Consultation: A Governance Framework for IP Agents

By helping inventor's secure exclusive Intellectual Property (IP) rights, IP agents are a key component of the innovation ecosystem. To that end, entrepreneurs must have confidence in IP professionals and the services they provide. A modern values and ethics framework would set standards for client expectations and ensure agents respect privilege, meet professional & ethical standards, and are accountable.

In June 2015, Bill C-59 granted a statutory privilege to protect communications between intellectual property (IP) agents and their clients. The privilege provision will come into force in June 2016. This delay was intended to provide time to further develop a code of conduct and a disciplinary framework to address agent misconduct and to provide agents with an opportunity to familiarize themselves with new obligations related to privilege.

Professional governance frameworks can encompass many different aspects related to the regulation of a profession, such as: entry requirements, continuing professional development, an insurance framework, codes of conduct, and a disciplinary process. This paper provides an overview of three proposed governance models in addition to a values and ethics framework for IP agents (comprising a code of conduct and disciplinary process). The Government is seeking comments on the proposals based on the questions listed at the end of this paper, with a view to implementing a new governance model alongside the values and ethics framework.

Past Consultations

In 2013–2014, the Canadian Intellectual Property Office (CIPO) launched a consultation process entitled "Modernizing the IP Community", a collaborative effort between CIPO and the IP professional community. Three working groups were established to examine various aspects of the governance of the IP profession, with one working group specifically created to explore and develop recommendations regarding a values and ethics framework for IP agents. The goal was to develop a fair and consistent framework to provide IP agents with a clear understanding of acceptable conduct and to provide clients with a clear expectation of service. The working group examined current best practices in other jurisdictions and identified ethical behaviours commonly expected of agents. At that time, the scope of options was limited to those that complied with existing authorities of the Commissioner of Patents and Registrar of Trademarks (i.e., no consideration of delegation of powers).

Despite being limited in the scope of options being assessed, the working group advanced several key factors that should be considered in the design and implementation of any eventual framework. The framework should: respect natural justice, balance the interests of the profession with the public interest, and be transparent. Taking these factors into account, outlined below is a proposed value and ethics framework to be administered by one of three regulatory models: an administrative agency housed at CIPO (administrative agency model); an independent body with representation from CIPO, the profession, and the public (a mixed model); or, a body administered by the profession (self-regulation model).

A Values and Ethics Framework

Regardless of the regulatory model chosen, the values and ethics framework would operate using the same common elements. These elements, which are present in the vast majority of professional values and ethics frameworks, include:

  1. A Code of Conduct: the government is proposing a draft code of conduct based on the Intellectual Property Institute of Canada (IPIC) draft code of conduct, with sections from the Federation of Law Societies of Canada Model Code of Professional Conduct. The draft code is included in Annex A
  2. A Disciplinary Process comprising:
    • a complaints receipt function: a point of contact to receive complaints against an agent;
    • a review function: a body to handle complaints and conduct a review to determine if the complaint has merit, and if there is sufficient evidence to proceed;
    • an investigative function: persons with the authority to investigate a complaint, where necessary, and provide additional evidence to the review body;
    • a disciplinary tribunal: an adjudicative process to determine if a breach of the code of conduct has occurred, and decide on an appropriate remedy, if necessary; and
    • an appeal process.

Please refer to Annex B for a brief description of each of these elements and how we anticipate they could operate in practice.

Governance Models

The values and ethics framework could be implemented and administered by a regulatory body, which could have one of three types of governance models. These models are:

  1. an administrative agency model;
  2. a mixed-model; or
  3. a self-regulatory model of governance.

This regulator would have responsibility for administering the values and ethics framework, and in some cases, would include other responsibilities for overseeing the profession, such as maintaining the register of agents, establishing and administering entry qualifications for the profession, or establishing and monitoring ongoing requirements, such as continuing professional development or insurance standards.
           
It would also be the responsibility of the regulator to maintain the code of conduct for agents. The regulator would receive submissions recommending changes to the code of conduct and conduct public consultations regarding proposed changes to the code.

Model 1: An Administrative Agency Model of Governance

Under this model, the regulator would be housed within CIPO. This model would be similar to the way patent and trademark agents are regulated through the Office of Enrolment and Discipline at the United States Patent and Trademark Office (USPTO).

An advantage to this model of governance is that it can be set up fairly quickly; using existing regulatory authorities governing the "entry on, maintenance of, and removal of" agents from the applicable register of names provided for in the patent and trademark acts and the costs for administering the system would be covered by CIPO with a potential impact on fees. This would be followed by necessary legislative changes at a later date to account for additional details, such as investigative powers.

A complaints review board would be established under the regulations (similar to the establishment of the current Examining Board at CIPO) to undertake the complaints receipt function, the review function and the investigatory function of the disciplinary process.

In the event that the complaints review board wishes to initiate a disciplinary action against an agent, a disciplinary tribunal that is independent from the complaints review board would be appointed to decide on the merits of the claim. This tribunal could consist of one or more people (possibly a retired judge) who would be appointed by the Commissioner/Registrar on an ad-hoc basis from a pre-formed list to hear disciplinary actions. The tribunal would have the authority to require the Commissioner or the Registrar to remove agents from the register. Agents could be removed permanently (i.e., expulsion) or for a set period, after which they could apply to be reinstated (i.e., a suspension). Decisions of the disciplinary tribunal would be subject to judicial review by the Federal Court. The authority for additional disciplinary measures could be introduced in a subsequent legislative update.

Model 2: A Mixed-Model of Governance

The mixed-model form of regulation describes a framework where the authority to regulate is shared by both the government and the profession. Under this model, the disciplinary framework and code of conduct would be administered by an independent, tri-partite Board composed of representatives of CIPO, the profession and independent members of the general public, similar to Australia's Professional Standards Board for Patent and Trademarks Attorneys. Board members would be appointed by the Minister for a specified term, and would represent an equal number of CIPO employees, IP agents and members of the public (those who do not qualify under the other two groups).

The mixed-model of regulation aims to ensure that the process remains fair toward both the profession and the public and to ensure an appropriate level of government involvement. Representatives of the public, the profession and the IP office would have equal standing on the Board. This would further help avoid any perceived conflicts of interest by one or more of the organizations involved. This model provides for the input of both the public and the profession, allowing the regulator to take into account the interests of all parties affected by the regulatory framework.

The Board would operate as an independent body and would be responsible for the complaints receipt function, review function and investigative function of the disciplinary process. In the event that the Board wished to initiate a disciplinary action against an agent, a disciplinary tribunal that is independent form the Board would be appointed by the Minister on an ad-hoc basis to decide on the merits of the claim. This tribunal would consist of an expert, such as a retired judge, who would hear the case against the agent and, if necessary, impose a disciplinary measure. A party to a proceeding before the disciplinary tribunal could appeal the decision to the Federal Court.

Model 3: A Self-Regulatory Model of Governance

Self-regulation refers to a governance model administered and funded by the members of the profession, with the government acting in an oversight capacity. This model would be similar to the way patent and trademark agents are regulated by the Intellectual Property Regulation Board in the United Kingdom, or the way Canada Lands Surveyors are regulated in Canada. Under this model, the government would propose legislation to create a College of Patent & Trademark Agents. The College would be governed by a Council consisting of multiple patent or trademark agents elected by the profession, the Commissioner of Patents/Registrar of Trademarks and persons who are not agents appointed by the Minister. The Council would have the authority to establish by-laws and, subject to the approval of the Minister, to make regulations. The Council would also have the authority to charge its members fees and dues to cover the costs of administering the system. This authority could result in an increase in fees above their current level.

The legislation would also require the Council to establish a Complaints Committee and a Discipline Committee. Other committees such as an Executive Committee or a Board of Examiners could also be established. The Complaints Committee would be responsible for the complaints receipt function, the review function and the investigatory function of the disciplinary process. The Discipline Committee would act as the disciplinary tribunal, with the authority to impose an appropriate disciplinary measure. A party to a proceeding before the Discipline Committee could appeal the decision to the Federal Court.

The legislation would be modelled after the Canada Lands Surveyors Act, and would grant certain powers of the Minister to oversee the profession. In order to ensure that the College acts appropriately in fulfilling its objectives and acts in the public interest, the College would be required to submit an annual report to the Minister. Other powers would be similar to those granted to the Minister of Natural Resources in the Canada Lands Surveyors Act, and could include:

  • the ability to review the activities of the Council and request that the Council undertake activities that, in the opinion of the Minister, are advisable to carry out the objectives of the College; and
  • the ability to take such measures as the Minister considers appropriate to fulfil any objective of the College if the Minister is of the opinion that the College is not fulfilling it.

Conflicts

Many IP agents are also lawyers and, depending on the roles and responsibilities they take on, their actions may implicate more than one code of conduct (i.e., a particular action may breach either the code of conduct of the relevant law society or the code of conduct developed for IP agents, or both). There are two main types of conflicts that need to be accounted for in this system: overlapping regulatory regimes, and direct conflicts.

Overlapping Regulatory Regimes

These types of conflicts may occur in the context of a values and ethics framework when there is behaviour that potentially conflicts with multiple codes of conduct. For example, most codes of conduct for lawyers include obligations to keep client information confidential. Likewise, with the recent introduction of privilege for IP clients, the code of conduct for IP agents should include similar obligations to maintain client confidentiality. In the event that an IP agent that is also a lawyer was to release confidential information, it would be a violation of both codes of conduct, potentially triggering the disciplinary process of both regimes.

If the case against the agent were to proceed under both regimes, problems could arise in the form of inconsistent outcomes, inconsistent penalties, or inefficiencies that could result from the duplication of resources. It is proposed that the regulator have the ability to coordinate with provincial regulators, and have the authority to suspend processing of a complaint pending the outcome of the provincial regulator's investigation. In the event the provincial regulator issues a disciplinary action, the regulator would be able to proceed directly to a disciplinary tribunal to request a similarly appropriate action. For example, if the provincial regulator revokes the agent's license to practice law, the regulator may recommend also striking the agent from the register.

Direct Conflicts

These conflicts occur when the applicable two sets of rules are in direct conflict. Usually the requirements needed to satisfy a more restrictive code of conduct would also satisfy the requirements of a less restrictive code, however there may be situations where it is not possible to satisfy the requirements of one code without violating the other. For example, if one code is interpreted as requiring an IP agent to do something that another code of conduct forbids them from doing. Consideration should be given to which rules a lawyer/agent must follow in the event of a direct conflict.

Conclusion

We welcome your comments on the proposed code of conduct and disciplinary framework. Some questions to be considered:

Code of Conduct

Please see Annex A for the Draft Code of Conduct

  1. Does the draft code cover all the right elements? Are any elements missing? Are any changes necessary before implementation?
  2. Should the code of conduct or other applicable regulations clearly define what activities qualify as permitted practice in front of the patent or trademarks office?

Disciplinary Process

Please see Annex B for the Disciplinary Process

  1. Is the described structure appropriate?  Namely: a complaint receipt function; a review function; an investigative function; a disciplinary tribunal and its decision powers; and, the appeal process. If not, how can it be improved?
  2. How should the disciplinary framework ensure open and transparent proceedings while still maintaining the confidentiality of privileged information?
  3. What remedies should be available to the disciplinary tribunal in the event of a breach of the code of conduct?
  4. What measures are necessary to ensure the regulator under all models is governed by the rules of fairness and natural justice, and avoids conflicts of interest (real or perceived)?

Governance Models

  1. How does each governance model best align with the principles of cost-efficiency, ensuring timely resolution of issues, and fostering a competitive marketplace?
  2. What additional measures might be necessary to protect against barriers to entry and mobility of agents?
  3. What measures are necessary to ensure that the governance model is effective in setting rules and standards, creating incentives for compliance, monitoring behaviours, and maintaining a quality agent community?
  4. How can the regulator best ensure open and transparent governance?
  5. What additional accountability mechanisms should be considered to ensure fairness and avoid regulatory capture?
  6. How does the governance framework align with the way IP agents are regulated globally?
  7. What measures are necessary to ensure the regulator is accountable to the public interest?
  8. What should be the review mechanism for the code under each of the models?

Conflicts

  1. In the event of a direct conflict between the code of conduct for agents and another code of conduct the agent is required to follow (for example, a provincial law society code), such that it would be impossible follow one code without violating the other, which code should prevail?
  2. What measures, if any, are required to account for a situation where an action by an agent/lawyer violates the code of conduct of multiple regimes?

Submission of Comments and Contact Information

ISED and CIPO request that answers to the included questions and any general comments on the proposed draft code of conduct be submitted by June 13, 2016. Answers to questions and general comments relating to the remainder of the consultation paper, including the governance model and disciplinary process, must be submitted by August 31, 2016 to be considered.

Please submit all responses to Denis Martel, Director of Patent Policy, Strategic Policy Sector, Innovation, Science and Economic Development Canada at denis.martel@canada.ca. Please note that all comments will be posted on this website for three months following the end of the consultation period.

Should you have any questions about this consultation, please send them by email to denis.martel@canada.ca or by phone to 343-291-2686.

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