent attorneys, and the phrase “patent attorney” should be construed accordingly.3. Trade mark attorneys
(a) The role of a trade mark attorney
16.8 The primary role of a trade mark attorney is to apply for and obtain trade marks on behalf of another or others,19 and to advise on the protection and infringement of trade marks. The role includes advising on the selection of a trade mark and how to use it, and assisting in disputes relating to the registered trade mark or third party rights. The trade mark attorney will also deal with more administrative matters on behalf of his client, such as paying renewal fees in order to maintain a trade mark on the register after registration.(b) Registered trade mark attorneys
16.9 A registered trade mark attorney is any attorney whose name is entered on the register of trade mark attorneys20 as maintained by CITMA. Qualification for registration is determined by the Intellectual Property Regulation Board (IPReg) and requires obtaining both academic and qualifications and practical experience. A registered trade mark attorney is exclusively entitled to carry on business under any name or description which includes “registered trade mark attorney”.21 16.10 As for patent attorneys22 a registered trade mark attorney’s rights of audience are governed by the IPReg Rights to Conduct Litigation and Rights of Audience and Other Reserved Legal Activities Certification Rules 2012. The Trade Marks Registry is an inferior tribunal under the Tribunals and Inquiries Act 1992 and accordingly a registered trade mark attorney may appear before the registrar in relation to trade mark proceedings such as ex parte applications, to register a mark, or in opposition or rectification proceedings. He may also appear on appeals from the registrar to the Appointed Person23 all without further qualification. However, higher rights of audience are governed by the qualification scheme set out in paragraph 16.5 above. 16.11 Any communication between a client and his registered trade mark attorney or for the purposes of providing his attorney with information or instructions in relation to the protection of a trade mark or design or as to any matter involving passing-off is privileged from disclosure in legal proceedings.24(c) Unregistered trade mark attorneys
16.12 Any person may act as an agent for any other person in connection with the registration of a trade mark or any procedure relating to a registered trade mark.25 However, such a person cannot conduct business as a “registered trade mark attorney”, although he is entitled to appear before the registry. Further consideration in this chapter is in relation to registered trade mark attorneys only, and references to trade mark attorneys should be construed accordingly.II. DUTY OF CARE
16.13 In general terms, the duty of care expected of and to be exercised by a patent attorney or trade mark attorney is the same as that for any other profession, in that the attorney is under a duty to practise his profession with the reasonable skill, ability and experience that it demands.26 For patent attorneys and trade mark attorneys, in particular, this includes the duty to keep abreast of relevant27 developments in the law and practice.281. Duty of care in contract and tort
16.14 The primary duty of care owed to the client is imposed on the patent attorney or trade mark attorney under the contract of engagement of the attorney to perform certain services. The contract may be written29 or oral,30 and the duty of care may be express or implied.31 16.15 In addition to the contractual duty, there is duty of care at common law. This tortious duty is concurrent with the contractual duty, although it adds little in practice since generally32 the duties are the same.33 This is illustrated in the case of Andrew Master Hones 34 where the claimant sued for damages in both negligence and breach of contract, but the decision was only in contract. Graham J stated: “. . . in these cases the same facts may give rise to an action in tort as well as in contract. It was, however, agreed that, although tort now clearly extends not only to personal injuries but to financial loss also . . . in the present case it did not matter and that I could properly decide the issues on the basis of breach of contract only.”35 16.16 The same approach was apparently adopted in the Halifax case, since Jacob J only made a finding of negligence in respect of the defendant’s performance of its contractual duty.36(a) Duty to perform specific tasks or achieve specific results
16.17 Generally a contract for engagement for professional services does not include an express duty to achieve a specific result. Rather, the courts will imply a general duty of care, which is defined by the instructions from the client as to the tasks to be performed.37 Of course, a distinction must be made between achieving a result and performing specific tasks in an attempt to achieve it. It is submitted that patent and trade mark attorneys are under a duty to perform specific acts and tasks in accordance with their instructions. So, for example, a patent attorney who is instructed to pursue a patent application on behalf of a client will be under a duty to draft the specification and claims of the patent and file the application with the appropriate fee, but will not be obliged to provide a granted patent.38 In the case of Finecard International Ltd v. Urquhart Dykes & Lord,39 the court held that the duty cast on a patent attorney was analogous to that of a conveyancer, and that the purpose of the retainer was to avoid potential disputes.40 There is no reason why this would not also apply to trade mark attorneys. Patent and trade mark attorneys may both also be obliged to consider the more general, commercial aspects of a particular matter and give advice where appropriate. This may extend to asking for information or instructions from the client necessary to give proper advice.41 However the giving of commercial advice, and any duty to do so, is the exception based on the particular facts, and not the rule.42(b) Reliance upon third parties and delegation to them
16.18 It is common for patent and trade mark attorneys to delegate certain specific tasks or duties. For example, a patent attorney will normally delegate the task of filing a foreign patent application to a foreign patent attorney, or a trade mark attorney may delegate a search of the register to an external search facility. This raises the question whether it is a defence for a patent or trade mark attorney alleged to have been negligent to show that he relied upon the advice or work of a third party and/or delegated the task to them, and whether such reliance or delegation was reasonable. 16.19 The general principle in contract is that the professional who delegates a contractual task remains contractually responsible for the performance of that task with the proper standard of care.43 At common law, however, the matter is not necessarily so straightforward. Consider for example the patent attorney who delegates a task to a foreign attorney. It is doubtful—in the absence of an express agreement—that a patent attorney would be able to claim for himself the status of a mere post box with his responsibilities limited to the transmission of instructions from his client to the foreign attorney. If the task was one which the UK attorney was not qualified to carry out—such as advising on a non-straightforward point of foreign patent law and practice—then obviously he must rely on the expertise of the foreign patent attorney and his duty to take care is likely to be limited to choosing a competent person to whom to delegate this task.44 16.20 This may be unsatisfactory as circumstances may leave the client without a remedy in the absence of a direct agreement between the client and the foreign patent attorney. Whilst the foreign attorney may also owe a direct duty of care to the client,45 it is obviously more difficult for the client to have to enforce that duty in a foreign jurisdiction. Where the foreign patent attorney is domiciled in a Community member state, it may be possible to sue him here under Articles 5.346 or 6 of Council Regulation 44/2001.47 16.21 However, it may be part of a patent attorney’s duty of care to seek to understand—as best he can—the advice being given by the foreign patent attorney in order to be able to advise his client on the optimum course of action. An obvious example is where a prior art search has revealed potentially damaging citations48 and the foreign law of novelty and inventiveness is not exactly the same as UK law but is not so entirely different either. It may not be sufficient in those circumstances merely to pass on the advice of the foreign patent attorney to the client without involving himself in assessing and advising on the impact of that advice. In other words it remains his duty to give proper advice to his client, which duty includes taking into account the advice given by the foreign patent attorney, considering the quality of that advice and acting accordingly. The UK patent attorney would not be entitled to rely blindly on the foreign patent attorney on matters which should or must have been apparent to a UK patent attorney of ordinary competence.49 The same principles and reasoning apply to trade mark attorneys. 16.22 It is common practice for patent attorneys and trade mark attorneys to delegate certain tasks to third parties, such as carrying out a prior art search for publications which may affect the patentability of a patent, checking the register of granted patents to see whether a patent remains in force or searching the register of trade marks for any earlier conflicting registrations or the payment of renewal fees. In such cases, the patent attorney’s duty of care is fulfilled if he instructs a competent and reputable firm or company specialising in the carrying out of such searches.502. Fiduciary duty
16.23 As well as duties in contract and tort, patent and trade mark attorneys owe their clients a duty in equity.51 One of the main duties is not to breach the confidence of the client. The requirement of novelty for patentability52 makes this particularly important for patent attorneys, who must take great care not to disclose any confidential information which could jeopardise a client’s potential monopoly. Other important duties include the duty not to profit from a position of trust, not to profit from the client’s property and not to act in conflict with the client’s best interests. This latter duty is expressly considered in relation to a patent attorney’s own abilities to act for a client in his professional code of conduct.533. Duty of care to third parties
16.24 Although a patent attorney’s liability for negligence is primarily founded in contract and his duty is owed to his client, there may be some occasions where he owes a duty of care to third parties.54 For example, a patentee may instruct a patent attorney to pay the renewal fees of his patent portfolio which has been exclusively licensed, to the knowledge of the patent attorney, to a third party. It is a foreseeable consequence of any failure to pay the fees55 that not only the patentee but also the exclusive licensee will suffer damage. In such circumstances, it is submitted that the patent attorney would be liable to compensate both. Indeed, in the recent case of Baillie and Others 56 Birss J indicated that a patent agent could owe a duty of care to potential investors in company with pending patent applications if those investors relied on advice given by the attorney that he knew was to be given to the investors57 .4. Overlap with duty owed by solicitor
16.25 It is common for a patent attorney or trade mark attorney to work in conjunction with a solicitor. In that case, there is the potential for the duties to overlap, particularly when the solicitor is a specialist practitioner. It is submitted that whether or not a particular duty is concurrent and owed by both professionals or belongs to one only depends on the particular circumstances. Reference is made to Chapter 9 in this work on solicitors’ negligence.5. Specific duties of a patent attorney
(a) General
16.26 By their very nature, most patents involve some kind of technical subject-matter.58 Accordingly, it is fundamental that the patent attorney has some level of technical ability and understanding. Most patent attorneys have a scientific qualification or some kind of scientific background, although this is not compulsory. In any case, the diversity of work of a patent attorney is such that he is most unlikely to deal exclusively with the subject-matter(s) for which he has a qualification or experience. It is therefore necessary that the attorney makes clear to his client his previous technical exposure to the subject-matter of the invention, and whether or not he will need assistance from a specialist in the field in question. The Rules of Conduct for Patent Attorneys, Trade Mark Attorneys and Other Regulated Persons59 expressly provide that an attorney is under a duty to only undertake work within his experience or competence and to inform his client if he considers that their interests would be served by some other person acting in his stead. Further general duties are provided for in the Special Rules of Professional Conduct60 applicable to a patent attorney conducting litigation or exercising a right of audience.61(b) Pre-grant duties
16.27 The patent attorney must have regard to and advise on all matters of law and procedure directly relevant to a patent application that he is instructed to prosecute.62 Primarily and most importantly, he must understand the inventive concept to be protected.63 This usually entails an in-depth discussion with the inventor as to how the invention was made, how it works and how it differs from what had been done before.64 16.28 Once he has understood the invention, the patent attorney can assess whether or not, in his view, it is patentable.65 Even if he is of the opinion that it is not, he should explain to the client that it is possible to apply for and obtain a patent which is most likely invalid, and the potential benefits in doing so.66 He should also advise as to the types67 of patent that can be applied for, including the relative procedures,68 costs and time frames involved. In most cases, a UK patent will be suitable, unless, for example, the client requires protection in a number of jurisdictions. It is possible to apply for a European patent for the same invention and with the same priority date69 if the application is filed within 12 months of the filing date or the priority date of the UK application (whichever is the earlier).70 The patent attorney should therefore be aware of when his client’s right to make foreign applications will lapse and give timely notice of the same.71 16.29 The patent attorney is under a duty to draft the abstract, specification and claims of the application in the prescribed form.72 This requires particular skill and care by the attorney. First, the claims of the application define the limit of the monopoly and so must be drafted unambiguously and with extreme care. Secondly, the body of the specification discloses the invention to the person skilled in the art, and must do so clearly and completely enough to enable him to perform it, for otherwise the patent may be revoked.73 In addition, in infringement proceedings where the patent is found to be partially valid, the court must not grant relief for infringement unless the proprietor can prove that the specification was framed in good faith and with reasonable skill and knowledge.74 16.30 Thereafter, the patent is filed in accordance with the administrative formalities.75 The patent attorney must request a preliminary examination and search within the prescribed period and pay the search fee. The examiner produces a preliminary report which indicates if any formal requirements have not been complied with and gives the applicant the opportunity to amend the application within a specified time. It is important that the attorney effects any necessary amendments within the time frame, since otherwise the application may be refused.76 The report also includes any relevant prior art revealed by the Patent Office search. It is the duty of the patent attorney to review the prior art and enquire of his client how the invention can be distinguished from it.77 16.31 The application is published within 18 months of the priority date.78 Within six months thereafter, the attorney must request a substantive examination and pay the prescribed fee. The examiner produces a substantive report which indicates whether any amendments relating to the substance of the application are required. The application may be refused if such amendments are not made within the prescribed period79 and it is the duty of the patent attorney to file any amendments in time. 16.32 In addition to the preliminary and substantive reports, the applicant is entitled to amend the application (subject to certain conditions) of his own accord at any time before the patent is granted.80 Amending an application requires care, since adding matter to the application can cause the patent to be revoked.81 Accordingly, it is important that the attorney ensures full disclosure of the invention in the initial application. 16.33 Throughout the application process, the patent attorney is under a duty to act within the prescribed time periods. Official correspondence from the Patent Office generally specifies a date by which time a response should be received or action taken. The patent attorney should notify his client as to any instructions or information he may need to make such response or take such action at the earliest opportunity. If his client is dilatory or does not respond, it is common for the attorney to send one or more reminders. Certainly he should warn the client of the consequences of missing the deadline, and enquire whether or not such consequences are intended.82 He should also keep an accurate record of the steps he takes and the dates on which he takes them.83(c) Post-grant duties
16.34 The main duty that a patent attorney may have in relation to a patent once it has been granted is to keep the patent in force. This is achieved by paying renewal fees, which must be paid annually from the beginning of the fifth year up to a maximum of 20 years. If renewal fees are not paid within the prescribed period the patent ceases to have effect.84 However, it can be restored within 19 months thereafter, subject to certain conditions.85 Payment of renewal fees by a patent attorney has to be on specific instructions; it is not an inherent duty. 16.35 Other duties of a patent attorney may include advising on assignment or licensing of the patent. These must comply with certain statutory formalities. For example, an assignment must be made in writing and signed by or on behalf of the parties to the transaction.86 Further, both assignments and exclusive licences must be registered on the register of patents87 if the proprietor or exclusive licensee is to be awarded damages or an account of profits for any infringement of his right.88 Assignments must also be registered if they are to be effective against third parties acquiring subsequent rights in the patent.89 The patent attorney is under a duty to effect the transaction as instructed and in accordance with the statutory framework and rules.(d) Patent infringement and validity
16.36 A patent provides a monopoly right and can be used to stop a third party exploiting the invention of the patent. In most cases, this is the primary purpose of the patent for the client. Similarly, a competitor may have a keen interest in demonstrating that the patent is not valid. The issues of patent infringement and validity are therefore a significant part of a patent attorney’s work, and he may be instructed to advise on issues of infringement and validity of a patent either by the proprietor (which may or may not be for a patent he has drafted) or the potential infringer. 16.37 The question of infringement or validity will depend on the facts of any particular case. Generally, however, in considering these issues, the patent attorney must have regard both to the statutory framework and rules, and as well as their interpretation and application by the courts. The attorney’s duty to keep abreast of developments in the law90 can be very important in this context. 16.38 The attorney must also consider and understand the patent and any prior art, and if necessary conduct a further91 prior art search. If the subject-matter of the patent is outside his experience, he is under a duty to tell the client and, if necessary, advise switching to another attorney.92 Consideration of prior art is particularly important if validity is put in issue in infringement proceedings, since failure to plead all the relevant prior art in good time may have serious costs consequences.93 Infringement proceedings can be brought in the Patents Court or the IPEC,94 and it may fall to the patent attorney to advise on the appropriate forum if litigation is contemplated. Litigation in the IPEC is considered to be cheaper than in the Patents Court.956. Specific duties of a trade mark attorney
(a) General
16.39 The trade mark attorney is under a duty to advise in relation to any application for a trade mark96 which he is instructed to make. That advice is, to some extent at least, technical in nature in that it requires a detailed knowledge and understanding of the relevant provisions of the Trade Marks Act 1994 and the practice of the Trade Marks Registry as set out in the Trade Mark Rules97 and the Manual of Trade Mark Practice.98 Accordingly, the advice will relate to such matters as timing, cost, administrative requirements and procedure. Familiarity with Community trade mark applications and knowledge of the Community trade mark regulations99 is also required. 16.40 However, the advice should not be limited to such technical aspects, and should also include more general trade mark advice in relation to the legal and commercial risks (if any) of the application. The kind of general advice that is expected was explained by Jacob J in the case of Halifax Building Society v. Urquart Dykes & Lord 100 in the following terms:“… where a trade mark attorney undertakes to pursue a trade mark application for a client, then his duties to that client extend to advising in relation to all legal pitfalls reasonably connected with that application. The trade mark attorney is not under a duty to give commercial advice as such, but he is under a duty to keep his client informed of the legal problems which may arise and his duty extends to warning his client to consider any commercial problems which may arise as a result of the legal problems which he, as trade mark attorney, should reasonably discern.”101