At one time, patent agents were found "particularly responsible for the deceptive advertising and victimization of inventors" at the Patent Office.Sperry v. State of Florida ex rel. Florida Bar, 373 U.S. 379, 390 (1963) (discussing the early history of patent agent practice before the Patent Office). Back then, patent agents - who could label themselves as patent attorneys - were not required to register before the Patent office and were not subject to the professional restraints of their lawyer brethren. Id. at 395. To remedy this plague at the Patent Office, the Commissioner of Patents first required registration of patent agents in 1899. Id. at 390. In 1922, Congress amended the patent statute and expressly authorized the Commissioner to create the patent bar and to require a higher standard of qualifications for registry. Id.
At present, patent agents have the same rights as patent attorneys in their practice before the Patent Office. The Patent Office makes no distinction between patent agents and patent attorneys during patent proceedings and both are subject to the same rules and regulations. In the 1922 amendments to the patent statute, Congress intended to create a system where patent applicants could choose between patent agents and patent attorneys when prosecuting patents before the Patent Office. Id. at 379. The 1922 amendments were never intended to restrict patent agent practice, but they were intended to prevent patent agents from holding themselves out as patent attorneys. Id. at 393.
Yet, even though patent agents practice before the Patent Office, district courts have remained split on the issue of whether communications between patent agents and clients are privileged. One line of district court cases extends from the Supreme Court's ruling in Sperry, and recognizes patent agents and patent attorneys as equals in matters before the Patent Office. Based on Sperry, these district courts have reasoned that a patent agent privilege must attach in order to avoid frustrating the Congressional scheme. A second line of district court cases limits privilege to attorneys, analogizing patent agents to other non-attorney client advocates, such as accountants, where no privilege attaches.
The Federal Circuit has not weighed in on this long simmering issue, until now. On March 7, 2016, a divided Court of Appeals for the Federal Circuit ("CAFC") panel held that there was indeed a patent agent-client privilege. In re: Queen's University at Kingston, PARTEQ Research And Development Innovations, No. 2015-145, slip op. at 26 (Fed. Cir. Mar. 7, 2016).
Queen's University sued Samsung in the United States District Court for the Eastern District of Texas for infringement of three patents relating to "attentive user interfaces," which allow a device (e.g., smartphones or tablets) to change its behavior based on the attentiveness of a user (e.g., by pausing or starting a video based on a user's eye contact with the device).Id. at 2. During discovery, Samsung moved the district court to compel production of communications between Queen's University and its patent agent discussing prosecution of the asserted patents. Id. at 3. Queen's University filed an opposition, but the district court determined that attorney-client privilege did not protect the communications between Queen's University and its patent agent and granted Samsung's motion to compel. Id. Queen's University petitioned the CAFC for mandamus review and the district court agreed to stay production of the communications pending resolution of the writ. Id.
The CAFC determined that mandamus review of the district court's discovery was appropriate because it had never addressed the issue of patent agent privilege. Id. at 6. Recognizing that the issue had split the district courts, the CAFC pointed out that immediate resolution would avoid further inconsistent law. Id. at 7.
Relying heavily on the Supreme Court's decision in Sperry, the CAFC determined that "patent agents are not simply engaging in law-like activity, they are engaging in the practice of law itself." Id. at 14. According to the CAFC, "clients have a reasonable expectation that all communications relating to obtaining legal advice on patentability and legal services in preparing a patent application will be kept privileged." Id. at 18. Whether that advice comes from "an attorney or his or her legal equivalent patent agent should be of no moment." Id. at 19. The CAFC reasoned that the lack of a patent agent privilege would hinder communications between patent agents and their clients, undermining the real choice Congress and the Commissioner have concluded clients should have between hiring patent attorneys and hiring non-attorney patent agents. Id. at 22. In this way, the CAFC found that recognition of the patent agent privilege serves public ends. Id.
After finding that a patent agent privilege exists, the CAFC then turned to the scope of the patent agent privilege. Id. at 23. Of course, recognizing that patent agents are not attorneys, the CAFC cautioned litigants to distinguish communications that are within the scope of activities authorized by Congress from those that are not, explaining that 37 C.F.R. § 11.5(b)(1) helps define that scope. Id. at 24. The CAFC held that communications "reasonably necessary and incident to the preparation and prosecution of patent applications and other proceedings before the Office involving a patent application or patent in in which the practitioner is authorized to participate receive the benefit of the patent agent privilege." Id. at 25. Communications not reasonably necessary and incident to the prosecution of patents before the Patent Office fall outside scope of the patent agent privilege. Id. For example, communications with a patent agent who is offering an opinion on the validity or infringement of another party's patent in contemplation of litigation, or for the sale or purchase of a patent, are not within the scope of the privilege. Id.
Judge Reyna dissented, arguing that the majority should not have recognized a patent agent privilege because there was no need for such a privilege, and even if there were, the majority should have deferred to Congress or the Patent Office to create it. Id. at 1, 15-16 (J. Reyna, dissenting). Judge Reyna also argued that the majority created a confusing patent agent privilege with complicated and uncertain scope. Id. at 7.
Hiring a patent agent has always been an attractive alternative to a more costly patent attorney, particularly for corporations and departments with limited patent budgets. Patent agents have many of the skills necessary to prosecute patents, and typically without the higher price tag. However, for many stakeholders and corporations, the fear of waiving privilege has historically been enough to eliminate the hiring of patent agents altogether.
The CAFC's decision in In re Queen's University at Kingston may assuage some fears of waiving patent agent privilege and allow companies to increase patent agent hiring as they work towards leaner operations. But companies should keep in mind that the scope of the patent agent privilege is restricted solely to patent prosecution matters. A patent agent offering opinions on invalidity or infringement of a competitor's patent would not be within the scope of the privilege, may waive privilege associated with the involved attorneys, and may even be engaging in the unauthorized practice of law. Moreover, taking into account Judge Reyna's dissent and that this is an important issue involving Congressional intent, Supreme Court precedent, and public policy, applicants should consider that a CAFC en banc rehearing or even a petition for certiorari to the Supreme Court is possible.