31 August 2020

Beware Unregistered Patent Practitioners!

Smooth CriminalThe title of this article is intentionally ambiguous.  Does it mean that prospective clients should beware of unregistered practitioners?  Or does it mean that unregistered practitioners should beware of getting caught out?  Ideally, it would mean both.  In practice, as things currently stand in Australia, it mostly means neither.  Unregistered practitioners are not a problem that most innovators genuinely seeking professional representation are presently at great risk of encountering.  By the same token, the number of people carrying on business, practising, or acting as patent attorneys while unregistered is so small, and the circumstances in which they are doing so are so limited, that the prospects of any enforcement action being taken against them are essentially nil.

But unregistered practise does happen, and the extent of it is worth keeping an eye on, if only to ensure that it does not become a larger problem in the future.

In this article I will discuss the legal framework around the provision if patent attorney services in Australia, including the information that clients are entitled to receive from registered attorneys.  I will provide some numbers demonstrating the relatively small scale of the problem of unregistered practitioners.  And I will explain the enforcement regime, and potential penalties that can be imposed upon people found to be acting as patent attorneys without being appropriately qualified and registered.  Additionally, I will report on some feedback I obtained from IP Australia on their current approach to unregistered practitioners, and the prospects of any change in the foreseeable future.

Who Can Act as a ‘Patent Attorney’ in Australia?

Patent attorneys who have met the required qualification standards, and been registered by the Trans-Tasman IP Attorneys Board have certain exclusive rights of practice.  In particular, non-registered persons are not permitted to carry on business as a patent attorney, meaning that they cannot undertake for gain, on behalf of any other person or company, to: apply for or obtain patents in Australia, New Zealand or elsewhere; prepare specifications or other documents for the purpose of the patent laws of Australia, New Zealand or elsewhere; or give advice (other than advice of a scientific or technical nature) about the validity or infringement of patents. 

Otherwise, no person may act, or hold themselves out, or permit themselves to be described or held out as a patent attorney, or as an agent for obtaining patents in Australia.

These rights of practice are set out in sections 201 and 201A of the Patents Act 1990.  Legal practitioners may also carry out some patents work, but are restricted by section 202 in their authority to prepare patent specifications, and amendments to specifications.

Patent Attorneys Are Not Compulsory

Nobody is obliged to engage a patent attorney (however unwise it may be to ‘go it alone’).  There is no restriction in Australia on people, or companies – whether resident locally or overseas – applying for their own patents, without the assistance of a registered patent attorney.  The only obligation – which impacts foreign applicants more so than Australian residents – is to provide an ‘address-for-service’ in Australia or New Zealand.  In practice, this simply requires having an Australian postal address. 

For applicants using the services of a patent attorney, the attorney will provide the required address-for-service.  Self-represented Australian and New Zealand applicants will typically use one of their own residential or business addresses.  However, it is perfectly permissible for a third party, who is not a patent attorney, to provide an address in Australia or New Zealand, effectively acting as a ‘post box’, so long as they do not offer or provide patent attorney services.

How to be Sure You Are Dealing with a Registered Attorney

To my knowledge, it is extremely rare in Australia for an unregistered person to falsely claim to provide patent attorney services.  The chances of anybody unwittingly engaging an unqualified ‘patent attorney’ are therefore fairly slim.  If in doubt, however, it is very easy to check.  The Trans-Tasman IP Attorneys Board (TTIPAB) maintains a searchable copy of the Register of attorneys on its website.

In addition, all registered attorneys are subject to the Code of Conduct for Trans-Tasman Patent and Trade Marks Attorneys 2018.  This is a statutory instrument, i.e. it has the force of law, and is not merely a set of guidelines or aspirational statements.  Among other things (and subject to exceptions when dealing with other attorneys and legal professionals), the Code of Conduct obliges registered attorneys to inform clients, in writing, that:

  1. they are registered attorneys, and that they are bound by the Code of Conduct; and
  2. they are competent to perform the work required by the client, including any necessary technical competence;

Accordingly, a client that does not receive this information is either not dealing with a registered attorney, or is dealing with a registered attorney who is failing to comply with the Code of Conduct.  Either way, it might be best to look for an alternative service provider!

How Big is the ‘Problem’ of Unregistered Practice?

The table below lists numbers of patent applications possibly filed by unregistered practitioners between 1 January 2018 and 31 July 2020.  These are the numbers of provisional applications, innovation patent applications, and standard patent applications (including PCT national phase entries) filed by somebody other than: (a) a registered attorney (or firm employing registered attorneys); or (b) a named applicant or inventor actually resident in Australia.  For the reasons discussed above, not all of these will be cases of unregistered practice – some will simply be cases of an Australian resident or a related business providing a postal address for an applicant, without offering any additional professional services.  This is, as I have said, perfectly legal, and makes it very difficult to identify genuine cases of unregistered practice.

Origin Innovation Provisional Standard/NPE
AU/NZ 132 329 181
China 942 9 273
Rest of World 208 79 457

During the 31-month period covered by the above figures, there were 12,589 provisional applications, 5,455 innovation patent applications, and 76,630 standard patent applications filed in total.  Setting aside the numbers of innovation patents – which are known to be distorted by Chinese applicants seeking government subsidies back homeat an absolute maximum 3.3% of provisional applications and 1.2% of standard patent applications may have been filed by unregistered practitioners.  The true proportions are probably significantly lower, with many simply being cases in which postal addresses have been provided that cannot readily be matched with an applicant or inventor.

To the extent that there is any problem with unregistered patent practice in Australia, the magnitude of that problem appears very small.  And, as I shall explain, the mechanisms for enforcement of the prohibitions on unregistered practice are unwieldy, and thus unlikely to be brought to bear against such minor infractions.

Enforcement of Prohibition on Unregistered Practise

In principle, practising as a patent attorney when unregistered is an offence, punishable by a fine of (currently) A$6,660 for an individual or member of a partnership, and A$33,300 for a company.

In reality, however, there is very little prospect of enforcement.

You might think that the TTIPAB would be responsible for monitoring unregistered practise, and imposing the fines provided under the Patents Act.  But that is not correct.  The Board is responsible for administration, registration, and discipline of the patent attorney profession, but it has absolutely no power whatsoever in relation to persons who are not registered, or seeking registration, as attorneys.

Responsibility of prosecutions of persons practising as patent attorneys without being registered lies with the Federal Crown Prosecution Service (CPS).  Any such prosecution would be a criminal matter, and thus subject to the ‘beyond reasonable doubt’ standard of proof.  Considering the persuasive evidence that would be required, the cost of prosecution, the low level of the problem, the relatively small magnitude of the applicable fines, and the minimal public interest in pursuing the negligible number of alleged unregistered practitioners, there has never been a prosecution (to the best of my knowledge), nor does one seem likely in the foreseeable future.

IP Australia’s Approach to Unregistered Practice

I recently reached out to the Board regarding its views on the question of unregistered patent practitioners.  Michael Schwager – who, as the current Director General of IP Australia, also has the roles of ‘Designated Manager’ responsible for maintaining the Register of patent attorneys, and ex-officio member of the Board – kindly took the time to respond, and to clarify IP Australia’s current position.  As he explained:

Where there are cases of suspected fraud the Commissioner has stepped in, and our practice is to write to people who may appear to be acting as patent attorneys, but are not registered as an attorney.  These people often include lawyers, accountants and students.  We have taken the approach of education – we explain that it is an offence to act as an attorney and list what constitutes providing attorney services.  The responses are either that the person will stop as they were unaware, or they claim that they are acting as a mailbox.  In that case, we assess the situation and question whether they are truly passing on correspondence, seeking an appropriate assurance, and where we have established they are not forwarding correspondence we have determined that an address for service is not available.

I have noted recent examples of applications originating in China in which, on the face of it, the applicant is representing themselves, with an Australian (non-attorney) resident providing an address-for-service.  These applications have been examined by IP Australia, and in some cases submissions have been made in response to adverse examination reports that are signed by an inventor.  However, the submissions are of a quality – in terms of both legal argument and English expression – such that it seems almost certain that someone with substantial experience in patent prosecution has been involved.  I infer that one or more practitioners based in China are assisting these applicants, while the Australian resident is genuinely acting only as a post box.

The difficulty in such cases is that while a foreign practitioner is technically in breach of the Australian law – not being registered as an Australian attorney – the government (through the CPS) has no power to prosecute anybody operating outside Australia’s borders.  I am in complete agreement with Michael Schwager that the primary purpose of the attorney regulation regime is to protect the Australian public against unqualified and substandard practitioners.  As he stated in his message to me, ‘if foreign applicants wish to avail themselves of foreign representation that may or may not be low quality, and not get enforceable rights as a result, that is their judgement.’  This is undoubtedly the pragmatic position to adopt, so long as those applicants are not behaving in a way that adversely impacts the proper administration of the patent system in Australia.  I am assured that IP Australia has seen no evidence to that effect and – considering the negligible proportion of all applications that could fall into this category – I have no doubt that this is correct.

Conclusion – Should We Change the Rules?

It is apparent – both anecdotally, and based on the limited available data – that unregistered patent practise is not a significant problem in Australia.  The pragmatist in me is therefore inclined to agree that no further actions, or additional powers, are necessary.  It is good to know that IP Australia is, in fact, monitoring the issue, and quietly stepping in where appropriate, and it appears that in most – if not all – cases they find that the cause is ignorance rather than fraudulent intent.

But while I am pragmatic, I am also a person of principle, and it just does not seem right to me that the provisions in the Patents Act that are supposed to prohibit and penalise unregistered practise are effectively unenforceable.  I find myself wondering just how severe an infraction would have to be to attract the interest of the CPS – which doubtless has far higher priorities in prosecuting more serious crimes.

The corresponding regulatory regimes for lawyers and solicitors in Australia operate at a state, rather than federal, level.  In the state of Victoria, for example, the independent statutory authority responsible for regulation of the legal profession is the Victorian Legal Services Board.  According to the VLSB 2019 Annual Report, during 2018-19 it opened 16 new cases to investigate suspected unqualified legal practice, and concluded a total of 16 investigations, including two prosecutions in the Magistrate’s Court.  In principle, I can see no reason why the TTIPAB should not be granted similar powers to investigate and prosecute allegations of unqualified patent practice.  I expect that the much smaller size of the patent attorney profession, and associated funding issues, would be factors in this, but I think it would be worth at least looking into such an option.

A review of the trans-Tasman IP attorney system is due to occur in 2021.  I understand that the TTIPAB will be suggesting that the terms of the review include an investigation of how the issue of unregistered practitioners may be addressed.  There is, however, no guarantee that this suggestion will be accepted.  The primary purpose of the review will be to assess how the trans-Tasman arrangement specifically is working, rather than broader questions of attorney regulation.  The final terms will need to be agreed between the New Zealand Government and Australian Governments.


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