Patent advisers pressured by in-house strategy changes

Companies are increasingly demanding their in-house counsel create more integrated, well-organised and cost-effective patent strategies. And according to in-house sources, that shift in expectation has translated to pressure on external lawyers.

Eight corporate lawyers from patent-focused businesses tell Managing IP that the three main attributes they expect from their patent law firms are a more considered approach to their legal service, better communication and improved value for money.

Perhaps the most important aspect that in-house lawyers look for in their external counsel is value for money. Like any corporate department, patent legal teams need to justify their budgets, and the best way to do that is by demonstrating that they can get considerable return on investment.

That need has become more pressing in recent years, according to the head of IP in the commercial arm of a UK university. This is because patent budgets have not risen but business leaders increasingly want to see more done with similar expenditure. He says that this appears to be a trend within IP departments broadly, which is perhaps spurred by increased efficiency expectations because of advancements in technology.

A European patent attorney at a Swiss confectionery manufacturer adds that cost efficiency is a big driver for his department and that the company is developing mechanisms to better monitor patent expenditure, including on external counsel.

The UK university head of IP explains that such pressures are forcing in-house counsel to consider whether to bring patenting functions in-house that they previously outsourced. But if private practice lawyers could find ways to deliver such services for less or in a more efficient manner, he adds, that argument could be negated.

The assistant general counsel at a global generics drug manufacturer tells Managing IP that ensuring value for money, for his business, is largely about making sure resources are not wasted.

“Value for money does not necessarily mean cheap, but if you’re going to pay a lot of money that you’re going to have to persuade management is worth spending for these patent-related services, you want to know it is not being wasted on unnecessary activities,” he explains.

“You need to know the money is not being spent on training people who are uninformed, or letting people learn on the job. There are some great counsel out there but there is also a lot being done by lawyers who think they know everything but have failed to do a basic commercial feel around.”

The vice-president of IP at a global technology manufacturer adds that his company has a unitary rate for lawyer fees by jurisdiction and so does not want them to compete on cost but instead on quality and speed of service.

A business will only feel that a lawyer has achieved value for money if he or she has tailored the service to the business. A one-size-fits-all patent strategy simply does not work.

Nicolas Gambini, CEO of autonomous underwater drone maker Notilo Plus, tells Managing IP that he looks for counsel that can appreciate the budgetary limitations of a small tech start-up and work to adapt to those constraints.

“Good counsel can adapt to the client’s constraints,” he says. “Sometimes they want to discuss the legal parts of a big contract and it takes months, and a start-up cannot afford this. We make our counsel aware of such things and it is important that they adapt their service to give us the best possible protection.”

He adds that similarly counsel should not necessarily advise SME or start-up clients to patent everything, and should instead work with the company to help it identify which patents are vital and need to be protected and which are less important and could be protected by other means, such as trade secrets.

Katherine Anastasi, head of innovations at medical research charity The Wellcome Trust, agrees that a tailored approach from external IP counsel is important, and adds that medical charities that fund a broad range of activities, as another example, tend to need a one-stop shop.

“We fund a broad range of activities and need a one-stop shop for external counsel,” she says. “So we need people with a global reach and experience on lots of different types of product. 

“In our area a lot of the stuff is not terribly commercial, so it might be a slightly different challenge to some of the standard medical developments that are not philanthropically funded.”

She adds that counsel must be cost efficient, because a non-commercial entity such as a charity like The Wellcome Trust must be conscious of how it is spending its money - and pragmatic as a result.

A tailored approach is also important for a company undergoing big change. European seed companies, for example, have significantly altered their IP strategies over the past five years because of technological developments that have enabled more of their innovations to be patented.

The IP research manager of a Netherlands-based seeds company tells Managing IP that external counsel should be able to adapt to these changes and should be prepared to review business activities and suggest new strategies for activities such as licensing and litigation. He adds that there is not a formal culture in his industry and the counsel he works with should recognise that.

But perhaps the most important aspect of a more considered approach to patent strategies, according to most of the in-house people Managing IP spoke to, is ensuring that the right people with the right knowledge are put forward for the job.

The vice-president of IP at a global technology manufacturer says that his external counsel has to have a good knowledge of semiconductors so that they can understand what the company is looking to achieve. Similarly to Anastasi, the manager of the European arm of a Japan-based chemicals company says he needs private practice lawyers to know about the broad range of products that his company manufacturers to give him the best possible service. 

He adds that if counsel do not know the firm’s competitors, channels of trade, or how it markets products, they cannot give the best advice.

The best way for private practice lawyers to get to know the business and learn how to tailor their patent services, according to in-house counsel, is with good communication.

“I’m not going to check everything that our external counsel gives us; I have to rely on them,” says the seeds company IP research manager. “They should know what I need to know and that is not something you can take for granted – you must invest in the relationship and with the people doing the work.”

He expects frequent interaction with counsel for that reason, and even more so when it comes quick-changing elements of a patent strategy, such as litigation proceedings.

The global technology manufacturer IP VP agrees and adds that he expects to develop strong and long-lasting working relationship with his external lawyers, and that can only be achieved with regular interaction through visits, phone calls and meetings.

Some companies may also want external counsel to act as a source of IP knowledge for other parts of the business. Rodolfo Rosini, partner at AI company Zeroth.ai, says the best IP lawyers he has worked with are those that have been able to interact with engineers in their terms to help them understand how IP works and what processes they should follow to protect the business’s inventions.

Pressure on corporate patent counsel to achieve more for less will likely increase as technology advances, and pressure on external counsel to do the same will follow suit. The trick for external counsel to get ahead of that, it seems, is for them to spend more time talking to clients to determine where they can add value to their overall patent strategy and ensuring they represent the best value for money.