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Your source for news, updates and guidance on all things trademarks and intellectual property.

Alt Legal Connect Session SummaryClaim on You!: Proactive steps you can take to avoid IP malpractice claims

Alt Legal Team | February 08, 2023
6 min read

On Tuesday, February 7, Tracy Kepler—the former Director of the Center for Professional Responsibility for the ABA and now CNA’s Risk Control Consulting Director presented the ethics CLE session, “Claim on You!: Proactive steps you can take to avoid IP malpractice claims.” During this session, Tracy discussed current and emerging trends in IP professional liability claims, the USPTO Rules of Professional Conduct at issue, lessons learned, and best risk management practices.

Presentation Materials: Click here

View Recording: Click here

Tracy began her presentation by noting that every four years, the ABA produces a report with anonymized data from all insurers and tells you about trends and where errors occur and in which practice setting. Among all practice areas, the primary issue that comes up is conflicts of interest. In the IP sphere, the number one issue is missed filing and payment deadlines. Other key issues in the IP sphere include: due diligence errors (11-103 and 11-104) – not doing enough research and providing bad advice; drafting errors (11-101) on USPTO forms; counter-claims to suit to collect unpaid fees; improper release of funds from escrow; dabbling outside off your primary practice area or jurisdiction; litigation-related claims. One burgeoning area is the exceptional case filing.

Tracy continued on to present anonymized cases to help the audience learn how to avoid these issues.

Missed Deadlines

In this case, the law firm managed a worldwide patent portfolio and the firm hired foreign counsel to handle matters in a foreign jurisdiction. The law firm missed an appeal deadline provided by foreign counsel, causing the client to lose their patent rights in that country. The claim was promptly reported, no malpractice suit was filed, and defense counsel was retained early on. They held a mediation and the issue was resolved with a settlement before year-end.

Lessons learned – how to avoid missed deadlines:

  • Have an effective, reliable docketing system.
  • Maintain calendar deadlines and apply rule updates.
  • Ensure backup calendars are kept with critical dates, held separately and apart by a main server and verify weekly.
  • Ensure central quality controls with a team that is responsible for all of these goals.
    1. Ensure that everyone has read-only access and only a limited few have edit access.
    2. Second-eye checking.
    3. This process is considered by underwriters.
    4. Large firms will have a docketing department and they must have training.
  • Have a single email address to collect inbound documents.
  • Calendar all upcoming deadlines upon receipt.
  • Soft dockets – tickler dates ahead of deadlines, checklists a few weeks out, align with client guidelines.
  • Look-ahead dockets – long-term dockets to help you plan workload.
  • Assign multiple responsible parties.
  • Daily quality controls – ensure a “zero docket” with an empty e-mail box every day.
  • Set expectations – compliance with firm’s calendaring is mandatory and there are built-in links to performance evaluations and a system of escalation.

Advice Issues

In this case, the law firm was retained by a family to determine if its IP infringed on a competitor’s product and then to defend the family in the infringement litigation. The family alleged that the advice that their product did not infringe led to unnecessary litigation, litigation errors, and issues with the ultimate settlement which the family felt was too low.

One of the important lessons learned here has to do with client vetting – you do not need to take every person who comes in the door. There are some signs to look out for in a “bad client” – poor finances, won’t meet in person, unrealistic expectations, fired/sued other attorneys, family/close friend, comes in at 11th hour, or if you have a visceral feeling. Failure to perform proper due diligence on clients can lead to many negative risks including: malpractice claims, disciplinary actions, lost revenue, disqualification, and reputational damage. Be sure to ask the right questions of potential clients to determine if they will be a good fit for your firm and keep in mind it is much easier to withdraw before you’ve taken on a client than it is to withdraw after they become a client.

Another important strategy for avoiding risk with advice is to ensure that your client’s objectives are aligned with what you are able to accomplish. If their objectives and your means are not aligned, this could be a problem. It’s important to keep an open dialogue so clients know the status of their matter and is given enough information to make informed decisions. If you recognize that continued representation could cause issues with your ability to comply with ethical conduct, you should withdraw.


In this case, the law firm handled many IP matters for the client and the client asked to handle corporate restructuring matter, converting from an S-corp to a C-corp. The law firm failed to send necessary materials to a minority shareholder who sued and the company was forced to pay a substantial settlement. The client sued the firm for malpractice and damages.

Lessons learned – There are inherent risks to practicing outside of your comfort zone. It’s important to consider the USPTO Rules of Professional Conduct including 11.101, the competence rule, having the legal knowledge, skill, and preparation for the representation. You should also be candid and tell the client what areas you have experience in. If it’s an area in which you can educate yourself and properly represent them, let your client know. Also, you can associate with co-counsel, another experienced practitioner, or a retired attorney to help you with the matter – just ensure that the client agrees with the arrangement and that you have their consent in writing. Tracy also advised that if you find yourself in over your head, you should withdraw and avoid doing anything to prejudice the client.

Litigation Error

In this case, the law firm was hired by a company to bring infringement claims against stores selling knockoff versions of the company’s goods. The law firm had an investigator go to purchase one of the knockoff items. The law firm drafted an affidavit for the investigator that contained inaccurate information. This caused a significant trial delay and ultimately the successor law firm for the company secured a verdict for $1.1 million. The company sued the original firm for negligence, resulting in increased fees and a decreased verdict.

Lessons learned – It is crucial to have candor before the tribunal, whether it’s a court, the USPTO, TTAB, etc. You cannot make misstatements of material fact (11.303(a)(1) and (3)). If you realize something that you’ve submitted is inaccurate, you must correct it with the court.

Litigation Error – Counterclaim for Legal Fees

In this case, the law firm was hired by a corporation to defend it in a trademark litigation. The adversary was granted summary judgment and the judge precluded the corporation’s damages expert due to failure to timely file a disclosure. The law firm sued for unpaid fees and the corporation countersued for malpractice.

Lessons learned – Avoid sticker shock by having conversations with your client throughout the representation. Also, be sure to set expectations about the billing process, when you expect to be paid, and what the consequences are for nonpayment. It’s also important to confirm the client’s ability to pay. Tracy also recommends using law practice management software to minimize errors, facilitate efficiency in the billing process, and highlight any errors/issues in the billing process. Another key factor is to engage in proper billing etiquette, including sending clear bills that describe the services rendered, send status updates with every bill even if there is no major update, sending monthly bills to avoid large bills, reviewing bills for overcharges. If you haven’t been paid, be sure to reach out personally, consider a compromise depending on the reason for nonpayment.

Conflict of Interest

In this case, we are dealing with a law firm known for representing a particular business in all of their IP work, which therefore represents competing companies. One client asked the firm to file a provisional application and for advice as to whether it infringed another company’s product – the firm advised the product did not infringe. The competitor was a client of the same firm and the competitor asked the firm to send a cease and desist letter to the other company, which they did. The original client pursued filed suit against the firm.

Lessons learned – Clients expect loyalty and confidentiality. Lawyers cannot represent clients who have concurrent conflicts of interest, namely if parties are direct adversaries or if there is a material limitation. Particularly important in the IP sphere, lawyers must avoid subject matter conflicts.

USPTO Electronic Filing

In this case, a law firm was retained by a company to represent them in the purchase of patents, including the assignment of patents. A lawyer instructed his assistant to file the assignments on the USPTO’s electronic system. The agreements contained confidential and proprietary information that after filing, became pubicly available on the USPTO’s website. The company sued the law firm for damages and malpractice.

Lessons learned – Attorneys must pay close attention to anyone doing work for them, including assistants, contract lawyers, investigators, etc. Attorneys must have reasonable assurances that these individuals understand the USPTO’s Rules of Professional Conduct and that they are abiding by their responsibilities. Also, in terms of electronic signatures, attorneys must comply with the proper procedures before the USPTO. Tracy also warned that there has been an increase of cases involving attorneys “renting” their name or license and allowing others to file with the USPTO which is not permitted.

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