Abstract: For corporations that file responses to more than 500 office actions a year, finding ways to economize high-volume patent prosecution, while maintaining quality, is critical for business success. In addition to dealing with the cost pressures of high-volume patents, IP Managers must show and understand the business value of their patents for business growth. In part one of this two-part series, we examine the drivers for high volume prosecution and provide some best practices for high-volume patent prosecution.
Drivers for high-volume prosecution: Cost, quality and control
“Efficiency is doing things right; effectiveness is doing the right things.” This quote Peter Drucker, the father of modern business management, holds two essential truths for high-volume patent prosecution: IP managers must do the right things, and do them right, in order to manage high volume patent prosecution efficiently and effectively. Maintaining cost, quality, and visibility into the patent portfolio are all critical for business success.
Often, IP Managers are asked how their patent portfolios facilitates business growth. The answer to this question lies in the business objective of any patent portfolio. The business objective informs which patents are needed, why such patents are needed, and which patents can be leveraged for monetization via licensing or sale.
This leads to the need to have complete visibility about the patents at each stage of patent lifecycle, particularly during different stages of patent prosecution. Frequently, the focus of a patent application deviates during patent prosecution from what was envisioned when the patent application was filed. Often, the portfolio owners themselves do not have clarity on the patents at each stage. Visibility is important not only to provide important and timely information to other stakeholders, but also to the portfolio owner themselves.
Finally, cost and efficiency are obvious drivers for high-volume patent prosecution. The cost of attorney time for patent prosecution is especially high in United States and Europe, two of the main geographies for patent filings. Another factor for cost control is the number of rounds of prosecution. As the application goes into multiple rounds of prosecution, patent office fees for examining the application increase and attorney fees will have to be paid for each round. Companies need visibility into and control over the patent portfolio. This allows them to control costs, such as limiting the rounds of prosecution for low value patents.
Traditional practices for high-volume patent prosecution
For most corporations dealing with high-volume patent prosecution, the traditional solution has been to outsource the work to multiple law firms. As we mentioned above, corporations may divide patents belonging to a particular patent portfolio between multiple law firms. Their goal is to reduce costs and handle the workload involved for high-volume patent prosecution. This is especially the case if the patent portfolio has a large number of patents. In these situations, some law firms only handle prosecution for very small fraction of the patent portfolio.
Effectively managing low value patents is particularly important for high-volume prosecution. Corporations may be willing to make larger investments and want more direct involvement in each prosecution stage for patents they consider to be high value. Meanwhile, IP Managers may outsource the low value patents to mid-level or low-level law firms for those firms to manage prosecution. Sometimes there are more low-value patents in a portfolio than high-value patents, which means that even though these patents may be considered low-value, it is still critically important to have insights into these patents.
Several problems arise when corporations divide high-volume patent prosecution between multiple law firms. As the number of law firms handling patent prosecution of a patent portfolio increases, it becomes difficult for IP managers to have complete visibility into the portfolio and to ensure that each patent remains focused on the envisioned objective. With a lack of visibility and coordination in the patent lifecycle, quality control for the overall patent portfolio becomes challenging.
Some corporations have internal corporate counsel manage the prosecution. However, in this model, attorneys are unlikely to have the capacity to handle high-volume prosecution. The time required for in-house attorneys to manage hundreds of office actions isn’t sustainable.
Best practices for high-volume patent prosecution
If outsourcing patent prosecution to multiple law firms risks quality control- and yet managing the vast numbers of patents in-house isn’t realistic- how should corporations manage their patent portfolios? We recommend the following best practices that can help maintain cost, quality and visibility into the patent lifecycle.
- Consolidate law firms effectively: Part of the solution lies in reducing the number of law firms handling the patent prosecution and consolidating the handling of the patent prosecution work. The consolidation provides IP Managers with more visibility into how a patent portfolio is developing. In addition, patent prosecution strategies can be integrated with patent licensing strategies, resulting in stricter quality control of each patent in the portfolio. This also keeps prosecution costs under control.
- Find unconventional ways to handle patent prosecution: Consolidating law firms is an important step. However, corporations still need the capability to manage large volume patent prosecution. It’s important to consider some unconventional ways to handle patent prosecution. For example, having technical experts take on a larger role by performing both the technical analysis and preparing office action drafts can add efficiency while maintaining quality. The attorney then reviews the response from a legal perspective. We will share more details about this in a second blog post.
- Employ digital knowledge management tools: Another important best practice is to utilize digital and knowledge management tools. A combination of various knowledge management practices can support can help build a strong IP portfolio with a high monetary value. A previous blog post, (Digital and Knowledge management for patent preparation and prosecution: How it might impact patent portfolio quality in the technology sector) describes more about how to use these powerful tools to make patent prosecution more efficient and effective.
- Ensure the quality and efficiency of Office Actions (OA): For any robust patent prosecution model capable of handling large volumes, the two most important requirements are to ensure quality and efficiency handling Office Action (OA) responses. Efficient OA response systems are especially important in regions with high legal costs, such as in Europe and the United States. To ensure quality OA responses, attorneys must spend sufficient time and effort at each step of drafting the OA response. Most corporations would prefer attorney’s undivided attention to ensure the quality of their patent applications since a large portion of their fees is paid to the attorneys to obtain the patent protection. From the attorney’s perspective, there is a limitation on the number of office action responses that one attorney can handle in a given amount of time. When managing a large volume of OA cases, attorneys’ efficiency is an important factor.
This brings up the critical question: when attorneys are given more OA cases to control, how can they maintain efficiency without compromising quality? As we quoted Peter Drucker at the start, “Efficiency is doing things right; effectiveness is doing the right things.” In part two of this blog series, we will go into more detail, explaining how to increase efficiency in high-volume prosecution environments by breaking down the office action response into a series of patent prosecution steps to streamline high-volume patent prosecution.
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