the case for an ip management system _final
TRANSCRIPT
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February 2009
Patent Attorneys: The Time Has
Come To Adopt an Electronic IPManagement System
Given the remarkable efficiency and knowledge managementimprovements possible with electronic patent filemanagement systems, there can be no viab le excuse foreither corporate or law firm patent attorneys not to adoptsuch systems.
By: Jackie Hutter, MS, JDIP Strategist and PrincipalThe Hutter Group LLCDecatur, GA 30033web: www.JackieHutter.comblog: www.ipAssetMaximizer.com(Used with permission)
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About Jackie Hutter
Jackie Hutter, MS, JD is a self-described "recovering patent attorney" who has joined the growing
ranks of intellectual property (IP) strategists. Jackie is founder and principal of The Hutter Group
LLC, a leading provider of IP business and investment consultation to forward-thinking
organizations that seek to maximize firm IP value. She has over 13 years’ experience counseling
corporations, universities, entrepreneurs and investment professionals in all facets of IP
protection. In 2009, Jackie was named one of the 250 top IP strategists in the world by
Intellectual Asset Management magazine, the premier periodical in the area of IP strategy. Prior
to founding The Hutter Group, Jackie was Senior Patent Counsel to Georgia-Pacific LLC, where
she had sole responsibility for Dixie® patent matters and, later, the company's chemicals
business. Before joining Georgia-Pacific, Jackie was a shareholder at the prestigious IP firm of
Needle & Rosenberg, PC (now Ballard & Spahr), where she represented multinational
companies, universities and innovators in protecting their IP to create and maximize firm assetvalue.
About Innovation Asset Group
Innovation Asset Group is a leading provider of web-based applications for advanced IP
management. Founded in 2002, IAG develops innovative solutions for the challenges companies
face in managing their intellectual property and maximizing its value. Its flagship product,
Decipher, has quickly gained a national reputation for delivering superior IP asset managementcapabilities.
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Patent Attorneys: The Time Has Come
to Adopt an Electronic IP Management System
For many years, vendors of office automation systems expended considerable effort trying toconvince corporate and law firm patent attorneys to adopt paperless file management systems by
touting the time and money savings associated with electronic files over the traditional patent file
system. However, relatively few patent attorneys have done so, instead, remaining loyal to the
traditional three-sided manila patent file folder. Until recently I was one of those patent attorneys.
Now that I have discovered the vast efficiencies and improvements possible with these electronic
systems, the question is why I remained true to this clearly outdated system of maintaining client
patent prosecution records.
In retrospect, I think I found that the heft and
history represented by the partially filled patent
file folder provided a feeling of ongoing
accomplishment, even while I was contestingyet another trivial rejection from a patent
examiner. The need for a tangible sign of my
efforts prevailed over the backaches that I
incurred from carrying multiple patent files to
work on outside of the office. However, after
being faced head-on with the administrative
inefficiencies of the traditional paper-based
patent file management systems, I am now a
convert to the undeniable benefits of electronic
patent file systems.
Put simply, given the remarkable efficiency and knowledge management improvements possible
with electronic patent file management systems, there can be no viable excuse for either
corporate or law firm patent attorneys not to adopt such systems. When viewed in the best light,
patent attorneys who decline to adopt an electronic system are doing their clients and themselves
a disservice. Viewed in the harshest light, these attorneys are unintentionally cheating their
clients out of innovative methods that improve the quality of patent legal service while reducing its
cost.
The Awakening
My awakening to the value of electronic patent file management systems occurred recently while
leading a team of patent prosecution experts for an Intellectual Asset Management (IAM)
enterprise software vendor. For this project, my team conducted a detailed time comparisonbetween a fully electronic patent file management system and a traditional paper-based system.
By assigning times to each of the administrative steps involved in eleven common patent
prosecution tasks, we discovered that use of an electronic patent file management system
markedly reduced the amount of administrative time involved. Specifically, the amount of
administrative time (as opposed to substantive legal effort) required for each task was reduced
from roughly 60 percent to as much as 85 percent, depending on the prosecution matter. These
administrative tasks represented functions such as pulling and moving files from office to office,
Given the remarkable efficiency
and knowledge management
improvements possible withelectronic patent file
management systems, there can
be no viable excuse for either
corporate or law firm patent
attorneys not to adopt such
systems.
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uploading, retrieving and saving documents into department computer databases and inefficient
communication between in-house personnel and outside counsel.
Our analysis demonstrated that for a fully staffed corporate patent department (e.g ., docket clerk,
paralegal and attorneys) that files about fifty patent applications and engages outside counsel forpatent preparation and prosecution, adoption of an electronic patent file management system can
save anywhere from $150K to $220K per year (see the Appendix). For a fully staffed corporate
patent department filing a similar number of
patents but which handles patent prosecution
matters primarily in-house, the cost savings
range from $50 to $75K per year. Because the
tasks eliminated by an electronic patent file
management system are repetitive and routine,
these savings are fully scalable to organizations
with higher or lower filing levels.
Savings through Increased Efficiency
Further cost savings will also follow from a corporate patent department’s adoption of an
electronic patent file management system because having the appropriate documents readily at
hand in electronic form greatly increases communication efficiency between patent staff and
internal business clients regarding their patent matters.
For example, while employed as a senior IP attorney at a multinational corporation, I conducted
periodic patent committee meetings with my business and R&D teams. To collect and present
the information necessary for the teams to make informed decisions, the paralegal and
administrative staff were required to spend considerable effort copying, sorting and binding
relevant patent documentation. Moreover, because the information in the thick binders stayed
static, while the relevant patent matters did not, these binders became obsolete as soon as theperiodic meetings ended. The binders therefore needed to be re-created from scratch for every
meeting. Multiply this effort over multiple businesses, each with frequently changing patent
filings, and one can see how much work was required to keep my business and R&D teams up to
date about their patent portfolios.
Had the management of my corporate IP legal department invested in an electronic patent file
management system, countless paralegal hours (and reams of paper) would have been saved by
providing the same information to my organization’s business team for review on their laptop
computers. With an electronic system, our department’s staff could have avoided the repeated
pulling of patent files to copy relevant documents and prepare binders. The time-intensive nature
of patent committee preparation alone would have justified the adoption of an electronic filing
system.
Information to the Right People at the Right Time
A further, perhaps immeasurable, benefit of electronic patent file management results from the
greatly improved access to valuable corporate patent asset information.
Adoption of an electronic patent
file management system can save
anywhere from $150K to $220K
per year.
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With traditional, paper-based patent file management systems, patent staff necessarily controls
access to patent information. Those with important business interests in a corporation’s patent
matters—that is, business and R&D teams--must first ask their patent staff for permission to
access such information. For organizations where patents are recognized as valuable corporate
assets, the requirement is like needing to ask your banker for your bank balance. For thoseresponsible for managing corporate assets, such limited access to information is unacceptable.
No More Gatekeepers
An electronic patent file management system is a critical component for those managers seeking
to better capture and protect their intellectual property. When a corporation views its patents as
assets (as opposed to legal instruments);
those responsible for managing those
assets must have ready access to relevant
information. Under traditional paper-based
patent filing systems, patent staff serves as
gatekeepers of the information for the entire
corporation. With an electronic patent file
management system, those with a need-to-
know can be granted access to the patent
information on an as-needed basis. This reduces the workload of the patent staff and improves
the engagement of others in the organization with the patent process.
Managing the Cost of Transition
Given the large cost savings, increased efficiencies, and greatly improved corporate knowledge
management possible with adoption of an electronic patent file management system, there would
seem to be little reason for corporate patent departments to retain the traditional method ofmanaging patent documentation. Of course, the task of scanning active patent files into
electronic form may seem daunting. But there are ways to minimize the entry-level cost.
First, technology makes it easier to go paperless than ever before. Most organizations already
file patent applications and other patent documents electronically. This means that most patent
documents are present in electronic form and do not need to be separately scanned into an
electronic file. In the next several months, the US Patent Office will be introducing electronic
Office Action reporting, to be followed later by electronic reporting for other official documents.
The effective elimination of paper from communications to and from the US Patent Office today
will make it easier for forward-thinking organizations to eliminate paper-based patent file
management systems. When combined with modern document management systems typically in
place at corporate and law firm settings, most organizations will be able to convert to electronic
patent file management systems today for a reasonable price and with minimal effort
To further reduce the entry-level cost, legal managers can select only currently pending
applications for entry into a new electronic patent file management system. Of course, newly
docketed matters should also be made fully electronic from their inception. Issued cases can
later be added to the system if time and resources allow. By taking a measured approach to the
adoption of an electronic patent file management system, the cost of moving from a paper-based
file management system to an all-electronic patent management system can be minimized.
When a corporation views its
patents as assets, those
responsible for managingcorporate assets must be able to
readily access relevant information.
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The Role of Outside Counsel
Corporate patent managers should expect their outside counsel to be willing to provide them with
electronic patent-related communications on a low- or no-cost basis. Corporate patent managers
should also be prepared to discuss with their outside counsel where inefficiencies can beremoved from law firm operations and
communications to reduce overall patent
procurement costs. If an outside counsel
wants to charge a client additional fees for
electronic communications, the client should
seriously consider vetting new patent counsel
who is more willing to adopt innovative
solutions. Outside counsel saves money by
communicating electronically with clients,
and it is inexcusable for them not to pass such savings onto their clients.
Conclusion: Now is the Time to Adopt an Electronic IP
Management System
Although we represent technology savvy companies, patent attorneys often are somewhat
resistant to change. This conservative nature could explain why, to date, conversion to electronic
patent file management systems has been slow. With the remarkable efficiencies and
improvements over traditional paper-based patent file management systems more and more
evident, however, there is no reason for patent attorneys not to adopt electronic patent file
management systems today.
Outside counsel saves money by
electronically communicating with
clients, and it is inexcusable for
them not to pass such savings on
to their clients.
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Appendix: Explanation of Analysis
Methodology
Eleven common and repetitive prosecution tasks were broken down into constituent tasks. These
11 tasks were selected and analyzed by a team of experienced patent attorneys and paralegals.
The team agreed that the selected tasks were representative of the most prevalent,
administrative-intensive tasks conducted by a corporation having an established patent portfolio.
The tasks analyzed were as follows:
1. Reporting and Docketing of Application Filing;
2. Receipt and Reporting of Filing Receipt;
3. Correction and Reporting of Filing Receipt;
4. Preparation and Filing of IDS;
5. Receipt, Reporting and Response to Restriction Requirement;
6. Receipt and Reporting of Notice of Publication;
7. Receipt, Response and Reporting of Office Action;
8. Receipt and Reporting of Notice of Allowance;
9. Payment of Issue Fee;
10. Filing of Divisional Application; and
11. Reporting of Patent Issuance.
The administrative tasks conducted to complete each task were broken down for a corporate law
department that includes attorney(s), paralegal(s), docketing system and secretary.
Note: The task calculations were based only on administrative-intensive matters. Any
substantive review or effort required to complete a matter would not be readily improved by
adoption of an electronic patent file management system and, as such, calculations were not
included for such matters.
One set of calculations included the steps necessary for a “mirrored” system, that is, where the
corporate law department uses outside counsel as the primary means of completion of patent
prosecution matters. This is a very common system for corporate law departments which wish to
keep internal headcount low, while pursuing a robust patent procurement strategy.
The second set of calculations is for a corporate law department that uses internal corporate
operations as the primary means of completion of patent prosecution matters. This is a common
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set up for corporate law departments that handle their own prosecution matters in-house. Such
corporate law departments could be large or small with regard to headcount. Of course, larger
departments will have larger portfolios.
Estimated cost savings are also included. These costs should be considered rough estimatesusing blended hourly rates combining attorney and paralegal work.
For outside counsel, the hourly rates were estimated to be $150 to $200. (This is a conservative
estimate; three years ago, a well-known Atlanta law firm was charging $175 an hour for an
experienced patent paralegal and $250 an hour for a junior attorney.)
For inside counsel, the hourly rates were estimated from published sources. Conservatively, the
blended hourly rate for an in-house patent department should be $100 on the low side and $130
on the high side.
Results
Significantly, adoption of an electronic patent file management system results in an approximately
75 percent reduction in the amount of administrative time associated with the 11 common
prosecution tasks analyzed for this project. The range is 68 to 84 percent for mirrored systems,
and 61 to 81 percent for corporate law departments.
Using the blended hourly rates discussed above, cost savings vary as a function of the specific
task. It is noteworthy that cost savings are highly significant for prosecution tasks requiring high
administrative effort, such as Office Action and Restriction Requirement responses. While
paperless systems provide improvements for all tasks analyzed, benefits for paperless systems
are marked for mirrored systems where the task requires much back and forth effort between
outside counsel and in-house counsel. This means that tasks for which outside counsel must
obtain input and instruction from in-house counsel are vastly more efficient with an electronic
patent management system.
A detailed version of the study, including supporting spreadsheet
calculations, is available from Innovation Asset Group at:
www.innovation-asset.com/savings
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