The introduction of the due care standard under the Patent Act and Patent Rules has made it more important than ever that licensees cooperate with successor agents with respect to their former clients’ files. Successor agents may need the file materials from a previous agent in order to make arguments with respect to the due care standard on a patent application that has been deemed abandoned. It is important for licensees to be aware of the ethical obligations of the previous agent in sharing file materials and the emphasis the Code of Professional Conduct (the “Code”) places on ensuring the client’s rights and position are prioritized. This is true regardless of the due care standard – the obligation to share file materials and prioritize the client’s rights (even when they are a former client) is an ethical obligation of all licensees under the Code.
A client has retained a licensee to assist with an abandoned patent application. The licensee has determined that in order to assist, they will need to make some inquiries of the previous agent in order to determine whether there is an argument to put forward with respect to whether the due care standard was met. The client provides the name and contact information for their former agent. The following analysis considers the ethical obligations the former agent has with respect to the client and helps to inform a successor agent of the former agent’s ethical obligations as well.
Part 6 of the Code (Withdrawal of Services)
If an agent withdraws or is discharged from a matter, the agent must endeavour to avoid foreseeable prejudice to the client and must also cooperate with a successor agent if one is appointed.
If an agent withdraws or is discharged from a matter and is in receipt of an official communication on the matter to which a response must be filed in order to avoid abandonment of the matter, the agent must endeavour to report the official communication in a timely manner to the former client in order to avoid prejudice to that client and to permit them to take appropriate steps to safeguard their rights in the matter.
… the agents who are no longer retained by that client must act in accordance with the principles set out in this rule and, in particular, must try to minimize expense and avoid prejudice to the client…
On discharge or withdrawal, an agent must
(f) cooperate with the successor agent in the transfer of the file in a manner that minimizes expense and avoids prejudice to the client.
The obligation to deliver papers and property is subject to any agreement between the agent and the client. In the event of conflicting claims to such papers or property, the agent must make every effort to have the claimants settle the dispute.
Cooperation with the successor agent will normally include providing copies of all files for applications and patents but confidential information not clearly related to the matter must not be disclosed without the written consent of the client.
It is quite proper for the successor agent to urge the client to settle or take reasonable steps toward s settling or securing any outstanding account of the former agent, especially if the latter withdrew for good cause or was capriciously discharged. But, if a matter is in progress or is imminent, or if the client would otherwise be prejudiced, the existence of an outstanding account must not be allowed to interfere with the successor agent acting for the client.
Licensees’ obligations to their clients do not end when the agent-client relationship ends. Licensees have an obligation to ensure that they adhere to their duties under the Code with respect to the end of that relationship. These duties include cooperating with a successor agent on their client’s matter. These obligations are not dependent on the due care standard – they apply equally to patent agents and trademark agents.
A licensee must also be mindful of any official communication they might receive after the agent-client relationship is terminated, because the licensee has a duty under the Code to report that communication to their former client in order to avoid any prejudice to that client. Effectively, the duty to put a client’s interests first extends beyond the agent-client relationship. The licensee should make reasonable efforts to report the communication and they should document these attempts in their file. If a client is no longer reachable, the licensee should be able to at least demonstrate that they made reasonable efforts to attempt to reach the client.
In a situation where a client may need to make arguments with respect to the due care threshold, a licensee should be mindful of their ongoing duty to that client to do what they can to help the client to minimize expense and avoid prejudice. Where a successor agent may need to access the file materials of the previous agent, the previous agent has an obligation to cooperate in accordance with the rules and commentary in the Code. Of course, as with all of the duties in the Code, these obligations also apply even when the need to make a due care argument is not present.
With respect to the obligation of the previous agent to provide the file materials to the successor agent, the Code does provide that this obligation is subject to any agreement between the former agent and the client. If there are conflicting claims to the papers or property relating to a file, or a dispute about any agreement that may apply in relation to the papers or property of a file, the successor agent is required to make every effort to have the former agent and client settle the dispute.
The successor agent also has an obligation to urge their client to settle or take reasonable steps to settle any outstanding account of their former agent, where applicable. The Code provides however, that if the matter is in progress or imminent or the client would be prejudiced, the existence of an outstanding account cannot interfere with the successor agent acting for the client which may mean providing some of their file materials or giving evidence with respect to the due care standard in some circumstances even where there is an outstanding account.
Effectively, the Code requires that file materials from licensees should be shared with their former clients or their former client’s successor agents. Any licensee facing a request for their file materials should be mindful of their obligations under the Code and their duties to their former client.