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In preparing this response, CIPA has consulted with all its committees and its Council and has received contributions from individual members.
CIPA appreciates that IPReg has carried out a lot of work to prepare the present consultation, which is shown by the length of the consultation documents.
CIPA notes that the original deadline for filing responses to this consultation was 17th March, 2022. This gave only 3 months, including the Christmas holiday period, for responding to such a large volume of documentation. CIPA appreciates the extension granted by IPReg to 31st March, 2022 for filing responses. However, this is still a very limited period for preparing a full response.
We also note that, in paragraph 145 of the Consultation Paper, it is indicated that IPReg expects the Board to make decisions on the next steps in summer 2022. We assume that the next steps will include carrying out a full consultation on what IPReg considers the final form of the regulatory arrangements should be. The proposals in the present Consultation Paper are far reaching and interconnected. It therefore seems likely that the final form of the proposals will differ, perhaps significantly, from the present proposals. In CIPA’s view, this would require a full consultation and such a consultation would require at least 3 months for further responses.
CIPA appreciates the aim of the proposal, which appears to be to update completely the regulatory regime and to take into account changes in general regulatory frameworks. However, we feel that the aim should also be to make the regulatory framework for patent and trade mark attorneys proportional to the need for regulation and to reduce the cost of regulation. The consultation papers show that there is much less need for regulation for patent and trade mark attorneys and so the level and cost of regulation does not need to be as high as for other regulated professions. In this respect, we note that there are proposals which could require large cost without any justification based on the history of the regulation of the profession. It is noted that the consultation does not include any costings of the proposals and it is felt that such costings should be a central part of the further considerations by IPReg following receipt of the responses to this preliminary consultation.
What are your views on our Impact Assessment and specifically the impact of ourproposals in relation to equality, diversity and inclusion?
It is noted that the draft Impact Assessment contains no assessment of the financial impact of the proposed new regulatory regime and the impact of this on the practice fee for registrants. As some of the proposals seem to involve much expense, CIPA considers that such an assessment should be included.
It is difficult to see how the proposals support the existing equality, diversity and inclusion (EDI) activities being undertaken in the profession, in particular the work of IP Inclusive. There are very few references to the ways in which the new regulatory arrangements encourage EDI, both at the point of joining the profession and throughout an attorney’s career. Where there are references, these come from the perspective of the likely EDI impact of the regulatory arrangements rather than how the regulatory arrangements can help to promote and embed EDI. It is important to measure the impact of changes in terms of EDI, and we applaud IPReg for this approach, but we feel more could be done to take a proactive approach to EDI.
We suggest that IPReg should start by identifying and quantifying the ‘problem’ of approaches to EDI in the IP professions and ask itself if there is anything – from a regulatory perspective or a wider view – that IPReg can do to encourage and support individuals and organisations to improve EDI. The failure to mention EDI in the ‘principles’ section of the consultation paper is an indication that EDI has not featured prominently in IPReg’s approach to the review of its regulatory arrangements. Equality and diversity are mentioned in relation to the impact assessment but are not key drivers. The Legal Services Act identifies that regulatory bodies should encourage ‘an independent, strong, diverse and effective legal profession’. We believe that EDI should not only be included as a principle but should be a prime focus for the new regulatory arrangements. Such a principle could read:
Encourage equality, diversity and inclusion. IPReg is an inclusive organisation, and we actively promote equality of opportunity for everybody working within and interacting with the IPReg regulated sector, irrespective of their race, gender, disability, religion, belief system, sexual orientation, age or socio-economic background, with the primary aims of eliminating discrimination, advancing equality of opportunity and fostering good relations between people of different groups. IPReg will gather evidence and provide guidance to support and encourage the regulatory objectives of the Legal Services Act 2007.
In terms of the collection, analysis and use of data, previous IPReg surveys have focussed on patent attorneys and trade mark attorneys. The regulated community is, however, broader than this, including IP paralegals and other support staff in areas such as finance and marketing. We would be interested to know, as part of this comprehensive review of the regulatory arrangements, if IPReg will take a wider perspective on EDI and look beyond patent attorneys and trade mark attorneys.
We believe that it would be helpful to have a broad definition of each of equality, diversity and inclusion in the Glossary of Terms in Annex B. IPReg might want to consider using the term ‘equity’ rather than or in addition to ‘equality’.
Impact Assessment (Annex D)
Paragraph 7 states: ‘The majority are in private practice as part of a firm or as a sole practitioner, whereas others are in-house’. We believe that the wording of this paragraph is inappropriate, as it relegates in-house attorneys to ‘other’. We would prefer IPReg to refer directly to the percentages of attorneys working in-house and in private practice.
The findings quoted in paragraph 14 would benefit from the addition of figures and/or percentages.
We suggest that a bullet be included in paragraph 16 to acknowledge IPReg’s EDI aims.
In Annex D, there is frequent mention of ‘firms’, which does not acknowledge attorneys that are in-house or sole practitioners.
In paragraph 49, it appears that only the ‘effectiveness’ aspect has been expanded on. We would suggest that there should be further expansion on the ‘diverse’ element also.
We believe that paragraphs 76 and 77 require further consideration. We question whether this is a disability matter or a small firm matter. It seems to suggest that disabled people may work in smaller firms because they are unfairly disadvantaged in larger firms. Is there evidence to support this? It is unreasonable to suggest that the proposal will benefit disabled people working in small firms when the real benefit will be to disabled people thriving in larger firms. We think paragraph 76 should be deleted and paragraph 77 modified to remove ‘other’.
What are your views on the eight Principles we have set out?
CIPA notes that the eight Principles are preceded by a pre-amble which indicates that “IPReg expects all regulated persons to uphold [these principles] in all aspects of their life, be this within professional practice or private life”. This is also referred to in paragraph 27 of the Consultation paper. CIPA believes that the mention of “private life” is inappropriate. If there is any need for regulation, it is regulation of the behaviour of a registrant with respect to their clients, the public and their colleagues. There is therefore no reason to look into the private lives of registrants. Certainly, the Consultation paper provides no evidence that such intrusive regulation is required.
We note that Principles 1 to 7 are effectively the same as the principles applied presently by the Solicitors Regulation Authority (SRA). This leads to the conclusion that the Principles are not based on a proportional view of what is required for the regulation of patent and trade mark attorneys but are a copy-and-paste version of principles which are applied to solicitors. The consultation gives no explanation of where these Principles come from or why they are considered to be appropriate for patent and trade mark attorneys.
Also, as noted above, we consider that the application of these Principles to the private lives of patent and trade mark attorney is beyond the scope of what IPReg should be regulating. In the recent CITMA/CIPA webinar, for which IPReg is thanked, it was explained that IPReg would not be carrying out investigations into patent and trade mark attorney’s private lives but would only act if there was clear, publicly-available evidence of behaviour by a patent or trade mark attorney which could call into question their suitability to be on the Register. If IPReg has no intention to investigate and will only act when publicly-available evidence is available, it seems pointless to say that IPReg will regulate the private lives of patent and trade mark attorneys. It is therefore considered that it should be made clear that the Principles apply only to the professional practice of patent and trade mark attorney unless there is such publicly-available evidence. It may be worth considering the likelihood of a client being happy to work with the attorney despite there being “publicly-available evidence” about conduct in private life. If the attorney is no longer on the Register, the individual could continue to provide unregulated IP services, which would be against public interest.
If it is made clear that the Principles apply only in those circumstances, CIPA could agree with the Principles.
What are your views on the Code of Conduct – does it capture the right requirements or is there anything missing?
It appears to CIPA that the Code of Conduct has too many unexplained additions. It is therefore not a question of whether anything is missing. Rather it is a question of whether too much has been added. In CIPA’s view, too much has been added and the additions make the Code of Conduct too burdensome, which is contrary to one of the purposes set out by IPReg.
CIPA considers that new “expectations [1]” have been added in 1.1, 1.3, 3.1 and 3.2 (as regards subcontractors), 3.4 (as regards other regulators), 3.5, 3.6, 3.7 (as regards publication), 3.9, 4.1.2, 4.3, 5.2.2.2, 5.3 (as regards “free of charge”).
As regards 1.1, the requirement to provide “sufficient and clear information” about costs may be difficult to achieve in some circumstances and the regulatory arrangements need to recognise this. The very nature of the work carried out by patent and trade mark attorneys means that the cost of any project is not easily foreseeable. One patent application may take 5 hours to draft and the next one may take 5 days to draft. If the project involves the use of foreign patent attorneys, it will be difficult to give an accurate estimate of their costs, especially as the exchange rate may vary. Even patent office fees vary. Thus, an absolute requirement for sufficient and clear information is not the most helpful metric. The requirement should be that the attorney must provide the best available information on the work required and the associated costs and inform the client as soon as possible of any changes to the information. The attorney should only charge clients on a basis which has been explained to the client before the charges are incurred and to which they have agreed.
As regards 1.3, it cannot be seen why it is necessary to include any referral arrangements or fee sharing arrangements. All the client needs to know is the total cost to them of the project. It is of no interest to the client what goes into the costs. If the costs are too steep for the client, the client can always go elsewhere. IPReg has given no rationale for this additional requirement and so it cannot be seen why IPReg thinks that it is justified.
1.6 and 1.7 appear to replace current Rule 8 but has taken out any reference to former clients or future clients. The rule on confidentiality ought to apply to all clients, past, present or future.
1.8 refers to liens and it is not clear whether liens are applicable to patent and trade mark attorneys. This should be clarified by IPReg.
3.1 adds a new requirement in relation to subcontractors. There are many types of subcontractor potentially used by patent and trade mark attorneys, such as foreign associates, searchers, consultant patent or trade mark attorneys and payment agencies. These are usually used where the patent and trade mark attorneys themselves cannot offer the service or cannot offer the service at a competitive price. Generally, the attorney is not in a position to supervise the subcontractor and so cannot guarantee the quality of the service. It therefore seems inappropriate to require patent and trade mark attorneys to guarantee the quality of the services of subcontractors. The requirement should be that the patent or trade mark attorney must use reasonable care when appointing a subcontractor.
3.2 may be very difficult to achieve. In many countries, it is necessary to use local attorneys. They have to comply with local laws and regulatory frameworks. In any case, how would it be possible for a patent or trade mark attorney to force a foreign associate to comply with IPReg’s requirements? Again, all that should be necessary is that the patent or trade mark attorney uses reasonable care in selecting a foreign associate. This rule should be limited to the case where the subcontractor is a consultant patent or trade mark attorney covered by the instructing patent or trade mark attorney’s PII.
3.4 presents another new requirement. However, no explanation of it or justification for it is given. It appears to CIPA that it is, in any event, too broad. How would it be possible for any patent or trade mark attorney to know whether IPReg’s arrangements have been breached, let alone those of any other regulator? At most, a patent or trade mark attorney should be required to report only when they suspect that there might be a breach.
3.5 presents a further new requirement. However, no explanation of it or justification for it is given. It appears to CIPA that it is, in any event, too broad. This should only apply to people over whom the patent or trade mark attorney has control, such as current employees. It would appear to be an inhibition on whistle-blowing if it were to apply to former clients, clients or former employees.
3.6 also presents a new requirement. However, no explanation of it or justification for it is given. It appears to CIPA that it is, in any event, too broad. Many patent and trade mark attorneys will find it impossible to comply as IPReg is not in a position to inform patent and trade mark attorneys about the time frame for compliance.
3.8 requires the publication of data on diversity. This a new requirement which may be counterproductive. For small firms, it will be almost impossible for the data to be anonymous and this may be contrary to the wishes of the “diverse” members of staff. Thus, it will set up a situation which will discourage diversity.
3.9 is yet another new requirement and seems much too broad. How is any patent or trade mark attorney supposed to be able to identify, monitor and manage all material risks? No-one can do this and it would be burdensome, especially for small practices. All that should be required is that a patent or trade mark attorney has an effective risk management policy. This is an example of heavy-handed, rather than light-touch, regulation.
4.3 has yet another new requirement which appears to overlap with 1.3. The main problem is with discounts. If a patent and trade mark attorney has negotiated a discount with the supplier of office coffee, does that really need to be reported to all clients? Any discounts which can be negotiated are to the benefit of the practice and could be passed on to the clients. However, whether or not it is passed on is a matter of business practice. The client should not be able to request sanctioning a patent or trade mark attorney solely because such discounts are not passed on.
5.2.2.2 is unworkable as there may be no approved body. If IPReg intends to set up such a body, the expense would not be proportionate and would potentially cut across IPReg’s proposed disciplinary procedures.
5.3 makes it a new requirement that complaints are dealt with “free of charge”. This is entirely unjustified. This makes every patent and trade mark attorney a target for unjustified complaints. Any former client or existing client could make unjustified complaints merely to inconvenience the patent or trade mark attorney and there should be no reason why such a complaint should be dealt with for free by the patent or trade mark attorney. Instead, there should be a requirement for patent and trade mark attorneys to include terms for settling complaints in their terms of business.
On a more general point, it is considered that the Code of Conduct should be a stand-alone document. Attaching to it Chapter 3 onwards does not help with transparency. The Code of Conduct should be available to the public so that it is easy for the public, and in particular for clients, to refer to it if they consider that they may have a compliant. Having Chapter 3 onwards present in the Code of Conduct would dissuade the public from reading it as it would appear too complicated.
From the perspective of EDI, we recognise that IPReg has included in the Overarching Principles in Annex A the need to ‘act in a way that encourages equality, diversity and inclusion’. We believe that the Code of Conduct needs to be more explicit about how firms and individuals do this and what sanctions there are if they do not comply with this principle. Guidance to support the Code of Conduct (see also Q4) could include practical help for regulated firms and individuals on how to approach EDI. Revising the Code of Conduct (e.g. at the beginning before ‘Client Care’) to include a section entitled ‘Acting Fairly’ is suggested. The SRA’s Code of Conduct includes the following statement, which IPReg should consider adopting:
‘You do not unfairly discriminate by allowing your personal views to affect your professional relationships and the way in which you provide your services’
We would be interested in your views on where guidance is required to support attorneysand firms with compliance? Are there any specific examples or particularly difficult issues?
The proposals by IPReg represent a significant change to the regulatory regime and, as such, it will be necessary for IPReg to provide comprehensive guidance to enable patent and trade mark attorneys and firms to comply. From experience, guidance will be needed in the following areas:
In relation to our earlier comments on EDI within the Code of Conduct, we believe it would be possible to incorporate some practical help within the guidance, such as that offered by the SRA:
We expect you to take the necessary steps to run your business or carry out your role in a way that encourages equality of opportunity and respect for diversity. We expect you to be inclusive in your approach to everything you do.
You must comply with the law. The Equality Act 2010 sets out requirements against the following protected characteristics:
age
disability
gender reassignment
marriage and civil partnership
pregnancy and maternity
race
religion or belief
sex
sexual orientation.
You have a legal obligation to provide reasonable adjustments to disabled clients and employees to make sure they are not at a substantial disadvantage compared to those who are not disabled. Importantly, you must not pass on the costs of providing these adjustments to others. It is good practice to also provide reasonable adjustments to others you engage with as part of your work. For example, by making any necessary reasonable adjustments for a parent or carer of a witness who is aged 16 or under.
You have a responsibility to encourage diversity at all levels of the workforce. Encouraging a diverse profession is a responsibility we share with everyone working in the profession. This is a regulatory objective set out in the Legal Services Act (2007), ‘encouraging an independent, strong, diverse and effective legal profession’.
Given the recent conflict in Ukraine and the resulting sanctions imposed on organisations and individuals in Russia and Belarus, IPReg may wish to consider the need to provide more detailed guidance than would normally be the case, to protect attorneys against any inadvertent wrongdoings in such unusual circumstances.
What are your views on the proposed approach to the definition of client money and therequirements included within the Code? Do you think we have missed any benefits or risks in our analysis?
The proposed revisions to the requirements relating to client money are sensible and very welcome. IPREG has clearly listened carefully to the feedback from patent and trade mark attorneys. The exclusion of advance charges from the definition of client money should significantly reduce the burden on attorneys.
Given the exacting nature of the work of patent and trade mark attorneys, the proposed definition of client money (“money held or received in connection with work undertaken for a client, excluding any advance payments received where the terms have been agreed” [emphasis added]) may lead to uncertainty in some situations. A suggested definition might be “money held or received for or from a client which is not in payment of the regulated person’s invoiced fees or expenses; invoices may be issued and paid in advance for professional work agreed to be performed.” This definition is more closely related to that used by the ICAEW, which therefore has the benefit of consistency with other professions.
In the proposed core regulatory framework under the heading “client money” at 4.3 (on which we have commented above), there is the requirement that “clients receive an account of any financial benefits, including but not limited to any commission, disguised disbursements, foreign exchange uplifts, discount or rebate received as a result of their instructions”. This requirement appears to deal with professional charges rather than client money and is presumably intended to ensure transparency for the client. However, such a requirement has the potential to be both burdensome and confusing for attorneys. It may better be replaced by an item under “Client Care” requiring that the method by which charges are calculated is set out to clients on engagement.
It should be noted that the epi code of conduct at paragraph 3(c) bars members from giving commission to others for the introduction of business. Consequently, within patent and trade mark firms, explicit commission arrangements for the introduction of business are unusual. It is certainly the case that patent and trade mark firms will entrust their clients’ cases to overseas attorneys with the hope or expectation that the overseas attorney will reciprocate and entrust their clients’ cases to the UK attorney. This is not the case for all instructions sent overseas but it is common. However, this is not disadvantageous for the client. The exchange of cases between firms increases contact between attorneys and develops working relationships which facilitate communication and can achieve better results for clients. Each firm is both a supplier to and a client of the other firm, which balances the relationship between the two firms. Selecting overseas firms who have cases to send to the UK means that those firms have their own local clients and are not only servicing international work.
The experience of such firms in servicing their own local clients provides benefits to the clients of the UK firm in terms of understanding and approach. The cases sent to the UK attorney provide visibility of additional aspects of the work of the overseas attorney which allow an increased assessment of the quality of the overseas attorney’s work. In all cases, regulated persons have an overriding responsibility to act in the best interests of their client; they will not send their client’s cases to a bad overseas firm just because that firm would send them cases back; there is a sufficiently wide range of firms in most major countries to choose a good firm that also has their own clients. Rarely do such reciprocal relationships involve any kind of rebate or commission, but paragraph 4.3 of the framework risks being interpreted by regulated persons as requiring quantification of the financial benefit of their reciprocal relationships with overseas firms on a client-by-client basis, which is practically impossible.
In the past, foreign exchange uplifts have received negative attention, being characterised as a “hidden” charge (or a “disguised disbursement”). Such uplifts are a reasonable mechanism for attorneys to hedge against currency fluctuations and to receive compensation for providing clients with the convenience of invoicing in sterling to cover costs in many currencies. Problems have arisen, however, when such uplifts have not been set out clearly in the firm’s terms of engagement and have subsequently been a surprise to the client. The work of patent and trade mark attorneys often involves a significant proportion of expenses relative to professional fees. In a typical practice, the amount of expenses, such as foreign attorney fees and official fees, paid on behalf of clients, can roughly equal the amount of professional fees. In the case of foreign attorney fees, it is customary for patent and trade mark attorneys to commit to pay the fees of their foreign agents regardless of the eventual payment of the corresponding amount to them by their client. This is advantageous to clients because it means that foreign attorneys will act on instructions from UK attorneys, even at short notice, because they know they are guaranteed to be paid. In addition, because VAT is chargeable on most expenses (see below) there is an even greater cash requirement for the practice. The infrastructure required to manage such payments on an international basis is not insignificant. This is different to the situation for solicitors, for example, where disbursements are truly paid “on behalf” of the client and are less likely to be international. Recouping the cost of this kind of service via an uplift on foreign exchange means that it is paid for by the clients who use it the most and not by those who use an attorney’s other services, such as litigation, that do not require extensive overseas payments. Of course, where a firm chooses to charge in this way, that should be made clear in the terms of engagement.
“Disbursements”
In the glossary, the term “disbursements” is defined as “any costs or expenses paid or to be paid to a third party on behalf of the client or trust (including any VAT element) save for office expenses such as postage and courier fees”. The term “disbursements” has a specific definition in relation to VAT in the UK and has recently become a point of contention for solicitors in relation to appropriate charging of VAT on their invoices (see here). There is a seven-point HMRC test for an expense to be treated as a “disbursement” and therefore not chargeable for VAT. For patent and trade mark attorneys, expenses incurred on behalf of clients tend predominantly to be overseas attorneys’ charges and official fees. Apart from fees paid to the UKIPO, such expenses are typically incurred in currencies other than sterling. The HMRC test includes a requirement to recover only the exact amount paid to the third party and this is usually not possible on expenses paid in overseas currencies because of fluctuations in exchange rates between incurring and charging-on the cost. CIPA has previously provided advice, supported by accountants, that VAT should be charged on non-sterling “disbursements” for this reason. Consequently, the majority of expenses charged to clients by patent and trade mark attorneys are not “disbursements” as defined by HMRC (and solicitors).
It may be better to use the term “expenses” in relation to the costs that attorneys incur in the course of acting for their clients and which are included in client invoices in order to avoid the implication that these are true “disbursements”. This could also assist with negative client experiences in relation to foreign exchange uplifts.
“Clients” and “Principals”
It may be worthwhile revising the regulations to make the distinction between the “principal” (the person on whose behalf the regulated person is acting) and the “client” (the person with whom the regulated person has a contractual relationship and who will be responsible for paying their invoices). In some cases, the client and the principal will be the same person, but often the client and the principal are different, particularly where the instructing client is an overseas attorney. The relationship with the “client” is predominantly a commercial one where issues of transparency in the relationship are important; the relationship with the “principal” is a duty of care which requires the regulated person to act in the best interests of the principal. In the draft core regulatory framework, references to the “client” are mostly references to a client as defined above; Principle 7 and the sections 1.4 – 1.6 regarding conflict of interest relate to the “principal” as defined above. Bringing this distinction into the core regulatory framework would also assist attorneys in drafting their terms of engagement consistently with the code by using the same terminology. In addition, if further guidance is issued, this distinction may assist in communicating what is intended and required.
“Miscellaneous”
The definition of “client” in the glossary refers to “intermediary foreign patent or trade mark attorney” as if the term “patent attorney” and “trade mark attorney” are defined elsewhere, but there is no such definition of these terms.
There is a definition of “trade mark attorney work” in the glossary but no definition of “patent attorney work”.
For regulated attorneys and firms, please tell us in confidence how much client money youhold and how that would change under the proposed definition?
This question is not relevant to CIPA.
What are your views on our proposals in relation to CPD?
The move towards a more reflective approach to CPD is generally welcomed, as is the broadening of the range of activities that would qualify as CPD.
The provision of free webinars by CIPA has already removed some of the barriers to participation in formal CPD activities, such as cost and location. However, the fixed timing of some events and the need to travel to in-person events can still be problematical in terms of interruption to work and clashes with other individual responsibilities. This can be particularly challenging for those who have disabilities and/or caring responsibilities. The proposed increase in flexibility as to what may constitute CPD could therefore be very beneficial for some, particularly those who currently find the more formal routes for CPD difficult to access.
The extension of the options for CPD activity to include work shadowing, coaching/mentoring and in-house training is seen as a very positive development. It is recognised that such changes would encourage people to volunteer for such activities and this would be good for trainees in that it should increase the quantity and quality of training available.
The section headed “Risks to consumers” is rather vague. It is stated that it is hoped that the proposed changes to CPD requirements “will help to mitigate the risk of poor-quality advice and service”, but no evidence is provided that consumers are being given poor advice at present. We believe that patent and trade mark attorneys are generally up to speed on the relevant law but, if there is a problem here, it is that they may not be able to communicate as effectively as they might with a consumer. Keeping up to date with the law will not help to rectify a communications gap. A different type of training is required so that patent and trade mark attorneys are able to recognise what constitutes poor communication.
There is also some concern about the move from a prescriptive to a more subjective approach and this will be discussed further in the context of the next question.
Whilst it was recognised that opportunities for part-time working should be encouraged to promote equality and diversity in the profession, there is a strong view that part-time attorneys should be subject to the same CPD requirements as full-time attorneys.
For regulated attorneys and firms, what would be helpful in terms of guidance andresources for the proposed new CPD requirements?
As mentioned in response to the previous question, there are some concerns about the change to a more reflective approach to CPD. In particular, it needs to be recognised that patent and trade mark attorneys are a cohort of people who need an objective measure as to whether they have met the requirements if they are to be able to sign the necessary declaration. There therefore needs to be clarity about what qualifies as “valid” CPD and what is required of the patent or trade mark attorney to satisfy the new CPD requirements. For instance, does time spent on IP Inclusive work count as CPD?
With the above in mind, an appropriate structure needs to be put in place. Clear guidance before any changes come into force is essential, particularly if proof of compliance is required. This should include recommendations on best practice to record CPD as well as an indication of how random compliance checks will work in practice. Perhaps this could be achieved by providing a webinar with worked examples to illustrate best practice. A trial period could also be helpful with a view to providing an opportunity to identify and address any problems with the new approach.
What are your views on the principle that all attorneys should obtain basic litigation skills before the point of admission? How do you think this could work in practice?
A patent is, fundamentally, a right to sue. Patent attorneys therefore need to understand what litigation involves. Although many patent attorneys will not handle litigation directly themselves in the Intellectual Property Enterprise Court (IPEC) or the High Court, most will be involved with clients who need advice about possible litigation in those courts. Most will also be involved in UK Patent Office proceedings, which are governed by rules very similar to those of the courts. Further, litigation skills training in case analysis, evidence-gathering, instructing experts and advocacy skills are readily transferrable to the day-to-day work of almost all patent attorneys, including those who practice before the European Patent Office.
There is a general consensus that training in basic litigation skills for patent attorneys is very valuable, primarily because of the practical experience in advocacy and evidence-gathering that such training provides. CIPA therefore strongly supports basic litigation training for patent attorneys.
However, there is some confusion regarding the status of the current Basic Litigation Skills (BLS) course and considerable concern that the current timing of the BLS course is far from optimal.
Our understanding is that the reason that the Basic Litigation Skills (BLS) course is at present a post-qualification, CPD-like requirement in that it is a requirement for remaining registered that the BLS course is completed within 3 years of qualification. When it was first introduced, that was the easiest way to provide the course without disrupting existing qualification arrangements. However, it is also seen as an essential qualification. As a result, it is currently a strange hybrid that causes some confusion for trainees and trainers.
The present Review provides an opportunity to move on from that preliminary, ad-hoc arrangement and to integrate training and assessment of basic litigation skills within the normal training of a patent attorney.
It is generally felt that the BLS course would fit well during the pre-qualification training period. There are good reasons for moving it, as long as it does not negatively impact the workload/stress levels, access to the profession or progression of trainees. In particular, if it is moved to the pre-qualification period, the timing of this course needs to be considered carefully so that it does not cause exam congestion and add to the stress felt by trainees in the run up to sitting the UK or European Qualifying Exams. Another option could be to put the BLS course in the period between sitting exams and receiving the results.
There is a view that there is currently some overlap between the content of the current BLS course and the current syllabi for the Foundation Certificate (FC) (or equivalent) and Final Diploma (FD) examinations. It may therefore be appropriate for the BLS course to focus on advocacy and specific practical litigation skills, such as evidence-gathering, and include the legal knowledge component in other FC (or equivalent) or FD papers, such as the English Law paper (FC2), the Patent Attorney’s Practice paper (FD1) and the Infringement and Validity paper (FD4).
We suggest that, in practice, this could be done by:
There are some concerns that, if the BLS course were to be moved to the pre-qualification phase of training, it could prevent someone from qualifying if they could not pass this course and this could have serious ramifications in the context of salary. Clarity is therefore needed on whether a candidate who passes all FC (or equivalent) and FD exams but not the BLS course would be held back from qualification. There is also some reluctance for there to be a barrier to entry for the BLS course in terms of passing another exam. However, if it was considered that passing a particular paper was necessary, then passing FC1 (or equivalent) would probably be an acceptable entry requirement as passing FC1 (or equivalent) is already a requirement to sit the FD papers.
We believe that an advantage of the present approach to the BLS course is that candidates can choose when to do the course within a window of at least 3 years; we suggest a similar flexibility in timings for the proposed pre-qualification skills training; it could be done any time between completing the FC (or equivalent) and some period after obtaining the FD.
There are also concerns about the accessibility of the BLS course. There need to be more options available, especially if this course is regarded as essential. In particular, there does need to be an alternative for those who cannot attend face-to-face modules to ensure inclusivity. Consideration should therefore be given to remote attendance options and the possibility of online-only courses.
We believe that face-to-face training is the best method of delivering practical litigation skills training, and we therefore oppose training being provided exclusively online, but we also believe that it is important that candidates do have access to online training. As with the timing of the course, we believe that there should be flexibility in the method of delivery of the course.
Do you think that any changes are needed in respect of advanced litigation skills?
It was generally felt that, although they may need to evolve over time, the advanced litigation skills courses currently cover the necessary skills adequately.
At present, the Higher Courts Advocacy Certificate is only available to patent attorneys who already have the Higher Courts Litigation Certificate. We see no reason why those qualifications must be completed in that order and recommend that they are made independent of each other.
The advanced litigation skills training is generally good. Of course, it needs to keep up-to-date with developments. For example, the Unified Patents Court may become an important part of patent litigation practice for UK attorneys and so it may be appropriate to include UPC-related training in the UK-focused courses. Ideally, there would be a single course providing qualifications relating to the UK Courts and to the UPC, but we note that there are practical difficulties with that, including taking into account the requirements for the European Patent Litigation Certificate to be provided by EU-based institutions.
What are your views on how the proposed transparency requirements might work in practice for both regulated attorneys and consumers of IP legal services? Are there any particular elements of it thatmight be costly or difficult to implement?
CIPA recognises that IPReg is under pressure from the Competition and Markets Authority (CMA) to ensure that those who need to obtain IP advice can make informed choices, based on clear and accurate pre-engagement information. There can be no dispute that the client needs to know what and how they will be charged at the point of instruction and that this will not change when the client receives the invoice and that any changes, if necessary, will be explained and agreed in advance of the invoice. What matters to the client is the bottom line of cost, not how that cost is calculated.
The approach taken by IPReg to cost transparency does not appear to follow the principles-based model set out in the consultation and will be seen as IPReg interfering in the way patent and trade mark attorneys run their businesses. It is not necessary for clients to understand exactly how firms make money; what matters to the client is the cost to them. For example, if a firm has negotiated a discount in charges with an overseas attorney because of the large number of cases they send to that attorney across the range of the firm’s clients, what is the problem with the firm sharing that discount with the client rather than passing it on in full? Both the client and the firm benefit.
If the regulatory system starts to involve itself with the commercial models adopted by patent and trade mark attorney firms, by casting suspicion on uplifts and reciprocity, firms will have to make their money in a different way, which may negatively affect some clients over others. It has been best described by a small firm as “transparency should not mean going naked”. The requirement should be something like “regulated persons must only charge clients on a basis which has been explained to the client before the charges are incurred and to which they have agreed”. This would cover setting out a charging calculation in terms and conditions, such as an hours-based charge or a foreign exchange uplift, as well as an agreed all-in flat fee, which might include expenses as well as other (future) charging schemes. It covers both open-ended charging and flat fees.
As a point of regulatory principle, CIPA agrees that IPReg needs to take a more central role in the regulation of cost transparency. We would want to see, however, the evidence base for that regulation being at the level of detail set out in this proposal.
What are your views on our proposal to introduce independent case examiners to ourdisciplinary process?
CIPA is of the view that the whole proposal for the disciplinary process needs to be re-thought. It is a very cumbersome procedure and inevitably will incur large expense. CIPA considers that a simpler and less expensive process should be devised.
As IPReg is well aware, the number of complaints against regulated members is very low and the number of cases which go on to a formal complaints procedure is even lower. There is therefore no need for IPReg to have its own, entirely independent procedure.
Also, the procedure in some cases seems to set IPReg up as judge, jury and executioner. CIPA believes that, as far as possible, IPReg should be only the legislative body, limited to setting the rules. There should then be other bodies to enforce the rules.
It is suggested that IPReg should have experts who are well versed in IPReg’s rules and procedures and who also have good knowledge of the way in which patent and trade mark attorneys practise. These experts should be responsible for initial action on any complaint.
If IPReg receives anything which appears to be a complaint, it should be referred to these experts, who should evaluate the complaint and, if possible, resolve it by agreement between the parties. If it cannot be resolved by agreement, the complaint should be referred to a first level tribunal from another regulator, such as the SRA, BSB or CILEx, for a decision. The experts appointed by IPReg should act as advisors to the first level tribunal. IPReg would be able to make submissions to the first level tribunal but would not be involved in the decision-making.
It should be open to IPReg to refer a complaint directly to the first level tribunal if it appears to IPReg that the case is serious and interim measures are needed. In such cases, the experts would also be involved and would again advise the first level tribunal. Again, IPReg would be able to make submissions to the first level tribunal but would not be involved in the decision-making.
The first level tribunal could also be responsible for appeals from decisions made by IPReg, for instance in respect of refusal of registration or a licence, disqualification, HoLP or HoFA status etc. In such cases, IPReg would be a party to the proceedings and the experts would advise the first level tribunal.
Any decision made by the first level tribunal would be appealable to the second level tribunal of the same regulatory body. Again, the experts would advise the second level tribunal and IPReg could make submissions to that tribunal if not a party to the proceedings.
In appropriate circumstances, the decision of the second level tribunal would be appealable to the First-tier Tribunal (General Regulatory Chamber) of the UK Courts.
If this proposal were to be adopted, all that IPReg would need to do is to train the experts so that they are able to deal with any complaints where settlement is possible and then advise the first and second level tribunals. It would not be necessary for IPReg to train any tribunal members, although no doubt it would be necessary for IPReg to pay for its use of the other regulator’s first and second level tribunals.
Thus, CIPA considers that the use of experts who are familiar with the IPReg rules and patent and trade mark attorney practice would be a good idea, but only in a much simpler structure than the one proposed in the Consultation paper.
What are your views on our proposal to widen the range of consensual disposal options and therefore increase the option to dispose of a case at an early stage in order to reduce the cost and burden ofregulation? Are there any sanctions which should be reserved to the disciplinary tribunal only?
CIPA considers that the idea to widen the range of consensual disposal options is appropriate. However, as noted above, CIPA considers that this should be part of a simpler and more cost-effective structure. The experts referred to above should be allowed to settle any dispute if agreement can be reached. However, if agreement cannot be reached, then the case should be dealt with by a first level tribunal. The experts should not be allowed to impose any sanctions except by agreement. In particular, if the experts consider that a financial sanction, as opposed to an agreed payment to the complainant, is to be made or some condition be placed on the registrant, the case should be dealt with by the first level tribunal. This should in particular be the case where interim measures may be appropriate.
It is also considered that there is no need to have separate tribunals for interim measures and full cases. Patent and trade mark attorneys are used to the concept of a court initially deciding on interim measures and then deciding on the whole case. Thus, there is no need for a separate “interim measures” panel.
What are you views on our proposal to widen the pool of professional panel members toinclude non-attorneys?
CIPA considers that there is no need to have any pool of panel members. As suggested above, IPReg should only have bespoke personnel for settling cases where possible and for advising tribunals from another regulator. CIPA cannot see the point of IPReg training a large panel of possible tribunal members when they will hardly ever be used. All that is needed are experts in IPReg rules and patent and trade mark attorney practices who can advise first and second level tribunals which are used to dealing with disciplinary matters for regulated persons.
What are your views on our proposal to introduce new powers for interim orders?
CIPA welcomes the proposal for introducing powers to impose interim orders. As noted above, it is common for patent and trade mark attorneys to consider whether an interim order could be requested or granted and so it would not be something which would surprise a patent and trade mark attorney.
However, as noted above, the way in which IPReg intends to implement this is much too expensive and cumbersome. There is no need for “interim order” panels. Any first level tribunal would be able to deal with both interim orders and full cases.
Also as noted above, IPReg should have the power to refer serious cases directly to the first level tribunal but should not itself have the power to impose interim orders.
Where an alleged breach of the Code of Conduct relates to EDI (as proposed by CIPA in its comments on the Code of Conduct), there should be an option to undertake education or training to help the individual or firm understand the importance of EDI and to address any potential unconscious biases that may have contributed to the breach of the Code. This will have the effect of helping the individual or firm adopt more inclusive practices rather than simply act as a punishment. There will, of course, be extreme and conscious alleged breaches, where any of the other disciplinary sanctions may be appropriate, including de-registration.
We are interested in views on this proposal including the potential practical implications of an IPReg regulated businesses broadening its range of services. For instance, is this likely to present particular issuesaround conflicts, confidentiality or Professional Indemnity Insurance?
CIPA would be interested to see the evidence that supports IPReg’s assertion that the requirement that the non-legal services offered by patent and trade mark attorneys must be ancillary to the legal services presents a barrier to entry for entities into the regulated IP system. We understand that the removal of this requirement would enable current and future regulated entities to provide a range of non-legal services. This, however, would make IPReg the de factoregulator of those non-legal services, bringing into question IPReg’s competence to do so.
In our experience, there is not a great demand for patent and trade mark attorney firms to extend their services outside the current framework. An example would be the introduction of the Patent Box corporate tax regime, providing a financial incentive for businesses to focus on research and development. Patent and trade mark attorney firms have left this to accountancy firms, who are regulated to provide these services.
What are your views on the proposal to introduce a regulatory sandbox for PII?
In principle, we have no objections to the introduction of a regulatory sandbox. As users of IP legal services are the beneficiaries of PII, we would want to be assured that there was no risk to clients of firms who were making use of the sandbox and that IPReg had the competence to oversee the operation of the sandbox. Is there a question of any liability falling on IPReg should the PII arrangements operating within the sandbox environment prove to be inadequate in the event of a claim?
What are your views on the proposed changes to the practising categories?
CIPA is generally in favour of the proposed practising categories, bearing in mind the comments on question 17 above.
The area of business where there is most likelihood of there being a matter for IPReg to consider is new Rating 1. Even here, the risk of bad work or negligence is low and the main complaints are about fee levels. These complaints could be reduced by improved training in explaining the likely costs of any piece of work. Thus, although the risk is low, it is appropriate for these patent and trade mark attorneys to be in the highest risk rating category.
As regards Rating 2, the first part is appropriate. However, CIPA cannot see why those in the second part should be considered to be less risky than those in Rating 1. This includes patent and trade mark attorneys employed by foreign firms which are not regulated by IPReg. If they are not regulated by IPReg, it would appear that their employees should be in Rating 1.
Rating 3 appears appropriate.
For regulated attorneys and firms, please can you tell us whether you provide services tothe public and if so, what proportion are individual clients and which are business clients?
Not applicable to CIPA.
[1] CIPA questions whether “expects” in line 2 of the Code of Conduct is the appropriate word. Is it not a requirement for all patent and trade mark attorney to follow the Code of Conduct so that action can be taken if a requirement is not met? It is noted that Section 6 is headed “Requirements for licensed bodies” which implies that all that went before is not a requirement.
