Intellectual Property Law Blog

USPTO Closer to Recognizing Patent Agent Privilege?

December 9th, 2016

By Carly A. Shanahan, Ph.D.USPTO Closer to Recognizing Patent Agent Privilege

A key element of our justice system, the attorney-client privilege, was put in place to ensure that every citizen can obtain sound legal advice. Confidences discussed with an attorney in order to obtain legal advice are privileged from discovery in litigation. When it comes to the protection of intellectual property rights, patent attorneys, like all other lawyers, enjoy this privilege with their clients. But what about patent agents? Are their communications with clients privileged, too? This remains a contentious issue in the courts.

Both registered patent attorneys, who are lawyers, and registered patent agents, who are non-lawyers, represent inventors before and are licensed by the United States Patent and Trademark Office (USPTO). According to the Code of Federal Regulations (37 C.F.R. § 11.5(b)), the only limitation on a patent agent’s practice before the USPTO is that the agent’s activities must be “reasonably necessary and incident to the preparation and prosecution of patent applications or other proceedings before the Office involving a patent application.” Patent agents do not have a law degree, and therefore, cannot litigate because they are not licensed to practice law in any state.

That patent agents are not licensed to practice law, however, creates a potential gray area regarding the extent to which the attorney-client privilege protects communications between inventors and patent agents from disclosure in court. While attorney-client privilege extends, without question, to patent agents working under attorney supervision, communications with patent agents acting independently remain a possible target to which the privilege against litigation disclosure may be found inapplicable.

In re: Queen’s University at Kingston

That “loophole” seemed to be closed for good on March 7 , 2016, with the U.S. Court of Appeals for the Federal Circuit decision In re: Queen’s University at Kingston. Queen’s University had refused to produce documents containing communications between its employees and non-lawyer patent agents during discovery in a patent infringement suit, arguing that such communications should be protected by attorney-client privilege. A district court judge disagreed, and issued an order compelling the university to produce the documents. [Delete as unnecessary.]

The Federal Circuit ultimately ruled, though not unanimously, that attorney-client privilege should extend to patent agents, citing a 1963 Supreme Court decision that “the preparation and prosecution of patent applications for others constitutes the practice of law.”

While the pronouncement in Queen’s University at Kingston seemed to settle the matter, in August 2016 a Texas appeals court refused in a separate case to recognize the privilege that the Federal Circuit had conferred on non-lawyer patent agents. Writing for the majority in In re Silver, Justice Craig Stoddart asserted that Texas does not recognize a patent agent privilege, and that it would be inappropriate for his court to create a new common-law privilege in that state.

USPTO Steps in With Proposed PTAB Rule

Conflicting rulings have left the question of privileged communications between patent agents and their clients open to argument on a case-by-case basis, with a patchwork of different outcomes. And, for communications with foreign patent practitioners, whether a privilege applies in respect of U.S. litigation discovery depends upon whether a privilege against discovery is recognized in that foreign country. In an effort to establish consistency, at least at the USPTO, the USPTO on Oct. 18, 2016 proposed a rule that would amend the rules of practice before the Patent Trial and Appeal Board to recognize that “communications between U.S. patent agents or foreign patent practitioners and their clients are privileged to the same extent as communications between clients and U.S. attorneys.” The comment period remains open through December 19, 2016.

Before it was published in the Federal Register, the proposed rule received unanimous support from a roundtable held by the USPTO in February 2015. It would apply to discovery in all types of litigation-like proceedings conducted at the Patent Trial and Appeal Board (PTAB) of the USPTO, including inter partes review (IPR), post-grant review (PGR), the transitional program for covered business method patents (CBM), and derivation proceedings. The USPTO rule will not control the extent to which privilege protects communications with patent agents from discovery in the court system, where privilege will remain limited to communications with patent attorneys and communications with patent agents working under direct supervision of patent attorneys. However, future litigants seeking to shield from discovery communications solely with patent agents undoubtedly will apprise judges of the rule change at the USPTO, with hopes that a reasonable extension of the privilege against disclosure will be forthcoming in the courts as well.

Until the adoption of the proposed USPTO rule – which, given the positive reception during its public comment period, seems likely to happen – our firm recommends that patent agent activities be carefully limited to the scope specified by the regulations applicable to U.S. patent agents. Those activities include preparing and prosecuting patent applications; advising clients on filing patent applications; drafting the specification and claims of a patent application; drafting amendments and written arguments to establish patentability; and drafting communications to clients for an interference, a reexamination proceeding, a petition, an appeal to, or any other proceeding before the PTAB in respect of procuring patent rights.

The patent agents and attorneys at Panitch Schwarze will closely monitor further developments in the state of the law on this key intellectual property issue.

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