Patents make real estate look modern

• Increasing automation means more pressure on margins from clients
• Straightforward referral work will decline
• How will IP practitioners deliver what clients need?

In the short to medium term, the biggest impact of automation will be on the relationship between IP offices, patent professionals and their clients. Here, it will complement other forces – many of which already exist – that are putting downward pressure on fees. These include budget cuts in many companies, the growing involvement of procurement departments and the changing nature of in-house counsel; these trends are discussed further in our reports on the future of trademark practice and the future of in-house patent and trademark counsel.

“One thing AI can do is commoditise search and drive the price down. Law firms currently charge $3,000 to $4,000 for that,” says one US practitioner. In the future, it will be much harder to justify such fees. But that is just one example of how, as one in-house counsel puts it, “law tech will transform the law firm/in-house relationship”. Others are instructions, recruitment, billing and reporting. In fact, almost every aspect of the routine work of patent prosecution could be improved. As one client notes: “Patents makes real estate look modern.”

Innovative firms will embrace this by using technology to deliver new services, create efficiencies and cut costs for clients. For example, better visibility of prior art can improve the quality of patent applications; algorithms can help in mapping claims to products in infringement actions; and easy-to-use portals or apps improve the client experience. “I would love to see digital transformation built for users. I don’t really want to know about deadlines and formalities, not in detail anyway,” says one in-house counsel.

Patent practice is behind other areas of the law (including other areas of intellectual property) in adopting new technologies. There are many reasons for this: there are high barriers to entry (given the technical requirements) and for the past generation there has been plenty of work. A lot of work is also duplicated by practitioners in different jurisdictions. This means that competition is less intense – so there is less reason to innovate. Moreover, particularly for prosecution work, many practitioners continue to exist in small or medium-sized firms, some of which are still family owned and run. The IP world has not yet felt the full force of globalisation in the way that many businesses, accountants and corporate lawyers have. In the next 10 years, it will.

More automation means there will be less need for referral work between firms in different jurisdictions. As one patent attorney suggests: “A model which relies on work coming from overseas will break down or reduce in strength… clients are becoming more demanding and knowledgeable about how to manage patent attorneys.”

Automation also gives clients more power to monitor and take control of their portfolios. Clients’ businesses are moving quicker and expanding into new markets, and they will increasingly look to cut out delays and unnecessary costs. Below we consider how some firms are responding to these challenges, but first we look at some of the other trends that will shape patent practice in the 2020s.