A new Code of Conduct for Trans-Tasman Patent and Trade Marks Attorneys (the code) came into effect on February 23 2018 to address two issues:
1) The introduction of the trans-Tasman patent attorney regime which was commenced on February 24 2017. This is the regulatory framework for patent attorneys to register and practise between Australia and New Zealand.
2) Amendment of the conflict of interest provisions in response to the development of publicly listed companies acquiring multiple attorney firms and operating in a group and concerns related to the potential for conflicts of interest.
Registered patent and trade mark attorneys (attorneys) are bound by the code in relation to the following areas:
The code regulates the way attorneys communicate their legal and ownership structures to clients. In addition to informing clients about competency, costs, timing and procedures before taking on any new work, it is necessary to inform clients about whether the attorney is operating as part of a public or private incorporated company, or whether the attorney is a member of a group of entities which have a significant degree of common ownership or control or both (ownership group).
The code provides that an attorney must not use or disclose or allow use and disclosure, of confidential information of a client, a former client or prospective client, without their consent. In essence, an ownership group is considered to have a single body of clients and for the purpose of the confidentiality and conflict obligations, this must be considered across all members of the group.
An attorney’s fiduciary duty and duty of loyalty to the client requires that the attorney must not prefer the attorney’s interests over the interests of the client or prefer one client’s interest over the interests of another client unless consent is obtained from both clients after appropriate disclosure so the clients can make an informed decision. The code provides that an attorney may act adversely to a former client only if no confidential information is held by the attorney in relation to the matter or if an effective information barrier is established. However, an attorney must not act for two or more clients in the same matter in contentious proceedings.
An attorney must take all reasonable steps to avoid conflict of interest between the attorney’s interests and those of a client and between the interest of one client and another client.
Where an attorney is a member of an ownership group, a client of any member of the group is considered to be a client of the attorney and subject to the duties of loyalty and to avoid conflicts, and will not be considered independent of the ownership group unless the attorney operates independently of the other members for providing attorney professional services, including not having access to client confidential information held by another member of the ownership group. Irrespective of independence, the attorney must not act for a client in a proceeding against a party that is a client of another member of the ownership group unless the client has given informed consent.
Where an attorney is a member of an ownership group there is a requirement for clear public disclosure of this, including the identity of the other members of the group.
The code mandates that clients’ interests are paramount irrespective of the structure of any IP professional services entity. The code enshrines the primacy of client confidentiality, transparency and the avoidance of conflicts and is a practical solution to changing structures and practice in the Australian IP sector.