Archived — Modernizing the IP Community—Page 7 of 15

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5. A values and ethics framework for IP agents

5.1 Background

In developing a values and ethics framework, the working group focussed its discussions and the resulting framework on how to best serve users of the IP system. The goal is to develop a fair and consistent framework that provides IP agents with a clear understanding of acceptable conduct and a transparent and impartial process for handling contraventions of a code of conduct.

In developing a code of conduct, the working group took into consideration current best practices in other jurisdictions and identified ethical behaviours expected of agents.

The scope of options being examined by the working group was limited by the CEO of CIPO, who specified that a regulatory model that would entail delegating the CEO's powers outside of CIPO would not be considered at this time. The CEO requested to take part in a final decision on any disciplinary actions.

5.2 A code of conduct

The values and ethics framework should serve as a tool for the IP agent community, as well as innovators and businesses, to provide guidance and increased certainty to agents, and a better understanding on the part of businesses and other users of the IP system as to what constitutes suitable behaviour and normal modes of operating.

5.2.1 Policy objectives of a code of conduct

All individuals who act in a professional capacity take on additional ethical responsibility. Professionals therefore should have a code of conduct that outlines expected behaviour within the context of a professional practice.

From the professional's perspective, the underlying reasons for a code of conduct include:

• providing an ethical framework to guide professionals when dealing with ethical dilemmas;
• ensuring public approval for the professional conduct of its members, thus achieving continued existence/success of the profession within society;
• serving as a tool to secure public faith and trust in the profession;
• codifying existing industry practices that positively impact the profession to achieve consistency and efficiency within the profession; and
• assisting professionals in responding to client requests that raise ethical concerns.

From the perspective of the clients of an agent, a professional code of conduct helps to ensure that:

• their interests will be protected;
• they will be treated fairly and honestly;
• they will have a clear expectation of service; and
• they will have recourse in the event of questionable or unethical service or advice.

5.2.2 Overview of formal codes of conduct

While there is no standard conceptual framework that incorporates a uniform definition of a code of conduct and a process for its implementation, many common elements can be identified from the codes found in other professions.

For instance, most codes of conduct delineate boundaries and expectations of behaviour. They provide indications as to what behaviour is prohibited (such as conflicts of interest) as well as what behaviour is expected (such as acting with integrity). In most cases, they also articulate a set of values based on the concept of achieving the highest possible public good.

Forster, Loughran, and McDonald^{Footnote 15} studied a sample of firms listed on the Standard & Poor's 500 which revealed similar language in each of their codes of conduct. The repeated phrases include:

• obedience to the law;
• acting with integrity;
• commitment to integrity;
• commitments to treating others with fairness; and
• remaining committed to the organization's values. 

The basic tenets of codes of conduct of law societies in Canada, including the Model Code of Professional Conduct, are the following: 

• Act honourably and with integrity.
• Provide competent legal services.
• Serve clients in a courteous and prompt manner.
• Respect client confidences.
• Maintain loyalty to clients and avoid conflicts of interest.
• Ensure that fees for services are fair and reasonable.
• Safeguard and preserve funds and property entrusted to them by their clients.
• When acting as advocate, treat courts and other decision-making bodies with civility and respect.
• Encourage public respect for the administration of justice.  

5.2.3 Codes in Canada and abroad

In order to identify best practices, the working group examined a cross-section of codes of conduct, including:

• codes for professions in Canada (lawyers, advocates, the federal public service, certified management consultants, and professional engineers) as well as the whole scheme of professional codes in Quebec;
• codes for professions regulated or overseen by the federal government (bankruptcy trustees and immigration consultants); and
• IP agent codes and disciplinary frameworks in other jurisdictions (United Kingdom, United States, Australia, Europe, Japan, and China).

The working group also greatly benefited from the fact that IPIC has undertaken significant work in the development of a code specific to IP agents over the last couple of decades.

5.2.4 IPIC code of conduct

In the late 1990's, IPIC convened roundtables around the country with its membership (who are mostly registered patent and trademark agents) to discuss the need for, and content of, a code of conduct. Based on the mandate from those sessions, sub-committees of IPIC's Privilege and Self Governance Committee were tasked with preparing a draft code of conduct and a discipline process.

The sub-committee responsible for the draft code reviewed the codes of regulatory bodies and professional associations for multiple Canadian professions, including several law societies across Canada, as well as the codes for IP professionals in foreign jurisdictions (such as Australia). The code prepared was largely modeled after the code of conduct of the Law Society of Upper Canada (as it existed at that time), with modifications to take into account the specific roles of IP agents. 

The draft code was circulated for comment to the larger committee, and presented and adopted by the IPIC membership on March 6, 2001. 

The Federation of Law Societies of Canada is the national coordinating body for Canada's fourteen provincial and territorial law societies. In October 2009, the Federation adopted the Model Code of Professional Conduct (the Model Code) for the stated purpose of providing a harmonized national standard of rules of conduct so that the public can expect the same ethical requirements to apply wherever their legal advisor may practice law. The Model Code was subsequently amended in 2011 and 2012 and the current version was published in December 2012 and is being implemented by a number of Canadian law societies. The Law Society of Upper Canada adopted the Federation's Model Code in October 2013, and the new rules came into effect October 1, 2014.

In light of the Federation's Model Code and planned adoption by Canadian law societies, including Ontario's, in 2012, IPIC established a new sub-committee to review its own code of conduct. The Federation's Model Code was used as the basis for revising IPIC's Code with modifications to reflect the roles of IP agents. Using the Model Code as a starting point ensured the IPIC Code was up-to-date and aimed to achieve consistency with codes being adopted by law societies across Canada. A draft revised Code was completed in July 2013 and submitted to the Council of IPIC, but has not yet been circulated to the IPIC membership given that the issue was being addressed by the values and ethics working group of the IP Modernization initiative.

5.2.5 Proposed content for an IP agent code

“A code of ethics provides members of a profession with standards of behavior and principles to be observed regarding their moral and professional obligations toward one another, their clients, and society in general.”^{Footnote 16} 

A comparison of the 2013 Draft Code of Conduct from IPIC with codes of conduct for IP professionals from other jurisdictions^{Footnote 17} shows a commonality of the following key elements across several codes:

• Act with personal integrity and honesty.
• Provide competent professional services.
• Serve clients diligently.
• Maintain clients' confidences.
• Avoid conflicts of interest.
• When and how to effect withdrawal of services.
• Not facilitating unauthorized practice.
• Relations with the Intellectual Property Office and other members of the profession.
• Acceptable advertising.

The following additional elements were common to the codes from the United States Patent & Trademark Office and the Model Code of the Federation of Law Societies:

• fair fees
• safeguard retainers and clients' property

From this, and the fact that the IPIC Code is based upon the Model Code being adopted by Canadian law societies, we conclude that the 2013 Draft Code of Conduct from IPIC (attached as Appendix F) provides a good starting point for a code of conduct for IP agents in Canada. Depending on how a code of conduct might be implemented in statute or regulations, further work may be required to reformulate the Code to, for example, a principles-based approach (an illustration is attached as Appendix G).  

5.3 Framework for implementation and enforcement of a code of conduct

A common element to most forms of professional regulation is monitoring and enforcement of the code of conduct. The following sections present options available for implementing a values and ethics framework.

5.3.1 Approaches to regulation and enforcement

Approaches to professional regulation range from minimal to extensive control over a profession. Governments may decide on one of various regulatory approaches based in part on the nature of the activities performed by a profession, and the extent to which the public good might be harmed if a member of a profession withheld services or provided services that were below par or caused damage. In this regard, there is a potential duality to all professional regulatory activities. The Competition Bureau of Canada noted in 2007 that organizations such as those which regulate lawyers and accountants have potentially conflicting concerns and interests—their own and those of the public. ^{Footnote 18}

In the attempt to address the needs of professions and the public, models of self-regulation and government regulation have undergone various transformations and reforms in the last several decades. The most prevalent models can generally be characterized as: a) all-out model (self-regulation by the profession), b) all-in Model (government regulation), and c) mixed model (oversight of the profession by both the government and the profession). Generally, these models share some common features, such as having a published code of conduct or code of values and ethics, a process for receiving and dealing with complaints, including an investigation and review function, and a clear separation of functions to avoid any conflict of interest or perceived bias within the regulatory framework.

5.3.2 All-out model

The all-out model, typified by the structure governing IP agents in the United Kingdom, is complete self-regulation. This model is the preferred option of the private sector IP professionals of this working group.

In the all-out model, the regulatory body for a profession is able to set entry requirements rather than having government set such requirements for the profession.

The specific legal authority transferred from government to the profession's regulatory body varies with different regulatory models. In exchange for the benefits of professional status, the regulatory body of a profession is expected to develop, implement, and enforce various rules. These rules are designed to protect the public by ensuring that services from members of the profession are provided in a competent and ethical manner. This legal authority often includes:

• the right to set standards for who may enter the profession;
• the right to set standards of practice for those working in the profession; and
• the right to create rules for when and how members may be removed from the profession.

The self-regulatory model also generally requires that a regulatory body put in place a complaints and discipline system to permit members of the public to raise concerns about the services a professional provides to them. This model should provide a process to investigate and, if necessary, discipline any member of a profession who fails to meet professional standards of practice. It is generally expected that all of a regulatory body's decisions and activities will be done in the “public interest.”   

5.3.3 All-in model

The all-in model puts the complete responsibility of regulating a profession under the role of the government. An example of this is the United States Patent and Trademark Office (USPTO) where the Office of Enrolment and Discipline is responsible for:

• registering attorneys and agents to practice before the USPTO;
• developing and administering the agent registration examination;   
• maintaining a public roster of attorneys and agents recognized to practice before the USPTO in patent cases;
• investigating complaints alleging unethical conduct by individuals practicing before the USPTO; 
• maintaining the Rules of Professional Conduct; and
• investigating complaints and administering disciplinary action.

5.3.4 Mixed model

The mixed model represents a blended approach to regulating a profession in which a government body works together with appointed representatives of a profession to set and enforce a code of conduct, including the investigation and prosecution, as necessary, of complaints against members of the profession.

One such example is Australia, which has in place the Professional Standards Board that is a statutory body (section 227A of the Australian Patent Act). The Australian Minister for Industry appoints members to the Board. The Board members comprise people from the profession, lawyers, IP Australia and from a cross-section geographically. The Board determines academic qualifications required to become patent and trademark attorneys, as well as accreditation of courses that satisfy subject requirements under the regulations. The Board also governs the professional conduct of patent and trademark attorneys and disciplinary matters, including the procedure for complaints and the role of the Board in proceedings.

The mixed model regulatory process used in Australia is outlined in the following diagram.

5.4 Moving forward—a disciplinary framework for IP agents

The committee recommends the adoption of a mixed model, which would allow CIPO to actively participate in overseeing the IP profession while ensuring the professional associations in Canada also play a meaningful role in guiding their profession. The mixed model approach aims to ensure that the process remains fair toward both the profession and the public and to ensure an appropriate level of government involvement. This would further help avoid perceived conflict of interest by one or more of the organisations.

It is also recommended that, in the design and implementation of a framework under the mixed model (or any model), the following factors be considered:

• Respect for natural justice.
• Avoiding regulatory capture, which occurs when a regulatory agency, intended to act in the interest of the public, eventually acts in ways that benefit the industry it is supposed to be regulating, rather than the public.
• Ensuring fairness and transparency for both agents and their clients.

Care must be taken to ensure that all elements of the framework—investigative, adjudicative, and disciplinary—are structured around appropriate ethical walls or are otherwise independent of each other. This entails ensuring that these functions are kept separate so that individuals are not undertaking multiple functions in the same case or proceeding.

Lastly, it is recommended that CIPO send a request for a legal opinion to the Regulations Section of the Department of Justice to determine the extent to which there is regulation-making authority for a trademark and patent agent code of conduct and accompanying framework, including a discipline process.

5.4.1 Proposed framework

Below is a figure depicting the proposed process for resolving complaints about an agent.

Complaint receipt function: As pictured above, a complaint receipt function is the first step in the process. It is recommended that this be an administrative function only with no decision-making powers. The working group discussed having CIPO be the official receiving function for complaints about an IP agent.

Review function: The complaint would then require review and assessment. Should the review function find that there are reasonable grounds to support the allegations made in the complaint, and no settlement is reached, the complaint would be referred to the investigative function. Should the review function find that there are no reasonable grounds to support the complaint, the complainant would be advised accordingly with the applicable rationale for not proceeding with an investigation. The working group discussed having complaints forwarded to a review function made up of a small, mixed CIPO-professional committee (e.g. one designated CIPO representative and one designated IP agent).

Investigative function: The complaint may require investigation. In such cases, an investigation would be conducted for the purposes of obtaining additional information about the complaint and informing the review function accordingly.

The group discussed that an investigation committee could be composed of a small, mixed CIPO-professional committee (e.g. a designated CIPO representative and a designated IP agent).

The review function would review the results with the agent. In a case where the matter is serious and there has not been a settlement with the agent, the matter will proceed to a hearing before a tribunal.  

There may be justification to provide the review function with powers to impose limited sanctions. Some behaviours or actions may be found after investigation to not require formal disciplinary procedures such as a tribunal. For instance, where it is found that an agent's actions may have been taken without intent, or were due to a limitation or flaw in knowledge, the review function could impose a sanction of limited scope (e.g. additional career development, private admonishment, or periodic audits of the member's books or work products).

It may also be that, further to the review function's initial analysis, with support from the investigative function, the review function and the IP professional under review agree to a sanction to be imposed. In such a case, resolution may result at the review function stage.

Tribunal: It is recommended that a three-member panel be established to hear disciplinary matters and that the panel consist of one member of the public (e.g. from a decision-making profession such as a retired justice, adjudicator, or arbitrator). The two other members would be one member of the IP profession (which could be pulled as needed from a roster of such members) and one member from CIPO. Having a member of the public as part of the panel would help support the transparency of the process.

The private sector IP professionals of the working group recommend that IP professionals have a role in each of the review, investigative and decision-making (tribunal) stages, given the potential significance of disciplinary proceedings to each professional.

5.5 Further investigation required

A number of operational issues in creating a disciplinary framework were identified by the working group, not all of which could be thoroughly researched or addressed within the given timelines of this project. These include issues such as the types of sanctions that could be applied by a tribunal in addition to removing an agent from a register (e.g. suspension, auditing of work, etc.). Other operational issues include:

• Process and representation: Tribunals engaged in an adjudicative process generally function in a manner more closely analogous to the courts with the holding of formal hearings that are, with some exceptions, held in public. As part of the proposed disciplinary process, the working group discussed having the review committee argue the case against the agent. An agent should have the right to represent themselves or be represented by a lawyer. There should also be a right of appeal to the Federal Court.
• Sister organizations: It is possible that there could be agreements with other organizations as to how to handle complaints against members who are also members of an organization with a code of conduct (e.g. bar or law society).
• Review of a code of conduct: The working group discussed a review mechanism for the Code. Options include a code review/update on a regularly prescribed schedule or simply as warranted.

5.6 Recommendations

It is the recommendation of this working group that:

1. There should be a requirement for all registered agents on the lists to abide by a code of conduct. The code should be modeled after the IPIC Draft Code of Conduct, which is aligned with the Federation of Law Societies Model Code of Professional Conduct.
2. A mixed model values and ethics framework should be created, comprising members of CIPO and the IP profession, as appropriate, tasked with the following functions in the disciplinary process:
   1. Complaint receipt function
   2. Review function
   3. Investigative function
   4. Tribunal (with an additional member from the public)

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