Research Trends and Conclusions: Patents 2011
With the benefit of over 14 years of research and thousands of votes from clients and private practitioners, Who’s Who Legal takes a closer look at developing trends in the patent legal marketplace worldwide.
Patent law is often touted as being particularly resistant to difficult economic conditions. Litigation is the bread and butter work of many of the lawyers selected for inclusion in this book and the relative levels of courtroom work is watched with intense interest by those active within this field. Broadly speaking, reports from our sources in private practice and in house suggest that litigation appears to have remained relatively constant – the perception that companies’ need to protect their intellectual property remains a top priority even during economic downturns holds true. A deeper look into levels of work reveals a more complex view of the legal market conditions faced by patent lawyers.
Patent litigation is subject to the same cost worries as litigation in any other practice area – companies are continuing to see financial pressure and are picking their battles, primarily looking for instances where litigation could be seen as an investment with a good financial return in the long run. Several of our sources mentioned that they had seen an increasing tendency, particularly among pharmaceutical companies, to be very picky about which cases to litigate. In the US, this has resulted in more pharma cases being settled and there is an increasing sense that companies and their counsel know how to settle less consequential cases to the benefit of both parties. Cost factors are not the only worry contributing the rise of cases settling – competition law concerns have also taken their toll on the extent to which companies are able to protect their IP.
What must also be taken into account is that pharma companies are under the same financial pressures as any other commercial entity would be and this affects the sort of service they expect from legal counsel. This might be expressed in straightforward terms as a pressure to downsize in order to cut costs but it is also being expressed in a change in clients’ attitude. Lawyers are increasingly being called upon to be more efficient and cost effective and this has meant being able lay out the legal risk of a particular case, how it affects the bottom line and even an expectation of counsel presenting to the boardroom of a company. One lawyer we spoke to referred to pharma companies as caught in “the perfect storm” as they are finding it more difficult to develop new blockbuster products and harder to generate revenue from existing products.
The litigation situation can be broadly summarised by picturing two conflicting interests for clients – on the one hand, the need to protect their ‘crown jewels’ that might result in future profits and on the other hand, the need to keep current costs down in order to weather the recession. There looks set to a be a rosier outlook in the coming year – a number of our interviewees noted that they had seen a flood of enquiries from clients about patent infringements, which may indicate that clients are at a stage where litigation cannot be avoided, or alternatively a long-awaited loosening of the purse strings. This situation is also affected by alternative and anticipated sources of litigation work – patent ‘trolls’ continue to make their presence felt in the US, while biotechnology and biosimilar products are areas where work is expected in future. This brings us to one of the big stories in the patents area this year: the rise and rise of smartphone-related cases.
A complicated network of suing and counter-suing has developed recently between several of the largest players in the smartphone market. A single handheld device may contain hundreds or even thousands of patents. The larger mobile technology companies may hold 10,000 patent families, launching several at a time. Because of the preponderance of separate patents in each device, an allegation of infringement will often result in several separate trials en each court, as well as parallel litigations in other jurisdictions.
This leads us to another of the continuing trends in the patent law area. Cases that would once have taken place in single countries now stretch across continents. If a client decides that an infringement or an accusation thereof is worth pursuing in court, they will do so in all of the jurisdictions where they possess a market presence. In Apple v Nokia, for example, the case was fought in Benelux, across Europe, the United States and China. What is most important in inter-jurisdictional litigations is to understand how to make the different regulations and judgments work in the favour of a client. The most difficult challenge may be to prejudice one case in the course of pursuing another; for instance garnering what can be seen as a positive settlement in a local context may have significant negative ramifications for the case worldwide.
The perennial issue with inter-jurisdictional litigations is whether boutique firms, often with very localised branches, or international ‘one-stop shops’ are more suited to this sort of work. On the one hand, international firms provide the full range of complementary legal services, such as competition and general commercial litigation practices. Also, as we can see in the chart below, the international firms with the largest contingents in this area have displayed a controlled and consistent growth of top lawyers in this practice area over the past few years. Many large firms are seeing their IP practices as priority areas and included expansion of these groups into their longer-term business plans. This is arguably a testament to the economic resilience of IP as a practice area. On the other hand, some might argue that it is difficult to achieve a consistent quality of service across all of the offices of a firm.
Best represented firms in The International Who's Who of Patent Lawyers since 2007
This chart show the firms with the highest numbers of highly-nominated practitioners. IP specialist firms perform well in the listings, with most showing a sustained growth over the past few years.
Whether or not clients favour boutique or broad-spectrum firms, what is clear is that those lawyers who are most well-regarded by their peers and clients are those who can boast the greatest levels of experience. Many firms are focusing on recruiting lawyers who hold technical qualifications as well as legal credentials, and thus are better able to understand their clients’ business.
For example, those who hold qualifications in biochemistry would be particularly in demand for IP work in the life sciences sector, while those who have studied computer science can offer a deeper level of insight into technology-related patent cases.
This duplication of expertise can also be seen by examining the findings of related Who’s Who Legal publications. The chart below shows the amount of overlap with other practice areas in this chapter. For cases between originators of new technologies and research tools, this can prove particularly useful.
The chart below shows that the 559 lawyers selected for inclusion here appear 262 times in other Who’s Who Legal publications, some in more than one other edition. Unsurprisingly, life sciences and trademarks are the most heavily represented, while there are only four duplicated listings in the commercial litigation chapter, despite so many of the experts listed in these pages being patent litigators, attesting to the degree of specialisation of those included here.
Other practice areas in which 2011 nominees are selected for inclusion