Thursday

THE ELEPHANT IN THE ROOM IS REALLY A SANDWORM: WHY BIG LAW FIRMS ARE PART OF THE PROBLEM

Yesterday I attended a webinar put on by Gathering 2.0. These folks aspire to become the Facebook of the IP world. The seminar was titled The Elephant in the Room. And it was meant to be a provocative commentary on the prevailing patent strategies employed by those with the biggest stake in the current patent system. The lecturer was a seasoned patent attorney who practices in Silicon Valley for one of America's most well known law firms.

This gentleman trotted out some statistics to demonstrate that filing large numbers of cheap patents is false economy for those companies who depend on patents to protect their interests. He challenged the accepted wisdom of letting technical people drive the patenting strategy. His fundamental point: Large numbers of cheap patents, written by solo practitioners, sought for reasons unrelated to a clear market strategy, produce assets of little or no value at great cost.

So what's the cost effective alternative? Seek quality not quantity. Let experienced patent attorneys, part of a full service law firm, familiar with the companies goals, file a small number of elaborate patents applications. Since, by definition, such attorneys charge $300 to $400 dollars per hour, let them charge by the page instead of by the patent application.

Seems to make a lot of sense. Or does it?

Einstein is famous for noting that we can't solve problems using the same thinking that produced the problems. More prosaically, if you are a hammer then you see the whole world as a nail.

The larger fact is that a revolution is underway. And this revolution is meant to overthrow the old fashioned ways in which legal services have been delivered. Does size matter? You bet it does. SMALLER IS BETTER. More efficient. More nimble. More able to fairly share the risk.

Should companies stop filing large numbers of narrowly written( read worthless) patents? Absolutely. But must they accept the open ended $400.00 per hour alternative? Of course not.

And what's the best evidence? The ever increasing number of biglaw partners who are leaving their firms to go solo or as part of a small group. Why are they leaving? Because they understand that the lock step internal economics of the law firm force them to charge far more for their services than the services are really worth.

By fully embedding themselves in technology, and by adopting an entrepeneureal mindset, lawyers are delivering superb legal products to their clients at a fraction of the cost that biglaw can deliver the same- or less- product. Everyone else in the world must offer fixed fees- why not the lawyers? No reason. Most everyone else offers some form of satisfaction guaranteed. Why not lawyers? No reason.

But there is a more fundamental question that economists and some lawyers are asking about the US patent system. There is a mounting body of evidence to support the radical conclusion that patents inhibit rather than promote innovation.
Here's where we can really apply a different form of thinking than the thinking that brought us to this crisis. Is it time to jettison the patent monopoly grant and consider other ways to reward those who innovate?
Hopefully, the very serious economic challenges we face will mean that all points of view, and new and different ways of thinking, get considered.

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