United States: Patent Office Proposes Rule Changes Concerning Patent Agent And Foreign Patent Practitioner Privilege And Duty Of Disclosure

Recognizing Patent Agent and Foreign Practitioner Privilege

On October 18, 2016, the United States Patent and Trademark Office (the "PTO") issued a proposed rule that would "amend the rules of practice before the Patent Trial and Appeal Board to recognize that, in connection with discovery conducted in certain proceedings at the United States Patent and Trademark Office... communications between U.S. patent agents or foreign patent practitioners and their clients are privileged to the same extent as communications between clients and U.S. attorneys.1

The PTO's proposal stems from a February 2015 roundtable and solicitation of comments on attorney-client privilege issues. Commenters "unanimously supported a rule recognizing" a patent agent privilege.2

The PTO's currently-proposed rule is especially timely and necessary to resolve the uncertainty over patent agent privilege created by the various judicial and administrative bodies. As the PTO noted, "PTAB proceedings are subject to the Federal Rules of Evidence (FRE), which include rules on attorney-client privilege.... Accordingly, privilege may be asserted in PTAB proceedings by licensed attorneys. However, the FRE does not explicitly address privilege for communications with non- attorney U.S. patent agents or with foreign patent practitioners."3 Moreover, "[t]he rules governing PTAB practice likewise do not address this matter, and when it arises, PTAB Administrative Law Judges make legal determinations as to which communications may be protected from disclosure on a case-by-case basis, based on common law."4 And, the PTO recognized that "U.S. courts have devised several different approaches to determine under what circumstances communications with these practitioners are privileged... and results sometimes conflict."5

Earlier this year, the Federal Circuit appeared to have clarified matters in In re Queens, holding that the patent agent privilege extends to communications with patent agents when those agents are acting within the scope of their authorized practice of law before the PTO.6 The Federal Circuit examined the unique role of patent agents and the history and treatment of the profession by Congress and the Supreme Court, with the majority concluding that the agent-client relationship is virtually indistinguishable from the attorney-client relationship.7 A lack of the patent agent privilege, the court found, would hinder communications between patent agents and their clients, thereby undermining Congress's dual-path system affording applicants the choice between agents and attorneys.8

But, more recently, a Texas Appellate Court re-injected uncertainty into the discussion. In In re Silver, the Texas Appellate Court denied a petition for mandamus, and declined to adopt the patent agent privilege recently recognized by the Federal Circuit.9 The petition arose from an underlying contract dispute wherein the trial court did not recognize the patent agent privilege because it is not recognized by Texas statute or rule.10 Without the authority to adopt a new discovery privilege, the Texas Appellate Court found that the trial court did not abuse its discretion by declining to adopt the privilege.11 It further found that the Federal Circuit precedent in the patent case In re Queens was not binding in this breach of contract case.12 Rather, the patent agent privilege does not govern communications "that are not reasonably necessary and incident to the prosecution of patents before the [PTO]."13 And, "in a civil case, state law governs privilege regarding a claim or defense for which state law supplies the rule of decision."14

The PTO's proposal also seems to go beyond the Federal Circuit's In re Queens holding, as it appears to bring communications with non-U.S. patent-related personnel within the ambit of the privilege. This issue has, for some time, been of special interest to companies based in countries—like Japan—with few lawyers, and where in-house IP departments are largely staffed by "informally" trained ex-engineers, so long as they are "authorized to practice patent matters in foreign jurisdictions."15 The PTO's proposal will not completely solve this issue for these companies, as it remains unclear how courts will deal with in-house communications that are not clearly related to a proceeding before the PTO.

The comment period ends on December 19, 2016.

Modifications to Duty of Disclosure

In addition to the proposed rule on patent agent privilege, on October 28, 2016, the PTO published a proposed rule revising the duty to disclose information in patent applications and reexamination proceedings in light of the 2011 Federal Circuit Therasense case.16 In Therasense, an en banc Federal Circuit tightened the materiality standard for inequitable conduct, holding that "the materiality required to establish inequitable conduct is but-for materiality"—likely reducing the number of inequitable conduct cases that the Court would have to review. The PTO's proposed rule would modify 37 C.F.R. §§ 1.56(a) and 1.555(b) to incorporate but-for materiality as set forth in Therasense into the materiality standard for the duty of disclosure. It would also incorporate affirmative egregious misconduct to address any fraudulent schemes that might arise under the but-for materiality standard.

The PTO stated that the proposed rule would have the following positive effects: (1) simplifying the patent system as a whole; (2) decreasing the frequency of inequitable conduct charges; (3) lessening the amount of marginally relevant information in information disclosure statements; (4) enhancing patent quality through more focused prior art submissions; and (5) continuing to encourage applicants to act in good faith.

While the proposed rule would appear to officially narrow the duty of disclosure, we believe that it is unlikely to have significant practical effect, as applicants likely will continue to err on the side of over-disclosure.

The comment period ends on December 27, 2016.


1 81 Fed. Reg. 71653, 71653–54 (Oct. 18, 2016) (to be codified at 37 C.F.R. pt. 42).

2 Id. at 71654.


4 Id. (citing GEA Process Engineering, Inc. v. Steuben Foods, Inc., IPR2014-00041, Paper 117 (PTAB 2014) (ordering Petitioner to produce documents despite Petitioner's argument that said documents were protected by the attorney-client privilege)).

5  81 Fed. Reg. 71653, at 71654.

6 In re Queen's Univ. at Kingston, 820 F.3d 1287, 1302 (Fed. Cir. 2016).

7 Id. at 1300.

8 Id.

9 In re Silver, – S.W.3d –, 2016 WL 4386004 (Tex. App. Aug. 14, 2016).

10Id. at *2–3.

11 Id at *3.

12 Id.

13 Id. (quoting In re Queen's, 820 F.3d at 1301–02).

14 Id. (quoting In re Queen's, 820 F.3d at 1294).

15 The Notice defines the term "patent practitioner" to include "both those authorized to practice patent matters before the USPTO and those authorized to practice patent matters in foreign jurisdictions."

16 Therasense, Inc. v. Becton, Dickinson and Co., 649 F.3d 1276 (Fed. Cir. 2011) (en banc).

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