Tech Transfer University Reporter

You CAN cut your patent budget without cutting the quality of prosecution or reducing the number of patents filed …

By David Schwartz
Published: January 6th, 2014

Patent prosecution costs are at the very top of every TTO’s expense list – and that means your office has a big opportunity to reduce costs and make a major budget impact in 2014.

But before you go and reduce the number of patent applications your office files, read below for an excerpt from our recent webinar: How University TTOs Can Slash Patent Expenses While Improving Patent Quality (for details on ordering this full recorded session, CLICK HERE.)

1). Establish and memorialize relationship expectations between the TTO and outside counsel. 

This can be accomplished by engagement letters that are executed by an individual with signature authority in the TTO, and outside counsel.  Even though the engagement letter may go to the account manager, we can also ask for a particular attorney in that law firm to be working on the project.  The engagement letter contemplates key aspects of the relationship for a specific technology or portfolio of technologies.  It also specifically identifies the scope of work to be performed: for example, preparing a patent application or performing a patentability opinion. 

The engagement letter fully describes the cost structure: for example, a fixed-fee cost for the scope of work, a blended billing rate between all the attorneys that touch the work, or a combination of fixed-fee and blended rate.  Next, it will include a calendar of events, such as delivery of a full set of claims, delivery of figures, delivery of the first draft, delivery of the second draft, etc., to allow time for the inventors and the TTO to ensure sufficient coverage, quality, and that the application is actually on-point.  It may also include legal guidelines provided in an appendix or schedule and may include pricing expectations for various follow-on legal work involved with the prosecution.  Examples include preparation in filing of IBSs; preparation in filing of office action responses, including interview with examiners; appeal briefs; pre-appeal requests for review briefs; filing of continuation applications; filing of nationalization applications.  The engagement letter may also include invoicing instructions and expectations of when invoices should be provided to the TTO.  Internally, a TTO may wish to develop provisions to monitor the invoices and compare the invoices with the guidelines as well as provisions for departure from the guidelines in specialized circumstances. The clarity of engagement letters serve to relieve cost pressures placed on the outside counsel.


2). Establish a common customer number (CCN)

The CCN is used between the technology transfer office, the firm of the outside counsel and the USPTO.  Once the common customer number has been established, all the legacy cases that are residing at that firm can be transferred to that common customer number, as well as all the new cases that are filed in that firm under that new common customer number. 

The TTO can then set up a system to utilize the CCN by receiving alerts from the USPTO at the same time as the law firm that a new communication is available.  This allows a TTO to send a new communication to the inventors to begin the analysis as soon as it becomes available.  This type of system really helps in situations where there is a time sensitive office action provided by the TTO: for example, if you have to give a response to a restriction requirement, but you only have a one-month timeframe to respond, the CCN can allow the TTO to provide meaningful comments from the inventors to the outside counsel by elongating the time that inventors have in reviewing the communications from the patent office.  In addition to that, setting up the CCN can result in a significant reduction in petitions for extension of time, which can result in cost saving, as well as term of any patents that result from the applications. 

3). Obtain written patentability opinion prior to filing the patent application

The written patentability opinion will include closest prior art, and it will include a rationale as to why the technology is still patentable in view of that prior art.  I suggest a different firm prepare the written patentability opinion than the firm that actually prepares the application.  While the cost of preparing the patentability opinion seems to be additive to the cost of preparing the application, it can actually reduce the cost in the long run by either informing the TTO to not even file the application in the first place, or to provide information to the law firm that is going to be preparing the application of the closest prior art available in the particular field.That way, the application is not drafted blindly. 

4). Review invoices against legal fees

This step may require grouping invoices for a particular activity, which can be accomplished internally at the TTO, or can be accomplished by asking the law firm to group those activities and report a particular group of activities all at once.  This will allow the TTO to compare the invoices against the pricing guidelines, and make sure that the TTO stays on budget for that particular project.

5). Analyze the office actions in-house prior to any analysis by the outside counsel. 

Many times the outside counsel provides a very well written description of the office action and a theory of how we can overcome that office action rejection.  But by that time, the TTO may have already decided to completely cancel that project.  If analysis is done internally, that can preempt that analysis by the outside counsel, which can result in the reduction of legal fees that would otherwise be wasted.  Next, establish a patent tree chart for portfolios to avoid duplication of claim scope.  In many cases where there are large patent portfolios, it becomes very difficult to determine which application claims what subject matter, and without a tree structure, it becomes very difficult to manage that portfolio.  Establishing such a tree structure will avoid unnecessary duplication.

Other strategies that can make a big dent in the patent costs include preparation and recording of assignment in-house using templates for various situations, including, for example, single or multiple inventors, patent assignments versus copyright assignments versus trademark assignments.  Preparing those assignments and having the assignments executed by the inventors in-house and recording those can result in a significant cost reduction overall.

Special thanks to Hamid R. Piroozi, JD, an experienced patent attorney who now serves as the associate director in charge of legal affairs for Purdue’s Office of Technology Commercialization for sharing all of his real-world lessons with our live audience. We captured every word and dozens more practical strategies so you can also benefit from his experience. This program is available on DVD, On-Demand video, and PDF Transcript and can be ordered by CLICKING HERE.

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Visit for more unique, practical, and advanced strategies, case studies, best practices, and expert guidance on a broad range of challenges and opportunities for technology transfer offices and professionals.

Posted under: Tech Transfer University Reporter

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One Comment so far ↓

  • Suleman Ali, Holly IP

    I certainly agree that controlling patent attorney costs must be a key part of the strategy of reducing costs. The commercial worth of the case must be the driving force behind what to spend on a patent application, rather than simply the cost of getting broad claims granted. Amending to narrow the claims early in examination, avoiding filing divisionals and limiting territorial coverage can cut costs substantially.

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