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IP malpractice mitigation: What IP practitioners should do to avoid claims, conflicts, and calamities

9/22/21

By: R. Victoria Fuller and Jessica Gray Kelly

Intellectual Property attorneys face malpractice risks unique to their specialty.  Avoiding claims from clients and complying with the rules of professional conduct requires practitioners to exercise constant vigilance.   

Understanding both the circumstances that tend to drive claims, and the types of conflicts that trip-up IP practitioners, will help you mitigate your risk.  Recent data trends show claims arise from foreign filings, poor or late communications with domestic based clients, and clerical or scrivener’s errors with filing or docketing.  Malpractice claims arising out of IP litigation are not as common but are much more likely to result in large damages awards. 

How can IP practitioners mitigate their risk? The following tips, while not exhaustive, provide a framework for best practices: 

  1. Robust Conflict Checks:  

Ensure you have a robust conflict check process that screens out potential conflicts either with current or former clients. To avoid conflicts arising from corporate affiliates, include any subsidiaries, parent or other closely related entities of the client in the conflict check.  Err on the side of being overly inclusive of potential adverse parties.  

  1. Screen for Subject Matter Conflicts:  

IP attorneys need to be especially careful about potential subject matter conflicts, e.g., representing different clients who are pursuing patents for the same technology.  You should run the name of the potential client’s competitor(s) in the same technology space as adverse parties.  This check may need to be re-run periodically as the technology or the industry develops.  For a trademark subject matter conflict check, the attorney should run a search for the proposed mark as well as a search for similar goods or services. 

  1. Use Tailored Engagement Letters:   

Engagement letters should be tailored to specifically identify who the client is (and who the client is not, through a representational disclaimer, when necessary).  It should also specify who will pay the bills (if not the client), and the scope of the representation.  If the scope of representation changes, a new engagement letter may need to be sent to avoid engagement creep.   

  1. Robust Calendaring Systems:  

Make sure you have a robust calendaring system with a backup calendaring system.  The lawyer should always confirm calendared dates are accurate, because it will be on you if a deadline is missed. 

  1. Good Client Communication:  

Communicate with your client often and especially when important decisions need to be made.  Follow-up any verbal conversations with a letter or electronic mail to confirm your advice and the client’s decision.  Many claims can be avoided by clear communication with the client during the representation.   

  1. Pay Attention to Potential Arising Conflicts: 

Be wary that potential conflicts could arise during the representation. For example, you are defending a CEO and a company in litigation when you learn that the CEO was fired.  You may no longer be able to simultaneously represent both clients.  You must deal with this arising conflict as soon as possible.  

  1. Use Disengagement Letters:  

At the end of a representation, send a disengagement to the client making it clear the representation has terminated. 

  1. Think Hard Before Suing Clients For Fees:   

Many fee suits against clients are countered with a malpractice claim against the lawyer or law firm.  Think carefully about whether the potential collection of fees is worth the risk.    

  1. Do Not Represent Yourself:  

Abraham Lincoln’s time-worn wisdom that an attorney “who represents himself has a fool for a client” remains true today.  Do not try to resolve a problem with a client yourself.  Do not represent yourself or your firm against a malpractice claim.  Doing so can compromise both your insurance coverage and your defense strategy.  Attorneys facing malpractice claims need the experience and skill of malpractice specialists. 

  1. Do Not Wait to Put Your Carrier on Notice:  

Professional liability policies are claims-made policies.  Failing to timely provide notice may jeopardize your coverage.  This means you should not wait until a claim becomes a lawsuit to notify your carrier.  Bell & Clements’ bespoke IP Legal Professional Liability insurance solution offers a high security rating, and includes coverage for pre-suit and pre-claim legal consultation with professional liability attorneys at Freeman, Mathis & Gary, LLP. There are modular and flexible supplementary limits available depending on the needs of IP firms.  

Following these best practices should significantly reduce your risk of malpractice claims.  While lawyers are not required to be perfect, attorneys would do well to remember that implementing strategies to reduce malpractice risk, and avoiding claims from arising in the first place, permits you to focus your time and energy on your clients and your practice, rather than your defense. 

For more information, please contact  R. Victoria Fuller  at vfuller@fmglaw.com or Jessica Gray Kelly at Jessica.kelly@fmglaw.com. 

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