A conflict of interest is a circumstance which places an employee in a position where their personal interests (including those of their immediate family) could compromise their independent decision making. Conflicts of interest can occur during the examination process. For example, conflicts may arise as a result of:

an examiner’s or close family member’s direct financial interests;
an examiner’s or close family member’s involvement with the applicant, agent, or inventor; or
an examiner may have prejudgement or bias from relationships, personal beliefs or experiences.

Examiners must be impartial and assess each case on its merits. If an examiner has a conflict of interest in a specific case, it may be perceived that they have not delivered the service impartially. This can create doubt about the validity of the outcome.

This section outlines the processes for identifying and handling real or perceived conflicts of interest during examination.

Requirement to declare a conflict of interest

The APS Code of Conduct requires examiners to disclose details of any personal interests in connection to their employment. Under the code all staff must lodge a declaration concerning any actual or perceived conflict of interest. Staff are required to lodge this declaration at least annually and at any time a potential conflict of interest arises due to a change in circumstances (for example, when an examiner receives new information that places them in a position of conflict).

A disclosure officer will assess the declaration to determine whether a conflict exists. If a conflict does exist, a management strategy will be developed with the employee to manage and/or mitigate the risks. The case will normally be allocated to an examiner who does not have a conflict. Where a conflict of interest is established, the staff member concerned should not be involved in the examination of the case.

For more details on this process see Conflict of interest and insider trading – policy and procedures. For more details on conflicts of interest, see the APSC website and LearnHub.

Identifying a conflict of interest

For each case they work on, examiners should be mindful of their circumstances, personal interests, and relationships. They should check who the applicant, agent, and inventor are and consider whether an actual or perceived conflict of interest exists.

Types of conflict of interest

Direct financial interest

A conflict of interest can occur where examiners or their close family members hold a direct financial interest in a company that is an applicant.

Another type of direct financial interest is where examiners have personal shareholdings in listed companies that own patent attorney firms.

Because of these interests, there may be questions about the examiner’s ability to be impartial. Even if the examiner’s consideration of the matter is impartial, there may be a perception that the applicant has received favourable treatment from them.

Where examiners are aware that they have a direct interest in a company or other entity associated with an application, they should not examine the case. If they discover the interest after commencing examination, the examiner should immediately report it to their supervisor.

Holding an indirect financial interest, such as by membership of a superannuation fund that owns shares in a company, does not normally represent a conflict of interest.

Involvement with the applicant, agent, or inventor

A conflict of interest can arise based on a past association or current relationship between the examiner and a person or entity associated with the application. This could be the applicant, the agent, the inventor or a potential opponent.

For example, there is a potential conflict where the examiner has:

worked on research projects that were funded or partially funded by a particular company associated with the application;
been previously employed by the applicant or agent or done consultancy work for them; or
a friendship, family connection, or other personal connection with the applicant, agent, or inventor or potential opponent.

Where the examiner is aware of a potential conflict, they should not examine the case.

Sometimes the examiner’s prior affiliation with a particular individual or company is not apparent, for example, a holding company could be used as the applicant. If the examiner becomes aware during examination that there could be an affiliation with a person or company associated with the case then they will need to report the potential conflict.

Note that being a customer of the applicant or a related entity (such as owning a particular brand of mobile device, using a particular brand of cosmetics) does not represent a conflict of interest.

Prejudgement and perceived bias

Bias can be defined as the inclination for or against a person in a way that is considered to be unfair. Bias may result from the decision-maker’s personal associations or interests or the structure of the decision-making process.

Prejudgment is a form of bias. A prejudgment occurs where a person forms a view of a matter before considering all the relevant facts.

During examination, an examiner may face a moral or ethical dilemma given their personal beliefs. In such cases, there is the risk that these personal beliefs could lead to prejudgement of the matter. Where examiners have moral or ethical objections to the subject matter of an application then they should not examine the case. For example, a device directed to improved processing of livestock meat. An examiner who is vegan, may unfairly examine this case as it would be against their personal beliefs.

Prejudgment or perceived bias may arise in cases that have received media attention or publicity. If examiners have concerns about examining a matter that has received public scrutiny, they should consult with their supervisor.

An examiner’s use of their technical and legal expertise to assess the subject matter of the application is not prejudgement of the case. The use of these skills is an essential part of assessing an application.

Likewise issuing multiple adverse reports on an application or a subsequent divisional is not prejudgment. It is a normal part of the examination process, provided there is proper legal basis for each report.

To avoid perceptions of bias or prejudgment, examiners should address all substantive points made in the submissions in relation to the specific case.

Where an applicant raises concerns regarding prejudgment or perceived bias, examiners need to consult with their supervisor to address the issues raised.

Rule of necessity

Where the only examiner competent (on technical grounds) to examine an application is barred because of a conflict of interest, the matter should be referred to an assistant general manager to decide whether necessity requires that the examiner conduct the case despite the conflict.

Amended Reasons

Amended Reason	Date Amended
	30 May 2024

3.5.2 Conflict of interest

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Overview