19 June 2016

Attorneys Should Keep Clients Informed – The One Lesson From a Very Odd Disciplinary Proceeding

Speak See Hear No EvilThe Patent and Trade Marks Attorneys Disciplinary Tribunal has issued a decision finding a senior member of the Australian patent attorney profession guilty of ‘unsatisfactory professional conduct’ for failing to inform two clients in a timely manner of problems with patent applications in the United States and India.  Indeed, the attorney in question effectively pleaded guilty to the charges brought against him in this regard.  He was, however, found not to be guilty of more serious charges of ‘professional misconduct’ in relation to the same matters.  (For an explanation of the difference between the two charges, see my earlier article What To Do If You’re Unhappy With An Australian Patent Attorney.)

A copy of the Tribunal’s decision can be found on the website of the Professional Standards Board for Patent and Trade Marks Attorneys, or downloaded directly via this link [PDF, 322kB].  The name of the attorney in question is, of course, revealed in the decision.  However, for reasons that should become apparent, I will not be naming him in this article.  To quote from the Tribunal’s decision, he ‘has in my view already been through enough’ and it would be inappropriate in light of that finding to expose him to potential further embarrassment, along with the additional damage to reputation that may result from having negative information reflected disproportionately in internet search results.

I have, in fact, given very careful thought to whether I should comment of the Tribunal’s decision at all.  In deciding to do so, I have taken into account the fact that disciplinary decisions in relation to the conduct of Australian patent and trade marks are very rare (there have been only seven since the Tribunal was created), and each is therefore significant in what it may teach attorneys and their clients about expected standards of conduct.

In this case, the lesson is a simple one: when things go wrong – and things most definitely do go wrong, from time-to-time – attorneys need to think about how they communicate with their clients, and about keeping them informed of what is happening in relation to their IP rights, even if that may mean delivering potentially alarming news!

The Two Matters Before the Tribunal

The matters brought before the Tribunal relate to two different foreign patent applications, made on behalf of two different clients.  The first of these was a US filing in 2005, in the name of a company identified only as ‘ABC Pty Ltd’ in the Tribunal’s decision.  The second was a filing in India, for a client identified only as one of the attorney’s ‘regular corporate clients’, of an application which resulted in a patent being granted in 2007.

The US attorney responsible for handling the US filing is not named in the Tribunal’s decision.  The firm of Indian attorneys is identified only as ‘XY & Co.’ of Kolkata.

So far, so oddly anonymous!

What Happened in the US?

In the US case, the Australian attorney provided the US agent with instructions to file the application at a time which, while fairly described as ‘last minute’, certainly enabled the relevant filing deadline to be met.  For reasons that appear to be the result of a clerical error in the US attorney’s office, the application was, in fact, assigned a filing date that was one day late.  Repeated efforts by the US attorney to correct this error (which, as the Tribunal rightly noted, ‘would have been readily accommodated in Australia under section 223 of the Patents Act 1990’’) were unsuccessful.

Ultimately, the matter ended up in judicial review (which was also unsuccessful), with a US Federal District Court issuing a decision on 25 April 2008.  The US attorney covered all of the costs of the various petitions and reviews, and had generally given the impression throughout the majority of the process that the filing date would eventually be corrected.

Meanwhile, the application itself continued through the usual examination process.  (It should be noted that, notwithstanding the missed filing deadline and associated potential loss of its original priority date, it was otherwise a validly-filed US application and subject to processing independently of the ongoing efforts to correct the filing date.)  In 2010, ‘Mr X’ of ‘ABC’ informed the Australian attorney that he had become aware of the US court decision (in which he was named as a party) and demanded an explanation.  A full explanation was finally provided via email on 27 February 2010, nearly five years after the application had been filed.

What Happened in India?

In the Indian case, the troubles occurred at the other end of the process.  The patent application was correctly filed, examined, and a patent issued on 2 March 2007.  This was not reported by ‘XY & Co.’ to the Australian attorney until 24 May 2007.  The email from the Indian attorneys requested instructions for payment of fees that were due at issue of the patent, but said nothing about any deadline for payment.  The fees were paid to ‘XY & Co’ on 3 September 2007.

It appears that nothing happened after this for a period of more than two years.  Starting on 15 September 2009, repeated enquiries were made to the Indian attorneys regarding the patent certificate, which did not appear to have been issued or forwarded on to Australia.  It then emerged that the deadline for paying the fees had been 2 June 2007, that these had not been paid in time, and the patent had therefore lapsed.

There were further investigations into the possibility of restoring the patent, however its seems unlikely that this would have been possible by the time the true situation was made clear to the Australian attorney.  The attorney finally informed his client of the situation in full on 19 January 2012.

The Tribunal’s Findings on ‘Professional Misconduct’

It is very clear that the Australian attorney was not responsible for what happened in relation to either of the applications.  His failure in each case was in not keeping his client fully informed of the situation as it unfolded.  As expressed by the Tribunal, he ‘accepted that, with the benefit of hindsight, he was remiss in failing to advise his clients promptly about the problems which arose on their files.’  For this, he substantially admitted guilt on the lesser charges of ‘unsatisfactory conduct/unsatisfactory professional conduct’.

On the more serious charges of ‘professional misconduct’, the Tribunal found that this would have required a ‘substantial or consistent failure to attain the requisite professional standard’, with ‘consistent’ taken to mean ‘making the same mistakes of principle or acting in the same inappropriate way in a variety of situations’.  On this basis the Tribunal concluded that ‘professional misconduct’ was not established:

In each matter there has been, in my view, a repeated or constant failure to meet required standards arising from an overarching error of judgment. In the case of the US matter the error of judgment, encouraged by the US lawyer, was that the problem was a minor one and would be rectified. In the Indian matter, it was [the attorney’s] decision to delay reporting to the client until he made independent enquiries to get to the bottom of exactly what had happened in India and what avenues were available to rectify the problem.

This occurred on two files. In my view, that does not constitute “consistent failure” because it does not involve the necessary “variety of situations” contemplated by [the legal authorities].

Conclusion – An Odd, But Still Useful, Decision

I have indicated that I consider this to be an ‘odd’ decision.  Here is why.

First, neither of the clients complained.  It appears that neither has suffered any commercial damage (at least, not yet) as a result of what happened.  I imagine that they are satisfied that the Australian attorney was monitoring the situation in each case, and that steps were taken to try to correct the problems that had arisen at no cost to the applicants.  Would they have done anything differently if they had been kept informed?  Perhaps, or perhaps not.  It is hard to know, given that they had no part in the proceedings before the Tribunal.  Indeed, the clients’ identities have been concealed, so we do not even know who they are!

Yet someone complained.  Someone, clearly, with fairly detailed knowledge of the relevant events.  I am not going to speculate publicly as to who that someone may be, or what their motivations might have been (and if anyone does so in a comment below, they can expect to have it deleted).  We do not know who the complainant is, because they have also been granted anonymity.

Nonetheless, the mystery complainant has done the profession a service, at least insofar as the Tribunal’s decision teaches us something useful about expected standards of professional conduct in keeping clients informed.  I will confess that I can think of two occasions, out of the many hundreds of files I have handled during my time in the patent attorney profession, when I have taken time to clarify a situation, and investigate avenues for rectification, before reporting a problem to a client.  Both involved delays on the order of weeks – certainly not years – and were motivated by a belief that, where possible, it is better to present people with solutions, rather than just bringing them more problems.  In both cases, the solutions offered led to rectification of the issues that had arisen.  Naturally, the clients were therefore happy with the outcomes, and were probably even grateful that I had not troubled them with the problems prior to identifying the solutions.  But does that mean I did the ‘right’ thing?

I have no doubt that many other patent attorneys reading this will have similar stories to tell.  Should we be reporting to our clients everything that happens, as it happens?  Or is it more appropriate to conduct additional enquiries before reporting, so that we can provide informed advice, rather than merely a (potentially troubling) status report?  As with most matters of professional judgment, I expect it is a matter of striking the appropriate balance in each case.  This Tribunal decision should give us all cause to think more carefully about how we deal with these situations.


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