IAM article on external ownership of US patent attorney firms

Hello, I’m back….and why (you might ask yourself, because hasn’t Patent Busting already laid out a comprehensive framework for patent attorney businesses in Australia in previous blog posts?  Hasn’t he done enough already…)?

I’ll tell you why, imaginary readers!  Because, IAM (a well known intellectual property review body) have published an article on the potential for US patent attorney firms to be externally owned, ie have shareholders who are not attorneys.  The possibility has been raised because the State Supreme Courts of Utah and Arizona have relaxed their bar rules to allow for non-attorney ownership and investment into law firms together with approving the position of non-attorney licensee who can represent clients before the court (snappily (and a bit spookily) known as Legal Paraprofessionals!).  See here.

Thanks to my former (patent attorney) partner Tom Gumley for passing this article on.

Now this could be huge news if it opens the door for publicly listed corporate patent attorneys such as exist right here in Australia – firms such as IPH and QANTM IP (actually that’s all of them).  And the IAM article raises this possibility.

Why is it huge news?  Because, up until now, the position of attorneys (that’s lawyers to you Australian readers) in the US has been virtually untouchable.  They have a uniquely privileged position in terms of being able to resist employment restraints as their relationship with clients are sacrosanct and they have some of the most stringent conflict of interest rules you are ever likely to see on God’s good earth…so…

If you had asked me yesterday whether there was even the merest whisper of a possibility that patent attorney firms in the US could be externally owned in a viable fashion, I would have laughed in your face.  It would have been seen as anathema.  In fact, the biggest concerns raised against the listing of Australian firms has always come from the US (apart from the guerilla actions within the Australian market, of course) on the basis of their very strict conflict provisions and the deep rooted assumption that individual attorneys have the relationships with clients, not the firms in which they happen to be partners or employees.

However, as comfortable as I am with wild extrapolations and feats of the imagination, it does seem to be drawing a bit of a long bow to say that the actions of the Utah and Arizona Supreme Courts will readily lead to large publicly listed US patent attorney firms.  The revisions to the ethics rules seem more focused on greater access to justice before these Courts and not so much around providing access to the US Patent Office and the Federal Courts where most patent matters are dealt with.  The US Patent Office and Federal Courts have their own jurisdictions and priorities.

It is an interesting thought experiment though…what would it look like to have a massive Amazon-like US patent firm (perhaps manned by patent agents rather than attorneys)…

Anyway, have a look at the article, you can register for free to read it.  There’s a lot of other commentary in it as well and I might return to it at some stage.

Take care…


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