Intellectual property lawyers have been warned to exercise care when claiming ownership of intellectual property from clients in settlement of outstanding bills.

A practice note issued by the Intellectual Property Regulation Board, which regulates patent and trademark attorneys, warns practitioners to ensure that exercising a lien over IP in settlement of a client account might put them at risk of a conflict of interest.

The board recognises that because patent attorneys frequently work with start-up businesses ‘the relationship between regulated persons in the IP sector can be different from many other sectors’.

However, it says that contractual liens may put lawyers in breach of rules. The note also strongly urges attorneys to ensure that terms of business are both read and understood by their client, and signed in acknowledgement.

In its first disciplinary hearing, the board last month ruled that a registered patent attorney, David John Rickard, ‘had placed himself in an inadvertent conflict of interest’ with a former client, Desk Space Ltd.

According to the statement of facts, Rickard had acted as patent attorney for Desk Space and, following a breakdown in relations, executed a deed of transfer of the client’s intellectual property under powers he claimed to have acquired under his terms of business.

Following the hearing, Rickard undertook to transfer to Desk Space the legal title to intellectual property acquired. Rickard also undertook to contribute £8,000 towards the applicant’s costs.

In a separate development, business secretary Vince Cable (pictured), finalised the deal for a new London-based unified patent court, which he said would give a £200m-a-year boost to the UK legal sector.