Founded in 1975 and headquartered in Redmond, Washington, Microsoft is the worldwide leader in developing, manufacturing, licensing and supporting a wide range of software, services and solutions for computing devices. Known best for its Windows operating system, Microsoft Office suite of business software and the Xbox gaming console, the company’s patent portfolio includes more than 75,000 matters.
IP OUTSOURCING SERVICES USED
- Proofreading and Certificates of Correction
- Patent Research and Analytics
- Paralegal and administrative support
- First level helpdesk for inventors and outside counsel questions
- Increase portfolio size and protection within a fixed budge
- Build a team of prior art researchers to provide novelty, freedom to operate, invalidity and infringement searches to support activity across the IP lifecycle
- Identify and implement improvements in US and international filing and prosecution processes
- Offload repetitive and time-consuming administrative tasks
- Optimize the impact and value of in-house resources and Microsoft’s outside counsel
- Seamlessly integrate outsourcing processes into Microsoft IP management workflows
- Significant IP management cost savings
- Streamlined workflows and processes
- Increased operational efficiency
- Opportunity for in-house IP staff and outside counsel to be more impactful
At its peak, the company was filing more than 3,000 original new cases annually in the United States alone. Although patent application volume has lessened in recent years, the scale of filings is still significant, and the impact of the wave of increased filings that began in 2003 is still being felt within Microsoft’s in-house IP department.
One of the key challenges for Microsoft has been to build processes for managing these increased workloads while reducing and controlling the costs associated with both the filing of new patent applications and the future management of those assets.
As the portfolio grew, it quickly became apparent that Microsoft not only had to find ways of working more efficiently, it also had to develop better processes for creating value from the patent assets it developed. With Microsoft’s in-house IP department assuming the responsibility for these strategic and business-critical tasks, the company needed to find a solution for alleviating the additional administrative, technical and paralegal pressures.
Develop an outsourcing strategy based on continual process improvement
In concert with its decision to implement an outsourcing strategy, Microsoft initiated a three-part review of its IP management processes.
FIRST, the company examined all the contributions made by its in-house team of paralegals, analysts and attorneys with the goal of identifying tasks that only those full-time Microsoft employees could perform, and removing all other tasks that could be performed externally with greater efficiency.
SECOND, in conjunction with CPA Global, the company analysed each business process for improvement opportunities, performing a series of what the company refers to as “rapid events” — week-long deep dives into specific workflows during which the whole team collaborates to identify more effective working practices.
FINALLY, Microsoft reviewed the contributions of their outside counsel, again seeking more time to focus on tasks that they were uniquely positioned to handle, and removing other tasks such as more repetitive administrative and paralegal tasks. The deep dives specifically highlighted inefficiencies in how Microsoft tasked people in different roles with preparing responses to outstanding office actions within the United States.
Previously, an in-house attorney would be notified that an office action response was due and that the firm’s outside counsel had prepared a draft amendment. To review the matter and provide feedback, the in-house attorney would locate and open the draft response, the office action and the prior art documents, all of which might have been stored in different locations and in different formats.
During the process discussions, the team suggested the idea of creating a hosted SharePoint site where all the relevant information could be stored in one place. CPA Global’s paralegals in India now prepare all the documentation, compile the information and then post it to the site.
The new process enables Microsoft’s attorneys to easily see when a matter is ready for review and to obtain a high-level view of all supporting documentation. In addition to saving a significant amount of time per matter, the new SharePoint solution makes the document review process much more convenient, efficient and enjoyable for the in-house attorneys.
Representatives from Microsoft flew to India to work with CPA Global in developing an IP administration and paralegal support process strategy that could be integrated into the outsourcing team’s quality management system. This gave Microsoft the opportunity to build a brand-new process that was aligned more closely with the company’s business objectives and internal reporting needs.
No longer relying on the information provided by many different outside counsels, the CPA Global team receives a PAIR report and uses that USPTO data to build and manage the docket. The team then uses the PAIR report to double check that all actions have been received and recorded by the USPTO.
In addition to streamlining many administrative processes, the IP support model also delivers significant cost savings by centralizing the technical search and review work. This change in workflow now enables the company’s virtual legal counsel to focus on higher-value legal work while CPA Global’s team of highly qualified engineers delivers complex search solutions at a fraction of the cost.
Like many companies, Microsoft decided to test the waters with some relatively straightforward and low-risk tasks before making a full-scale commitment. Starting out as a team of four patent engineers working on a pilot program in 2005, Microsoft’s dedicated support team has grown in size to more than 100 people working across three key competencies: a paralegal function, an “extended team” function consisting of searchers and analysts, and a prosecution support team.
Providing a steady flow of opportunities and challenges is a key component of Microsoft’s IP support strategy. Combining the CPA Global team’s existing search capabilities and technical skills with specific training to help apply the correct perspective for patent search, Microsoft and CPA Global developed a process for undertaking preliminary patentability searches in all its patent cases.
Once the support team demonstrated a solid understanding of Microsoft’s patent research requirements, Microsoft provided further training that would enable the team to gain a deeper understanding of how prior art is applied to a patent claim, and to develop the knowledge base to analyse portfolios and individual cases for validity and infringement studies.
In addition to delivering on Microsoft’s goal of maximizing the impact of everyone involved in managing the company’s IP, the IP support program has also yielded significant financial benefits in the form of an estimated $15 million in annual savings. As a result, CPA Global and Microsoft will continue to explore opportunities to improve the operational model and identify more cost-efficient ways of doing business.
HOW MICROSOFT STRUCTURES ITS CPA GLOBAL IP SUPPORT TEAM
Progressive skills stack provides continual opportunities for growth
Microsoft’s IP Support Team in India consists of more than 100 people working across three distinct divisions — Paralegal, Extended and Prosecution — with each requiring progressively more detailed education, knowledge and legal training. The organizational structure rewards hard work and provides a steady flow of opportunities for promotion and personal growth — two keys to ensuring that valuable skilled employees stay with the company.
Initially tasked with proofreading and Certificates of Correction, the Paralegal Team quickly progressed to more advanced paralegal tasks and technical administrative work. Over the years, the team has evolved into a comprehensive paralegal support resource. For example, when Microsoft noticed that its in-house paralegals had to deal with numerous telephone calls and emails regarding its patent incentive program, the company decided to outsource the tasks to the CPA Global Paralegal Team, which now handles all inquiries except those that require proprietary knowledge.
Comprised of six different teams that align with a specific Microsoft Legal and Corporate Affairs Team, members of the Extended Team are chosen based on their familiarity with a particular technology domain and include a mix of junior and senior people to handle all kinds of projects. This model gives the Microsoft attorneys direct access to the engineers who work on their projects. The Extended Team initially performed preliminary patentability searches. Once the team demonstrated its competencies in the core set of patent law concepts, the team moved to the next level of analysis. The Extended Team now has a deep understanding of how prior art is applied to a claim as well as the skill set to analyse portfolios and individual cases for either validity or infringement studies.
The most recent addition is the Prosecution Team, comprised of people with a strong education, a deep background in technology and a strong desire to expand their skills and knowledge base. The team started out performing amendment drafting before progressing to preparing responses to office actions, analysing prior art and drafting amendments in conjunction with Microsoft’s outside counsel. In the future, Microsoft also plans to use the group to handle several elements of the patent drafting process. The Prosecution Team is especially valuable in helping outside counsel be more impactful.
A WINNING PARTNERSHIP
John Weresh, General Manager, Patent Operations, for the Intellectual Property Group at Microsoft, discusses their successful outsourcing partnership with CPA Global.
Q: What is Microsoft’s vendor partner philosophy?
JW: We believe that outsourcing is very much a two-way process and that it’s a long-term commitment. You can’t just throw projects over the wall to an outsourcing partner and hope for the best. Outsourcing should be an integral component of a company’s overall IP management strategy. There should be an alignment of cultures between the company and its outsourcing partner, who should feel like a true extension of the in-house team.
Q: Can you summarize what makes a successful IP support service strategy?
JW: Continual exploration of process- improvement opportunities is the foundation of a successful outsourcing program. And that’s a three-part strategy. At Microsoft, we analyse our internal processes and individual workflows to ensure that each person is contributing in the most impactful way that they are able to.
We then look at areas where we believe our outsourcing team could have a greater impact than our in-house team. Our goal is to ensure that everybody who contributes to our IP management does so in the most efficient and impactful way given their location and competencies.
Q: Please give us an example of the process- improvement sessions?
JW: In addition to performing internal workflow reviews and rapid events to highlight improvement opportunities, we occasionally will go through the same exercise with vendors. For example, we recently sat down with an IP law firm that manages a significant amount of our patent drafting and prosecution work. Together, we uncovered inefficiencies in our existing workflows that included them, e.g., in how prior art from preliminary patentability searches was submitted to the USPTO.
Realizing that it was inefficient to have our outside counsel’s paralegals copying prior art information from CPA Global’s search reports into official office forms, we worked with CPA Global to create an automated tool that extracts the metadata associated with the prior art and populates the official form, which is then sent directly to the counsel.
Q: How do you handle export control requirements with the CPA Global team in India?
JW: Our internal audit team monitors compliance with our export control team in the United States. Export control is becoming an increasingly complex problem, and it is something that we absolutely need to monitor internally. When we determine that an invention disclosure cannot be exported, we use separate processes to keep that information within the United States until the case is filed and has received a foreign filing license.
Q: What advice would you give to other companies that are thinking of engaging a new vendor partner?
JW: I would say that although there are certain things you can learn from Microsoft’s outsourcing philosophy and strategy, it’s important to build slowly and pursue impact as well as financial savings. It is also very important to find a partner that is invested in developing expertise in your patent space. It is the opportunity for your partner employees to develop new skills and competencies within this specialized domain that keeps them motivated. And that allows you to get a longer return on your investment in training and collaboration.
In the early days of our outsourcing program, we experimented with other outsourcing vendors, some of whom were not investing in growth and development in the IP space. We discovered over time that these companies had a much higher attrition rate than CPA Global. We want to keep good people, and the only way we can do that is by giving them the opportunity to grow.
One of the strongest benefits we have seen from our relationship with CPA Global is that it has an entire IP knowledge and skills stack, so the people who work for us are vested in learning about IP. I get excited when I go to India because I’ve now known the people there for several years and it is really fun to see them enjoying the work they do with us.
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