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IP: Subject matter conflicts of interest in patent prosecution

In the high-stakes world of intellectual property, law firms must diligently guard against hidden conflict of interest traps

Attorneys who have been practicing for more than a day are familiar with the process of conflicts of interest searches. A new client comes into the office or firm, the attorney or conflicts team searches a client database for the name of the person or entity. If a potential conflict surfaces, the conflict must be cleared, waived or the client sent elsewhere. As law firms merge and attorneys move from firm to firm, conflict of interest searches become important considerations. Are companies doing all they can to ensure that outside counsel is properly handling conflicts of interest?

The issue is not only ensuring that the prospective clients don’t present conflicts with one another, but also ensuring that their patent applications don’t present conflicts. A subject matter conflict search is equally as important as an entity/individual conflict search. This type of additional search is not related to the inventors, assignee or research team, but is directly related to the patent application disclosure. Ignoring these searches can create mountains of problems down the road ranging from allegations of inequitable conduct to patent invalidity.   

Larger firms or patent boutiques with several patent practitioners may decide to handle subject matter conflicts of interest by setting up a firewall between attorneys. The firewall is announced to the firm and work handled by one attorney is not disclosed or shown to the other attorney (and vice versa). A problem surfaces if one of the attorneys leaves the firm and doesn’t take that client with him/her or takes an extended leave of absence, leaving the firm to fill the void with another patent attorney. A firewall may break down completely in these situations.

Another question is whether a firm representing competitors in patent or other types of matters can diligently prosecute patents for each. The firm may jump through every hoop and be above board when handling both clients, but there will always be “the appearance of impropriety” when looking back on the matters.

Contributing Author

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Sandra P. Thompson

Sandra P. Thompson, J.D., Ph.D., is a shareholder in the Orange County office of Buchalter Nemer. Her practice focuses on intellectual property, specifically, patents and...

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