Advice from PCC

The Professional Conduct Committee provides advices or opinions upon enquiries from epi members under Art. 7(d) of the epi Code of Conduct. Any advice given does not have regulatory force and is prepared with the intention to provide helpful assistance. No liability of any kind attaches to the epi, the Professional Conduct Committee or any members of that Committee in respect of these advices. In accordance with Article 7(d) CoC, opinions of the Professional Conduct Committee shall not be binding on the disciplinary bodies.

The following advice has been considered useful for epi members as the questions it addresses are particularly significant. Thus, it has been decided to publish it, in anonymised form.

Summary of Referral

The Referring Member has raised the question of whether there is a limit to the time period during which a European Patent Attorney who has moved from one position of employment to another is under obligation to a former client that the Referring Member represented at his/her former firm. The question has arisen in the context of the European Patent Attorney being instructed by a current client of his/her new firm to take action against the interest of the former client. In particular the Referring Member has been asked to handle the preparation, filing and prosecution of an opposition (presumably at the EPO) against a patent owned by the former client.

The Referring Member does not state whether he/she was directly responsible for the patent in question; but he/she has indicated that he/she had responsibility for the relationship with the former client entity.

The Referring Member left his/her previous employment approximately two years ago.

Legal and Ethical Questions Raised

The Referral raises a number of somewhat interdependent issues. It is difficult to resolve what seem to be conflicting aspects of the situation.

The main questions appear to be:

  1. Based on a practical interpretation of Article 3(2), it seems necessary to ask whether a fiduciary relationship with the former client arose when the Referring Member was in his/her previous employment.

    1. If a fiduciary relationship existed, what obligations would this have created with respect to:

      1. Safeguarding of the former client’s confidential information;
      2. Acting in a manner that is contrary to the interests of the current client?
  2. Is there a material risk of prejudice to the position of the former and current clients if the Referring Member:

    1. Should act as instructed; or
    2. Should not act as instructed?
  3. If the conclusion reached is that the Referring Member should be restrained in some way from acting against the former client, should the restriction apply in a general sense to all possible actions that the new client requests; or should it be limited in some way to merely the use of the confidential information that has come into the knowledge of the Referring Member?

  4. Are there any other factors which have weight in determining the freedom of the Referring Member to represent the new client as requested?

Sources Accessed

This advice has been prepared primarily with reference to the epi Regulation on Discipline (“RoD”), Article 3(2); The Code of Conduct of the Institute of Professional Representatives before the EPO, Section 4(f) (the “Code”); and (to a limited extent) the English law Court of Appeal case referred to as Glencairn v Final Touch [2020] EWCA Civ 609.

Article 3(2) of the RoD reads,

“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.”

Glencairn v Final TouchGlencairn v Final Touch relates to somewhat different circumstances than those set out in the referral. The case concerns a situation in which a firm of English solicitors (attorneys-at-law) acting for a first defendant acquired confidential information about the terms on which a claimant was prepared to settle litigation. The solicitors’ firm subsequently was instructed by a second defendant, that was unrelated to the first, in a similar dispute against the same claimant. The claimant sought an injunction to prevent the solicitors’ firm from representing the second defendant at all, because of a fear that confidential information acquired by the solicitors could be used to the detriment of the claimant. In particular there was a concern that the second defendant could gain an advantage in negotiations because it had become known by that defendant’s legal representatives on what terms the claimant might be prepared to settle the dispute.

The English Court of Appeal decided against injuncting the solicitors’ firm. This was for a number of reasons, including that (in the view of the Court) adequate safeguards of the acquired confidential information had been set up; and therefore the practical risk of harm was very low.

Moreover the Court of Appeal determined that at no point had the solicitors’ firm been in a position to have a fiduciary relationship with the claimant, which entity was never its client. Consequently various sanctions that might have applied in the case of a client-attorney relationship were not applicable.
is a case decided under the laws of England, with subsidiary reference to various judgements in certain Commonwealth countries. Consequently its relevance to the Referral may be limited; and there may be other sources of law in other jurisdictions that are at least as relevant. Equally, the judgement is instructive with respect to the obligations that arise from a fiduciary relationship and also with respect to the question of whether prejudice is likely to arise as a practical matter.

The Regulation on Discipline

A straightforward reading of the RoD as reproduced above suggests that there is a simple resolution to the Referral: as long as the Referring Member did not himself/herself draft or prosecute the patent that is to be opposed, he/she appears to be free to represent the new client in opposing the patent.

This is based on the reference in the RoD to the “particular matter”: if the Referring Member was responsible for the patent application that constitutes the “particular matter” when in his/her previous firm then he/she is forbidden to provide services to the new client in respect of the opposition, unless the former client gives consent to this (or the conflict is in some other way resolved). Otherwise (i.e. if the Referring Member was not responsible for the patent) there is no “particular matter” falling within the scope of Article 3(2) and, as indicated, the Referring Member is free to act for the new client.

However it seems clear firstly that such a simplified interpretation could not have been intended when the RoD was drafted.

This inference is based on the underlying reason for creation of this Article of the RoD. This surely was, primarily, to minimise the risk of harm to a former client arising when a European Patent Attorney ceases to act for the former client and furthermore seeks to act against the former client on behalf of a new client.

Clearly in such situations a narrow interpretation of the “particular matter” can bring exactly the same hazard to bear on the former client.

This can be illustrated by an example: suppose the Referring Member drafted and prosecuted a patent application directed to a pharmaceutical compound. Clearly under any reading of Article 3(2) the Referring Member would be prohibited from opposing that patent if instructed to do so by the new client. However, what would be the situation if the new client instructed the Referring Member to oppose not the patent to the pharmaceutical compound, but instead a further patent directed to a salt of the compound?

A narrow reading of Article 3(2) would allow the Referring Member to oppose the salt patent because it is not the “particular matter” (i.e. the original pharmaceutical compound patent). However in that situation the former client might well suffer at least as much harm (if not more harm, if the salt patent was commercially more valuable) as if the Referring Member had opposed the pharmaceutical compound patent. Hence a literal interpretation of Article 3(2) could defeat what appears to be the underlying objective of protecting the former client from hazards of this kind.

A similar problem arises with respect to divisional European patent applications: is a divisional case the same “particular matter” as the parent from which it is derived? A literal interpretation of Article 3(2) suggests not; but everyday experience of divisional patent practice shows that a divisional case may be so close in terms of both its objective and content that it would not be reasonable to say it is not, in practical terms, the same “particular matter” as the parent.

In some other cases of course it would be clear that e.g. a divisional case or a patent directed to the salt of a compound is not the same “particular matter” as the parent case on which such filings are based. It will be a matter of assessment in individual cases whether the “particular matter” definition embraces (or not) the case that is to be the subject of opposing action.

In short therefore it seems clear that a mere difference of patent number does not automatically mean that two patents do not relate to the same particular matter; and in all likelihood it will be necessary to have detailed information in any given case to determine whether the wording of Article 3(2) permits a representative such as the Referring Member to act.

A second factor of relevance to Article 3(2) of the RoD is that it contains no limitations as to time. It seems therefore that any effect of Article 3(2) will be perpetual unless any conflict on which it has a bearing becomes resolved.

The complete silence of Article 3(2) on the duration of its effects suggests that the Professional Conduct Committee is not free to interpret the duration aspect in any way except that the effect of the Article is perpetual unless a resolution is possible.

Resolution of the Conflict

The most obvious way in which a conflict as viewed under Article 3(2) may become resolved is if the former client grants consent for the Referring Member to file an opposition. The conflict also could be resolved through the former client ceasing to exist (although in that case it may be unlikely there would be any requirement to oppose the patents of that entity) or through the former and new clients reaching an agreement in a manner that renders the conflict moot. It must be assumed that these are all unlikely outcomes in the present case. Therefore it is somewhat likely that the effect of Article 3(2) will in the present case be long-lasting, if not perpetual.

Fiduciary Relationship

The analysis in Glencairn v Final Touch among other things indicates that there is no set definition of what form a fiduciary relationship may take; and there could be various kinds of relationship that give rise to one or more fiduciary obligations. In this regard see Paragraph [73] of the judgement. Nonetheless for the reasons explained below it seems clear that a fiduciary relationship existed in the client-attorney dealings between the former client and the Referring Member.

Paragraph [20] of Glencairn v Final Touch lays out the situation very clearly: in circumstances in which a solicitor was instructed by a former client,

“there is a continuing fiduciary duty owed by the solicitor to the former client and a risk of disclosure of information which is [..] confidential to the former client [..].”

There seems to be no reason not to apply this interpretation to the relationship between a former client and a patent attorney. In other words a relatively simple assessment indicates that the Referring Member’s former employment established a recognisable fiduciary relationship with the former client; and therefore Paragraph [20] is relevant guidance.

Fiduciary Obligations

Note that Paragraph [20] addresses both the confidential nature of information learned; and the risk that such information may be disclosed (in a way that is harmful to the former client).

Notwithstanding that Glencairn v Final Touch by reason of relating essentially to a single EPC Contracting State may not be unassailably applicable to the work of a European Patent Attorney, Paragraph [20] sets out a position that one imagines would apply in the majority of EPC States if not all of them. In view of this for purposes of this advice it seems reasonable to conclude (a) that the Referring Member must maintain confidentiality of any information obtained from the former client; and (b) that there is a perpetual risk of disclosure of that information.

That risk would seem to exist regardless of any undertaking made by the Referring Member not to make use of the confidential information. Paragraph [20] implies that it may not be within the ability of the Referring Member to ensure that no breach of relevant confidential information occurs. As an example in this regard one may consider information such as a prior art document a detailed interpretation of which does not take place until some time after an opposition has been filed. In such a situation, which is not uncommon in opposition practice, the Referring Member would not be cognisant of a breach of confidentiality until long after it had occurred.

Paragraph [66] of Glencairn v Final Touch explains that although the fiduciary relationship between a solicitor and a client comes to an end with termination of the solicitor’s retainer, the obligations of confidentiality that arose while the fiduciary relationship existed endure without termination. The same situation seems to arise when for example a European Patent Attorney leaves a firm that has a fiduciary relationship with a client: the patent attorney thereafter does not have to behave as though a fiduciary relationship continues to exist. However any confidential information gained as a result of the fiduciary relationship must remain confidential at least for the remainder of the patent attorney’s active professional life.

Restraint of Individuals vs Restraint of Firms

The RoD appears to have effect only with respect of the actions of individual European Patent Attorneys. It therefore seems unlikely that the RoD could be invoked to prevent someone else in the Referring Member’s new firm from handling the opposition. However in suggesting this the Referring Member’s colleagues must have regard to Section 4(f) of the Code. This reads:

“(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 cognisance of the matter and is no longer in a position to take cognisance 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.“

This provision in the present case may prevent the Referring Member’s firm as a whole from handling the opposition, because (self-evidently) the Referring Member has cognisance of the matter in question and (in all likelihood, although as noted this was not stated) was himself/herself responsible for it at the former firm. Hence a colleague (who is not the Referring Member) only would be free to handle the opposition, etc., if it could be clearly demonstrated that the colleague has no cognisance of the former work of the Referring Member in his/her previous employment.

The cognisance problem could be avoided through setting up of an effective information barrier within the Referring Member’s firm, such that any colleague having responsibility for the instructed opposition the Referring Member is prevented from accessing information or documents of relevance to the matter that are in the Referring Member’s possession or sphere of knowledge.

Such an information barrier however in the view of the Chamber must genuinely be effective, and must not be capable of circumvention by the Referring Member or the allocated colleague. Moreover it must exist at least from the outset of the allocated colleague’s receipt of materials of relevance to the opposition.

It is observed that the size of the Referring Member’s current firm may determine the ease with which an information barrier may be established. A large firm or one having multiple office locations may be more readily able to set up an information barrier than a small firm. Of course if the current firm employing the Referring Member is a sole trader practice it would not be possible to set up a meaningful information barrier at all (and indeed there then would exist no colleague who could handle the matter in place of the Referring Member).

Other Factors

The only other obvious factors that appear to be relevant are:

  1. Will the new client be prejudiced by refusal of the Referring Member and/or his/her firm to act?
  2. Will the establishment of the Referring Member’s business and his/her ability to practise his/her chosen profession be prejudiced by refusal of the Referring Member and or his/her firm to act?

The answer to both these questions is that there could potentially be detriment. For example if the Referring Member’s technical knowledge is sufficiently specialised that the new client cannot locate alternative representatives having the same level of skill, detriment to the new client could arise.

Similarly if the Referring Member’s practice is specialised in the technology area of the former and new clients he/she may find it hard to establish a practice unless he/she indicates a willingness to provide representation in the opposition.

As noted these risks seem real and possible; but considering that the practices of many patent attorneys are wide-ranging as to technical scope; and also considering that such considerations do not seem to be underlying reasons for the existence of (in particular) Article 3(2) of the RoD, for present purposes they have to be considered as secondary factors that do not detract from the overall conclusions presented below.

Conclusions and Advice

Balancing the various competing factors outlined above the conclusions of the Chamber are:

  1. The relationship between the Referring Member and the former client clearly was fiduciary and, by the Referring Member’s admission, gave rise to confidential information;

  2. The RoD makes clear that, without limit as to duration, a European Patent Attorney may not act against the interest of a former client in respect of a matter.

  3. An orthodox legal analysis concludes that although any fiduciary relationship with a former client ends when the European Patent Attorney moves to a new firm that is not retained by the former client, any obligations of confidentiality arising from the fiduciary relationship are perpetual unless the patent attorney is specifically released from them by the former client; or unless other circumstances (such as winding up of the former client) arise that end the obligations.

  4. This obligation cannot be discharged through the giving of undertakings not to make use of confidential information. As explained, disclosure of confidential information to the detriment of the former client may occur without this being immediately apparent.

  5. The references to a “particular matter” in the RoD should be interpreted more broadly than at first sight seems justified by the wording of the provision. If this is not done the reason for the RoD could be undermined as explained above, and it is incumbent on epi not to interpret the RoD in a way that frustrates its objectives.

  6. In the present case it does not seem possible for a colleague of the Referring Member to handle the opposition without transgressing Section 4(f) of the Code, unless a truly rigorous information barrier can be established, in the Referring Member’s firm, such that the Referring Member as a result has no cognisance of any opposition handled by a colleague against the matter forming the subject of the enquiry; and the colleague has no cognisance of any relevant information gained by the Referring Member in his/her previous employment.

  7. Further considerations of commercial detriment to the new client and the Referring Member, that in a limited way mitigate the foregoing, may have some force; but bearing in mind the obvious intention of the RoD to protect clients such as the former client of the Referring Member these must be treated as subsidiary factors that do not overturn the main conclusions above.

For the foregoing reasons the Referring Member is advised that it does not seem possible for him/her personally to handle the opposition without a serious risk of breaching at least the RoD, and potentially the Code of Conduct as well (if the matter is handed to a colleague in the same office and no effective information barrier is established). In view of this the Referring Member is urged to review whether it is possible to establish an effective and timely information barrier. If this is not possible (because of the nature of the Referring Member’s firm; because material pertaining to the opposition has been received in a manner giving the Referring Member cognisance of it; or because the Referring Member’s colleague has cognisance of confidential material acquired by the Referring Member) the Referring Member is advised to ask the new client to identify alternative representatives to handle the opposition.

This advice does not have regulatory force and is prepared with the intention to provide helpful assistance. No liability of any kind attaches to the epi, the Professional Conduct Committee or any members of that Committee in respect of this advice. In accordance with Article 7(d) Code of Conduct of the Institute of Professional Representatives before the European Patent Office, the opinion of the Professional Conduct Committee shall not be binding on the disciplinary bodies.