In reversing an appellate court decision that had caused concerns throughout the patent world, the Texas Supreme Court recognized that communications between patent agents and clients could be covered by the attorney-client privilege.[1]  In Patent Office proceedings and patent litigation, patent agent-client communications could already be protected; in non-patent litigation, however, it is far less clear -- and the prior Texas appellate court decision suggested such communications could be revealed in discovery.  By reversing the appellate court decision, the Texas Supreme Court should have patent agents feeling more confident that their representation of clients in patent prosecution is no different than that provided by patent attorneys . . . and their clients breathing a sigh of belief.

In this case, Mr. Silver was the named inventor on a patent application related to a stand-alone tablet designed to allow restaurant customers to order food and pay without having to interact with a waiter or waitress.  He hired a patent agent to prosecute the application before the U.S. Patent and Trademark Office, which the agent did successfully.  Mr. Silver sold the patent to Tabletop Media, LLC, who then licensed it to restaurant chains.[2]  Tabletop allegedly failed to pay him, and Mr. Silver sued Tabletop for breach of contract.  In the breach of contract case, brought by Mr. Silver in Texas state court, Tabletop sought production of communications between Mr. Silver and his patent agent.

The trial court compelled production of the communications, and the Texas Court of Appeals refused to overturn the trial court's decision in responding to Silver's petition for writ of mandamus.[3]  It did so because it understood Mr. Silver as requesting the court to establish a patent agent-client privilege separate from the attorney-client privilege, which it indicated that it was not empowered to do.[4]  One of the appellate court judges dissented from the panel opinion, understanding Mr. Silver's request not as the creation of a new privilege, but as an application of the existing attorney-client privilege to the patent agent-client relationship.[5]  Ultimately, the Texas Supreme Court unanimously agreed with the dissent.[6]

In Texas, claims of attorney-client privilege are governed by Texas Rule of Evidence 503.  Under that rule, "[a] client has a privilege to refuse to disclose and to prevent any other person from disclosing confidential communications made to facilitate the rendition of professional legal services to the client [between, among others] between the client or the client's representative and the client's lawyer."[7]  In that context, a "lawyer" is defined as "a person authorized, or who the client reasonably believes is authorized, to practice law in any state or nation."[8]  Thus, the key question was whether a patent agent was a person "authorized to practice law" in a state or nation.

While not controlled by Federal decisions, the Texas Supreme Court's answer to that question was informed by them.  Over five decades ago, in Sperry v. State of Florida ex rel. Florida Bar,[9] the Supreme Court had held that a patent agent's prosecution of applications before the U.S. Patent and Trademark Office did not constitute the unauthorized practice of law.  Then, in In re Queen's University at Kingston, which was decided just months before the Texas appellate court's decision, the Federal Circuit had determined as a matter of Federal common law that the attorney-client privilege included "a patent-agent privilege extending to [a client's] communications with non-attorney patent agents when those agents are acting within the agent's authorized practice of law before the Patent Office."[10]  In both cases, the Federal courts had reached the conclusion based on the belief that a patent agent's role in patent prosecution was not just law-like activity, it was the practice of law itself.

The Texas court also looked to Texas statutes and dictionary definitions for its decision, since Rule 503 does not itself define what "the practice of law" entails.  The Texas State Bar Act includes a definition of the practice of law in the context of unauthorized practice of law, but it is not necessarily coextensive with Rule 503.[11]  Similarly, both Webster's and Black's provide dictionary definitions.  The definition in Black's Law Dictionary includes "preparing papers to bring about various transactions,"[12] which is exactly what patent prosecution involves.  Both the Texas statutes and dictionaries also require that a lawyer's services be provided directly to a client, but that unquestionably occurs with patent agents within the scope of patent prosecution.

For the privilege to apply, Rule 503 also requires a lawyer to be authorized to practice by a state or nation.  The defendant argued that meant that a person had to be licensed as a lawyer by a state or nation, regardless of authorization by the U.S. Patent and Trademark Office.  Again, the Texas court considered the Sperry and Queen's University cases as persuasive authority.  But more importantly, it focused on the distinction between being "authorized" to practice law and being "licensed" to practice law.  It found the latter to be a subset of the former, not coextensive therewith.  Under U.S. Patent and Trademark Office regulations, a patent agent is authorized to practice before it even if he or she is not licensed to do so.  Accordingly, the Texas Supreme Court found that a patent agent is a "lawyer" for purposes of the application of the attorney-client privilege in relation to communications regarding patent prosecution.

While it might otherwise seem that the Texas Supreme Court's decision in In re Silver is merely one more case supporting the existence of a patent agent-client privilege,[13] it bears greater importance because it reversed a decision to the contrary.  The Texas Appellate Court's decision had raised great concerns that states, in breach of contract or other state law claim litigation, would not extend privilege to such communications.  The appellate court's decision had a chilling effect on clients' choice of practitioners:  to ensure the application of attorney-client privilege, they were opting for patent attorneys or patent agents supervised by attorneys.  Now, with that decision reversed, there is less reason for fear of revelation of communications and greater freedom to discuss patent applications directly with patent agents.  Thus, today, all precedent points to patent agent-client communications being privileged.

[1] In re Silver, Case No. 16-0682 (Tex. Feb. 23, 2018).
[2] If you've used a Ziosk tablet or Abuelo's, Chili's, or Red Robin, you may be part of Mr. Silver's damages claim.
[3] In re Silver, 500 S.W. 3d 644, 647 (Tex. App. 2016).
[4] Id. at 645.
[5] Id. at 650 (Evans, J., dissenting).
[6] For a more complete discussion of the Texas Appellate Court's decision, and other recent patent agent privilege decisions and regulations, see "Patent Office Ethics Developments: Patent Agent Privilege and Duty of Disclosure," Snippets (Winter 2017).
[7] Tex. R. Evid. 503(b)(1).
[8] Tex. R. Evid. 503(a)(3).
[9] 373 U.S. 379 (1963).
[10] 820 F.3d 1287, 1302 (Fed. Cir. 2016).  For an excellent recap of the Queen's University case, see "In re Queen's University at Kingston (Fed. Cir. 2016)".
[11] See Tex. Gov't Code § 81.101.
[12] The Court showed its respect for patent prosecutors by not only acknowledging that patent applications are legal documents, but actually constitute "one of the most difficult legal instruments to draw with accuracy."
[13] In the interim between the Texas Appellate Court's decision and the Texas Supreme Court's decision, the Patent and Trademark Office adopted patent agent privilege as a rule for Patent Trial and Appeal Board proceedings.  See "USPTO Issues Final Rule Establishing Patent Agent Privilege".