Can IP Counsel Have a Business Strategy?

Fellow Kat Jeremy's blog of earlier today here contains Jeremy's usual erudite commentary about IP and business strategy. Goodness knows, this Kat has on occasion also offered his thoughts about this subject. But there comes a time when we need to descend from the view at 39,000 feet and ponder how IP operates in the trenches, when business strategy gives way to tactics at best, survivalism at worst. Consider a recent encounter, to which this Kat was witness (the facts are substantially massaged for public consumption).

Picture a creative Ph.D-type in the bio-medical world. In the spirit of IPKats everywhere, we will call him Felix. Through dint of Felix's creativity, perseverance and self-funding (most of Felix's personal inheritance being applied to pursue his dream), Felix has achieved some highly promising lab results. Despite his research Ph.D., the goal of Felix is not the furtherance of science per se but the possible application of his results to product development and ultimately to commercialization.

In the first step to reach the nirvana of product development and commercialization, Felix turns to a patent attorney with particular expertise in the area of Felix's research. Several related patent applications follow. Less than 18 months from first filing have passed, but Felix is already thinking about how to secure funding for the next developmental stage of his project. Not one to settle for only short-term goals, Felix also wishes to develop a longer-term plan of for the ultimate commercialization of his inventions. To achieve both these shorter and longer-term goals, Felix engages a specialist in grant-writing, a general-practice commercial/corporate lawyer and a business consultant.

Felix now finds himself in a bit of a personal quandary. He feels most comfortable when in the company of his patent attorney. But Felix knows that staying solely within the comfort zone of his patent attorney will not propel him to the next stage. Indeed, while Felix's immediate goal is to attract funding to conduct further research, his business consultant is busily preparing a business plan.

Felix, however, has also sought out the view of his IP/patent counsel regarding the best way to approach commercialization. It turns out, however, that counsel's view, based on his understanding of the invention and the scope of the patent applications, is very different from that of the consultant. Felix returns to his consultant and summarizes for him counsel's view on commercialization. The consultant is soon to respond. He advises counsel that he has no patience for lawyers and that the business plan will proceed apace with no further interference from counsel. Felix, from his perspective, has stretched his current budget to the point of zero slack.

 While he is not privy to the business plan, counsel is reasonably certain that it is not in compatible with the current state of Felix's patent position. On the other hand, since the consultant declared counsel persona non grata, Felix has not been in contact with counsel. Should counsel simply proceed with patent prosecution and refrain from any foray into the commercial side of Felix's activities? Or should counsel initiate a communication with Felix, reiterating counsel's view about the preferred direction for commercialization? Or should counsel contact Felix and offer a revised patent strategy, if required, provided that Felix shares the business plan with counsel? If the latter, how should counsel address the issue of costs for the revised patent strategy?

 What is counsel to do?

Can IP Counsel Have a Business Strategy? Can IP Counsel Have a Business Strategy? Reviewed by Neil Wilkof on Monday, January 16, 2012 Rating: 5


  1. --- now that the US has turned to FTF, the advice everywhere for the way responsible counsel should act is to center on timing, timing, timing. The time limits for certain actions are fixed by two things: the contents of the filed texts and their filing dates. The deadlines generated must be the cornerstones of all business activity, and not respecting them cannot be compensated later. This makes not heeding the patent counsel's warnings the most dangerous activity of all.

    But my general advice is, if counsel does not feel that his or her advice is heeded, terminate the business relationship before the blame is reversed. Some clients are more than happy to relieve the attorney's insurance company of their money.

    George Brock-Nannestad

    P.S. A specialist in grant-writing is what we all want, one with a big wad of money.

  2. Neil - is it just me or is are all of your posts turning into "hypotheticals"? Although I don't seek to be churlish, in that I generally feel that one of the best aspects of this excellent blog is when the IP community engages into a discussion on newsworthy items in the comments section, there must however be a limit to this. It would be a real shame if this blog became merely a proxy legal practice by crowdsourcing.

  3. Perhaps a bit of a biased comment but here goes:

    Given the fact pattern above, I think it is essential for Felix to get the consultant, the counsel and the patent attorney in the same room to discuss this and hammer out an understanding of 1) what is the goal, and 2) how each of them can help Felix get there. This is their professional obligation, regardless of their personal feelings. None of them can work in a vacuum, and all of them actually have the same goal - to maximize Felix's chances for success. If the consultant refuses to listen to the patent attorney, then it is time to switch consultants as he is pandering to his own ego, and not looking out for the client's best interests. Furthermore, the consultant may be trying to achieve something which the IP position, or legal regime does not support. Likely in such a situation, each side is in possession of critical information that the other side is not aware of.

    Similarly, if the patent attorney or the counsel refuse to take prudent or reasonable steps to achieve Felix's goals, or in fact somehow prevent Felix from achieving the goals, then this is a perfect example of a malpractice suit waiting to happen - especially since you are virtually guaranteed to have a disappointed client. Similar sanctions or legal remedies may be available against the consultant, depending on the jurisdiction and/or local legal regime.

    A consultant that does not listen to attorneys / counsel will not succeed for very long, as it's the lawyer's job to watch out for the worst-case scenario and to play the Devil's advocate. The phrase "Hope for the best, plan for the worst" comes to mind here. Most of the good consultants I know are eager to listen to the attorneys, and visa-versa. The best IP & general attorneys I know are experts in the law, and also in understanding business and communicating with business-types.

  4. Send an Invoice. It usually means clients call you up and that will give a verbal opportunity for discussion.

  5. You are mixing up 2 separate issues. Firstly, business advice on commercialisation is not the domain of a patent attorney. There may be exceptions, but use an attorney for what they are good for (door stops maybe?). Secondly, the IP strategy must relate to the commercialisation strategy the former is what the attorney should be good for (except we have our 'private practice' attorneys, and those who are not partners do, I hear, make good door stops, while the partners are just good for making money)

    Sending invoices is the only real way to get a dis-interested, slow-moving, unhelpful, client to pull their finger out. Some clients like to delay the conclusion of a piece of work (eg filing an aplpication) just to delay the arrival of an invoice. I find an interim invoice always lubricates the provision of that data or comments that is preventing me completing the work.

  6. This is a very difficult situation, and I can say that is extremely difficult, and utterly ungrateful, to attempt to save a client from himself (never mind from a persuasive "consultant").

    The best solution is to try to explain the situation as clearly as possible, preferably using colourful charts (MBA types like them almost as much as toddlers). A nice colour timeline with big numbers at the strategic points can be much more useful than a thousand words in getting a point across.

    Always remember: for business communication, the model to follow is "Sesame Street". Just a few letters and numbers, in a large format and bright colours, and endless reiteration. Juvenile jokes and silly puns also help.

  7. The attorney should explain to the client that IP divorced from a commercial strategy is money poorly spent, and that to get the right IP strategy the attorney needs to know the commercial strategy.

    The attorney should also identify the commercial consultant and gauge their background. There are a lot of consultants out there who have retired from a specialised business and assume their insights are generally applicable.

    Those consultants who know their stuff generally welcome collaboration with the attorney. After al, close collaboration generally gets the best results.

    Those who do not know their stuff tend to be very defensive as they are insecure in their ignorance. It sounds like Felix has met the latter type.

  8. This familiar scenario is pregnant with reasons why Felix should pack up being an attorney. Arrogance being one of them. The business plan is not aligned with the patents! He’s a nit. That is not the problem.

    A bit risky, because he has not seen the plan, but if he is feeling brave I would suggest he inform the client that the patent applications should be abandoned as they are not aligned with the business plan devised by the client and his consultant. I think this is a much better approach than trying to impose his inevitably flawed commercialisation plan on the client to fit what he has prepared and filed.

    The risk with this of course is having to explain to the client how he is now into £30K of IP spend for no value. I already have your money dude!


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