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Privilege for patent and trade mark attorneys unaffected by Supreme Court's Prudential ruling

28 January 2013

Last week the Supreme Court in R (on the application of Prudential plc and another) (Appellants) v Special Commissioner of Income Tax and another (Respondents) [2013]UKSC1 refused to extend legal advice privilege to communications with professionals other than lawyers.  Any extension of legal advice privilege is a matter for Parliament not for the courts. 

The Supreme Court confirmed that Parliament has already statutorily extended privilege to both patent attorneys and trade mark attorneys who are considered professional legal advisors for this purpose.  Certain communications with patent and trade mark attorneys are privileged but the extent of the privilege falls short of the full legal privilege accorded to solicitors.

In Prudential the Supreme Court was concerned with the scope of legal advice privilege (LAP).  LAP applies to all communications passing between a client and its lawyers, acting in their professional capacity in the provision of legal advice.  The issue in this case was whether a company is entitled to refuse to disclose documents produced in connection with its tax affairs on the ground that these are covered by LAP where the legal advice was given by accountants (PricewaterhouseCoopers) in relation to a tax avoidance scheme. The Supreme Court was faced with deciding a key point of principle: whether LAP should be extended to other professions beyond the legal profession.

Lord Neuberger held that LAP does not extend to communications in connection with advice given by professional people other than lawyers.  Such an extension would go beyond the recognised limits of LAP. Extensions to LAP was a question of policy which should be left to the domain of Parliament and the normal legislative procedures.

Lord Neuberger acknowledged that Parliament had on a number of occasions legislated in this field.  He expressly cited the examples of the statutory extension of LAP to patent attorneys by section 280 of the Copyright Designs and Patents Act 1988 (CDPA), and to trade mark attorneys by s. 87 of the Trade Marks Act 1994 (TMA) (as amended by the Legal Services Act 2007). In the light of this it was inappropriate for the Supreme Court to extend the law on LAP as proposed by Prudential. 

Prior to these acts, the courts had also refused to extend LAP to both patent and trade mark attorneys.  In the Court of Appeal case of Wilden Pump Engineering Co. v Fusfeld [1985] FSR 159, the Court of Appeal refused to extend privilege to legal advice given by a patent agent, with Dillon LJ holding that,

"It seems to me that it would be quite impossible for this court, in the face of that limited grant of privilege by Parliament, to hold that there exists a much wider, general privilege covering the advice of patent agents to their clients on matters of law – not even limited to matters arising under the Patents Act."

Similarly the same court in the earlier case of Dormeuil Trade Mark [1983] FSR 159 had refused to extend privilege to legal advice given by a trade mark agent.

As acknowledged by the Supreme Court in Prudential, subsequently both patent attorneys and trade mark attorneys have been afforded a statutory extension of LAP.  This extension of privilege is achieved by a 'legal fiction' - both trade mark and patent attorneys are deemed "as if (they) had at all material times been acting as the client's solicitor".  It is pertinent to point out here by way of comparison that under Article 48 (5) of the Draft Agreement on a Unified Patent Court, and the corresponding Draft Rule 361, a patent attorney's privilege is directly accorded.

However, the extension only applies to 'qualifying' patent and trade mark attorneys, for example registered patent attorneys qualified in the UK (on the register of patent attorneys) or in the EU (on the European list of persons entitled to practice before the EPO); and similarly registered trade mark attorneys, or persons on the European list.

Furthermore the extension of privilege to these qualifying attorneys falls short of the full legal professional privilege accorded to lawyers (where documents are protected irrespective of the subject matter to which they relate), as it is limited to communication, documents, materials or information relating to, in the case of patent attorneys: "the protection of any invention, design, technical information, or trade mark, or as to any matter involving passing off  ", and in the case of trade mark attorneys: "the protection of any design or trade mark, or as to any matter involving passing off,  "

This raises questions such as: Is "invention" wide enough to cover any protection for an invention? Is privilege limited to the act of "protection" (for example the obtaining of a patent or the contesting of validity or infringement proceedings) or does it also apply to any question relating to ownership and exploitation of that protection?  Does "design" include unregistered as well as registered designs? Are communications relating to copyright in press releases or advertising and sales material privileged?

Although patent and trade mark attorneys can rest secure in the knowledge that their legal advice privilege has received the blessing of the Supreme Court, with the level of uncertainty which remains in interpreting these legal provisions, we recommend that patent and trade mark attorneys take their own view on the risk to their client if they are subsequently required to disclose communications in litigation. Where a real risk exists the attorneys should ensure that advice is channelled through a lawyer.

We will be covering the wider implications of the Supreme Court's ruling in a separate article.

For further information please contact Nicola Dagg or Lorraine Neale.