The firm that you helped to found is now one of the United States’ largest IP boutiques. How did you achieve this?
While it is difficult to say exactly why any firm enjoys more success than others, we believe that the following are key elements to our success:
- having a tightly focused specialisation in patent prosecution;
- promoting a culture that encourages strong teamwork and collaboration among the best patent prosecutors and supports staff in the field;
- continuously innovating all aspects of our services, with a strong emphasis on automation to deliver industry-leading capabilities at high levels of efficiency;
- paying careful attention and adhering to clients’ unspoken needs and explicit requirements; and
- maintaining a longstanding willingness to provide highly flexible working arrangements to accommodate a diverse workforce.
How does an IP boutique successfully compete with larger rival firms?
It might be better to ask Big Law how they are going to compete with us in the prosecution market. Large firms’ billing rates have greatly increased over the past decade, while the prevailing rates for prosecuting patents have increased at a much slower pace. This has made it almost impossible for patent prosecution lawyers in large firms to compete for large corporate accounts in the prosecution business, where most of the business is. Our focus on running a super-efficient back office – coupled with aggressive investment in the most advanced practice tools, analytics and automation – allows our firm to keep top prosecutors and staff, deliver world-class service and enable a family friendly billing goal.
What are the biggest challenges currently facing law firm IP practices in the United States?
As our clients get increasingly more sophisticated in their approach to patent development and management, our firm has to work increasingly harder to keep up with the myriad of client requirements and aggressive delivery timelines. At the same time, our clients expect more for their money, while our overhead costs keep increasing due to inflation, more complex client requirements and clients shifting more administrative tasks to us that they used to handle in-house. This means that we must increase productivity with better tools and organisation to maintain the margins necessary to maintain a healthy business. Also of concern is a looming shortage of law school graduates with the technical background required to replace attorneys exiting the prosecution business to retire or pursue other opportunities. This will likely make it difficult to find resources in the near future.
What does leadership in the IP world look like to you and how can it be developed and nurtured at an individual level?
Leadership in the IP world means different things to different persons, but we think that the following characteristics are germane to both firms and individuals:
- being an expert in your domain of practice;
- encouraging and developing diversity;
- providing pro-bono assistance and funding to those in need; and
- innovating and pioneering new approaches, including broad engagement with new technologies (eg, docketing and paralegal automation using AI, tools to help automate certain aspects of patent drafting and analytics).
You describe yourself as your firm’s chief innovation officer. What does that mean in practice?
In practice, it means having a budget for innovation that is larger than that of any other IP firm in the industry, combined with encouraging and facilitating non-stop innovation from one end of the organisation to the other. At Schwegman, innovation has been a core value since our founding, and from that we have developed a culture that expects change and facilitates innovation by tolerating the disruptive changes that true innovation requires. In addition, there are many great ideas being generated by all of the attorneys and staff throughout the firm, so we are never short on ways to improve our operations through innovation.
Schwegman’s innovation and automation of legal operations has been a cornerstone of our strategy for decades. At the beginning of this decade, the question for Schwegman was: with intellectual property having as many rote and repeatable processes as it does, could we automate docketing to further our operational efficiencies and accuracy? The answer was yes, although the solution we built had to be extremely sophisticated in order to gather and consider all of the information used by our staff when they performed these tasks manually. We now automatically docket more than 90% of our US and Patent Cooperation Treaty docketing, and the percentage of foreign docketing that we have automated is growing daily. What used to take up to three days to turn around is now completed within minutes of receiving communications from the USPTO or foreign patent offices through our agents. Best of all, the accuracy and reliability of our docketing has never been higher, as we have eliminated the primary source of error in legal operations – human error.
We are now turning our attention to the use of AI and other tools for various purposes to help us improve decision making and increase the productivity of our attorneys. We have our own machine-learning team and produce our own in-house examiner and portfolio analytics. At present, we are building systems to accurately predict future costs and expenses in a patent portfolio under prosecution and assist in ensuring that our billings to customers precisely meet all of the data requirements that our clients’ billing systems need to smoothly process our invoices. All of this will greatly assist our clients in running their operations. We are also trying many of the tools being sold by third parties, such as systems for automating certain aspects of drafting patent applications.
However, as always, we find that there are some serious barriers to innovation. For example, while almost all of our clients now have IP management systems that are connected to the Internet, many are reluctant to open these systems up to exchange data directly with other IP systems. In addition, virtually all of these systems were primarily designed to receive data input by a human, with little or no thought given to interoperability. These factors and others are now presenting serious limitations on innovation in the IP space. Currently, we find one of the main barriers to cost-reducing innovation is the unavailability of open application programming interfaces (APIs), forcing everyone to continue to use slow, inaccurate, expensive and innovation-limiting manual data entry. This archaic practice needs to be put to bed as soon as possible. To get there, all IP systems need to have a robust API and be open to law firms, corporations and other companies in the IP space. Some major system vendors – such as CPA Global, CPI, AppColl and Patrix – have great APIs and are open, thus enabling a lot of great innovation. However, many vendors are either behind the curve or resisting open APIs.
What is the best piece of advice that you have ever been given?
The following pieces of advice have worked well for me in practising law:
- Generally speaking, clients want their attorneys to make clear recommendations with a well-explained rationale and not just explain the options and ask the client to decide.
- When you make a mistake, promptly admit it and make amends in all ways possible.
- It is far better to be known as the dumb lawyer in town versus the one who cannot be trusted.
- Always take the high road.
Who is your IP hero and why?
My personal IP hero is Mike Schwegman, who hired, trained and mentored me when we both worked together at another law firm and then became our leader at Schwegman. He has a tremendous legal mind that can bring clarity to any legal problem and is one of most fair, decent, ethical and wise people I have ever met. I can say without hesitation that Mr Schwegman is my IP hero and that I will forever be in his debt for enriching my life and career beyond all expectation.
In your experience, what does a well-run corporate IP group look like?
There are many different varieties of well-run corporate IP groups. Ultimately, a corporate IP group is well run if it satisfies the needs of corporate management, and we are seldom in a position to judge that. As far as substantive practices go, the practice of shaping a portfolio to read on strategically important targets is a game changer, as opposed to simply stuffing disclosures into a pipeline and hoping that they mature into patents that are of some value years later when they are needed. We believe that the clients doing this with discipline are yielding much better results than those that do not. We also think that top groups collaborate closely with outside counsel on directing patent prosecution and do so with the highest degree of efficiency possible. In terms of the corporate IP groups with which I regularly work, I think the patent operation at Intel Corporation stands out for the sophisticated way in which it manages the company’s portfolio and the professionalism of the team.
One of your specialist areas of practice is software, how would you describe the current state of play with regards to software patents in the United States?
Any reasonable patent system must recognise and reward technical electronic innovations, whether they be in software, hardware or some yet-to-be invented form. The United States is going through a difficult period of drawing the line between software innovations that are deserving of patent protection and those that are not, but this will eventually be resolved. The patent system has been a cornerstone of technical innovation for many centuries and as long as the US economy thrives on innovation, the patent system will remain critical.
How do you expect the US patent environment to evolve over the next few years?
The environment is steadily improving and, as China develops as a technology innovator, the worldwide system will likely continue to be an important element of economic growth and reward in industrialised nations. For this reason, it is important for clients to diversify their portfolios out of the United States to some degree. To address this need, we are growing our European patent prosecution team in the United Kingdom and Germany and have more recently added an in-house expert on Chinese intellectual property.
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