I ♡ Trademarks Conference 2025Fraud with Errors: Avoiding Both Egregious and Unintentional Ethical Issues
Alt Legal Team | February 04, 2025
At the Alt Legal I ♡ Trademarks Conference on March 18, 2025, Michael McCabe, Managing Partner, McCabe & Ali presented the session, “Fraud with Errors: Avoiding Both Egregious and Unintentional Ethical Issues.” Download presentation materials here. Here are some key takeaways from the session:
- Client identity and intake – Understand from the beginning of the relationship who is and who is NOT your client. This dictates who you communicate with and how to communicate with them. The client is not your referral source, nor is it necessarily the payor or the point of contact. To determine the client, consider: Whose rights are at stake and who is applying for the trademark (an individual or an organization)? These are the first questions that you should ask.
- Avoid accidental clients – these are the people who will sue you! It is perfectly ok to say to a person who you’re speaking to, “You are not my client, I represent X.” This is an Upjohn warning, SCOTUS case about attorney-client representation.
- Avoid accidental clients by getting something in writing to avoid he-said-she-said argument. An engagement agreement will sort this out including fees and who is/isn’t the client.
- Conflicts of interest are one of the main reasons for professional malpractice claims. When does your representation end for trademark clients? Does it end when registration issues or does it continue? Does a reminder establish an attorney/client relationship or is it merely a courtesy? Be careful and tell clients when relationship actually ends.
- Confidentiality – Some clients believe they have the right to keep their identify confidential even if it is public record that you are the representative for this client. But this doesn’t necessarily give you free license to discuss your clients publicly. You want your clients to be comfortable to discuss the bad stuff with you so that you can represent them fully.
- Note that the duty of confidentiality continues after termination of the attorney-client relationship. You can be disloyal to former clients, but you still owe them the duty of confidentiality. You can’t take on a matter that is substantially related to a former client matter or directly adverse to a former client.
- Business relationships with clients – If you enter into a business arrangement with a client you have to ensure the deal is good and fair for you and the client. The terms must be fair and reasonable and client should be advised to get independent advice and the client must give informed, written consent. If you don’t do these things there could be a conflict of interest.
- Fees – The lawyer shall not accept compensation from someone other than the client unless client gives informed consent, whoever pays bills doesn’t interfere, and lawyer protects client confidentiality. Third party payors may include family, insurance companies, an entity paying for an affiliate, a lead counsel paying for a local counsel, etc.
- Subject Matter Conflicts – The Finnegan Henderson Law Firm was sued by a former client and ultimately a current client for taking on a new client that was seeking a patent for a substantially similar invention. The USPTO adopted a new doctrine around “subject matter conflicts” whereby firms cannot represent patent clients seeking to protect substantially similar inventions. Per the USPTO OED, the same doctrine applies to trademark conflicts.
- Prevent subject matter conflicts at the client intake stage. Look at who your client is and what the mark that they’re applying for. Do a conflicts check in your own database for the same or substantially similar mark in the same/substantially same space. Therefore, it is important to have a conflicts system in place to check for these types of clients. You might ask as part of your intake process if the client would be upset if you were to represent certain other clients – who are their competitors, etc.
- Intermediaries and referrals – Often come through email, text, LinkedIn. The proposition is that they’ll do all the legwork and your involvement is perfunctory if anything at all. You may review the application, maybe not. Sometimes you’ll sign and sometimes they’ll sign your name to it. Lawyers are getting paid a small amount for these cases and it’s merely a numbers game. Be very wary of these situations.
- With intermediaries and referrals, remember that each applicant that you’re being referred to by the intermediary is a client. Run conflict checks on all of them, document engagement, ensure informed client communications, determine third party payor (if applicable), ensure proper oversight and supervision, avoid unauthorized practice of law, an ensure proper signatures. Without all of this oversight, referrals can create big problems.
- Check out the OED FOIA Reading Room after August 3, 2019 (when the US Counsel rule for foreign applicants went into effect) to see all of the attorneys who have gotten in trouble for working with intermediaries. The US Trademark Bar is under heightened scrutiny.
- Signatures – Audit the signature process at your firm. Make sure everyone is signing properly and not delegating supervised authority. The USPTO is very literal about this – they want a personal signature and there are no exceptions to that.
Speakers
Michael McCabe
, Managing Partner, McCabe & Ali
Michael McCabe is the Managing Partner of McCabe Ali LLP, with offices in Washington, D.C. and Los Angeles. Michael has practiced IP law for 32 years and served for over a decade as in-house ethics counsel for a large IP boutique law firm. Michael’s practice focuses on the intersection of IP and ethics. He has represented hundreds of trademark and intellectual property practitioners in ethics investigations, sanctions issues, disciplinary trials, malpractice cases, and professional misconduct matters before the USPTO. Michael regularly consults with lawyers and law firm management on risk management, ethics compliance, and internal investigations. He has testified as an expert witness before federal and state tribunals in IP legal malpractice cases. Michael serves a Chair of the ABA IP Section’s Professional Issues Division and was the IP Section’s Chair or Vice Chair of the Ethics and Professional Responsibility Committee for seven years. Michael is a member of the teaching faculty for the Virginia State Bar mandatory Ethics and Professionalism Course. In 2014, Michael created IPethics & INsights, an award- winning law blog focusing on ethics, malpractice and related issues in patent and trademark law. Michael earned a B.S. in Mechanical Engineering from the University of Maryland and graduated magna cum laude from the University of Baltimore School of Law. Before law school, Michael worked for 4 years as an engineer for NASA’s Goddard Space Flight Center.