Intellectual property neglected as organisations continue to cut legal spend
- Concern over IP assets as budgets are cut
- But cost reductions have helped to streamline practices and processes
- Europe cited as a problem area for difficulties in securing rights on ‘new technologies’
In-house and private practice IP professionals remain united in their concern over the impact of budget cuts and slowing markets on IP assets and future competitiveness, findings from CPA Global’s second annual State of the IP Industry Survey have revealed.
Despite signs of economic recovery, nearly three quarters of the IP professionals who responded to the survey* indicated that reducing spend on their or their clients’ intellectual assets has been a priority over the past 12 months. Among in-house IP practitioners, 71% regard IP budget control as very important, while 40% say their restricted budgets make the proper management of IP assets difficult.
Respondents were more positive about the evolution of IP practices and processes - such as rights renewals, IP searches and data verification - over the past 12 months; identifying the credit crunch as the impetus the industry needed to develop more streamlined alternatives to old ways of working.
This optimism also extended to national and government levels with many respondents citing new leadership in the European Patent Office (EPO) and the US Patent and Trademark Office (USPTO) as key drivers of change. That said, concern about cumbersome legislation, inconsistent case law and discordant national systems across the world was prominent.
A myriad of global IP challenges
More than half of in-house IP departments (55%) and over a third of IP law firms (34%) surveyed label the Asia Pacific region the most challenging to deal with. Respondents commented that governments in the region need to take greater action to enforce rights, prevent piracy and reduce the cost of maintaining IP portfolios in the region, and China was cited as a particularly problematic jurisdiction.
“Companies need to be aware of the potential dangers associated with releasing proprietary information in China, even under confidentiality arrangements,” summed up one respondent.
But regions with less developed IP processes weren’t the only ones to come under criticism. Continental Europe and Scandinavia were also highlighted by some as problem areas, where respondents indicated that it was difficult to “secure rights on technologies of emerging importance, as the Europeans have taken a narrow view of the patentability of newer computer-implemented method inventions”. Additionally, the patchwork quilt of the European Union, where differing policies and regulations among member states continues to cause concern for respondents, making broad IP penetration a halting and uncertain process.
Filing and maintaining IP Rights in North America was also noted to have provided IP professionals with increasing frustration over the past year, as the “cost and intensity of litigation” continues to increase and the “backlog of cases at the USPTO result in significant pendency periods”.
The future of the IP industry
When asked for their predictions on how the global IP landscape will develop over the next five years, respondents to the State of the IP Industry Survey 2010 agreed that the recent recession is likely to have a significant and lasting knock-on effect on the industry. In-house IP professionals noted that reductions in research and development spend will lead to a decrease in innovation and consequently the number of IP Rights being filed. While law firm based respondents agreed with this sentiment, they indicated that it would become more difficult to provide the depth of advice required by clients if in-house IP budgets continued to be cut.
However, some respondents were more positive about the future, suggesting that as IP portfolios are forced to become more streamlined and cost-effective, businesses and their external counsel will find new ways to monetise their IP. Results of the Survey show that nearly three quarters of companies with IP assets review their portfolios at least once a year, 39% conduct IP audits at least twice annually and ten per cent appraise their portfolios monthly.
Simon Webster, Director of Operations at CPA Global, said: “The past 12 months have been challenging for the whole global economy, leading to severe budget cuts affecting IP protection across the world. This has made it more important than ever for companies to manage their IP portfolios in a streamlined and cost effective way so that they can then find new approaches to derive value from their IP. It is a positive sign that the State of the IP Industry Survey 2010 shows organisations to be taking an increasingly proactive approach to managing and monetising the rights they hold.”
IP monetisation and portfolio auditing will likely assume greater importance in the coming years, as companies contemplate how best to position and protect their assets. Law firm respondents maintain they are still educating clients on the singular importance of IP assets to business, and pushing clients to undertake audits, protect core assets, and sell or let lapse assets that are no longer needed.
Key influences on the past year
Respondents to the Survey frequently cited David Kappos, the Undersecretary for Commerce and Director of the United States Patent and Trademark Office (USPTO) as the person who has influenced the IP industry most significantly over the past year, having ‘advocated much-needed changes at USPTO with the business background and reputation to back up those changes’. When respondents were asked what were the most noteworthy cases of the past year, Bliski and KSR v Teleflex (both US) were both cited, the former for the impact it is likely to have on software and business method patents and the latter for its effect on interpretations of ‘obviousness’ in patent viability claims.
For further information and a copy of CPA Global’s State of the IP Industry Survey 2010 report, please contact:
CPA Global
Steve Clark +44 (0)20 7549 5504, sclark@cpaglobal.com
Rob Coveney +44 (0)20 7549 5505, rcoveney@cpaglobal.com
*About CPA Global’s 2010 State of the IP Industry Survey
The State of the IP Industry Survey was carried out in March and April 2010. The results were collated from 242 responses from around the world – 68.6% from in-house counsel (166 respondents) and 31.4% from private practice (76 responses).
About CPA Global
CPA Global is the world's leading provider of legal services outsourcing, including intellectual property (IP), document review, transaction support, contract solutions, and legal research. With offices across Europe, the United States, Asia and the Pacific, CPA Global supports many of the world’s best known corporations and law firms with a diverse set of legal and IP specific requirements.
CPA Global helps its clients manage their valuable IP Rights, such as patents, designs and trademarks, ensuring that IP portfolios are protected, maintained and regularly reviewed in order to maximise value.
Founded in Jersey, Channel Islands in 1969, CPA Global today employs around 1500 people in 15 offices in ten countries, serving clients’ needs in over 100 countries. The company has a large and diverse list of clients: from major global corporations to small and medium-sized enterprises and innovation start-ups; and from the top international law firms to national and regional law and IP firms. Clients include leading Fortune 500 and FTSE companies, and two-thirds of the Global Lawyer 100.
CPA Global’s leadership position is underlined by its ranking as the world’s top intellectual property outsourcing provider and its second place overall for core legal services outsourcing in the Brown-Wilson Group’s Black Book of Outsourcing 2009. CPA Global also achieved more first place ‘quality’ ratings in this prestigious industry survey than any other provider. This follows CPA Global’s success in the International Association of Outsourcing Professionals 2010 Global Outsourcing 100 list, in which it achieved the highest position of any pure-play legal services outsourcing provider.
For more information, visit: www.cpaglobal.com
