Code of Professional Conduct for Patent Agents and Trademark Agents Regulations — 1
1 An agent must not act for a person if there is a substantial risk that the agent’s loyalty to or representation of that person would be materially and adversely affected by the agent’s own interest or the agent’s duties to another client, a former client or any other person (referred to in this Code as a “conflict of interest”), except as permitted under this Code. COMMENTARY As described in this Code, a conflict of interest exists if there is a substantial risk that an agent’s loyalty to or representation of a client would be materially and adversely affected by the agent’s own interest or the agent’s duties to another client, a former client or any other person. The risk must be more than a mere possibility. There must be a genuine, serious risk to the duty of loyalty or to client representation arising from the retainer. A client’s interests may be seriously prejudiced unless the agent’s judgment and freedom of action on the client’s behalf are as free as possible from conflicts of interest. A client must be assured of the agent’s undivided loyalty, free from any material impairment of the agent-client relationship. The relationship may be irreparably damaged if the agent’s representation of one client is directly adverse to another client’s immediate legal interests. A client may legitimately fear that the agent will not pursue the representation out of deference to the other client and an existing client may legitimately feel betrayed by the agent’s representation of a client with adverse interests. The prohibition on acting in such circumstances except with the consent of the clients guards against such outcomes and protects the agent-client relationship. An agent has a duty of commitment to the client that prevents them from summarily and unexpectedly dropping a client to circumvent conflict of interest rules. A client may legitimately feel betrayed if an agent ceases to act for the client to avoid a conflict of interest. An agent must examine whether a conflict of interest exists not only from the outset but throughout the duration of a mandate because new circumstances or information may establish or reveal a conflict of interest. Accordingly, factors for the agent’s consideration in determining whether a conflict of interest exists include (a) the immediacy of the clients’ interests; (b) whether the clients’ interests are directly adverse; (c) the temporal relationship between the matters; (d) the significance of the issue to the immediate and long-term interests of the clients involved; and (e) the clients’ reasonable expectations in retaining the agent for the particular matter or representation. The following are examples of conflicts of interest: (a) an agent acting against a person in one matter while representing that person in some other matter; (b) an agent, an associate, a firm partner or a family member having a personal financial interest in a client’s affairs or in a matter in which the agent is requested to act for a client such as a partnership interest in a joint business venture with a client; NOTE : An agent who owns a small number of shares of a publicly traded corporation would not necessarily have a conflict of interest in acting for the corporation because the ownership of those shares may have no adverse influence on the agent’s judgment or loyalty to the client. (c) an agent having a sexual or close personal relationship with a client; NOTE : Such a relationship may conflict with the agent’s duty to provide objective, disinterested professional advice to the client. The relationship may obscure whether certain information was acquired in the course of the agent-client relationship and may jeopardize the client’s right to have all information concerning their affairs held in strict confidence. The relationship may in some circumstances permit exploitation of the client by their agent. If the agent is a member of a firm and concludes that a conflict exists, the conflict is not imputed to the ag