How to Avoid Ethical Traps Remember what we were taught in law school…. Don’t lie Don’t steal Don’t cheat Don’t sleep with your clients * Keep a client trust account for unearned fees! We should add…. Don’t give clients a reason to even suspect legal malpractice. Don’t get sanctioned by a Court or Tribunal. Don’t commit a crime (probably redundant but needs saying). Don’t be stupid! Usually not a problem for patent practitioners, but potentially NOT an ethical violation under the new PTO Ethics Rules.
Malpractice Mistakes When you make mistakes your clients get unhappy clients and when clients get unhappy they sometimes complain and when unhappy clients sometimes complain they contact the Ethics Police and when unhappy clients contact the Ethics Police your life gets more complicated. Don’t let your life get more complicated. Don’t make mistakes!
New Ethics Rules 2012. USPTO finalizes Disciplinary Rules http://www.ipwatchdog.com/2012/07/30/uspto-issues-final-rules-of-discipline-for- patent-practitioners/id=26952/ AIA = 10 year statute of limitations A complaint must, however, be filed within 1 year from when the OED Director receives a grievance forming the basis of the complaint The USPTO and Practitioner may agree to tolling 1 year period to attempt to negotiate resolution.
In 2013 the USPTO adopted new Rules of Professional Conduct, based on the ABA Model Rules. The Office also revised the existing procedural rules governing disciplinary investigations and proceedings. These changes now provide practitioners with substantially uniform disciplinary rules across multiple jurisdictions. http://ipwatchdog.com/blog/FINAL-representation-of-others.pdf
Some Highlights 1.The Office removed this practitioner maintenance fee. 2.The definition of fraud or fraudulent used in the ABA Model Rules was not adopted. USPTO believes common law should apply. 3.Action or notice by OED Director is not a final agency decision under the Administrative Procedure Act; must exhaust administrative remedies before an appeal out of Office. 4.USPTO expressly has jurisdiction over a person not registered to practice before the Office if the person provides or offers to provide any legal services before the Office. 5.Section 11.106 relates to confidentiality of information. This section generally corresponds to ABA Model Rule 1.6, but it also includes exceptions in case of inequitable conduct before the Office. Interesting--- ABA Model rule 1.6(c) says: “A lawyer shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.” There is no PTO equivalent to 1.6(c). http://ipwatchdog.com/blog/FINAL-representation-of-others.pdf
More Highlights 6.RE: 11.106(c) and the duty of disclosure… “If a practitioner has a conflict of interest in a given matter, arising from a different client, timely withdrawal by the practitioner from the given matter would generally result in OED not seeking discipline for conflicts of interest under part 11.” 7.Sexual relations with clients… The PTO has declined to enact a rule that specifically addresses sexual relations between practitioners and clients. Because of the fiduciary duty to clients, combining a professional relationship with any intimate personal relationship may raise concerns about conflict of interest and impairment of the judgment of both practitioner and client. To the extent warranted, such conduct may be investigated under general provisions of the USPTO Rules. 8.If you know another practitioner has committed a violation that raises a substantial question as to that practitioner’s honesty, trustworthiness or fitness, you must inform the OED Director and any other appropriate professional authority. Similar rule with respect to Judges. http://ipwatchdog.com/blog/FINAL-representation-of-others.pdf
In the Matter of James B. Hicks (OED 9-30-2013) Available at http://e-foia.uspto.gov/Foia/ReterivePdf?system=OED&flNm=0749_DIS_2013-09-10http://e-foia.uspto.gov/Foia/ReterivePdf?system=OED&flNm=0749_DIS_2013-09-10 Hicks engaged in conduct prejudicial to the administration of justice. In Rates Technology v. Mediatrix Telecom the EDNY sanctioned Hicks for failing to comply with the discovery orders and imposted monetary sanctions in excess of $43,000 against Hicks. On appeal the Federal Circuit found that Hicks had made misleading and improper statements in the brief he submitted challenging the sanction levied against him.
Virginia Innovation Sciences v. Samsung Parties knew of IPR petition, but didn’t inform the Court for six months. Counsel said it never occurred to them that they should advise the Court of the parallel proceeding even given presence of estoppel provisions. Court said this gave parties two bites at the apple regarding validity. “The parties should have notified this Court of the IPR petition as soon as it was filed, and the failure to do so appears… to have been a glaring omission.” Given newness of IPR this admonition falls short of a formal reprimand. Future failure to disclose by any parties “will be met with far sharper Consequences.” future failures to disclose to the Court any concurrent inter p a r t e s review proceedings will be met with far sharper consequences. Eastern District of Virginia, Norfolk Division 2:12-cv-548 (5-2-2014)
“Cyber Switching specifically asked for help to develop a plan to enforce these patents. Over the next two months, K&L Gates attorneys and Cyber Switching personnel engaged in face-to- face meetings and other privileged communications. Cyber Switching provided confidential information and work product analysis of the patents to K&L Gates, and K&L Gates provided advice. K&L Gates billed Cyber Switching for the time its attorneys spent on this matter, and Cyber Switching paid those bills.” California’s conflicts rule tracks ABA Model Rule 1.9(a), which states: “A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client consents after consultation.” Cyber Switching Patents v. Eaton Corp. Northern District of California, Oakland Division 4:14-cv-02682-PJH
K&L Gates argued that Cyber Switching never retained the firm in any matter that would give rise to a disabling conflict, and never provided K&L Gates with any confidential information that could be used during this litigation. Notwithstanding, K&L Gates did establish an ethical wall between the attorneys contacted by Cyber Switching regarding a non-conflicting engagement and the K&L Gates’ attorneys of record in this litigation. Nevertheless, K&L Gates withdrew out of an abundance of caution, explaining that “it would be fundamentally unfair to subject Eaton to a protracted distraction on this issue that is unrelated to the merits of the case…” Cyber Switching Patents v. Eaton Corp. Northern District of California, Oakland Division 4:14-cv-02682-PJH (9-29-14)
An attorney who “multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses and attorneys’ fees reasonably incurred because of such conduct.” See 28 U.S.C. § 1927. The Court also has the inherent power to sanction a lawyer for a “full range of litigation abuses” including for acting “vexatiously.” [ ] In this case, Escort’s counsel represented that ESC17363 operated Escort’s accused devices knowing that ESC17363 did not operate any accused device. This false representation was beyond reckless and was made in bad faith because Escort’s counsel knew it was not true. The Court will therefore award attorney fees as sanctions under both § 1927 and the Court’s inherent power. Cyber Switching Patents v. Eaton Corp. U.S. District Court for the District of Idaho, 1:12-CV-066-BLW (9-29-2014)
Defendants alleged that LBDS manufactured and falsified evidence, testified falsely, and committed a fraud upon the Court. Akin Gump immediately forwarded the Motion to representatives of LBDS, who eventually admitted the allegations were “essentially correct.” Akin Gump attorneys explained that if LBDS did not promptly admit the allegations to the Court, Akin Gump would do so in accordance with the Texas Rules of Professional Conduct. Further, LBDS was notified that Akin Gump could not continue representation. Akin Gump ultimately disclosed the deception to the Court. LBDS Holding Co. v. ISOL Technology Eastern District of Texas, Tyler Division 6:11-cv-00428-LED (5-21-2014)
Akin Gump did not have any reason to question the authenticity of the documents and did not know that any of the testimony offered was untrue. Revealing of confidential client information was not only within the rules, but mandated. (A lawyer shall reveal confidential information if the lawyer comes to know that he/she has offered material evidence that was false.) Texas Disciplinary Rules permit withdrawal when “the client has used the lawyer’s services to perpetrate a… fraud.” LBDS Holding Co. v. ISOL Technology Eastern District of Texas, Tyler Division 6:11-cv-00428-LED (5-21-2014)
In re Edward R. Reines (CAFC Nov. 5, 2014) Reines Publicly reprimanded by CAFC for misconduct in disseminating an email to clients and prospective clients that he received from then-Chief Judge Rader. CAFC ordered Reines to show cause why his actions associated with the email did not warrant discipline. “[T]he fact that Mr. Reines circulated the email extensively and that it became a matter of general public knowledge warrants a public response by this court.”
In re Snyder, 472 U.S. 634 (1985) FRAP 46 requires “members of the bar to conduct themselves in a manner compatible with the role of the courts in the administration of justice.” “The phrase ‘conduct unbecoming a member of the bar’ must be read in light of the "complex code of behavior" to which attorneys are subject… [I]t is clear that ‘conduct unbecoming a member of the bar’ is conduct contrary to professional standards that shows an unfitness to discharge continuing obligations to clients or the courts, or conduct inimical to the administration of justice. More specific guidance is provided by case law, applicable court rules, and "the lore of the profession," as embodied in codes of professional conduct.
CAFC Applies Model Rule 8.4(e) “We conclude that with respect to the email dissemination we should look to the Model Rules of Professional Conduct rather than to the rules of any individual state. We note that other circuits have imposed discipline by referring to the Model Rules of Professional Conduct. We think that Model Rule 8.4(e) sets forth the relevant standard.” Rule 8.4(e) --- professional misconduct for a lawyer to “state or imply an ability to influence improperly a government agency or official or to achieve results by means that violate the Rules of Professional Conduct or other law.”
5 Reasons Why Reines E-mail Violated 8.4(e) 1.“[T]he email both explicitly describes and implies a special relationship between respondent and then-Chief Judge Rader. The text… describes a close friendship between the two. The email included the language, ‘[i]n sum, I was really proud to be your friend today,’ and closed with ‘[y]our friend for life.’” [ ] Respondent’s comments transmitting the email also convey a special relationship with then-Chief Judge Rader and the Federal Circuit. Respondent described the email as “unusual” or “quite unusual” in some of his accompanying comments and referenced his “stature” within the court and his role as chair of the Federal Circuit’s Advisory Council…”
2.“[R]ecipients of the email also viewed it as suggesting the existence of a special relationship between respondent and then- Chief Judge Rader and perhaps other judges of the court. Several responses referred to the high opinion then-Chief Judge Rader and judges in general had for Mr. Reines…” 3.“[T]he transmission of the email did more than suggest that respondent should be retained because of his superior advocacy skills. It suggested that his special relationship with the court should be taken into account…” 4.“[I]n sending the email to clients and prospective clients, respondent sought to directly influence their decisions about retaining counsel.” 5.“[T]he email itself and respondent’s comments accompanying the sending of the email suggested that Federal Circuit judges would look favorably on the retention of respondent.” 5 Reasons Why Reines E-mail Violated 8.4(e)
Reines “provided a ticket for one concert, at another concert arranged for upgrading to a standing area near the stage, and arranged for backstage access for then-Chief Judge Rader at both. Then-Chief Judge Rader paid for accommodations. This occurred while Mr. Reines had cases pending before this court. We do not decide whether Mr. Reines’s actions violated standards of professional responsibility. We have decided to refer this separate matter and the underlying relevant documents to the California bar authorities for their consideration.” “In referring this matter to the California bar authorities, we have determined to enter a protective order and to place the filings relating to the matter under seal since this does not concern a matter as to which we have imposed discipline.” Exchange of Items of Value w/ Judge Rader
“The post-trial discovery conducted in this case surrounding allegations of inequitable conduct and litigation misconduct on the part of Tesco has revealed that Tesco’s counsel affirmatively misrepresented to the Court during trial the statements of key witnesses regarding important evidence disclosed only during trial. Accordingly, in an effort to safeguard the integrity of the Court and these proceedings, the Court utilizes its inherent authority to DISMISS the case WITH PREJUDICE.” Tesco Corporation v. Weatherford Int’l Southern District of Texas, Houston Division 4:08-cv-02531 (8/25/2014)
OED Process on Discipline Avenues OED can follow to hand out discipline: 1.Interim suspension under 11.25. Practitioner who commits a serious crime can be suspended immediately on an interim basis. 2.Reciprocal Discipline. If the practitioner has been disciplined previously by a State Bar or Court OED processes are streamlined with no. 3.OED Initiated Discipline. If process has not previously been given, OED follows a path that leads to a hearing before an ALJ at the Environmental Protection Agency.