ETHICS OPINION 530-1964 SEPARATE BUSINESS

NUMBER 530

QUESTION

 

As I am. now planning to organize a separate lay business in addition to my regular practice of U.S. and Foreign Patent Law, I respectfully request committee opinion on any aspects which unknown to me may be in violation of the Canon of Ethics.

 

The lay business will be a company for the routine clerical payment of annual taxes which are required by most foreign Patent Offices in order to maintain valid patents after they are issued. The accounts of the new company will be, in the main, local U.S. corporations who now own foreign patents upon which annual taxes are due in the foreign Patent Offices. Generally, all contact and correspondence with such U.S local corporations would be with a lawyer, namely the patent counsel of the corporation.

 

The payment of annual taxes on patents is a mere clerical routine and of course involves no legal activity whatsoever.

 

I intend to operate the new lay company in the following manner:

 

1. Operations will physically be conducted in the same front office where typing is now done for my legal practice. Such new activity will be a highly mechanized IBM card system.

2. In order to distinguish the lay company from my legal practice, I intend to name the new company “John Doe Company.” The use of the word “Company” should definitely indicate that the new company is not a law firm. Alternatively, I may decide to use a name such as “XYZ Company”

3. The new company name will be listed in the building directories, but I will not place such company name on the entrance door to my law suite.

4. I will act as the president of the new company and the company letterhead will list me in such capacity. There will be no statement on the letterhead nor in any correspondence thereon that I am a lawyer.

5. Announcements of the new service will be made by mail to interested parties (which will mainly be the patent counsels of local U.S. corporations) and by posting notices in professional publications such as the “Journal of the Patent Office Society” (which is the major publication for patent lawyers), the various legal publications of Bar Associations and Martindale-Hubbell, possibly.

6.  No law business will be solicited.

 

The sample wording of the announcement car is as follows:

 

“ANNOUNCING

 

( XYZ ) COMPANY

300 Park Avenue

New York 17, N. Y. XY 7-7777

 

Specializing in International Patent Tax Payments <Text not Clear> Volume Mechanized Business Machine Methods for Very Substantial Savings and Avoidance of Human Errors. Payments Made Directly to Foreign Patent Offices or Through Foreign Patent Agents.

President”

 

The proponent of the question makes the following observation:

 

Opinions Nos. 399 and 406 as published in “Opinions on Professional Ethics,” The Association of the Bar, Columbia University Press, 1956 apparently sanction the contemplated operation.

 

The following is the substance of a supplemental letter received from the proponent of the question:

 

If your answer to my previous inquiry should be adverse by reason of the views expressed by your Committee in response to Question 519, I would like authorization to operate my contemplated lay business under my individual name at a different address from that at which my law office is located with the understanding that I will refuse, if offered, any law business from any client of my lay activity, In all other respects, my lay business will be operated according to my letter of June 16th and according to the approved pattern of the Answer to Question No. 519.

 

In addition to an opinion on a lay business as modified above (“the first question”), please favor me with an opinion on the propriety of the following arrangement (“the second question”):

 

I would propose in the alternative, in the event that it appears more advantageous (to the Bar, the legal profession and myself) to operate the new service as an integral part of my law practice in that way hopefully avoiding any problem of concurrently operating both a law practice and a lay business. In that connection I believe that the enclosed copy of an announcement card, addressed to lawyers only, is proper under Canon 46 as substantiated by Opinion 851 of the Association of the Bar of the City of New York, 1961 Yearbook, page 313 as well as Opinions 360 and 642 of Opinions on Professional Ethics, Columbia University Press, 1956.

 

JOHN DOE

 

Patent Lawyer

500 Park Avenue

New York, N,Y.

Telephone XY 7-7777

SPECIALIZING IN FOREIGN PATENT PROSECUTION

ANNOUNCES TO MEMBERS OF THE BAR

 

BUSINESS MACHINE COMPUTER SERVICE

 

FOR THE PERIODIC PAYMENT OF INTERNATIONAL PATENT TAXES, TRADE MARK* AND WORKING FEES DIRECTLY TO PATENT OFFICES OR THROUGH PRESENT AGENTS FOR REDUCED ADMINISTRATIVE COST

*U.S. & Foreign Renewal Fees and Filing Affidavits of Use

 

ANSWER.

 

The plan outlined In the first question appears to be objectionable for the reasons indicated in our prior opinion rendered in response to Question 519. If, however, the plan is modified in the manner indicated in the first part of the supplemental inquiry, there would appear to be no objection to the plan.

 

In view of the fact, however, that there would appear to be some danger of the lay business serving as a means of advertising John Doe s law practice, it would appear that the lay business should not bear the name “John Doe Company” but should use a name such as “XYZ Company,” (See Opinion No. 178 of the Committee on Professional Ethics of the Association of the Bar of the City of New York).

 

The Plan outlined in the second question cannot be approved in view of the fact that the announcement card would not qualify as a “dignified notice” within the meaning of Canon 46. Any announcement card containing reference to the computer service would seem inconsistent with the requirements of that canon as stated by the Committee on Professional Ethics of the Association of the Bar of the City of New York in Opinion 851:

 

“As to the form of the advertisement, brevity and dignity are of the utmost importance and it should be so worded as to indicate that it is addressed to lawyers only. It should not be in display type or contain representations of special ability, diligence or experience, nor should it contain puffing, selling, or self-laudatory language.”

 

November 4, 1964