37 CFR 11.108: Conflict of interest; Current clients; Specific rules

Taken from the Ninth Edition of the MPEP, Revision 07.2015, Last Revised in November 2015

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11.108    Conflict of interest; Current clients; Specific rules.

  • (a) A practitioner shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to a client unless:
    • (1) The transaction and terms on which the practitioner acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing in a manner that can be reasonably understood by the client;
    • (2) The client is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel in the transaction; and
    • (3) The client gives informed consent, in a writing signed by the client, to the essential terms of the transaction and the practitioner’s role in the transaction, including whether the practitioner is representing the client in the transaction.
  • (b) A practitioner shall not use information relating to representation of a client to the disadvantage of the client unless the client gives informed consent, except as permitted or required by the USPTO Rules of Professional Conduct.
  • (c) A practitioner shall not solicit any substantial gift from a client, including a testamentary gift, or prepare on behalf of a client an instrument giving the practitioner or a person related to the practitioner any substantial gift unless the practitioner or other recipient of the gift is related to the client. For purposes of this paragraph, related persons include a spouse, child, grandchild, parent, grandparent or other relative or individual with whom the practitioner or the client maintains a close, familial relationship.
  • (d) Prior to the conclusion of representation of a client, a practitioner shall not make or negotiate an agreement giving the practitioner literary or media rights to a portrayal or account based in substantial part on information relating to the representation.
  • (e) A practitioner shall not provide financial assistance to a client in connection with pending or contemplated litigation or a proceeding before the Office, except that:
    • (1) A practitioner may advance court costs and expenses of litigation, the repayment of which may be contingent on the outcome of the matter;
    • (2) A practitioner representing an indigent client may pay court costs and expenses of litigation or a proceeding before the Office on behalf of the client;
    • (3) A practitioner may advance costs and expenses in connection with a proceeding before the Office provided the client remains ultimately liable for such costs and expenses; and
    • (4) A practitioner may also advance any fee required to prevent or remedy an abandonment of a client’s application by reason of an act or omission attributable to the practitioner and not to the client, whether or not the client is ultimately liable for such fee.
  • (f) 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 protected as required by § 11.106.
  • (g) A practitioner who represents two or more clients shall not participate in making an aggregate settlement of the claims of or against the clients, unless each client gives informed consent, in a writing signed by the client. The practitioner’s disclosure shall include the existence and nature of all the claims involved and of the participation of each person in the settlement.
  • (h) A practitioner shall not:
    • (1) Make an agreement prospectively limiting the practitioner’s liability to a client for malpractice unless the client is independently represented in making the agreement; or
    • (2) Settle a claim or potential claim for such liability with an unrepresented client or former client unless that person is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel in connection therewith.
  • (i) A practitioner shall not acquire a proprietary interest in the cause of action, subject matter of litigation, or a proceeding before the Office which the practitioner is conducting for a client, except that the practitioner may, subject to the other provisions in this section:
    • (1) Acquire a lien authorized by law to secure the practitioner’s fee or expenses;
    • (2) Contract with a client for a reasonable contingent fee in a civil case; and
    • (3) In a patent case or a proceeding before the Office, take an interest in the patent or patent application as part or all of his or her fee.
  • (j) [Reserved]
  • (k) While practitioners are associated in a firm, a prohibition in paragraphs (a) through (i) of this section that applies to any one of them shall apply to all of them.
[Added 78 FR 20180, Apr. 3, 2013, effective May 3, 2013]