Incorporation by Reference: Everything you need to know
Incorporation by Reference is T=the process of making a document as part of another different document by referring to the former document in the latter. It also consists of a declaration that the former document will be considered a part of the latter document as if it was set out there.
The common practice of drafting incorporates an existing writing legal document like a contract or pleading to save space. The incorporated document, on the other hand, is usually attached to the back of legal papers. It will describe the contents briefly along with a photocopy rather than including the exact words from the existing document.
Incorporation by reference is one of the most convenient ways to incorporate the whole existing written material on the concerned topic into a pleading, contract, or other legal documents to save space. This makes the paperwork concise by letting the involved party or individual add references for previously published relevant documents into the official document.
Every clause or document incorporated by reference needs to be carefully assessed and specific as per the relevance. The Office of the Federal Register (OFR) verifies and approves these references before they can be utilized for legal purposes.
- Types of Incorporation by Reference
- Exceptions to Incorporation by Reference
- Background of Incorporation by Reference in Industries
- Challenges of Incorporation by Reference in Agencies and Firms
Types of Incorporation by Reference
In the first sort of incorporation by reference, the incorporation is based automatically from a priority claim to a prior application. If priority is claimed as of the filing date, any unintentionally omitted material from the parent application, contract, or document, can be incorporated into the new document by making amendments to the new document, contract, or application.
The other type of incorporation is purposeful incorporation, where the incorporated clause or material is added to the document to avoid having to reproduce the material in the specification. For patents, to purposefully incorporate any pre-existing material or clause, the pursuant must express the clear intent to include the document with words like "incorporate" and "reference" or directly mention incorporation by reference.
Exceptions to Incorporation by Reference
Even though incorporation by reference is standard practice for most legal documents, it conflicts with the requirements prescribed for a will by law. When it comes to wills, one needs to meet the following requirements before the document is considered legally valid:
- The referenced document that is to be incorporated must be present in hard copy at the time of referring.
- The will must include the intentions of the testator making the will to incorporate the mentioned document.
- It is also essential that the will specifically mentions the said document so that it can be specifically identified easily from the reference.
For example, if a will is a holograph, i.e., written by the testator’s hand without the presence of any witness, the attachment would be considered invalid since it may not be written by the deceased testator. Whereas, if the will is formal, such an attachment could violate the testator’s requirements.
Background of Incorporation by Reference in Industries
Incorporation by reference is mostly used by federal companies to incorporate the information, usually to include voluntary consensus standards developed by private industries into the federal regulations during rulemaking. This easy method helps reduce the amount of written material for rules that agencies publish in the Federal Register and the Code of Federal Regulations.
Individuals and parties must also note that any written material incorporated into the agency rule has the same legal validity as the text in the rulebook itself. Each of these incorporations by reference documents is thoroughly verified by the federal agency before incorporation.
Incorporation by reference is also used by government agencies for drafting contracts. However, instead of citing the whole article, these contracts include several clauses from various reference sources. The clauses may be as low as ten or go beyond 200 clauses in a single contract or legal document.
Challenges of Incorporation by Reference in Agencies and Firms
When it comes to the legal proceedings in firms and agencies, incorporation by reference works by addressing the ways in which agencies publish the various rules on conduct, production, safety measure, etc., concerning the standard practices published elsewhere.
While the procedure for incorporation specific clauses or entire documents by referencing seems simple on the outside, several issues still need to be addressed when it comes to its practical applications within the legal criteria. The major ones are mentioned below:
Sharing access to the originally referenced document
Getting access to the references for all the parties involved becomes difficult when the referenced material is subject to copyrights. Addressing the issue, the Administrative Council Recommendation of 2011 proposes ways in which companies and firms can ensure that the material mentioned by reference is available to the restricted concerned communities and other associated individuals or groups.
These recommendations help to ensure that the involved parties have allowance to update regulations that are incorporated by reference and navigate drafting difficulties, and follow other procedural requirements for the materials incorporated by reference.
Updating regulations that are specified using incorporation by reference is another major challenge. The task is challenging not only because it is difficult to make the referenced document available to all the concerned parties but also because of various regulations on the incorporation of materials for agencies.
As per the regulations of incorporation by reference, whenever the material mentioned by reference is updated in the original form, agencies are also required to go through the updated document and update their data accordingly. Updating the documents may also require mentioning a specific clause to be included or excluded while referring.
Complying with the legal procedural requirements
Drafting documents with incorporation by references needs to follow several regulations that also include taking account of the copyright and license regulations of the referenced document. Agencies must follow the detailed procedures and regulations before being allowed to incorporate any piece of material into their data by reference.
Every incorporation by reference also needs to be approved by The Office of the Federal Register (OFR). The OFR has also issued several strict rules and conditions for the same. Even the slightest error in the way the reference is made or lack of document can significantly delay the approval process.
While the gist of the section of incorporation by reference is the same for all aspects, the rules and regulations, procedural requirements, pre-requisites, etc., are not the same for different legal material such as the legislature, the rulebook for agencies, patents, etc.
Here is an article detailing more about the regulations applicable to the incorporation of documents by reference in documents for patents.
The document or clause incorporated is legally binding and must be considered when working with the document.
Even though incorporation by reference makes paperwork easier, some challenges may still arrive due to the availability of the referenced document, updates, and procedural regulations.