IP Services - an overview

IP services are traditionally perceived to be only in the domain of legal services. Even today, legal services continues to be a primary and essential aspect of IP services, however in addition, there are other services that include:

1) Research and analysis
2) Training
3) Business consulting
4) Miscellaneous support services

Of these 5 types of services, the business consulting and training targets companies that do not have strong in-house IP teams or that do not have local IP personnel at R&D centers. The legal services and research and analysis target companies with as well as without in-house IP departments. The miscellaneous support services target companies that have established IP departments, but which prefer outsourcing specific functions.

There are various types of firms that address one or more of these services, to different levels of focus, quality, and efficiency. Given that IP services is a very specialized field and that IP is critical to technology companies, quality is of paramount importance. To maintain quality in a specialized field, focus is essential. Also, costs (without compromising on quality) should not be prohibitively high, hence efficiency is required. Some of the types of players in the IP services market are:

KPOs – They are not focused on IP. For these companies, IP is just one of the things that can be done at a lesser cost in India. Their services are restricted to those that can be done in large volumes by engineering graduates fresh out of college with little or no training (e.g., patent search). Lack of legal expertise and inadequate training leads to poor quality. They are run by business savvy people, and may be efficient due to segmentation of groups focusing on particular tasks and technology areas. However, in IP services, the cost of quality tends to be much higher than temporary savings from efficiency.

LPOs – These provide a wide spectrum of legal services at lower costs than foreign law firms, of which IP is just one, hence the focus is not there. They have a team of lawyers who work on non-IP matters, but the IP work that is outsourced to these LPOs is done by engineers, who are mainly fresh graduates or those who have previously worked with KPOs. Quality of work might be marginally better than KPOs; however, their business focus is on the cost arbitrage and not on value addition through IP services.

US patent law firms with presence in India – These are highly focused on US patent prosecution. They provide only legal services, and act as external service providers only. Their quality of work in US patents is much better than that of KPOs or LPOs. They are led by US patent attorneys, who have degrees in technology as well as law, and are among the most qualified and highly paid IP professionals. However, they have had limited success due to inability to significantly take advantage of their India presence, and scale their operations utilizing the Indian talent pool. The India team of these US patent law firms is trained by the US patent attorneys to handle support services such as detailed description writing and patent illustrations, however the legal aspects (claims writing) are done by the US patent attorneys themselves. This model requires a US patent attorney for every 3 engineers, and is not scalable due to the difficulty of getting US patent attorneys to live and work in India. Patent engineers that do get trained by US patent attorneys to prepare high quality US patent applications have a restricted career path, unless they themselves become US patent attorneys. Since they are already capable of preparing high quality patent applications, they can choose positions from various in-house positions or IP services companies that have a large demand for people (US patent attorneys or not) who can prepare high quality patent applications. Hence these US patent law firms have a high rate of attrition among patent engineers that keeps them from scaling operations and increasing efficiency. Also, being law firms, they have various restrictions and cannot be run like a pure business like other IP services companies.

Indian IP law firms – They are focused on IP law. Their work quality may be better than KPOs and LPOs, but not as good as US patent law firms. They provide only legal services, act as external service providers only, and do not provide support services. Also, they have restrictions from the bar council on promoting their business. They face the same attrition problems from patent engineers and agents that are faced by US patent law firms due to restricted career paths for non-lawyers.

IP services and consulting companies – These companies are neither law firms, LPOs, KPOs. They may have been started by patent agents, lawyers, or combinations of these. They have the potential to be run like pure businesses, providing a wide variety of services such as research and analysis, IP training, Business consulting, and Miscellaneous support services. However they mainly focus on one or two for which they have the capabilities, such as training and support services. They do not provide legal services, which is a primary and essential aspect of IP services. Unless their personnel have received training in best practices of US patent law firms, they have problems with maintaining quality.