• Research from Mathys & Squire based on interviews with 100 legal services buyers
  • 77% of respondents labelled IP as a priority, but only 24% had a formalised IP strategy
  • A quarter of IP strategies did not deal specifically with litigation, despite threat fears

New research has revealed that, while almost two-thirds of legal services buyers are concerned about being a defendant in IP litigation, a quarter of companies that have a specific IP strategy in place state that it does not deal with litigation threats.

The research – from IP firm Mathys & Squire – is based on interviews with 100 legal decision makers in organisations with turnovers of £10 million - £1 billion+ across a variety of sectors. The mix of respondents leaned towards the UK (62), with just over a third (38) hailing from the US (just 13 were current Mathys & Squire clients).

A survey speaking to legal services buyers and focusing on IP will inevitably come out with some positive headline findings (as interviewees are less likely to engage with the researchers if the issue is not something they think about). Thus it is arguably not a surprise that 77% of respondents labelled IP as a priority. More concerning is that this has not, in all instances, followed through into a nuanced understanding of the portfolio and its worth.

Specifically, despite the majority (76%) recognising the impact that understanding the value of their IP has on their commercial strategy, less than a quarter of responding legal services buyers (24%) work at organisations that have created a formalised IP strategy (an additional 37% said they have an overall IP strategy that is not formally documented), while just 23% have conducted a valuation of their IP assets.

This echoes the findings of WTR’s own Global Trademark Benchmarking Survey, in which 70.1% of in-house respondents stated that they had not had their company’s brands valued by a valuation firm. In our survey 43.7% also stated that their company’s brand/trademark strategy is not discussed or decided at board level. Clearly, there is a way to go before management awareness of the importance of IP results in the budget and support required for brand and legal teams to fully explore the value and utilisation of IP assets.

In the meantime, those toiling in the legal trenches are all too aware of the importance of these assets and need to protect them. Of the legal service purchasers that Mathys & Squire spoke to, 91% stated that brand protection is important for commercial success, with just 5% feeling that it is not at all important. Respondents are also taking measures to respond to related risk by preparing for litigation - three quarters (74%) of companies with an IP strategy say it deals specifically with IP litigation threats, with one third (32%) having a contingency budget for this. Drilling down, a quarter of this 32% have a budget larger than £750,000/$750,000.

In many respects this is canny risk management - 60% of the respondents stated that they are either 'very', 'moderately' or 'slightly' concerned about being a defendant in future IP litigation during the next two years, with over half (57%) believing it is likely that their business will be involved in IP litigation as a claimant during the same period. Preparing for such an eventuality is therefore the best way to assuage such fears.

However, that a quarter of those with IP strategy reported that it does not deal specifically with IP litigation threats suggests that a significant number of organisations could find themselves in fire fighting mode.

Amongst the other findings in the study were that:

  • 60% of companies surveyed have been involved in IP litigation, most commonly as a claimant.
  • Alternative dispute resolution (ADR) is increasingly important, being used by 56% of respondents (and by 29% specifically in IP litigation).
  • Of those that used ADR in IP litigation, a quarter (24%) use it in every case.
  • When choosing an IP litigation team to manage cases, the most important criteria is specialist technical expertise (58%) but value for money is second (35%), beating out breadth of expertise (21%), an understanding of the business and commercial strategy (15%) and location (10%).
  • 65% viewed it to be very or extremely important to find a good expert witness for IP litigation.

Ultimately, the study contains a number of positive findings for firms providing IP legal services – in-house teams clearly perceiving risk and allocating spend to it. It also validates the time spent by those corporate IP professionals focused on their company’s portfolio, and how it can be utilised and protected, with Margaret Arnott, Mathys & Squire partner and head of IP litigation, commenting: “The results of our research suggest that businesses with a more developed IP strategy generally have a better experience of litigation. It has also made clear that protection of brand is our respondents’ prime consideration for maintaining their success, so it makes sense to take strategic steps to assure the safety of their trademarks.”

However, it also highlighted that concerns over the threat of IP litigation persist – something that will no doubt cause sleepless nights for many a corporate professional.