One of the biggest issues for companies is the breadth of IP demands that they are currently facing and the costs associated with maintaining, enforcing and exploiting IP portfolios, given limited budgets. Even large companies have budgetary constraints. This puts a cap on what they can invest in IP. They are having to consider carefully where to invest the resources that they have. But, if you can’t do everything, where do you plant your flag?

In practice, this has led to the growth of IP audits to help separate core assets from deadwood. This can be a challenge for patent-heavy industries, such as pharmaceuticals and car manufacturing. Most companies in these industries are trading worldwide, which means they face not only the cost of maintaining patent rights on a global scale, but also cases of infringement in multiple jurisdictions.

Increasingly, companies are going to have to forgo 200% protection and concentrate on what is realistically possible. There have been some helpful legal developments in this area; for example, the Madrid Protocol has helped greatly to reduce costs for registering trademarks in signatory countries. However, there is still a long way to go to achieve a similar framework for patent rights.

Even with the European Patent Convention, companies still need to sue to enforce their rights in every jurisdiction, plus register their rights as national patent rights in key countries. I strongly believe that there needs to be a greater development of international registration systems moving forward. The Patent Cooperation Treaty should also be reformed to make patent registration more cost-effective.

In pure cost terms, a Europe-wide patent would also be a good thing, as would any development which helps companies to maintain large patent portfolios more cost-effectively; however, even with such systems in place, companies still need to think about what rights they should cut given that it is no longer possible to do it all.

More focus on the practice of IP

Of course, law firms need to adapt too and cost remains a major issue here as well. I don’t believe that the UK is a grossly expensive jurisdiction in which to manage a portfolio of IP Rights, but it’s important to be flexible in light of the challenges to business. The recent judicial report on costs, in particular as it relates to the use of contingency fees, will help in this respect. Law firms need to place a greater emphasis on the use of technology to automate processes and also implement the economic staffing of cases.

The key IP challenges here aren’t necessarily related to substantive legal matters, but are also about practice management in general. There are also questions about the validity of the UK county patent court and a case for a small claims IP court that provides a cheaper way to resolve disputes between smaller companies. I sit as an arbitrator for the World Intellectual Property Organization (WIPO) and Nominet on which domain name disputes are dealt with swiftly and cheaply. This is a useful precedent.

Clive Thorne is partner at Arnold & Porter LLP

This article first appeared in IP Review, Issue 28