Rethink(THIS!): Patent prosecution a loss leader?

Posted by J Matthew Buchanan at May 6, 2005 09:45 AM

Does your patent counsel view patent prosecution work as a loss leader?  Does that give you a warm-fuzzy, or the heebie-jeebies?

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Nipper Says:

May 6, 2005 11:33 AM

Are you implying the prosecution is done as a loss leader to get the litigation work?

Matt Buchanan Says:

May 6, 2005 01:18 PM

Yes. Its common for some of the large firms to take on prosecution work in hopes of getting a client's litigation work. The litigation work is, of course, more lucrative, so the rationale is "we'll do some of the less lucrative work, maybe even at a loss, to increase the odds that we'll get the more lucrative litigation work."

I struggle to understand how any client that values their patent portfolio would entrust it to a firm with this attitude. It doesn't necessarily follow from the loss-leader rationale that the prosecution work is of lower quality. Indeed, I'm sure several loss-leader type firms do very high quality patent prosecution work. As a client, I would just worry that the loss-leader attitude would spawn a culture of negativity against patent prosecution work, and my portfolio specifically. I think I'd rather entrust the prosecution work to a firm that prides itself on that type of work.

Douglas Sorocco Says:

May 6, 2005 03:29 PM

Another issue with the loss-leader concept is that firms who use it typically have a sweat-shop mentality when it comes to the work. The work is given to associates/agents who are required to grind it out as quickly as possible and with as little insight and review as possible. Typically these patents are very narrow, not well thought out and certainly not vetted for litigation concerns down the line.

I agree with Matt - my philosophy is that except in very rare circumstances, patent prosecution should be done by boutique firms that specialized in prosecution while the litigation should be handled by larger firms.

There really doesn't have to be an antagonistic relationship between the two. For example, I would be happy to do all the prosecution for a client and refer the litigation business to someone else. As long as the two firms could agree not to "poach" the other's work subject matter - I think it works best for the client as well. They get two firms working together and focusing on what they do best and enjoy doing.

-- Douglas

The Doomsayer Says:

November 2, 2006 02:42 PM

Matt has hit the nail right on the head when he speaks of a "culture of negativity against patent prosecution work." That is a very good articulation of the current state of things at firms that do both IP litigation and prosecution. I've worked at several of those firms and I know it to be true. I won't bore you with my resume. Let's just say I've been around.

One of the firms at which I worked started as a small firm focused primarily on prosecution. As the firm's litigation practice grew, its prosecution practice declined. The decline was directly attributable to treating prosecution work and prosecuting attorneys as second-class. The power went to the litigators because they billed more hours. The promotions went to the litigators. The experienced prosecutors left. And the prosecution work was assigned to "scientific advisors" who were largely untrained and unsupervised.

Indeed, "culture of negativity" is too mild. I've seen associates at big firms treat prosecution files like live hand-grenades. Understandable, since being labeled as a prosecutor in one of those firms destroys your future with the firm.

A word to the wise in-house counsel, keep the prosecution work with firms who generate the majority of their profit from prosecution. If your work has to compete with litigation work, you lose.

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