Deep pockets needed

• Patent service providers will be squeezed by pressure from above and below
• Providers will have to decide on the most appropriate response to the squeeze
• Expansion into new areas requires patience – and deep pockets

If you were to draw a line encompassing the full range of IP services, from least complex/expensive to most complex/expensive, it would probably start with basic news and information (now virtually free), continuing on through case reports and analysis, then administrative services such as searching, renewals and docketing, going on to things such as translation and portfolio management which may or may not require legal qualifications, and finally to services that can be provided only by patent attorneys or lawyers (eg, prosecution, litigation and legal opinions).

Most patent service providers today sit in the middle of that range. That means they can charge reasonable fees without bearing the burdens of those at the top end (eg, expensive training, indemnity insurance and conflict checking). But over the next few years that range will be squeezed. Services at the bottom end will become commoditised, forcing those providers further up the chain to respond.

Publishers, for example, will improve their offerings so that they are more searchable and comprehensive, with unique data and analysis, while patent offices will make their information more widely available and more accessible. Meanwhile, at the top end, law firms will introduce more technology to handle administrative tasks and make some of their services cheaper (as we discuss in our report on patent law firms). As the head of one IP law firm figures: “We are now an IT firm that does intellectual property.”

Service providers will adopt different responses to this squeeze. Some will stay firmly in the middle ground; others may feel that they can move up the ladder, offering services such as patent drafting that have hitherto been reserved for law firms. But doing so means that they may be competing with some of their traditional clients. That requires boldness. And expanding services requires investment and patience, as one CEO remarks: “It can take nine to 12 months to convince customers. In other industries, that would be only three months. That means you need deep pockets.”