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Rule 1 and Rule 4 – Competence and Quality of Service – considering all relevant facts and providing strategic advice

A question from licensees often arises: what should or must I do when a client or potential client asks me to do the least amount of work for the least cost in order to make their patent or trademark become a reality? As with most ethical questions, the answer is, ‘It depends’.

The following scenario and analysis consider a licensee’s obligation to inquire into and tailor their advice to a client’s particular needs and business strategy.

The Scenario

A client has retained a licensee to assist with a patent application for an invention. The client is a novice with respect to intellectual property and while their invention is promising, the client does not have much understanding when it comes to whether, when and how to protect their intellectual property.

The Rules

Part 1 of the Code (Competence)

Rule 1(2) An agent fails to meet standards of professional competence if (a) there are deficiencies in

(i)     …

(ii)   their attention to the interests of clients

Part 4 of the Code (Quality of Service)

Rule 4(1)

The agent must give the client competent advice and service based on a sufficient knowledge of the relevant facts, an adequate consideration of the applicable law and the agent’s own experience and expertise.

Rule 4(2)

The agent’s advice must be open and transparent and must clearly disclose what the agent honestly thinks about the merits of the matter at issue and the likely results.

CPATA’s Guidance

As a starting point, it is helpful to consider what are the minimum ethical, competency and practice requirements and then, what are the best practices in client service?  It is then important to clearly explain to each client in advance of confirming a retainer the differences in those service levels and the risks of providing only the minimum required services as set out in the Patent Act, Trademarks Act and the CPATA Code of Conduct. For example, patent agents can do far more than filing and prosecuting patent applications; they can (and arguably should) inquire into and provide advice about a client’s business model, strategy and resources, and engage a client in discussion about the short- and long-term viability of their invention, as well as the likelihood of patent approval.

In order to provide competent, quality service to clients, licensees must take the time to ascertain their client’s goals, always considering both the client’s means and the client’s ends. Advice should be tailored to the client in consideration of all the relevant facts, which means that licensees need to ensure they have spent time asking their clients about their business plan and discussing the resources the client wants to dedicate to securing their intellectual property. It also means that licensees should find out how sophisticated their client is and how much their client understands of the intellectual property regime in Canada and, where applicable, internationally. Licensees have an ethical obligation to have a robust understanding of their clients’ interests.

The depth and extent of discussion should depend on factors such as: a client’s experience and relative sophistication in patent or trademark matters; the complexity and uniqueness of the matter; the challenges and hurdles a client may face both during and after the approval process; importantly, the likely range of costs and expenses, and factors that may cause those to increase through the process; and whether the client has a clear vision and well-articulated business plan once the patent or trademark has been approved. 

Clients need to be put in a position to pursue the best option available to them considering the totality of their circumstances. Licensees have an ethical obligation explain to their client the various options available to them and to ensure that the client understands and appreciates the pros and cons of each option. Licensees must provide their best advice based on the options available to their client in consideration of their client’s interests, which the licensee must ensure they canvass.

In short, the analysis for each file or client matter is always contextual. There is no “one size fits all” when it comes to this work – each client’s needs, sophistication and goals need to inform how a licensee approaches their file.

Are you a Licensee with a Question about your Professional Obligations? Contact CPATA.

We invite you to contact us with your ethics questions online. Through the Ethics Inquiry process, CPATA’s professional conduct experts are available to help interpret the Code as part of the process of risk-assessment and ethical analysis.