On February 6, 2019, the Colorado Supreme Court shuttered a Colorado business, which once billed itself as an “expert patent law” firm, and its owner, for engaging in the unauthorized practice of law. According to the Court’s order (here), Intelligent Patent Services, LLC (IPS) and its non-lawyer owner, Dak Steiert, are enjoined from engaging in the unauthorized practice of law in the State of Colorado. The Colorado court also ordered IPS and Steiert to pay restitution to their victim as well as fines and costs.
The Colorado Supreme Court found that IPS operated from 2014 through 2017 as a non-lawyer-owned limited liability company operating under the trade name “Expert Patent Law.” IPS advertised on the internet and promised potential customers
that the company could make their patents profitable: “We’re here to be more than patent attorneys. We’re here to be in your corner, to fight for you, and to make sure your invention gets protected and stays yours!” Respondent lPS pledged to do so by offering a number of services, including patent searches, commercializing inventions, and as relevant here, “drafting highly effective patents, designed to add the maximum value to your business.”
The IPS site touted the high quality of patents produced by the company, explaining, “our patents are drafted entirely by patent attorneys with at least 5 years experience. Unlike any other firm, we do not use paralegals to draft patents. we don’t let rookie attorneys draft your application, then give it to a senior employee for a brief glance.”
Potential customers were advised that they could request “one of our attorneys who used to work for the USPTO examining patents.” The IPS website explained that, “There is no better way to make sure your patent gets granted than to use an attorney with experience on the other side of the equation, evaluating patents for the government! ”
IPS offered fixed-fee pricing for provisional patent applications of between $2,700 and $2,900 and between $900 and $9,700 for non-provisional applications. IPS would receive invention materials directly from its inventor-customers. IPS would then email outside patent attorneys with whom it had contracted to draft documents “relate[d] in some aspect to the preparation and prosecution of patents.”
For example, one of the attorneys would receive $1,800 from IPS for preparing a non-provisional application, although he would be docked $200 in pay if he delivered the patent application more than one week late. IPS and Steiert then would pocket the difference.
According to the attorneys, they were prohibited by Steiert from communicating directly with IPS’s customers. The attorneys would file their work product in the USPTO and would invoice IPS for their services.
The Colorado Bar alleged that IPS, which was owned by nonlawyer Steiert, engaged in the unauthorized practice of law “by advertising, offering, and providing the legal services of patent attorneys to inventors in Colorado.” Under Colorado law, a nonlawyer may not offer or provide legal services to the public.
The court found that IPS, as a nonlawyer owned corporation, was prohibited from “offering or purveying legal services of licensed lawyers.” The court explained that “such corporations may not prepare legal documents for others, regardless of whether those legal documents are drafted by lawyers on staff” and that by “holding itself out as able to perform legal services and by rendering under the corporate aegis those legal services, including the preparation of patent applications, Respondent IPS engaged in the unauthorized practice of law.”
In addition, the court found that IPS’s website held the company out as a patent law firm, “suggesting that the company was, in fact, a law firm owned and controlled by lawyers”–such as by referring to IPS as a patent firm and comparing itself to other law firms. The court concluded that IPS engaged in the unauthorized practice of law through its representations on the IPS website.
The Colorado court rejected IPS’s argument that it was a “mere conduit between customer and lawyer,” finding that:
To the contrary, that conduit role injects great uncertainty into the lawyer-client relationship, including whether the protections of confidentiality and attorney-client privilege apply, and whether advertising can be relied upon not to mislead or overreach.
The court found that in one particular matter, an inventor contracted with IPS to help it with securing a patent for his invention on a portable urinal. After getting paid by the inventor, IPS subcontracted with a patent attorney to draft the application. However, due to delays in the patent attorney’s schedule, the attorney was unable to complete the draft application in the time required by IPS. As a result, Steiert terminated IPS’s relationship with that attorney. Thereafter, according to the opinion, Steiert completed the application himself, including by drafting the patent claims.
The court found that by drafting the patent claims himself, Steiert engaged in the unauthorized practice of law.
In a second matter involving Steiert, he was accused of engaging in UPL by signing an attorney’s name to a Request for Continued Examination without the attorney’s knowledge or consent. The court, however, found that the evidence was insufficient to support this claim. Notably, the court stated that it was “unconvinced that the mere act of signing, dating, or filing a document without the knowledge or authorization of a lawyer constitutes the unauthorized practice of law”–although such conduct “might very well constitute criminal impersonation and run afoul of other rules and regulations.”
The court reasoned that the act of signing and filing a “mostly completed document” did not involve “any inherent exercise of professional judgment beyond that which is possessed by a layperson.”
As for the penalty, the Colorado Supreme Court entered an injunction prohibiting IPS from advertising, offering to provide, or providing legal services, whether provided by lawyers or nonlawyers. The court further enjoined Steiert from “preparing or prosecuting patent applications for others; advising others as to their legal rights or duties, including patentability of inventions; and forming or participating in the formation, ownership, direction or control of an entity that advertises, offers, or provides legal services.”
Finally, the court ordered Steiert and IPS to pay one of the inventor-clients restitution in the amount of $5,700, as well as court costs and a fine for each incident of unauthorized practice of law.
The Colorado Supreme Court’s disposition is not the end of Steiert’s legal woes. Prosecutors in Eagle County, Colorado have accused Steiert of multiple felonies, including fraud and criminal impersonation, in connection with IPS’s business. See Colorado v. Dak Brandon Steiert, 2017CR137. Steiert has denied the criminal charges. A jury trial is scheduled to begin later this summer.