Two Clients, One Former Employee: Conflicts and Confidential Data
Mei is a registered Malaysian patent agent. Her firm has acted for Alpha Sdn Bhd for six years on a pending catalytic reactor application. Alpha's former R&D engineer, Raj, now approaches Mei with an improvement to the same reactor. Raj provides a draft specification that includes Alpha's unpublished test results and a reactor dimension of 42 mm taken from an Alpha confidential report. Raj says he developed the improvement after leaving Alpha and asks Mei to file it urgently. The same week, Alpha emails Mei asking her to file a divisional application 'before Raj's invention is published' and suggests that Mei use Raj's draft as a template because 'it will save time'. Mei's junior has already saved Raj's draft in the firm's shared folder. Mei has not yet signed an engagement letter with Raj. Alpha does not know Raj has approached Mei.
1. Identify the professional conduct and confidentiality issues and decide whether Mei can act for Raj.
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Mei owes confidentiality to Alpha as an existing client. She also owes confidentiality to Raj as a prospective client from the moment he approaches her, even though no engagement letter has been signed. The draft contains Alpha's unpublished test results and a confidential 42 mm dimension. Mei cannot treat that information as Raj's to use, and she cannot use it for Alpha's benefit either.
Acting for Raj would create a clear conflict. The matter is substantially related to Alpha's pending reactor application. Raj is a former employee of Alpha, and his draft contains Alpha's confidential information. Mei would be in a position where she might use, or be suspected of using, Alpha's confidential information against Alpha, or Raj's information against Raj. The fact that Raj says he developed the improvement after leaving Alpha does not remove the conflict because the draft itself contains Alpha's data.
Mei should decline to act for Raj. She should do so promptly and in writing, explaining that the firm cannot act because of a conflict, without disclosing Alpha's confidential information. She should not review Raj's draft further. If Raj asks for reasons, she can say only that the firm has a conflict and that he should consult an independent patent agent. She should not send Raj's draft to Alpha or use it in Alpha's file.
2. Advise on handling Raj's draft, the shared folder, and Alpha's request to use it as a template.
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Mei must contain the information immediately. The junior should remove Raj's draft from the shared folder and place it in a restricted file accessible only to Mei or the person handling the conflict review. Access should be logged. Mei should not circulate the draft, copy it into Alpha's file, or use any of its wording, test results or the 42 mm dimension. If the firm keeps a record for conflict purposes, it should keep only the minimum necessary, such as the fact that a conflict exists, not the technical content.
Alpha's request to use Raj's draft as a template must be refused. Mei can tell Alpha that the firm cannot use a third party's confidential draft and that the divisional must be prepared from Alpha's own disclosure. She should not identify Raj or reveal what Raj has said. If Alpha already knows about Raj's invention, Mei should avoid confirming or denying any details. She can explain generally that the firm's professional obligations prevent it from using material received from another person.
If the draft shows that Alpha's confidential information may have been misused, Mei should advise Alpha to investigate and preserve evidence, but she must not disclose Raj's confidential communication. The firm should also consider whether it can continue acting for Alpha at all. Because Mei has received confidential information from Raj that is relevant to the same reactor technology, there is a risk that the firm is tainted. A strict screen may not be enough in a small firm. Mei should consult the firm's compliance officer or the relevant professional body before continuing Alpha's divisional.
3. Explain what Mei should tell Alpha and Raj, and any safeguards if she continues for Alpha.
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To Raj, Mei should send a short written message: the firm cannot act on his application because of a conflict of interest; he should engage an independent registered patent agent promptly; the firm will not use or disclose his confidential information; and his draft will be returned or securely stored. She should not tell Raj what Alpha has said or what the firm has done for Alpha.
To Alpha, Mei should say that the firm cannot use a third-party draft as a template and that the divisional will be based on Alpha's own application and records. If she continues for Alpha, she should not mention Raj's identity or the contents of his draft. She should ask Alpha to provide its own disclosure and instruct an independent inventor or attorney to prepare the divisional if there is any doubt about the firm's taint.
Safeguards if Mei continues for Alpha include: a written conflict screen; restricted access to Raj's file; no participation by Mei in the divisional if she has read Raj's technical content; a written record of the screen; and independent review of the divisional by another agent who has not seen Raj's draft. In a small firm, these safeguards may be impossible. If so, Mei should decline both matters and refer Alpha to another firm. The overriding duties are confidentiality, loyalty and avoiding a situation where confidential information from one client could be used for or against another. The firm should also check whether Raj's removal of Alpha's documents requires a separate trade secret notification to Alpha, but that notification must not disclose Raj's privileged communications.