As Patent Counsel/Head of Patent Operations at Google, Sylvia Chen tackles the dual role of patent attorney and operations expert, both practicing patent law and overseeing budgeting, process, and procurement for the patent department.
I recently interviewed Sylvia about her intriguing position, about facing the “iron triangle” challenge, and about Google’s dedication to metrics and measurement, including their tradition of tabulating annual report cards for their outside counsel law firms.
We also discussed patent valuation, an issue I believe will become even more important in 2017 as companies thoroughly examine their patent portfolios to make decisions about which patents are paying off, and which are not. Without further ado, here’s the interview.
Elisa Cooper: As Patent Counsel/Head of Patent Operations at Google, what are your primary responsibilities?
Sylvia Chen: In my Patent Counsel role, I spend about one quarter of my time working with outside counsel prosecuting patent applications worldwide. As Head of Patent Operations, though, my role is quite different. Patent operations have a lot to do with budget and procurement.
It’s about being efficient and effective with multiple interactive parties including internal counsel, law firms, vendors, etc. Since I am a practicing patent attorney, I’m in a unique position to feel when a process or service provider is causing discomfort to me and my colleagues. I look for pain points and collect them across our holistic team, not just from our in-house attorneys and staff but also from outside counsel attorneys and paralegals. Capturing these pain points allows our team to address issues and streamline inefficient processes.
Elisa: The “Iron Triangle” shows the proportion between “good, cheap, and fast” for purchasing products and services. Can you ever get all three or must you always “pick two”?
Sylvia: I’ve never experienced an “all three” scenario. My understanding is that you can never get a full portion for all three constraints – good, cheap and fast - though the triangle can get bigger when values get higher. Still, if you push one corner positively, you’ll negatively affect at least one of the other corners.
Elisa: How has the Iron Triangle manifested at Google?
Sylvia: Google is interested in value for the money – you experience different inefficiencies if you underpay or overpay. The sweet spot lies in paying exactly the right amount so vendors, teammates, and suppliers can grow and develop along with their clients. It all comes back to quality expectations, budget, and procurement.
Patents blend technology and law – you can outsource quite a bit and find great specialists that serve as outside counsel law firms, paralegals, technical experts, and other service providers like data auditors; however, you also have to set clear guidelines so that the greater team can efficiently achieve expectations in both the legal and technology aspects of the resulting patents.
Elisa: Metrics are very hot right now. Why measure, and which metrics are truly valuable to assess?
Sylvia: Quite simply, we can get more bang for the buck with a process if we measure it. For example, by operationalizing and reporting quality measurements, we observe our vendors organically finding ways to improve quality.
On the patent measurement front, there are vanity metrics and valuable metrics. A vanity metric such as number of granted patents may provide a sense of accomplishment. However, not all patents are created equal and they don’t all have the same value for an organization.
There are different types of patents: utility, design, utility model, etc. and each produces a different type of asset. An organization can create a high number of design patents quickly to lay claim to a high number of granted patents. However, design patents, though faster to file and grant, can be less valuable for some types of companies so their ultimate value is not necessarily the same as utility patents which provide a different type of protection or financial potential for an organization. Thus, a valuable metric is a much more difficult measurement.
Elisa: How can a company determine what the value is for each patent?
Sylvia: Each patent has its own unique, yet relative, value proposition and corporations have to know themselves to estimate that patent’s value. There is rarely a blanket statement about which patents have value for a company.
For example, some companies may find that certain design patents are extremely valuable because customers purchase their products specifically for their unique and attractive appearance. Patent counsel can explore the theoretical value of the patent and ask questions to get a better idea of the value of the patent to its current owner and to non-owners. Could this patent be used as a proxy for innovation or to show innovation directly? Can it prevent others from copying your idea? Can the invention be licensed out to other companies for financial benefit? Answers to these questions, and others, contribute to the overall value of a patent to its owner.
Elisa: Google creates Annual Report Cards for its Outside Counsel Law Firms. How does this process work?
Sylvia: Once a year, Google sends each outside counsel law firm a report card with scores that we stratify by ranking: top third, middle third, bottom third. All the firms get the complete report card, which anonymously lists every firm we work with, and each firm privately receives its individual index numbers. We follow up with conversations requesting potential improvements to the report card, whether the scores held any pleasant or unpleasant surprises, and opportunities for outside counsel and inside counsel improvements. Invariably, the best firms get better and some firms are unable to climb out of the bottom tier.
We evaluate firms based on fairly structured metrics reflective of the Iron Triangle. Some criteria are more objective, like Timeliness. Other metrics are fairly subjective, but because we collect them for all firms, the results mean something. For example, we acknowledge that “legal judgment” is a subjective assessment, but if a firm consistently gets the same grade from multiple internal counsels over a sustained time period, that tells us something. Truly, all data is subjective – just like all news is subjective. You choose what to collect and what to omit.
Elisa: What is the primary benefit of the report cards?
Sylvia: We believe in transparency with our team including our external service providers. Justice Louis D. Brandeis said, “Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.” Publishing annual report cards for our law firms “lets the sunshine in” and sets a good baseline to see where our team is doing well and where opportunities to improve may exist.
It also serves as a starting point for investigations into potential root causes for both high and low ratings. We believe this recurring process allows firms with good value to succeed in a more visible way. Weaker performers receive valuable feedback so they can improve and we may find that some firms are not structured in a way that partners well with Google’s expectations.
One of my colleagues moved in-house and discovered that a law firm cumulatively billed her company $150k over many, many years on a standard mechanical patent application and no patent had yet issued. The firm violated the client’s trust. Low speed, high cost, and unsatisfactory results shouldn’t go together. If that firm had been evaluated on an annual report card, this issue would have been brought out into the open much sooner, probably saving the client a lot of money and prompting the law firm to provide truly valuable counsel to the company.
Elisa: In closing, how would you summarize the benefits of IP counsel adopting an operational mindset?
Sylvia: As clients collaborate more extensively and effectively with external experts such as firms and vendors, an operational mindset of transparency and continuous improvement serves to get more optimal results in terms of quality, cost, and quantity – good, cheap, and fast.