The Importance of IP Relationship Management

One of the most essential elements in supporting a global intellectual property (IP) portfolio is the network of IP agents and associates spanning the globe that represent and advise you and your organization – locally within each individual jurisdiction – on various patent and trademark matters.

There are IP agents and associates capable of handling parts or all of the IP-related activities of a company or organization. Their capabilities include analysis of the novelty and patentability of an idea, drafting the application, filing, prosecution and translation work.

However, despite the critical importance of a global IP agent network, many organizations do not invest much time or effort into pro actively managing their IP agents and associates. Yet, implementing an IP agent management strategy can deliver many benefits both to your organization and the integrity of your IP assets.

Working relationships as quality drivers

Various business models may be used to define the arrangement that a company has with its patent agency. One model is outsourcing – that is, transferring an activity to an external party. It may be external temporary labor, in which the company is buying a short-term external workforce. Or it may be subcontracting – a specific sub-stream of which is service provision. This is the purchase of a pre-defined end service from a provider, according to certain service level specifications. Service provision is the most common model when it comes to IP agents and associates.

Creating strong working relationships and establishing protocol with the right IP agents can help drive crucial factors such as portfolio quality, cost management and operational efficiency. Those relationships can also help to overcome the challenges associated with IP-agent management.

No two IP agents are the same. They will vary in terms of their responsiveness and timeliness; the levels of advice and recommendation they are willing to offer their clients; the strength of their dedication; the communication channels they utilize; their proactive behavior; and their pricing models. They will also vary in their invoice-handling processes; the legal, IP and technical skills of their personnel; their knowledge and insights into very specific IP matters; and the manner in which they assign individuals or teams to specific clients.

Building sound working relationships means establishing and enforcing defined and agreed service levels. It involves managing the tension between quality and cost, agreeing on clear quality guidelines, and negotiating pricing models in a climate where more and more companies are pushing for flat fees. An effective relationship requires the implementation of robust lines of communication, information-sharing strategies and agreed workflow processes. It means tackling the selection of IP agents and associates in some very challenging jurisdictions. It may also require a consolidation of your IP-agent network, and an evaluation of an IP firm’s skill set relative to your needs. Above all, it means measuring quality within your IP-agent network.

Harnessing efficiency

There can be many reasons for wanting to improve an IP-agent network. They may be cost related, such as a lack of cost control; a lack of knowledge about what budget is actually spent; concerns about increasing costs; an inability to foresee costs and budget accurately; a lack of information regarding the correctness of official fees charged; concerns about currency risk and how agents protect themselves – or simply an unwillingness on the part of an IP agent to conduct fee negotiations. They may also be quality related – such as poor work by the IP agent; a lack of quality standards; low consistency; a lack of quality control – or even no real understanding of what quality means.

Other reasons for wanting to improve an IP-agent network may arise from having too many, or not enough, IP agents in some jurisdictions. A company may find itself with too many agents as a result of acquiring new trademark or patent portfolios during mergers and acquisitions. Alternatively, it may not have enough IP agents when it moves into a new market. There may also be a lack of client-specific knowledge, in terms of IP agents not understanding or appreciating a client’s business, corporate strategy and/or technology.

Communication is key. The company must be willing to share information across its IP-agent network in such areas as IP strategy, financial targets, operational changes, and products and services. Having a feedback mechanism in place is also most important.

For any company embarking on improving its IP-agent network, the typical phases of such a project are:

•    Current-state analysis;
•    Agreement on the overall change- project plan with key milestone dates, covering – for example – the definition of the project phases; timescales for each phase; the deliverables; roles and responsibilities and the associated costs;
•    Creation of materials that will allow a formal audit of IP agents to be conducted, with this material covering areas such as IP-agent general criteria; trademark quality; trademark cost; patent quality and patent cost;
•    Distributing the audit material; compiling the data; sense-checking the results and re-contacting some IP agents for clarification where needed;
•    Simple and complex analysis of the data;
•    Drawing up recommendations for IP agents;
•    Negotiating and concluding Service Level Agreements (SLAs);
•    Possibly switching cases and representation;
•    Ongoing monitoring of quality and costs.

Reality checks

There are great benefits to be gained from well-conducted and professional IP-agent management projects. Clients may gain a firm understanding of benchmark data regarding IP-agent costs and quality. Clients may come to realize that not all IP agents are equal and that some of theirs are not ‘best in class’ – either in costs or quality, or both. Clients may manage to reduce the size of their IP-agent network, and may succeed in introducing new billing procedures based upon standardized cost blocks (with fixed fees per defined cost block).

Through new billing procedures, clients may achieve a reduction in costs, optimization of budgeting and simplified cost control. They may also improve quality management, via the implementation of quality guidelines, and may put more formal supplier-management practices in place – for example, through SLAs. Last but not least, the data from such projects creates the conditions for in-depth client-IP agent discussion about quality and costs.

Long term, the goal is to have an optimized number of IP agents and associates that are managed in a unified way. In order to ensure that you are developing these relationships, you should put some fundamental elements in place. Professional agreements are essential. The work flow between your company and its IP-agent network requires proper management – and cost and quality controls must also be in place.

Having that written agreement helps to clarify the division of responsibilities. Such formal agreements may govern the entire relationship, or can just be case specific. The choice here will be influenced by the volume of work, the regularity or irregularity of assignments and the criticality of the relevant IP agent, including their geographical location and capabilities.

Donal O’Connell is former director of IP at Nokia, and is currently an IPEG consultant
Sabine Baum is Trademark Attorney and Subject Matter Expert at IP management and legal services outsourcing company CPA Global

This article first appeared at CPA Global New Legal Review Blog