The Ethics of Independence

Michael E. McCabe, Jr.ABA Model Rules of Professional Conduct, Communications, Competence0 Comments

Three girls jump in  the Ohrid Lake in OEverything that is really great and inspiring is created by the individual who can labor in freedom” – Albert Einstein

As we prepare to celebrate the birthday of our country’s independence, I am reminded that we, as lawyers, owe a significant ethical duty to exercise independence in the representation of our clients.  As an attorney, independence is not a privilege or a right that we can take or leave as we see fit.  Regardless of what you practice and where you practice, we as attorneys owe a professional obligation to exercise independent professional judgment in the course of representing our clients.

Independence is embedded in the rules of ethics governing our practice.  And rightly so, for it is essential in representing our clients’ interests that we not be controlled or influenced by those forces which by their nature could cloud, impair, delay, or otherwise impact our independent thought and judgment.

One of the most common situations where a patent or trademark practitioner’s independence is at risk of being compromised is when someone other than the client is paying the fees and expenses incurred by the client.  Some third-party payors believe they have a seat at the “table” and have bought their way into the domain of the attorney-client relationship.  Not so.  Under 37 C.F.R. § 11.105(b) of the USPTO ethics rules, which largely follow Rule 1.5(b) of the Model Rules of Professional Conduct, a “practitioner shall not accept compensation for representing a client from one other than the client unless:

  1. The client gives informed consent;
  2. There is no interference with the practitioner’s independence of professional judgment or with the client-practitioner relationship; and
  3. Information relating to representation of a client is maintained as confidential—even as to the person or entity that pays the fees.

Another IP-centric scenario where U.S. counsel’s “independence” may be compromised is when U.S. patent or trademark counsel deals indirectly with their foreign clients through a middle-man or intermediary.  Such intermediaries are usually authorized to engage in patent or trademark law in the home country of the foreign client but have no license to practice in the United States.

Many U.S. patent and trademark practitioners mistakenly treat the foreign intermediary as “the client.”  They are not. On the contrary, giving the foreign intermediary client status exposes U.S. counsel to significant ethical risks. For one, counsel “shall” exercise independent professional judgment. Model Rule 2.1; USPTO Rule 37 C.F.R. § 11.201.

As the comments to the Model Rules explain, “a lawyer should not be deterred from giving candid advice by the prospect that the advice will be unpalatable to the client.” This can be called into question when foreign counsel is involved.

american-flag-2Dealing with foreign counsel—especially with a firm that the lawyer has developed a long-term business relationship, also may call into question the lawyer’s duty of loyalty under Model Rule 1.7(a) and USPTO Rule 37 C.F.R. § 107(a) – is the lawyer looking out to protect the interests of the monetary relationship with the intermediary, or is the lawyer really protecting the client first?

Some authorities could liken the foreign counsel relationship situation to entering into a business between a lawyer and a third party related to a client.  As the comments to Model Rule 1.8 explain,

the lawyer must disclose the risks associated with the lawyer’s dual role as both legal adviser and participant in the transaction, such as the risk that the lawyer will structure the transaction or give legal advice in a way that favors the lawyer’s interests at the expense of the client. Moreover, the lawyer must obtain the client’s informed consent. In some cases, the lawyer’s interest may be such that Rule 1.7 will preclude the lawyer from seeking the client’s consent to the transaction.

U.S. IP counsel must always be mindful that despite the fact foreign intermediaries may look like “the client,” and sound like “the client,” and act like “the client,” they are not “the client.” It matters not whether the intermediary receives U.S. counsel’s bills and pays those bills – they are still not “the client.”

Independence of the lawyer’s professional judgment is also part-and-parcel of ABA Model Rule 5.4(c), and its equivalent USPTO Rule 37 C.F.R. § 11.504(c), both of which state that a lawyer “shall not permit a person who recommends, employs, or pays the lawyer to render legal services for another to direct or regulate” the lawyer’s professional judgment in rendering such legal services.

But notwithstanding the professional judgment rule, it is not uncommon for foreign intermediaries to draft legal “instructions” for U.S. counsel and expect the U.S. patent attorney or agent to simply “do as they are told.”  That is not, however, the law. U.S. counsel should make clear to their foreign intermediaries they have a duty of independence under U.S. law.

Independence means counsel must decide whether the course of action being proposed is authorized as a matter of U.S. law.  If counsel believes it is a bad idea even though not illegal, then counsel needs to explain why taking the course of action proposed is against their advice and the client’s interests.  Clients are entitled to make bad decisions, but we as lawyers must at the very least advise them of the risks of a client-directed course of action that is contrary to the lawyer’s better judgment.

The better way to handle issues concerning the IP lawyer’s duty of independence is at the outset of the relationship, preferably in writing.  It is especially important when the client is unsophisticated or not a native English speaker.

And if a client insists on directing what you do and how you do it, the time may be right  to draft up your own Declaration of Independence and terminate that relationship.  For no lawyer should ever be bound into such a condition of representation.

Or in the much more eloquent words of my 12-year old daughter Caitlyn: “Daddy, it’s a free country!”

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