Good morning everyone. Thank you for joining us. This is Avoiding Discipline at the USPTO: Recent Developments in Patent and Trademark Ethics. This is a webinar that's live and on demand presented by Quimbee. And I am Emil Ali. I am a partner at McCabe and Ali LLP, and I am a registered patent attorney. But a significant focus of my practice is representing lawyers and law firms on the intersection of IP and ethics matters. That photo doesn't really look like me, because that's a long time ago. But luckily, Quimbee does not require me to show my face. Otherwise you will say that's bait and switch, but I do recommend that you check out our blog, which is IP ethics Law.com and you can read more about hot topics in IP, including things like conflicts of interest. Et cetera. All right, so here's what I like to kind of tell people. Is that IP law is complex itself, right. But as IP practitioners, the ethics rules in how we practice and how they're applied to us are somewhat different. So this course is built up around trying to help you understand your obligations, including one whether or not there are different ethics rules that apply. And in this case, if you are a patent or trademark attorney that practices before the USPTO, whether it is in trademark prosecution or patent prosecution or even litigation before the tab or tab, you might be subject to the USPTO rules of professional conduct. So when does that apply? What sort of regulatory structure do we have? Those are all important things that we are going to talk about today.
So in order to outline that I put some bullet points here. We're going to talk about the regulatory structure right. We're going to talk about 35 USC to B to D etcetera. We're going to talk about conflicts of interest. Right. That's the really big one. But we're also going to talk about some things that maybe don't get enough play. Right. And that's the client relationship right. Who are we representing. Those things are really, really important. And then something that's been very, very important with the USPTO and their focus on China is an understanding of how to work ethically with foreign associates. And then, of course, I will close with some best practices to mitigate ethics risks and avoid professional discipline, but also potentially malpractice as well. Right. My focus is really on ethics issues, but a lot of what I say will help you avoid liability as well. So let's start off with some of the basics. So the USPTO, unlike most federal agencies and departments, is not fully covered by the APA. So the APA is the Administrative Procedure Act. It's the idea that you can practice before any federal agency without being a member of a certain bar. So it holds true if you want to practice before the SEC, if you want to practice before the Department of Labor, but at the USPTO, it only holds true on the trademark side, because on the patent side, they're allowed to establish regulations governing the conduct of people who practice before them.
And when I say people, it's not only patent attorneys. Why? Because the USPTO also allows you to represent others through either limited recognition or becoming a patent agent. And then, of course, 35 USC 32 applies equally to anyone, right? Any person, agent or attorney who doesn't follow the rules could be disciplined by the USPTO. So let's extrapolate that a little bit into who is regulated by the USPTO. Well, all practitioners right. That's the term of art they use under 37 CFR 11.1. So I am a practitioner. Why? Because I am a registered patent attorney. I'm also a trademark attorney. So I'm covered under the USPTO rules, ostensibly until I die, good or bad. Right. But what about you? All right. Are you a registered patent attorney, then? Yes, you are probably subject to these rules. But what if you are, for example, not a registered patent attorney, right? You file trademarks occasionally. You are probably subject to those rules. Maybe you consider yourself a trademark attorney, but even if you don't, let's say that you are an immigration lawyer or your friend's an immigration lawyer, and they're like, you know what? I fill out forms for USCIS. I can fill them out for the USPTO. Well, filing that one trademark gets you under the jurisdiction of the USPTO limited recognition.
There's a couple different types, but the main one are for nonimmigrant aliens, essentially folks that aren't US citizens or permanent residents or those that are in a law school clinical program. And then, of course, there's some reciprocity with Canada. So we allow certain Canadian trademark agents and patent agents to get reciprocal recognition. So those are kind of who is regulated. But what is that regulation. Where does it come from. Well we talked about 35 USC to B to D and 32. But it's also helpful to understand what constitutes practice before the USPTO. So I want to give you a quick example and get a little sidetracked before we really talk about what's on the slide. So for all of you that are likely US licensed attorneys, you are subject to the rule of the state in which you are admitted. So if you're in California, you are subject to those California rules of professional conduct, pretty much no matter where you are, right, you're subject to their jurisdiction. But their choice of law really comes under rule 8.5, which talks about the predominant effect as well as what tribunal you're in front of. The USPTO doesn't have that, but it's also a different regulatory structure. So, for example, if I am practicing before the USPTO, it's helpful to know that I'm subject to the rules of professional conduct applicable to the USPTO. But in states they're looking at location. So we call that.
But in C, where are you working from? Right. That's why there was a lot of confusion during Covid. And to their credit, a lot of state bars adjusted their rules or added comments to make it easier to work from a state. Take, for example, Hawaii, which is like one of the last states other than Texas, to add a comment saying if you're working from Hawaii, we don't care anymore. They used to care, but they're saying we don't care anymore as long as you're practicing the law of a jurisdiction where you're admitted like your home jurisdiction, the USPTO a little bit simpler, but also different and sometimes more complex. What they say is, if you hold yourself out as authorized to practice in trademark law or draft or file applications, or here's the really, really tricky one you give advice and contemplation of filing a patent or trademark application. So if I tell somebody, hey, I think you have a great brand, you should trademark it. That could be advice in contemplation of a trademark application. Not that big of a deal. But what if I said, hey, I think that your quote unquote idea is patentable subject matter and you should file a design patent application. Right. And I'm using that as a joke because obviously that doesn't correlate. But that is a classic example of what some people do. You know, some attorneys are trying to be over helpful, but they don't understand patent law. And they.
Quote unquote give advice in contemplation of filing a patent application. And that puts them squarely in the crosshairs of the USPTO, because they're not only subject to those rules, but they might be engaging in the unauthorized practice of law. So, you know, if we talk about all these things, well, what about the ability for lawyers to use non-lawyer assistance? Sometimes the USPTO forgets that 11.5 actually says that you can write. You're completely allowed to use paralegals and legal assistants. Et cetera. You're allowed to do all those things, but you must supervise them, right? That is the point of contention that a lot of folks have. I know we rely a lot upon non practitioner assistance to help us with docketing, to help us with drafting, answer phone calls, things of that nature. However, that's not always a good idea, right? Not always helpful to let them go on their merry way. It is very important that you supervise, right. So let's talk a little bit about supervision. Right. We want to make sure especially in this remote work environment. Right. How many of my law firm clients have gone from having class A office building on the penthouse, whatever, and having great parties? It was it was awesome, right? Pre-covid, post-Covid, they're like, yeah, you know, we have like, you know, 1000ft² of office space so that we can collect mail and have a small conference room. Everyone else is working remote. Great for them. You save some money, you know, obviously it hurts the downtown economy a little bit.
But how do you react as a supervisor? Right. That's really, really important. Why? Because there are some rules about it. And obviously as an ethics class, I'm required to cite some of these rules. So I know it might be boring for you, but hopefully it is of interest and it helps you qualify for the ethics credit here. So whether you're an attorney or not, the ABA model rules 5.1 to 5.3. Talk about the duties of a supervising attorney, subordinate attorney, as well as those who supervise non-lawyer assistants like non practitioners. So you are required to take reasonable steps to ensure that the people that you supervise or manage act according to the rules. Right. So I want to be very clear about this. This doesn't mean that everyone has to do everything perfectly. That's a very clear point. I will tell you of all people, we all make mistakes, right? I'm in the business of defending lawyers and law firms. So I will always caveat that, yes, we all make mistakes. I make mistakes, right? If you read a 20 page brief that come out of me, I probably read it 50 times, but there might be a typo, right? We all make mistakes, but what procedure do you have in place to try to avoid those things? Right? Show your work. If anyone has ever heard me give a CLE, you'll note that I say that if it's not in writing, it didn't happen.
So same thing here, right? Let's say God forbid something happened, you get in trouble because your paralegal supposedly gave legal advice to a client, and that client went and complained and said, so-and-so said this, and they promised me X, Y, and Z one that may not have happened for sure. We have to take some of these things with a grain of salt, but to let's let's see the work. Show me what steps you've taken as an attorney to supervise that non practitioner. Did you have written procedures or written script? Have you ever listened in on calls? Maybe you could say, hey, I listen to your call today and I critiqued it, you know, not that I'm telling you to go and record calls, but being able to critique calls could be important. So just sitting behind them over their ear, put it on speakerphone, those sorts of things can be very helpful. And I know hopefully if there's a non practitioner in this room, they don't take offense to that. I'm not saying you need to doubt them, but we have ethics rules and we want to make sure that we don't unknowingly permit a non practitioner to do something that we ultimately become ethically responsible for. So give me some more examples of ethical supervision. Well, I told you we wanted some documentation. So practices and procedures training. Right. Maybe sending them to some ethics class.
I do a lot of ethics classes for non lawyers. Right. Even though they're not for credit. A lot of paralegals come to my classes just to learn about certain things. We actually do a specific one focused on like trademark assistance and how to utilize the system appropriately. Right. Hiring practices a lot of people are like, well, well, I'm not allowed to do background checks anymore because of this state law that state law. Well, be careful, because a lot of times that state law may be preempted or does not apply to people in professions. Right? You don't necessarily want somebody with a criminal background having access to certain things, right? Not saying we don't want to give people second chances, but sometimes you need to evaluate those things, especially when we're dealing with high value IP. We want to have appropriate employment agreements, right. We want to make sure that everyone's expectations are clear, but also a clear chain of command. So where does the buck stop? If I'm a mid-level attorney at a law firm and I have a problem with my paralegal or legal assistant, or think that they might be doing something wrong, what am I supposed to do? Am I not allowed to tell them what to do? Right? That's a problem. I remember when I was in the government, we had that issue. I, I was saying, hey, you know, I'm not my work is not getting done with the paralegal.
They're not doing it right. But I was like, oh, well, you're not their supervisor. You're not allowed to talk to them because they'll go grieve to their, you know, whatever. So we had to go through this process, but it was not clear to me what that chain of command was. Once it became clear, I was able to give the appropriate feedback because I was literally told, don't tell them, good or bad, what they're doing. The other thing is, you know what I talked about, like with phone calls, but also with file reviews, make sure your documents are getting in. If they're supposed to be docketing things, it's still your fault, right? Just because you miss a deadline, you miss a one year deadline, or a maintenance fee filing or a trademark renewal just because you're your paralegal docketed it wrong doesn't mean that you get out of jail, right? You could still be ethically and malpractice liable for that conduct. So you want to make sure that you're trying to do your best to make sure things are being done appropriately. And you know what? I think communication with clients is extremely important, right? I want to make sure that I tell my client if I don't like what my client is doing, like if I have a client that I, for example, don't trust. Or I believe they're doing something incorrect, I will tell them how it is right? Good or bad. I think it's really important to have that communication.
And under the same note, I think it's really important to have employee communication. And I'll give you an example. My partner, my colleague, he and I treat each other like our number one clients. He will always tell me how it is and I will always tell him how it is. And that's what makes our relationship so important. If he has a problem with me, he needs to let me know. He cannot let it perseverate right. If I make a mistake, he needs to call me out on it. He doesn't need to yell. I don't need to yell at him. We don't need to cry. We don't need to do all those things. We don't need to. We have to set our emotions aside and say, listen, Emil, you didn't do this. That's really, really important to an employee review, right? Give them positive and negative feedback. And then, of course, I've got to give a shout out to people like me. Right? I'm ethics counsel. Seek guidance from ethics counsel. Yes. Sometimes you can call your state bar. They'll tell you, look at this rule. But that does not constitute legal advice. And the legal advice is often a defense right advice of counsel. It's really, really important. But, you know, people like me are here to help, right? I am a patent attorney that like an IP attorney that focuses their practice on ethics. Right. It's easy for me to give you documents and procedures and review things to make sure they're being done appropriately.
Right, to help train your staff. It's a really, really good way to do things. But whenever we talk about a good example of ethical supervision, we should also talk about some unethical supervision, right? I do hate giving, you know, case sites and things like that, because I think sometimes you're you're just really focused on, oh, what one person did on their worst day. But here's an example. Real life I see this all the time. I've seen it in court cases. I've seen it in my own practice where my clients are telling me this is going on. So let's let's give some quick examples. So one, a paralegal gives their own opinion to the client on whether the specimen is suitable. Right. That's not good. The paralegal should not be saying oh yeah you know that should qualify or that qualifies or that's good or no. You need to change the specimen to do X, Y and Z. That's not appropriate. What about preparing an IDs. Well this is a maybe right? A non practitioner is allowed to prepare an IDs but it must be reviewed and approved by the attorney. Right. You're the one signing off on it. So you want to make sure that you're the one that makes sure that your information that's material patentability is in there. Right. But we also want to make sure that there is not some continued pattern.
Right. Hopefully this never happens. Right. But we want to make sure that it's a one off versus a systematic problem. Right. That is really, really key here. And of course you should understand that one mistake might be malpractice. It's not always a disciplinary problem right. It's not always unethical to make a mistake. But generally speaking, if you have a problem or repeated violations, that's going to be an ethics issue. But I will tell you, a lot of it just depends on the beholder, right? So if the USPTO Office of Enrollment and Discipline, which is their ethics arm, sees something, I mean, quite often depending on their workload, what their target is at that point, an error, one single error could be a very, very big problem. But by and large, it really depends on what the error is and how material it is. And you know, if your client is complaining, that's a really, really big point. Who is complaining? So let's talk about conflicts of interest. Right. So we all have interests that are different than others. And I'll give you the classic example. Right. This is not considered a conflict of interest, but I think it's a good baseline of conflicts. So I want to get paid for doing legal services. I want to make likely as much money as I can. Right. That's an example. But my client wants to pay as little as possible. Isn't that really a conflict? Right. But we're reaching a happy medium.
That's fair. And there's a separate ethics rule that applies to that, right. Rule 1.5 or 37 CFR 11 .1., 11.105. But let's talk about real life conflicts of interest and how they really, really interact. So one, I will tell you that conflicts of interest definitely do exist. And I tell the story sometimes, you know, if you ask me like 15 years ago. Would I ever have a conflict of interest? I'd say no. I'd say I will never have a conflict of interest, and I will never have a client trust account, because I will never have a conflict, and I'll never take money in advance. Then I join the real world and realized that you cannot not take money in advance because people won't pay you, and that if you're really good at what you do, you will have conflicts because everyone's going to want to come to you. So it is very important, especially for people in the field, right? Subject matters can be very close together. So you have to really understand the nuances. So again I'm going to go back to basics here. If you have a client that's directly adverse to another client or potentially yourself or whatever, then you cannot have that representation absent consent. That's rule 1.7 a one. And just so you know, the ABA model rules, which are based on the ABA rules, they're the ones cited next to it, 37 CFR 11.107. So if you can see how the zero turns into a sorry, an eye turns into a zero, and then you add the 11 dot ahead of it, that's that gets you to the ABA corresponding or sorry, the USPTO corresponding rule.
So you also cannot represent a client in a matter where there's a significant risk that the representation will be materially limited by duties to others like third parties, clients, whatever, or your own self interest. So what is that? What's the difference? The classic example of an A one conflict is A versus B in litigation, husband versus wife, so on and so forth. 1.7 a two is a little bit more nuanced material limitation. So what is a material limitation that could be a subject matter conflict. It could be you know I'm going to help one client versus the other. I, I might want to charge more in this case versus that case. Right. Those are all examples of material limitations. And we'll try to go through some examples with the real subject matter in a second. But before that, let's give some examples of some other client or other client conflicts. So under rule 1.8 there are some very unique conflicts that are really applicable to just a small set of people business transaction with clients. First off, I would always say avoid a business transaction with a client, right? Stop trying to get stocks in a client company or the second one acquiring an interest in a patent, etcetera.
That's adverse to the client, right? So if you're taking a payment of the application fee and taking a part of that application as payment for the fee, like an assignment, you know, joint ownership, etcetera, you can do it, but you have to follow some of the special rules. But my first response when a client calls me and says, hey, I would like to do this, saying, don't it just sometimes it's more trouble than it's worth. But what about a practitioner as a co-inventor? The gold standard here is to assign that right. If you believe that you're a co-inventor. And it just so happened that you became a co-inventor because you improved something during your prosecution while you were drafting the application. Assign that right. Right. But I would say the more common business transaction with the client is a third party payment of legal fees. Right. So where somebody's mom or dad is paying their legal fees, right. That's an example of a third party payment of legal fees. Perspective limitation of liability. Yeah. That's often something that we think about that happens a lot less here. There's also state law that's involved like some states really frown upon that California being one of the main ones, but definitely something to consider. So we talked about 1.7 and 1.8. Current client conflicts. But what about former client conflicts? And I'm going to give you a hint. The former conflict is really helpful to many people.
Why? Because it's easier to deal with than the current client conflict. So the rule is basically that you can't represent somebody directly adverse. If the subject matter of the representations, both prior and current, are the same or substantially related, same is very unlikely, right? That's everyone probably knows that switching sides etcetera substantially related. Maybe that's a patent family, right. Maybe there's some sort of, you know, like there's actually a good example in an in house case, the Schlumberger case, which is dynamic 3D Geosolutions versus Schlumberger. You know, Charlotte Rutherford works for Schlumberger and is evaluating a patent, then switches sides, goes to another company. They basically same same manner or substantially related basically by that patent and sue the old client for infringement. That's really, you know, switching sides. Not necessarily a good thing. So that's a really good example of being the same or substantially related. All right. So let's do a quick hypothetical. So you represent company A in one trademark application. Just one. Then company B wants you your firm to sue company A for patent infringement. Right? Totally unrelated. Right. We can argue that the trademark and patent. Totally different. Right? One is litigation. One is trademark prosecution. Can the firm take on that company be representation? And anyone in the audience want to take a gander. So technically the answer is no, right? We have fiduciary duties to our current clients. You have a duty of loyalty to company A and a duty of loyalty to company B.
How would you feel if your company A and your own attorneys. Or let's put it this way, your own law firm is suing you. They're still in the middle of practicing filing your trademark application. And then they're also suing you for patent infringement. That is not a good look. Not only is it an optical conflict, it's an actual conflict. So what if company A was a former client? In that case, yes, that would be a lot easier. It's not the same or substantially related matter. And unless they have some sort of behind the eight wall and depending on the jurisdiction, it's likely okay. But good news, even if they're current clients, it is a waivable conflict. But a waiver requires informed consent, right? That's really, really important. A waiver requires informed consent, and informed consent requires the client to be made aware of all the pros and cons of the situation. So having somebody sign a waiver, you know, ten years ago is probably not okay for a conflict that just comes up today. So another example is the opinion client. So you provide a non-infringement opinion to the tech company. Six months later you give a second opinion, a year later another opinion. Then for five years you don't hear anything. Now a much bigger company, Bigco wants your firm to represent it in an unrelated infringement action against Tech Co. Right. Is that okay? Well, the answer is it depends.
Five years is a very long time, but this is an example of when you should be closing matters. Right. How do we go from a rule 1.7 current client conflict that we had earlier to a 1.9 former client? The way we do that is we try to make sure that we understand and we record, hopefully in writing, the difference between a current client and a former client. So that silence of five years, you know, I think we can make a good faith argument to say that tech company is no longer a client, but, you know, it's a lot easier just saying, hey, tech company, thanks for asking for a supplemental opinion. This third opinion is great. If you need anything else, please let us know in the future. But we're closing our file in this matter, right? So a lot of partners will come and say, no, you're wrong. That's a bad way to do things, because then, you know, tech companies are not going to want to use our services. Well, I say, well, that's that's a risk that you're going to take. But it's all about client relationship management, right? You say, hey, this is our standard practice. You know, our firm is very entrenched in helping companies in this field. And we need to make sure that we're available to companies. And I apologize that we do have a, you know, a minimum each year. If you'd like to use us more, please feel free to do so.
But otherwise, you know, whenever you're ready, we just run a new conflicts check at that time. Nevertheless, it is still a waivable conflict if it's an open matter, and that that may be what you just have to do, right? But always check, you know, different things that apply, for example, outside counsel guidelines. And I'll bring that up in the next slide. So corporate families this is one that so difficult to understand right. You represent the subsidiary of a large company. Let's say you represent YouTube which I believe is owned by alphabet okay. Who is your client is your client YouTube is it alphabet? Is it Google? Is it nest or is it all these different companies? Right. Can you represent another client adverse to a different subsidiary. So you represent YouTube. Can you sue a client that or sorry, can you sue Google on behalf of another client. That's one question. Or let's do it a little bit more nuanced. What happens if Google's patent application or trademark application is cited against one of your clients application. Right. You only provide legal services to YouTube and they're totally different entity structures, right? That really depends. Right? Are they wholly or partially owned? Do they have common least employees or internal in-house like general counsel department? That's shared. Right. Those are important considerations. This Federal Circuit case here says that the outside counsel guidelines define client to include a family. And therefore the firm was disqualified.
Right. They didn't understand what they were up against. That's why it's very important to read your engagement letter and say who is the client and who is not the client, but also outside counsel guidelines. So for those of you that may not be familiar, outside counsel guidelines are basically guidelines that are used by in-house teams that can sometimes be the bane of my existence as an ethics lawyer, because they will say things like conflicts can only be waived by such and such person. With this title, however, that person does not actually exist. They tend to try to be a way to control costs, which is totally understandable, but at the same time they lead to a lot of issues for IP attorneys. So let's do a another quick example. But this time of a subject matter conflict. So you represent client one trying to procure a patent on a new automotive battery technology. So another client asks you or your firm to file an application also for a new battery technology. But it's not necessarily automotive. So is that directly adverse or a material limitation or nothing? Right. That's a that's a really, really important question. We want to first establish whether a conflict exists. So. First of all, are you against client one? Against client two? Not necessarily, but there could be a material limitation, right? There could also be a duty of disclosure issues. So for example, I may have a duty of disclosure obligation for client one to disclose the application information of client two.
Right. That's one issue and vice versa. But there might also be a claim shaving that could occur. So how do we judge whether something is similar. Well I think it's very, very hard. Right. If you're in the technology area it's a little bit easier. But for a non IP person in ethics I think it's very hard. I deal with this all the time. I have other colleagues that are ethics attorneys that ask me these questions and I'm like, well, you have to understand the technology because one of the problems with subject matter conflicts is it's garbage in, garbage out. And I'll give you an example of that. If I want to describe something, a very common word that I would use would be an apparatus for. And apparatus is a very common term in the patent field. But in a, in a conflicts database somebody might say thing to do this or, you know, in very odd terminology. But the problem is think of it like a thesaurus. If I go and search for certain key terms, I may not find it because the person that put it in didn't properly describe it. And that's why it's really important to make sure that not only do you have a good set of information that's in the database, but also you want to make sure that that database is consistently updated, right? Not only when that client comes with the disclosure, but as office actions come out, as more information is developed, keep that subject matter conflict checking system up to date.
But mailing Finnegan, I'm not really going to talk about it much here. It's a really good case that does talk about subject matter conflicts. It basically stands for the proposition that lawyers and law firms really need to do a lot to make sure that they're not engaging in these and claim shaving, etcetera. Oed has kind of chastised people saying, hey, you got to make sure you're doing something again, if it's not in writing, it didn't happen. So I would definitely suggest creating some sort of procedure for subject matter conflict checking. So let's switch over to the trademark side. So you know claims of use are really really important right. Because when we submit a trademark application a statement of use etcetera, we're doing so through a verified statement, usually under 18 USC 1001. We're saying this is how the mark is being used in commerce in a, you know, another application that's a bona fide intent to use. There's the word bona fide, right. We're also saying that we're alleging that this will be used in commerce. But the specimen is a little bit more important. We want to see how you're actually using this mark. But if you create a fake specimen that doesn't actually show the use in commerce, we just we don't need an example of what it could look like.
We need an example of what it does look like. So the TMP talks about this a lot. There's a lot of really interesting cases. And we'll talk about some kind of funny looking ones. And you can see for yourself what the USPTO has gone through over the years. So let's give you an example. Serial number. This one over here. The 372 trademark had numerous unrelated goods. Golf shoes. Brake discs. Tennis balls. Okay, well, if it had golf shoes and tennis balls, I'd say that could work. But brake discs? That is weird. And it's the Leo Staller Pension Plan LLC. So odd. Right? So they file saying that they're actually using this in commerce. The USPTO issues a refusal. They say, hey, prove to us that you are using this in commerce as early as the filing date, right? That's the requirement under the statute. So they had submitted some specimens and the the USPTO is like, no, that sounds like a printer's proof, aka it looks like it was superimposed. And the Leo Stoller pension plan says, nope. This attached specimen of use is not a proof, but is an actual specimen showing the applied for mark used in commerce. And get ready for it. Right? This is what it looks like. Tell me that this does not look real, right? First of all, why would you have a brake rotor with a logo on it on the area where the pad is going to be used to stop the vehicle? All right.
Does this look legitimate? Superimposed. Right. That definitely looks like it's got a problem. And then, of course, a tennis ball with stealth. We know anyone that plays tennis. You know, this is going to be fuzzy all over that. None of these are appropriate, right? These are these all. I hope it's apparent to everyone that these all look superimposed and fake. So this is an example obviously in one specific issue. But this has gone on for a very long time. So what can be done about it. Well first off as an attorney we don't want to submit fake things right. We want to make sure we're not making false statements. That's really important. But you're also certifying to the best of your knowledge, information and belief formed after an inquiry. That's reasonable under the circumstances that what you're submitting is appropriate. So. Uh, this is 37 CFR 1118, which is based upon rule 11 of the rules of civil procedure. So I can definitely say that you submitting a false or fraudulent specimen is a violation of your competence rule, could be a false statement, etcetera. Totally agree. However, even if you don't submit it, if you're later advocating it, or you're allowing your client to sign off on it, that's still you, right? You are still dealing with the potentially false statement. So you need to make sure that you have done an inquiry that's reasonable under the circumstances.
So if I see this any of these, I will say I don't believe that I'm able to submit this. I believe that the USPTO is going to ask for additional documentation, and we need you to provide additional versions of this. And an example. If you have a client relationship issue, client management issue, you can say, well, you know what? It's really important to avoid future costs. So why don't we build a stronger trademark by having additional photographs. Could you get one from, for example, the bottom angle? Hey, could you potentially put a newspaper underneath the ball that shows today's date? Right. That might be very helpful to get your client to have to do something correct. So let's roll into signature issues. So it's I would say this is another bane of my existence. The USPTO cares a lot about signatures, and I will admit to everyone that you're probably right. Every other jurisdiction could care less about who signs what. However the USPTO cares who signs. You cannot sign on behalf of a client, and your client can't sign on behalf of you. Your paralegal cannot sign on behalf of anyone and your colleague, your partner, or your associate, your special counsel. They can't sign on behalf of you. Same thing with me. I'm your ethics attorney, but I can't sign on behalf of, you know, X, y, z on a response or verified answer or whatever it might be. So what is the rule? Well, both patents and trademarks have a specific regulation that says that the document or signature must be personally entered by the named signatory.
So. If it's a inventor's oath, must be signed by the applicant, not the attorney. If it is a trademark application, it can be signed by the the applicant or somebody, the authority to bind or the trademark attorney. However, the trademark attorney cannot sign the applicant's name, just like the patent attorney cannot sign the client's name. And it is not delegable to your associate, paralegal, legal assistant, spouse, whoever with with consent, right? There is no such thing non-delegable period. All right, I'm not saying I agree with it. I'm just telling you that the USPTO has been very, quote unquote picky about the signature rules. And again, who uses handwritten signatures anymore? I'll tell you, the only time I really sign things by hand is if I'm signing some sort of a waiver at, you know, a sporting event or I'm signing a check. Those are the only two times I actually sign my name. Every other time I enter it in electronically. However, still, you've got to enter it personally. So why is this issue? Well, the USPTO says it's violation of 1118. It's a false representation. It impacts your supervisory duty. If you're a non is the one that entered it and it makes you incompetent. Again I don't agree, but this is the rule. This is what I have to advise folks on to make sure they don't unwittingly get a trout.
Let me give you an example of a really, I would say a sad story. This is Henry Mitchell. So this again tells us the importance of signatures and the eyes of the USPTO. This is another party that ended settling with the USPTO for a public reprimand. So to be clear, the TMP unequivocally states that the USPTO does not take a position regarding the validity of marks, and we haven't necessarily seen the USPTO void marks with the signature issues, though they're trying to do so, especially if they originate from China. So in this case, a company provided paralegal services to trademark clients. So Mr. Michael owns a company that provides paralegal services to trademark clients because he had the ultimate managerial authority over non practitioner assistants, even though they were supervised by his clients, the trademark attorneys. He relied on consent from those attorneys and permitted his staff to sign on behalf of those named signatories in 35 get it 35 trademark applications. And he got a public reprimand. Obviously, he was pro se, you know, I think he didn't quite understand what the USPTO was getting at, and they may have taken advantage. But there's a long line of cases. I mean, here's some I mean, these are these are old, I have I mean, each year there's a dozen or so or more cases dealing with signature issues. Right. And Ray Lou and Ray Sapp, these reprimands, you know, some of these are Bageshwar ended up I think getting excluded.
But that had that was a patent agent engaging in trademark practice. Swire's is I would say the the real interesting case because he's been excluded twice for inter alia, you know, engaging in creating false specimens on behalf of clients and engaging in or assisting in UPL. So very, very important set of cases. But these continue to go on for a long amount of time. If so, I know we are running out of time. I'm going to try to wrap up and as always, I am open to questions if anyone has any. But in terms of unauthorized practice of law, right? Upl is not just like notarios and fake lawyers, right? You need to make sure that you are supervising your staff to make sure that they're not engaging in the unauthorized practice of law. So we already talked about this a little bit, but what is the rule, right. Why do we bring up UPL? Because 37 CFR 11.505 is an ethics rule dealing with UPL. So UPL is not just a violation for those that might engage in litigation where they're not properly licensed, not just filing a complaint where you're not barred. It's also when you assist another. So if you assist your non-lawyer or a third party, maybe you're doing work for an invention promotion company or a company that's selling your trademark legal services that could get you in trouble with UPL.
Another example I kind of already went over this was in Russia, even though it looks like Shiites. Shah, she was a patent agent that represented applicants in trademark matters before the USPTO. But she was a patent agent, not a lawyer. So that's a really, really good example of UPL. But again, we have invention promotion companies. We have companies all over the world that are offering trademark legal services. And some it used to be mostly patent, but now it's really a lot of folks trying to say, hey, we can get you on Amazon Brand registry, flat fee of $700. But of course, it could also be just us in our own offices, failing to supervise our lawyers or outsourcing without properly supervising. So Ford Associates is another big topic that we see a lot of. And Ford Associates. You know, we have a lot of foreign clients. So Ford associates are often that communication and cultural connection to those clients. Very customary in IP practice. And basically if you're a foreign trademark client, you have to have us counsel. Same thing with you know, obviously anyone that wants to file a patent application should be generally speaking, you know, should hire an attorney. It's really the best process. So. When a foreign attorney has a client or a foreign patent or trademark agent, they'll contact a US attorney and they'll often act as an intermediary, which is technically okay, right? They help understand the culture, speak the language.
I'll give you an example. If you want to represent a client in Japan, it's very, very difficult for you as an American attorney unless you speak Japanese to do so. But even more so if they're represented by Japanese local counsel, that Japanese local counsel may allow you to talk to them and meet them in person if you fly to Japan. But otherwise they will only want you to deal with you and not have you talk to the client directly. And that's something that people recognize. Right. And the USPTO back in 1980 said, yes, you are allowed to rely upon the instructions of and accept compensation from a corporate liaison or foreign agent. So they're saying, yes, this is okay because if we go back a couple slides when we talk about unauthorized practice, if we're allowing a non-lawyer to essentially hire us on behalf of their client, isn't that UPL? Well, not in this case, especially because of the official Gazette notice. Right? The official Gazette notice says you want to make sure that the attorney knows who the client is, and that the client has consented after full disclosure to being represented by this third party liaison, foreign agent, foreign associate. Et cetera. Right. That's really, really important. So I use the word timing and proof. So one, I want proof that the client knows who you are, right. Maybe there's some sort of authorization letter that says Emily is authorized to represent, you know, Sony Electronics before the USPTO and blah, blah, blah, and he's authorized to communicate with XYZ Legal Associates in Japan.
Right. That's good. But what about timing? I use that as a proxy to say, hey, test and supervise that for an associate. We want to make sure that the foreign associate is doing what they're supposed to do. So if you ask a question at 9 a.m. Pacific. Which is probably late in the middle of the night in Japan. And you're saying, hey, I want to know, you know, if X, y, Z is applicable here or if I can respond to the office action with this. But I really need to know what is going on here, something that you need client consent on. And 9:02 a.m. you get an immediate response saying go ahead, write one that doesn't fully answer your question. And two, it definitely doesn't look like your client could have been contacted within those two minutes, right? That is a problem. That means, timing wise, it looks like your client is not actually being asked the question, and the foreign associate is kind of just manipulating and really not just acting as a liaison, but making decisions that are really, really important that the client do. So those are really, really important for you to consider. So let's talk about some final thoughts. So you know outside of what we've talked about there are a lot of things that we could do right.
We want to make sure that we look at conflicts. We want to make sure our law firm has a subject matter conflict checking system that's all about garbage in, garbage out, right? We want to make sure we're putting in good information that we, you know, adequately update those solutions. We want to make sure that we're supervising our client, our sorry, our foreign associates and our staff. Anyone that works with us, we want to maybe audit them. Right. And when I say audit, I'm not talking about hiring a CPA. Obviously our law firm does audits, but you don't need a law firm to do an audit. You could do those internally, right? Make sure that things are being done appropriately. If you're working with a foreign associate, maybe check to make sure. Hey, can I have a sample of how you communicate this or how you came to this? Why did you make this? You know, can I interview this client about X, Y, and Z? Can they participate in this discussion that we're having? Those are all examples of things that we can do to make sure that we're properly working with our clients. We're working with our teams and getting to a good position. But let's talk about when we're working with foreign associates. But also you can use this for yourself, right? We want to make sure that we always use an engagement letter. Right. In many jurisdictions an engagement letter is not required.
I know that, however, I told you this earlier, if it's not in writing, it didn't happen. So let's say that you have an arbitration agreement, or let's say that you told them that there's going to be a flat fee. How do you explain that? How do I prove when the bar comes knocking or XYZ happens? How do I prove that this, in fact, was an appropriate fee? Well, the client agreed to it. Well, how do I know that we want a written engagement letter? So we talk about the Dr. Falk Pharma case. We want to know who the client is and who the client is not. Right. So check to make sure there's no outside counsel agreements. But let's say we represent YouTube right. In the engagement letter. We say we represent YouTube. We do not represent any affiliates, subsidiaries, sister companies, children, companies, whatever, including but not limited to Alphabet Inc, Google, nest. Et cetera. Right. If we need to get consents from people, whether it's informed consent for a conflict waiver or otherwise, let's make sure we do that in one document. Right. It's not required to be in the engagement letter, but it's really good to try to do it all in one. Like I like to have one document that I say, hey, this is the document that reflects my understanding between myself, the client, the firm, whoever's involved. And then of course, explain the fees and expenses. Right. Expenses are somewhat important, especially in prosecution, where there might be micro entities, small entity, large entity.
Right. If you apply for micro entity, do you charge extra for that? Right. Do you charge a fee on top of a fee if they pay by credit card? Those are important. But also, is it a flat fee? Is it an hourly fee? Is there a minimum fee. Right. How do you calculate those fees? What is the fee rate for paralegals and legal assistants? We want to make sure that's in there. And then especially especially if you're dealing with a foreign associate or an entity, but also if you're dealing with joint inventors who speaks for the client. If joint Inventor A keeps calling you, does that mean that they're your client? No. What about joint Venture B? Right. Joint venture B is like, well, you never asked me. Well oh I thought it was only joint inventor A that speaks for you. Nope. We want that in writing again, preferably in the engagement letter. But even if it's not in the engagement letter, it could be in an email or some sort of communication that reflects who's going to do what. Right. It doesn't mean that you can just say goodbye to conflicts. If a joint inventor says, well, hey, we want to remove this claim, and that means Joint Inventor B is no longer the client, right? That's a whole nother set of issues. And then of course, limit the scope where appropriate.
What do you limit the scope? You do need to get informed consent of the client, but in most cases it's very reasonable, right? You want to say, well, I am only procuring this application for you, right? I am not going to do X, Y, and Z. I'm not going to also file a trademark. I'm not also going to engage in litigation. I'm not going to monetize your IP. That's the big one. A lot of unsophisticated users of legal services think that, hey, I'm paying $10,000 for a patent. You're going to help me turn it into $1 million empire. That's not necessarily or often the case. Patent attorneys don't generally engage and trademark attorneys don't engage in monetizing the the IP. And then of course related to limited scope it's post registration, post grant post everything duties and documents. So. Am I going to continue to hold the power of attorney or recognition with the USPTO? Will I continue to be your correspondence address? Will I pay maintenance fee renewals? What happens if I receive a document? Those are all really important. But also, how long will I keep the client file for? What about the originals? Will I share those with you? Will I do? All those different types of things are very, very important for you to address. Hopefully in that document that you have right in that engagement letter. Hopefully it addresses those things. If not right, it's not too late. When you are done with the trademark application or patent application or done with the litigation, send a closing letter saying, hey, we're going to do this.
We're closing our file. All the work is complete. We believe that you may still have to do X, Y, z in the future. Here are those next few deadlines. We encourage you to track them. You know, we are also going to destroy our papers after two years, right? In accordance with our document destruction policy. Et cetera. Those are really, really important things to consider. So I think it's like belt and suspenders. Not only do you ensure your client is aware of maintaining their responsibility to renew, maintain. Et cetera. But you want to make sure it's confirmed upon registration. So even if it says certain things in your client engagement letter. And you think it's clear in your scope. It doesn't hurt, right? I know that we want to keep matters open, but as we talked about, sometimes it's better to close matters, right? Because most companies should or most law firms should not be in the renewals business. Right. The maintenance fee. It's very, very risky. On the trademark side, it's a little bit less risky sometimes and it's more of a legal service. So I do totally understand and respect that. But I do encourage you to kind of think through what you're in the business of doing. Are you in the business of legal service advising, drafting, prosecuting, litigating, or are you in the business of charging somebody $300, $200 to pay a fee that, if you miss, could turn out to be a multi million dollar malpractice case? Believe me, I've represented clients in those positions before.
So we talked about just general engagement letters. But now let's talk about when we're working with foreign associates. Right. We want to see an agreement. If with that foreign associate right. What are your responsibilities. What are their responsibilities. How much will you get paid. Know what happens if something goes wrong. Those are all very important things to have. But more important than that, right? You still want to supervise them, etcetera. But we want to have an agreement with that foreign client. Does it mean that it has to be. Hey. Oh, I need to talk to you. We need to agree on these terms. A clickwrap kind of standard. One pager that says, dear Client, you know, we have been advised by foreign associate that you wish blank wishes to engage us to file these patent applications. You know, the US system has these duty of disclosure obligations which your foreign associate is aware of. If you ever have any questions, you're always free to contact us directly or blah blah blah. But by signing this, you are agreeing to appoint us as your attorney. In fact, before the USPTO to file these things, to also have this other third party foreign associate speak on your behalf, right, and communicate with us.
However, you know, this is what will happen once the patent issues or if it does not issue or if it's abandoned. We. This is what happens when we have conflicts of interest, right? How do you get that client to agree to a waiver? Maybe it's hey, you're delegating the ability to sign a conflict waiver to the foreign associate, right? I don't love that. But it might be something to think about, right? Maybe there might be some sort of an advanced waiver based upon the subject matter. Maybe. Hey, when does this engagement end? Those are all really, really important things to think of, to have in a foreign client agreement. Because, you know, there there is, you know, the thought process going back to law school, I think of privity of contract. Right. Who is the client? Well, I want to make sure that it's very, very important that we know our client relationship in a foreign associate matter is the foreign client, not the foreign associate. You're more than welcome to treat the foreign associate as a client, right. Some of the communications may be confidential and or privileged, depending on what you're doing and what you're saying and what they're acting on behalf of. But when push comes to shove, if you're subpoenaed for your contract between the foreign associate and your firm, that's probably subject to discovery, your agreement, the foreign client may not necessarily be right. That's that's a little bit trickier. So those are all really, really important things to think of as you work with foreign associates and foreign clients.
So with that, I'm happy to take any questions. I know there's about two more minutes to the program right at that mark. You should be receiving a pop up. Please wait for that pop up before logging off so you can get your credit again. My name is Emil Ali, and it's been a pleasure talking with you all. I do encourage you to visit our website at mccabe.com or IP ethics Law.com, where we have a lot of information about other opportunities and hot topics. Looks like we do have another question in the audience about recommendations for conflict checking software. Unfortunately, I don't have any specific recommendations. I will tell you that there is a gaping hole in that technology sector. No one has built a software system that I can really recommend and say is really good. I will tell you that with the advent of AI, I'm hoping there's going to be a lot of improvements in the next year or two where you can get like a Cots or off the shelf system that you might be able to put in a couple sentences and it'll be able to tell you, hey, here are some matches from your system. So I do encourage you to look out for that. I'm very hopeful that we'll be able to have something like that in the future. But with that, looks like we are at the 60 minute mark again. I appreciate your time and as always, feel free to reach out to me on LinkedIn by email or by phone. Thank you so much.
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