©2013. Published in Landslide, Vol. 5, No. 5, May/June 2013, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.
This article surveys the risks that can arise from what may appear to be innocuous conduct: copying text from one client’s patent or published application into another client’s application.
What risk, you say? Lawyers have argued that there is nothing wrong with copying text from one client’s application into another because it is “accepted practice.”1 That argument doesn’t work. It probably doesn’t help that the sole source of support is Patent It Yourself.2
Perhaps surprisingly, at least two courts have held that it is actionable for a lawyer to use text from even the published application of one client in another client’s application. At least one court also has recognized that a client can be damaged even if it is the “beneficiary” of the copying.
Prohibitions against use or disclosure of client information come from various sources. The attorney-client privilege, patent agent-client privilege, or even work-product doctrine may prohibit disclosure of certain communications. Copyright may subsist in a client on an application prepared by a practitioner for the client. The lawyer might agree not to disclose. And, likely the broadest of them all, the practitioner’s obligation of confidentiality may preclude use or disclosure of any information relating to the representation of the client acquired by the practitioner—even if the information was publicly disclosed in a patent or published application.
A Brief Word about Copyright
Owners of copyright in articles recently sued a patent prosecution firm, alleging that by copying copyrighted articles for submission to the U.S. Patent and Trademark Office (USPTO) as prior art, the firm violated the federal copyright laws.3 The USPTO promptly intervened, asking the district court to declare that such copying and incidental related copying was fair use. In response, the copyright holder amended its complaint to drop all claims that copying for submission to the USPTO infringed, but continued to assert that any copying beyond that necessary or incidental to submission was, nonetheless, infringement.4
No applicant apparently has, as yet, sued its lawyer for copyright infringement where the lawyer copied text from the client’s application for use in some other client’s specification. It may be the lawyer owns copyright in the text. But in any event, lawyers who copy text face other forms of liability.5
An Agreement Can Make Use or Disclosure of Patent or Published Application Text Actionable
A recent Northern District of California case addressed the motion of a patent prosecution law firm to dismiss a claim against it for breach of fiduciary duty. In Tethys Bioscience,6 Tethys retained a law firm to prosecute patent applications. Tethys alleged that it had given permission to the firm to disclose the information only to the USPTO, to affiliated counsel working on its applications, to the World Intellectual Property Organization in connection with its Patent Cooperation Treaty (PCT) application, when required by law, or in instances where Tethys expressly preapproved it.
While still prosecuting Tethys’s applications, the law firm filed another application for another client. Tethys alleged that in doing so the firm used Tethys’s applications as templates for the other client. The firm moved to dismiss these allegations under Rule 12(b)(6) for failing to state a claim. The district court held that the plaintiff had stated a claim, reasoning:
Plaintiff also plead[s] that Defendants violated their duty of confidentiality by, among other things, disclosing information on its provisional patent application to ATCC [American Type Culture Company]. Plaintiff’s claim appears to rest primarily on Defendants’ alleged copying of information from its applications for use on those of ATCC. Defendants assert that this information was not confidential because it constituted “high-level background information that . . . those of ordinary skill in the art already know.” On the limited record for this motion, the Court is not persuaded. Plaintiff pleads that it did not give permission to Defendants to disclose any information it provided. Defendants’ argument, if accepted, would empower an attorney to determine what constitutes secret information and, if the attorney so decided, enable the disclosure of a client’s confidences with impunity. Further, even if skilled artisans may have had general knowledge concerning the allegedly copied information, it does not follow that the manner in which Plaintiff presented its invention in its provisional patent application was publicly known. . . .
Accordingly, Plaintiff sufficiently pleads that Defendants breached their duties of loyalty and confidentiality.7
The Tethys Bioscience case recognized that sometimes public information can be confidential in terms of a confidentiality agreement. While its context was whether the use of the text violated an alleged confidentiality agreement with the client, the same rule may arise as the result of state ethical rules.
Patent or Published Application Text Can Be Confidential under State Ethical Rules, but Likely Not under PTO Code
The ABA Model Rules of Professional Conduct (Model Rules) “make information ‘relating to’ a lawyer’s professional relationship presumptively confidential,” a definition which “thus is extremely broad, covering all information relating to the representation regardless of the source.”8 Courts have held that this plain language can sometimes include information a lawyer acquired from a client that is publicly known. Further, simply because information “can be found in the public domain” may not mean that it is still not confidential.9 Consequently, courts have held that public information acquired while representing a client must be treated as confidential under the disciplinary rules. That conclusion has been reached by courts in Iowa10 and Kansas,11 and it may be true in other jurisdictions as well.12
On the other hand, without much analysis one court stated that to the extent information is placed in a patent application, the applicant “cannot claim that it was confidential information as of the date of the patent publication.”13 In other states, courts hold the fact that information is generally known merely one factor indicating whether it is confidential, and in still other states, different forms of analyses are used.14 While there may be a rule in a particular state, there is no uniform rule among the states, and often very little considered analysis in any precedential opinion. Cases applying state rules may be beside the point, however, when it comes to patent practice at least.
Most states pattern their ethical rules on the Model Rules, while the current version of the PTO Code of Professional Responsibility (PTO Code) is based upon the ABA Model Code of Professional Responsibility (Model Code).15 The Model Code “only shield[s] information ‘gained in the professional relationship’ that either the client requested the lawyer to keep secret, or which would embarrass or likely be detrimental to the client if disclosed.”16 Hence, the scope of what information is protected under the PTO Code is clearly narrower than what is protected under the Model Rules.17 As noted above, all information relating to a representation is “confidential” under the Model Rules, while only privileged information and information that will embarrass the client, or that it has requested not be disclosed, are confidential under the PTO Code. Thus, both in terms of how confidential information is acquired and what is covered, the Model Rules are much broader. The result is that much more information is “confidential” under state law than under the PTO Code.
Applying state rules to information learned during patent prosecution may not always be correct. In fact, choice of law principles frequently will dictate that when a lawyer gains information from a client while representing it before a tribunal, that tribunal’s rules will govern whether that information is confidential. Thus, whether any information is confidential should be measured by the PTO Code, and whether its use is improper also should be determined by the PTO Code.
An ethics opinion from Oregon illustrates how choice of law can be outcome determinative in this very context. The Oregon Bar Association was asked by in-house counsel whether counsel could bring a claim for wrongful discharge if he was terminated for refusing to file a patent application intentionally misrepresenting inventorship.18 Relying upon the exception that permitted disclosure of information relating to the lawyer’s representation of the company, the Oregon Bar Association reasoned that disclosure was permitted if reasonably necessary to establish the claim.19
However, the PTO Code does not contain an express provision allowing disclosure to support a claim, only to defend one or to obtain a fee.20 Further compounding matters, some states do not permit disclosure by in-house counsel in wrongful termination matters.21 Thus, if the PTO Code is deemed to apply, then federal law may permit what state law prohibits.
Two final points: (1) If a lawyer discloses protected information when an exception does not apply, he or she violates the disciplinary rules. On the other hand, tort liability may arise even if the lawyer is not subject to discipline. Focusing too myopically on the disciplinary rules is a mistake. (2) The PTO is currently considering modifying its disciplinary rules. If it does, it may adopt the Model Rule definition of confidentiality, which may create problems even under the PTO Code.
Using Text in a Way That Harms the Recipient’s Patent
Assume for the moment that a client has no protected interest in the text of a patent application, not by copyright, agreement, rules of confidentiality, or any other source. Even if it does not breach a duty to the owner of the application, copying text into another client’s case without thought and care can create significant patentability problems for the text’s recipient.
In one recent case, practitioners were sued after allegedly using the text of one client’s application to describe the inventions of the later-filed application.22 The plaintiff, Cold Spring Harbor Laboratory (CSHL), had hired attorney Vincent to file applications for inventor Hannon. Rather than drafting an original specification, Vincent used language from an application he had previously filed for inventor Fire—and not just for the background of the invention section or something perhaps harmless. Instead, the specific allegation was:
When Vincent drafted the three earliest non-provisional Hannon Applications (U.S. patent applications nos. 09/858,862, filed May 16, 2001, 09/866,557, filed March 24, 2001 and international patent application PCT/US0 1/08345, filed March 16, 2001), rather than providing an original, complete description of Dr. Hannon’s work, Vincent instead relied upon copying extensive portions of text—essentially verbatim—from a prior patent application (WO/99/32619) published by a team led by another researcher in the [RNAi] field, Dr. Andrew Fire . . . to at least, in part, describe Dr. Hannon’s inventions.
According to CSHL, about one half of the “Detailed Description of Certain Preferred Embodiments” found in the three earliest filed Hannon Applications consists of text copied from the Fire application. On August 11, 2005, the [US]PTO issued a Notice of Allowance for the pending ’557 (Hannon) application claims. However, the [US]PTO subsequently withdrew the ’557 application from issue, and on September 6, 2006, the [US]PTO examiner rejected all pending claims as anticipated by the Fire Patent.23
Boiled down, on the event of its issuance, the plaintiff’s application was rejected in light of the disclosure of the patent from which some of its text had allegedly been lifted. That client sued, alleging among other things that the placement of the text had made patentability more difficult.
Thus, even if there is no obligation to the client on whose behalf the lawyer prepared the text to keep the text secret, using the text in another client’s case (or the same client’s, for that matter) can create liability. There could be, in other words, potential liability to the text owner, as well as its “recipient.”
Many circumstances are much more likely to cause practitioners problems than merely copying text. Missing deadlines, failing to pay maintenance fees, and other things will always be a greater source of liability. Nonetheless, being thoughtful about using one client’s text for another may help to avoid these pitfalls, as shallow and rare as they might be.
1. Cold Spring Harbor Lab. v. Ropes & Gray LLP, 840 F. Supp. 2d 473 (D. Mass. 2012).
2. Id. at 477–78 (citing David Pressman, Patent It Yourself 181 (13th ed. 2008)). The court stated that citing “a popular how-to reference book . . . is dubious at best, and at worst, an insult to the professional standards of the patent bar. Id. at 478.
3. Am. Inst. of Physics v. Schwegman Lundberg & Woessner, P.A., No. 12 Civ. 528 (RHK-JJK) (D. Minn. July 12, 2012).
4. Plaintiffs’ Amended Complaint, Am. Inst. of Physics, No. 12 Civ. 528 (RHK-JJK) (D. Minn. Oct. 3, 2012).
5. A lawyer who bills the second client for more than the time it actually took to prepare the application creates additional ethical issues concerning unreasonable fees, a topic beyond the scope of this article.
6. Tethys Bioscience, Inc. v. Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C., 98 U.S.P.Q.2d 1585 (N.D. Cal. 2010); see Cold Spring Harbor Lab., 840 F. Supp. 2d 473.
7. Tethys Bioscience, 98 U.S.P.Q.2d at 1589–90 (footnote omitted) (citation omitted).
8. Sealed Party v. Sealed Party, No. Civ.A. H-04-2229, 2006 WL 1207732, at *13 (S.D. Tex. May 4, 2006).
9. See In re Johnson, 4 Cal. State Bar Ct. Rptr. 179 (Review Dep’t of State Bar Ct. 2000) (holding that attorney breached duty of confidentiality by revealing to second client that first client had been convicted, where attorney learned of first client’s conviction while representing him, even though conviction was a matter of public record); Ill. State Bar Ass’n, Advisory Op. 88-07 (Mar. 15, 1989) (finding that lawyer who learned information in confidence may not represent a client where that information is implicated even if it has become public knowledge); N.J. S. Ct. Advisory Comm. on Prof’l Ethics, Op. 686 (Nov. 23, 1998) (“[T]o make a determination whether otherwise confidential information has become public knowledge and therefore is no longer entitled to protection from use or disclosure may require a fully-developed record possible only in the context of an adversarial proceeding.”).
10. Iowa Supreme Court Attorney Disciplinary Bd. v. Marzen, 779 N.W.2d 757 (Iowa 2010).
11. In re Bryan, 61 P.3d 641, 656 (Kan. 2003).
12. See In re Rules of Prof’l Conduct & Insurer Imposed Billing Rules & Procedures, 2 P.3d 806, 822 (Mont. 2000); USA Power, LLC v. PacifiCorp, 235 P.3d 749 (Utah 2010) (holding that a compilation of public information may be a trade secret); In re Advisory Op. No. 544, 511 A.2d 609, 612 (N.J. 1986); N.C. State Bar, Formal Op. 20 (Apr. 23, 1999). In addition, a practitioner cannot disclose to the USPTO information that is subject to a protective order, such as a prosecution bar. See In re Bollman, No. D2010-40 (Dir. of U.S. Pat. & Trademark Off. Oct. 19, 2011).
13. Blake v. Prof’l Coin Grading Serv., No. 11-11531-WGY, 2012 WL 4903334, at *8 (D. Mass. Oct. 16, 2012).
14. See generally Cal. State Bar Standing Comm. on Prof’l Responsibility & Conduct, Formal Op. 2003-161 (2003) (“[C]onfidentiality may also depend on both the degree to which the information communicated by the speaker already is known publicly, and the inherent sensitivity of the information to the speaker.”).
15. Subsequent to the writing of this article, on April 3, 2013, the USPTO published new ethics rules based on the ABA Model Rules of Professional Conduct. Changes to Representation of Others before the United States Patent and Trademark Office, 78 Fed. Reg. 20180 (codified at 37 C.F.R. pt. 11). See “Changes to the OED Disciplinary Rules” by Cameron K. Weiffenbach in this issue.
16. Sealed Party v. Sealed Party, No. Civ.A. H-04-2229, 2006 WL 1207732, at *11 (S.D. Tex. May 4, 2006).
17. See generally O’Brien v. Stolt-Nielsen Transp. Grp., Ltd., No. X08CV020190051, 2004 WL 304318 (Conn. Super. Ct. Jan. 30, 2004).
18. Or. State Bar Ass’n, Formal Op. 2005-136 (Aug. 2005).
21. See Crews v. Buckman Labs. Int’l, Inc., 78 S.W.3d 852 (Tenn. 2002) (discussing split of authority).
22. Cold Spring Harbor Lab. v. Ropes & Gray LLP, 840 F. Supp. 2d 473 (D. Mass. 2012).
23. Id. at 475–76 (footnote omitted) (citations omitted) (internal quotation marks omitted).