Modernize IP information management now to protect your company’s assets

In a first-to-file environment, inefficiency can result in costly patent losses

In a perfect world, IP counsel focused on building their company’s intellectual property assets would have unbounded space for storing paper files, an unlimited budget and resources and an infinite amount of time for filing patents and trademarks. If they were really lucky, there would be no threat of competitors beating them to the punch…because there would be no urgency or need to change.

However, as we all know, this mythical world does not exist. Instead, our world is rapidly changing, becoming more competitive and demanding and requiring ever higher levels of productivity. Intellectual property is among the most important assets at any company, and using outdated approaches to manage patent and trademark activity is a big gamble that carries a steep price. Companies must meet rapidly changing IP ecosystems with equally dynamic and nimble systems and procedures; in this context, technology is one of inside counsels’ strongest allies.

Facing the perfect storm of IP data volume

To assess the scale of the IP information management problem, consider the tremendous volume of data that today’s IP counsel must manage. There is transactional volume that includes email, physical “snail” mail, agent and outside counsel documents and notifications from the Patent and Trademark Offices (PTOs). Each matter or case also has its own volume of files and correspondence to manage. Transactional and case/matter volume combine to create huge quantities of documents (oftentimes in paper form) that businesses need to organize, file, store, share and securely archive.

Proactive corporations face this challenge head-on by investing in technology to streamline inefficiencies. Now that executive positions are increasingly filled with people who grew up using computers, tech-savvy C-level executives will undoubtedly become the new norm. More intractable organizations that choose to ignore this storm of information, even as it pounds on their doors, are quite simply jeopardizing their IP assets and their competitive viability.

Most IP organizations are still storing patent and trademark files of record in space-consuming file cabinets. When a lawyer or staff member needs a file, someone has to physically retrieve it and bring or ship it to the requesting party. Aside from the cost of the real estate, paper-based processes carry greater risk because they require more human touches. Paper files are physically moved around, shipped from office to office (and country to country) and can easily be misplaced, lost, damaged or worse, stolen. Each human touch to a document introduces the risk of loss or damage. Consider the time companies waste trying to find documents as time that they will never recovere, time that they could have applied to more productive endeavors. If a general counsel’s briefcase containing IP files is stolen at an airport, or if a disgruntled employee leaves the company and doesn’t return a case file, the company’s IP data management strategy has failed and there is an exposure that can lead to unfortunate consequences.

Leahy-Smith rewards electronic efficiency

The Leahy-Smith America Invents Act, which was finalized on Sept. 11  (the provision will go into effect on March 16, 2013) dictates that a patent is awarded to the company that is “first to file,” and not necessarily to the company “first to invent.” This shift has sparked great debate, and it has changed the rules of the patent race, giving the competitive advantage to companies that are more efficient and organized.

Companies that know where and how to find data sooner, how to collaborate faster and how to submit applications more effectively will win in this new environment. Conversely, companies that discover brilliant ideas sooner, but that are hampered by slow-moving or paper-heavy approaches, are going to risk their advantage by being “second or last” to file. 

As the USPTO updates its filing and correspondence methods and moves them online, corporations must respond by moving in an electronic direction themselves with data management and automation. Imagine the cost of missing out on a patent because of paper-based inefficiency, a tragic waste considering all the R&D that went into developing the new invention. With Leahy-Smith, there is no silver medal for second place—if you’re not first, you’re last.

The risk and cost of the human touch

Losing out on patents is only one of the consequences of relying on outdated data management tactics. Remember that a corporate legal department is a cost center—part of the overhead. In today’s low-inflation, low-growth and low-cost environment, inside counsel is becoming a favorite target for cost-cutting.  And since patent volume tends to increase each year while the headcount for corporate counsel departments rarely increases, your lean staff must infuse efficiency at every turn simply to shoulder its previous and existing workload, let alone what’s coming next.

Consider also the potential of inaccuracy in filing that can result from human error. If prior art and documentation are in paper format and one or more of those documents are damaged, go missing or are inaccurately associated or passed over, your company could be vulnerable to a claim of inequitable conduct. Or, if several people are managing documents in different locations with different non-integrated paper or electronic files, there is a high chance that there will be a material mistake resulting from these errors, not to mention that each person is doing redundant work.

Take control with centralized electronic IP data management

Proper use of IP management technologies can go a long way toward reducing the risk resulting from the above factors. Commitment to this effort must come from the top. So the GC, chief patent counsel or vice president of IP must lead the purchasing and implementation of IP management software, even if she does not need to use the system personally on a daily basis.

Ralph Schroeder of Hyperion Research, a leading provider of technology market intelligence to the legal market, recommends that corporate legal departments and outside counsel focus on finding solutions that provide an end-to-end IP information management process that builds efficiency, quality and productivity. While companies have historically managed IP with collections of standalone tools, Hyperion has found that leading organizations are building more integrated provider management (IPM) platforms that combine critical functions. A recent Hyperion survey found that while docketing remains a core function, document management, management reporting and client collaboration are considered higher-value and higher-priority opportunities. 

As PTOs open their systems to electronic business transactions, IPM systems must also enable two-way data sharing. This includes electronic filing as well as data validation between PTO and internal dockets.

Schroeder recommends that corporate counsel define their requirements clearly prior to implementation and then strive to understand and learn the vendors’ technology thoroughly in order to receive its full benefit. Hyperion has developed a set of guiding principles for selecting and implementing IPM systems. Organizations must consider not only product functionality, but also the capabilities of their vendor partner in implementation, training and support. It is also important to understand the IPM vendor’s business viability and vision for future enhancements. These are all critical to the long-term success of the system and ultimate value to the organization.

Since there is no perfect world, corporate counsel must work hard to adapt and keep up with changes in their given environment. Electronically stored IP documents are more mobile, secure and efficient than paper. Firewalls and passwords can protect e-files, which employees can then upload, view, share and use to collaborate instantaneously. Don’t allow the past to drive your lack of future performance. Instead, be proactive, and seek out new means of automating and managing your IP. Remember that if you choose not to pursue updated systems, your competitors are probably going to be the first to file. Don’t risk being left behind—modernize now. 

Contributing Author

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James Bergeron

James Bergeron is CEO of First To File (www.firsttofile.com), an IP information management technology company based in San Mateo, California. First To File technology...

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