Some years ago I was discussing the structural features required in a new IP management system we were considering purchasing with my IT manager. We were looking at different interactive modules for docketing, products, agreements etc. After agreeing on the “must haves” and the “nice to haves”, my IT expert made the astute comment that, whatever system we select it will only be as good as the accuracy of the data entered: “garbage in, garbage out”. How true!

When providing legal advice or preparing a legal document, whether as in-house counsel or as an external adviser, the quality of that advice or product is contingent on the information and data supplied to counsel/adviser. Information parsed out and limited to what the provider, usually having limited IP experience, believes is sufficient for Legal to work from is a dangerous path, often leading to poor legal advice or product and a potentially sticky end.

There are naturally company concerns with divulging highly confidential information to external consultants, and even broadly within organizations, and No. 27 in our Mistakes List “Mismanaging IP Outsourcing” rightly highlights the potential for IP loss. A solution stated in that blog of looking for highly reputable providers who you can trust and providing information under the umbrella of confidentiality agreements is obviously sound advice. Nevertheless, even with appropriate employment and non-disclosure agreements (NDAs) in place, and a level of trust, some individuals still have a natural tendency to keep confidential information close to the vest, and want to “manage” the information flow. Unfortunately, the error of such action is often only realized when a trigger event occurs. Examples of potential legal consequences could be: a claims set that doesn’t read on well to the product sold; a patent specification that doesn’t disclose the best mode; withheld prior art that impacts on the claimed patent scope or could lead to inequitable conduct; known 3rd party patent claims that implicate freedom to operate etc.

With experience, one can get a sense if someone is withholding information that is important to the legal determination. It’s incumbent on the legal adviser, in that situation, to dig a little deeper and ask further questions. If answers are not forthcoming, even with references to NDA terms and protestations of your good reputation, then there’s an issue that legal counsel/adviser needs to elevate in a thoughtful and sensitive, but firm way. As a consultant that may lose you work on occasion. So be it. Better to lose work than provide flawed advice. In most cases however, the company appreciates that you are looking out for their interests, and the ruffling of some feathers only leads, in the longer term, to a more solid relationship.

Well-intended, but potentially damaging, management (or rather mismanagement) of information flow is a mistake that often only surfaces after the event, and sometimes with catastrophic results. Whether in-house or a consultant, look to avoid these consequences by building trust and seek company management directives to staff, where necessary, to work openly with their legal teams.

(This is number 44 in our list of IP mistakes and how to avoid them.)

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