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Client Identity in Patent Prosecution

Client Identity in Patent Prosecution. David Hricik Professor of Law Mercer University School of Law. Two Common Malpractice Plaintiffs. Clients : under most US state law, only a “ client ” can sue a lawyer for breach of fiduciary duty.

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Client Identity in Patent Prosecution

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  1. Client Identity in Patent Prosecution • David Hricik • Professor of Law • Mercer University School of Law

  2. Two Common Malpractice Plaintiffs • Clients: under most US state law, only a “client” can sue a lawyer for breach of fiduciary duty. • Nonclients: under some US state law, can sue a lawyer for failing to warn the nonclient that the lawyer was not representing him.

  3. Two Common Movants for Disqualification • Clients: in all courts, a “client” (or former client) can move to disqualify a lawyer. • Nonclients: in some courts, some nonclients have standing to disqualify, but in very narrow circumstances.

  4. Definition of “Client”Broadens Both Types • Express contract or implied by all of the facts and circumstances and is... • Not dependent upon payment; • Not dependent on a written or even oral agreement; and • Implied later by a jury, in the context of litigation, perhaps with a sympathetic plaintiff or set of facts.

  5. Three Questions • Do you represent: • An employed inventor who is subject to obligation of assignment to your client? • The other party to a joint development agreement (or, perhaps, license) with your client? • Some or all other corporations that are affiliated with the entity you represent?

  6. Solo Inventors

  7. Employee Inventors • Under US law, inventions belong to creator. • Sophisticated companies require employees to assign all inventions to company. • But it is common for patents to be prosecuted with cooperation and involvement of inventor.

  8. Sun Studs’ Common Fact Pattern

  9. Not a Client…Under 9th Circuit Principles

  10. Four Things • “Ninth Circuit principles” don’t control state malpractice claims, so may only be 9th Circuit DQ • Three remaining risks: • the employee might think he’s a client, too. • the employee might later say he thought he was a client, too. • there won’t be a clear obligation to assign, and the lawyer will have told an unrepresented person to give up property.

  11. Employee Belief

  12. Assignment? • If no obligation assigning the invention, then lawyer is giving legal advice to and asking a nonclient to give up, for free, ownership of an invention.

  13. Reducing Risk: Employed Inventors • It is possible for lawyer to get involved only after assignment has been obtained by company • Business impracticalities. • Lawyer can include “warning” with power of attorney which states he does not represent the inventor. • No reason not to.

  14. Corporations A more or less true story... • Associate in the Macon office of a national law firm represented a small client in a small matter. • Huge, long-standing firm client needed half the lawyers in the Austin office to represent it in a bet-the-company case brought by a large competitor.

  15. Big Good Guy Big Bad Guy Austin Office Macon Office Affiliate Tiny Good Guy

  16. Can Firm be Adverse toSecond-Tier Parent? No uniform “rule” to determine whether by representing one company you represent any/some/all related entities.

  17. 3 Different Approaches 1st Approach 2d Approach 3rd Approach Corporations are one big client Only “real” client counts Facts & Circs Lose Business? Get Business

  18. Recent E.D. Texas • Firm disqualified from being adverse to affiliate (sister) of client in large corporate conglomerate • Among factors: … similar branding!

  19. What do you do? • Clear, uniform engagement letters

  20. Other Side of JDA

  21. What do you do? • New JDAs: Draft carefully to specify client identity • Existing representations: Send letters to “clarify.”

  22. Thank You! • David Hricik • David@Hricik.com

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