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[thought001]

There has been much discussion and controversy on whether or not non-attorney patent agents ("patent agents") can become partners in a law firm. It is generally understood, in accordance with the U.S. legal code, that patent agents cannot be partners. Many have pointed to situations where a patent agent may have a partnership status, but it would be generally agreed that such practices are questionable in view of the legal code.

While I believe that the legal code is to be appreciated and is appropriate as a general principle in the governance of law firms, I believe that in the particular area of strictly intellectual property or patent law firms, there should be an exception in the code as applied to patent agents (i.e., those recognized to practice before the USPTO). The reason for this is that the patent agent in such a law firm often plays a highly integral role in devising the legal strategies concerning prosecution of patents and intellectual property in general. This situation is completely unlike the situation found in other areas of law. Both the patent agent and attorney alike spend the bulk of their efforts operating before the USPTO, before which they are both equally recognized. With regard to legal matters that go beyond the auspices of the USPTO, the patent agent is also often highly instrumental in this regard. Furthermore, the patent agent must keep abreast of all of the latest case law and be fully cognizant of case law when drafting and prosecuting applications. Patent agents, like attorneys, are also urged by the firm to seek new clients and find new opportunities of business, thereby playing an integral role in the financial future and operations of the law firm. Again, the integral involvement of patent agents is highly unlike other non-attorneys, such as paralegals, of other types of law firms.

For all of these reasons, it is my firm belief that the legal doctrine proscribing non-attorneys as partners was not meant to proscribe patent agents as partners--this situation was overlooked, or not foreseen, by the legislators. The proscription of patent agents as partners was simply subsumed into the existing law without a particular assessment of the code's appropriateness to the unique conditions found in the strictly IP or patent law firm.

I urge those in our practice to support and push for a change in the legal code in this particular respect. Such a change is long overdue. It is my belief that the current barring of patent agents as partners is unfair in view of the special circumstances discussed above. I would appreciate receiving help from anyone who knows what can be done to modify the code in this respect.

Your help and support is appreciated.

[DogDayPM 9er9er9er]

Don't disagree that in many cases what you've written is the situation in firms.  What is the difference in US and Canadian laws in this regard?  (Noting no prohibition in CA firms regarding patent agents becoming firm partners).

[miltonian]

From the research I have done:

Rule 5.4 of the Model Rules of Professional Conduct states that "A lawyer shall not form a partnership with a nonlawyer if any of the activities of the partnership consist of the practice of law.”  37 C.F.R. 10.49 implicitly allows the partnership of patent agents and attorneys for the practice of patent law, whether or not the attorneys practice other law as well.  37 C.F.R. 10.1 acknowledges states have the right to regulate the practice of law except "to the extent necessary for the Patent and Trademark Office to accomplish its Federal Objectives."  Could a state that does not allow any partnership between agents and attorneys be in danger of preemption by the federal objectives?  Possibly.

The ABA actually issued an opinion on agent-attorney partnership; see ABA Comm. on Prof’l Ethics and Grievances, Formal Op. 257 (1944).  The opinion stated that “an attorney may enter into partnership with a layman who is an agent licensed by the United States Patent Office if the partnership’s activities are limited to such as the [sic] permitted laymen under the Patent Office rules.”  The rationale for limiting the partnership to that of patent practice was to allow the public to distinguish between lawyers and the non-lawyer agents.

Many states have adopted Rule 5.4 but fail to comment further on attorney-agent partnership, such as California.  It is unclear whether such an adoption suggests that agent-attorney partnerships are not allowed in CA, but it seems to.

Other states, such as Virginia, have explicitly stated the bounds of agent-attorney partnerships.  The Virginia Committee recently found that “[a lawyer] can join the practice of a non-lawyer patent agent either as a registered active Virginia lawyer or an associate member of the Virginia State Bar, as long as that practice is devoted solely to patent law before the USPTO.”  Va. LA Op. No. 1843 (2008).  The Committee acknowledged federal preemption (Supremacy Clause and 37 C.F.R. 10) in coming to this conclusion.

Very few agent-attorney partnerships exist, probably in large part due to the tenuous treatment of the issue in most states, but also because in the states where partnership is allowed (such as Virginia), the attorney is restricted to only patent law--no licensing, opinions, etc.

It would not be in violation of the federal code to allow agent-attorney partnerships to exist where the attorneys practice outside the realm of patent prosecution.  A strong argument for such a partnership would be that of preemption based on 37 CFR 10.1, “Nothing in this part shall be construed to preempt the authority of each State to regulate the practice of law, except to the extent necessary for the Patent and Trademark Office to accomplish its Federal Objectives.”  The restrictions placed on agent-attorney partnerships has drastically limited the existence of the same, and it would not be a leap to suggest that such restrictions are disabling the federal objectives of the USPTO.

Hope this helps.

[miltonian]

Also, I forgot to mention it, but patent agents are subject to an ethical code much like that of the Model Rules, and I think the USPTO was planning on or has revised its code to almost exactly reflect that of the Model Rules (See Changes to Representation of Others Before The United States Patent and Trademark Office, 68 Fed. Reg. 69,442 (Dec. 12, 2003)).  Agents are also subject to the same disciplinary standards such as disbarment, suspension from practice, etc.  In other words, agents and attorneys are already subject to the same professional standards.

Obviously, the place to attack the agent-attorney partnership issue would be your state bar association.

[ChrisWhewell]

One might have basis to argue that since the PTO has now positively acknowledged that practice before the office is practice of law, and since its known that agents are authorized to practice before the office, the word lawyer could be construed as including patent agents.  Even if the supreme court said tomorrow that its permissible for agents to be partners in law firms, such a decision would have little impact because most reasonable lawyers would not consider having an agent as a partner unless they had demonstrated competency over a substantial time, to at least the same level that state bar member practitioners demonstrate.
 

[dablueman]

One might have basis to argue that since the PTO has now positively acknowledged that practice before the office is practice of law, and since its known that agents are authorized to practice before the office, the word lawyer could be construed as including patent agents. 

I find this posting kind of offensive. Given the number of agents that post here I know my opinion won't be liked but...an agent and a lawyer are not the same and shouldn't be construed as such. Having a degree in science and passing an open-book, multiple choice, test on a limited subject doesn't equate to being a lawyer.

For all of these reasons, it is my firm belief that the legal doctrine proscribing non-attorneys as partners was not meant to proscribe patent agents as partners--this situation was overlooked, or not foreseen, by the legislators. The proscription of patent agents as partners was simply subsumed into the existing law without a particular assessment of the code's appropriateness to the unique conditions found in the strictly IP or patent law firm.

In fact it was not overlooked when the model rules were last updated, and it's not likely to happen because of the many legal problems associated with allowing people that are not subject to state bar discipline to be partners in a law firm. Virtually all rules of professional conduct would have to be amended and complicated constitutional questions would have to be overcome.

Note that patent agents aren't in a unique situation. Patent agents are no different than enrolled agents in the tax law arena. Both take tests limited to that specific agency's rules, both "practice" before federal government agencies, etc.

There are legitimate reasons for barring agents from being partners in a law firm, and it is fair. There's nothing barring non-lawyers from forming non-legal partnerships with lawyers as long as neither is practicing law (@Chris - the practice of law is governed by state law, and what the PTO "positively acknowledges" is completely irrelevant). There is also nothing barring a patent agent from going to law school and then becoming a partner in a law firm.

Again, I know most of the posters on this site are agents, so my posting won't be favored, but it's a side that should be told.

[PatentDave]

This situation is completely unlike the situation found in other areas of law.

How about real estate agents and real estate attorneys, or accountants and tax attorneys?  I don't find the patent attorney/patent agent relationship unique in any manner. 

For that matter, one does not become an attorney by implication.  I find this notion somewhat offensive as well.  The USPTO has no authority to state who shall and who shall not be an attorney in any state.  Their authority in this regard is bound solely to representation before the Patent Office. 

There are reasons that non-lawyers cannot be partners in a law firm.  One of the most important ones is that there is a public interest in keeping non-lawyers from providing legal counsel. 

[ChrisWhewell]

The PTO wasn't talking about attorneys, only said that it considered practice before the Office as being practice of law.

My words:    "One might have basis...." necessarily includes the possibility that one also might not have basis.  Its a maybe proposal.  Anyone who found what I wrote offensive, I apologize, but I truly don't see how that proposition could possibly be construed as offensive to anyone.   

 

[Scotto]

This appears to be a state (BAR) versus Federal (USPTO) debacle. Now if only state and federal would place nice we wouldn't have these sort of issues. I can see patent agents being partners with a lawyer, but only in the field of IP law. The whole idea of becoming a partner is somewhat misconstrued, because it basically means that an associate is bringing in enough business to have an active stake in the firm. If a PA is heavily relied upon in this fashion then I don't see why they wouldn't deserve it.

[ChrisWhewell]

I think agents already could be partners.  But, the reason they're not in general selected is that firms aren't just a couple lawyers getting together, each having the same capabilities.  Typically they're associations that bring a diverse skill and talent set into one organization, so a client can be serviced better in one-stop than they could by having to go out to find separate lawyers to conduct separate but needed services.  An agent would have a hard time adding to that synergy, unless they were one he77 of a rainmaker, since everytime they needed an assignment , opinion, etc. drawn up, they'd need to go visit their buddy down the hall, an inconvenience.  In college football versus pro ball, there may be a few college guys who might be better than some of the big leaguers but on average the proball guys make a better team, or something along those lines.  If the supreme court came out tomorrow in a loud decision authorizing patent agents to be partners in law firms, who believes that would cause any senior partners in firms to start thinking:  "Oh goody, finally we can make some patent agents into partners !!" and modify their organizations ?    I'm a hair away from laughing aloud even writing that.  With any luck nobody will be insulted by what I've written as I don't intend to insult anyone, just share a couple of thoughts.  I realize people are sensitive and some might think I've written badly about agents but keep in mind I'm an agent myself and I'm just describing what I see.  Not being permitted to be a partner isn't what holds people back - they hold themselves back, if anyone does.  Being a good agent is laced with responsibilities, and being a good state bar lawyer means even more responsibilities.  I get the impression a lot of people think lawyers have it easy and maybe some do but the best I know work their tails off, and its not easy at all.  I've seen this discussed on the merits of whether its permissible by state law or federal bar law standpoints, but neither of those matter as much as the impracticality of having agents as partners, which means its effectively prohibited by the unwritten laws of business. 

[Tarah]

Just a note on the Canadian situation for patent agents. Patent agents cannot become partners at a law firm. Law firms with large IP practices or IP firms often are comprised of two "companies": the law firm and the agency firm (for example, BLG is the law firm/ Scott & Aylen is the associated agency firm or Smart & Biggar/Fethonstonhaugh; patent agents can be partners of Fethonstaugh only). For firms that don't have an associated agency firm, the agents may be called "principal" but are not partners.  Also, in Canada, patent agents do not have privilege. They have sought it for years, but the lawyers argue it should be reserved for lawyers, and have always won.

[DogDayPM 9er9er9er]

Tarah, thanks, that's a nuance I wasn't aware of.