Legal Process Offshoring (LPO) refers specifically to Legal Process Outsourcing work that is sent to countries outside the United States. Although the two terms are often used interchangeably in the literature, LPO as used in this article will refer specifically to Intellectual Property (IP) work outsourced overseas.
A recent posting by the author noted divergent trends in LPO over the last couple of years. This article will look specifically at LPO trends in the IP sector.
PATENT PROSECUTION-RELATED WORK IS WELL-SUITED FOR OFFSHORING
IP or Patent-related tasks such as:
- Trademark and Patent Searches of various kinds
- Patent Applications
- Office Action Responses
- Patent & Trademark Monitoring
Can be time-consuming to complete (read expensive) and do not require a Patent Attorney to complete, although a Patent Attorney must supervise the work. In fact, it would be hard to find a patent attorney who completes their own drawings, and the same may be said for searches. Those tasks are normally completed by onshore or offshore third-party vendors. Some of the other tasks, such as drafting patent applications and office action responses are not normally thought of as work that can (or should) be outsourced. Nevertheless, many firms and corporate IP departments have taken that step.
India is often selected as the US country of choice for offshoring because of its highly educated population with strong technical backgrounds that are also English speakers and writers. With some training in USPTO requirements, Indian workers can easily adapt to completing the tasks listed at a fraction of the cost of US attorneys completing this work.
THE MICROSOFT EXAMPLE
This was the approach used by Microsoft. In a series of articles in Inside Counsel in 2014, then Microsoft AGC Jeff Ranck detailed how Microsoft was able to triple its patent filings through the use of a third-party LPO with a very small increase in its IP headcount. According to Ranck they were able to accomplish this through a tiered process whereby they started with tasks like docketing and sent that work to India. They then hired searchers in India and found their work comparable to the quality of US searchers at a fraction of the cost. They then started a patent training program and the team in India quickly became capable of doing all sorts of work, from validity analysis, office action responses, technical reviews, patent analytics, product mapping and more.
CURRENT LPO TRENDS IN IP
A recent study seems to indicate that the Microsoft approach could be the emerging trend as Corporate IP Departments and IP Firms respond to increasing pressure to efficiently and cost-effectively manage their day-to-day tasks. A 2014 survey by GPA Global and New Legal Review looked at 1600 responses from Corporate IP Departments and IP Law Firms in the US and internationally to see what trends are driving these groups and how they will respond. Some findings:
- The patent workload will continue at the same pace or grow for both corporate IP departments and IP firms according to 82% of the corporate respondents and 73% of the IP firms.
- Budget pressures in corporate IP departments and cost pressure on IP firms will also continue to increase forcing both sectors to find creative ways to decrease the cost of their patent work.
- More than half the law firm respondents indicated pressure from their clients for fixed fee patent services.
- Over 30% of the respondents noted an increase in the need for outsourcing to help in the areas of Patent Prosecution, IP Administration, IP Research, Patent Searching, and other IP areas.
Based on the Microsoft experience and the survey responses it seems clear that IP LPO will continue to grow and become an accepted way of doing business for many IP firms and Corporate IP departments who are not already offshoring some of this work. Cost pressures will continue to grow as well as the IP workload. As long as third party vendors can provide high quality, low cost work on schedule, their share of this work will continue to grow. This may be particularly true if the LPO firm can provide the fixed-price services which are increasingly in demand.