Reducing Technology Transfer Costs
October 20, 2008
Universities and research institutions typically retain outside patent
counsel to prosecute their patent applications. While some firms perform
the task efficiently and professionally, many firms exploit the university.
The methods these firms use to fleece universities border on the absurd.
For example, one university will not send a courtesy "thank you" email as
they are significantly billed by outside counsel for writing a "your
welcome." Technology transfer offices (TTOs) might consider the
following in making safe and effective outside counsel selections:
Quality of Patent Counsel
Patent firms that can operate on the university level should typically have
at least an average of 15 years experience on the partner level and be AV-rated.
Ask meaningful questions such as:
- Attorney Training: What ongoing training to the
attorneys receive (ABA, AIPLA, etc..)?
- Assignments: If attorneys with less than 4 years
experience will work on university matters, will all work be supervised?
- Supervision: If "yes" to above, will the TTO be billed
to "train" new attorneys on fundamental skills?
- Billing Requirements: What is the annual billing
requirement for an attorney. 1,800 hours is reasonable. If
attorneys must bill anything more there are probably not enough hours in the
day to ethically meet the requirement.
- Volume: How many filings/issuances has the firm
received in the last few years?
- Past Performance: How many clients have been
acquired based on a patent portfolio developed by the firm?
- Staff Training: What training do you give your staff?
Aggressive versus Moderate Prosecution
Not all technologies have the same licensing potential. A novel book
binder is not Taxol. A novel fishing reel is not Gatorade. Do not
fall for the premise that all disclosures must be pursued by egalitarian
principles. An experienced patent firm can step up or step down
prosecution responsive to TTO instructions. We suggest:
- Turnaround: For high-value applications TTOs should
press firms for expedited turnaround. Patent term is already
ticking-down so even if the firm will pick up the extension fee the TTO will
have less term to license.
- Pre-Emptive Interviews: For high-value applications
TTOs should press firms to call the examiner upon filing an amendment and
set a telephonic interview before the examiner writes a final rejection.
There will likely be less PHE and a better opportunity to get an earlier
- Appeals: For moderate-value applications that do not
have a definite licensee, filing an appeal might cost less than engaging in
an expensive cycle of continuation applications.
- Restrictions: For moderate-value applications, ask the
firm to structure the claims so the application will not be split into an
excessive number of divisional applications.
Avoid getting Fleeced
If the TTO does not police its patent costs then the burden is merely shifted
to the licensee. Some portfolios are so obese with unnecessary filings
they are "unlicenseable." There are a number of simple steps to mitigate
excessive costs before they occur:
- Flat Fees: Ask the firm whether they will set a flat
fee for the particular filing. Firms are in the best position to know
what resources will be required to fully and competently perform the work.
- Billing Ceiling: If hourly, set a billing "ceiling."
For example, if the billing for a non-provisional patent application will
exceed $5,000, require the firm to unambiguously explain why the project
requires more time than normally allotted.
- Extensions: Set a predefined window with respect to
office action extensions. If the TTO provides all necessary
information two months before a deadline and the firm sits on the
information, should the TTO pay for the extension? Flag firms that
continually bill for extensions they should pay. TTOs should not have
to continuously fight for billing adjustments.
- Delegation: Flag firms that bill attorney time for
doing anything assignable to a paralegal or secretary. Copying
references, submitting an IDS, or scheduling a conference call should not be
billed at an attorney rate. Also look for anomalies such as 18 minutes
of billable time to leave a voice message.
TTOs provide a streamlined environment for outside patent firms.
Disclosures have the core information required for a patent filing (i.e.,
statutory bar dates, inventors, etc..). TTOs send a consistent stream of
work to the outside firm. The firm rarely must discuss the fundamentals of
patent prosecution. Accordingly, patent firms should genuinely appreciate
and aggressively represent TTOs in a professional and efficient manner.
Anything less is unacceptable.