IP education needed to battle the budget squeeze

Tight budgets in innovation-rich companies are having an adverse effect on IP spending, a new study has revealed. Conducted by leading IP services company CPA Global – in association with IP Review magazine – the State of the Industry survey shows that more than a third (37%) of in-house IP professionals are planning to spend less on protecting their intangible assets in 2009 than they did in 2008.

The economic downturn is largely to blame with 51.9% of corporate respondents saying the credit crunch is having a detrimental effect on their IP strategies. Law firms express an even more pessimistic view, with 67.8% saying that the credit crunch is having a negative impact on their clients’ IP strategies and, by association, their own workloads.

More than half of the in-house IP professionals surveyed (52%) indicate that they are reducing spend on outside counsel in 2009 compared with 2008, prompting law firms to highlight educating clients on the value of their IP assets as critical to safeguarding revenue streams. They say this would help ensure clients made ‘rational decisions’ instead of ‘panicked ones’.

In-house IP professionals face similar challenges. The survey highlights their need to educate board-level executives on the value of creating a streamlined patent portfolio rather than accruing a collection of ‘trivial patents’.

Commenting on the relationship between corporations and legal staff, one attorney who took part advised: ‘More companies need to hire attorneys from the beginning instead of messing things up trying to file stuff themselves.’ Another, meanwhile, questioned the corporate perspective on IP during the recession, saying: ‘Clients need to carefully consider the value of their IP and prioritise their spending to get the most out of it.’

CPA Global’s Legal Process Outsourcing (LPO) Solicitor, Inderpal Lall, said it was ‘worrying’ that 37% of in-house professionals were spending less on IP Rights protection, adding that the consequences could be costly. ‘Law firms are right to react to this by placing a high priority on educating their clients on the value of keeping their IP portfolios healthy; especially during a time of financial difficulty,’ he said.

Lall’s concern was echoed by John Pryor, CPA Global’s Vice President for Patent Portfolio Optimisation. ‘The results of our State of the Industry survey have demonstrated a clear need for the IP profession to raise awareness of the value of a healthy IP portfolio,’ Pryor said. ‘The global recession has shown that law firm clients and corporate boards can often make knee-jerk reactions to safeguard their assets and control costs, but this can be dangerous.’

Pryor stressed that IP portfolios should receive ongoing scrutiny and maintenance in order to bring value to the companies controlling them. ‘Only through a regular and thorough auditing of an IP portfolio,’ he said, ‘can you reveal the true value of an organisation’s IP and provide an informed basis on which to make decisions. However, many companies do not currently have that discipline when it comes to assessing the value of their IP assets, and don’t always appreciate how proactive IP portfolio management can benefit them.’

When asked how they planned to overcome the industry challenges they’d identified, some corporate respondents spoke of the need to consolidate their IP portfolios through ‘aggressive auditing’. Many said that they were reviewing options for certain outsourced services, taking more work in-house in order to save costs or working with outside counsel on discounts to IP services and disbursements. Meanwhile, law firm respondents suggested discounts, alternative billing and outsourcing of routine tasks to specialist LPO providers as some of the methods they may employ to retain clients and save money in the coming months.

Now celebrating its 40th year, CPA Global is one of the world’s foremost providers of outsourced IP management and legal support services, with clients in over 100 countries. A full analysis of the State of the Industry survey will be available from Monday 25 May. For a copy of the report, please email Rob Coveney at CPA Global on rcoveney@cpaglobal.com.