The Role of In-House Patent Counsel in Prosecuting Patents

Query: When a law firm is hired to prosecute patents, should the in-house patent counsel be included in the list of patent attorneys with power of attorney over pending patent applications?

My informal conversations suggest to me that most major patent applicants want in-house patent professionals listed as having power of attorney in their pending cases. Smaller companies – even when they employ an in-house registered patent professional – are much less likely to be listed on the power-of-attorney roll.

When associated with a customer number, the power of attorney allows in-house counsel to access unpublished application materials through the USPTO’s electronic “Private PAIR” system. In addition, the in-house counsel would then have the right and authority to discuss the case directly with patent examiners and file papers with the Office.

On the other hand, some in-house counsel want to avoid complicating prosecution control and keep all filing duties in the hands of the law firm experts. This allocation of duties can also help to shift blame to a law firm when problems arise or when information fails to reach decision makers. When in-house counsel holds power of attorney, I could conceive of a law firm potentially avoiding a malpractice claim by showing that the in-house counsel failed in its role as “backup.”

45 thoughts on “The Role of In-House Patent Counsel in Prosecuting Patents

  1. Very interesting post. My comment relates to the statement re use of Customer Numbers (CNs), specifically the statement that “When associated with a customer number, the power of attorney allows in-house counsel to access unpublished application materials through the USPTO’s electronic “Private PAIR” system.” It is my understanding that being associated with a CN used in a POA, alone, will not provide access to use of private PAIR for that application unless the same CN is also designated as the correspondence address for that application, or a different CN listing the practitioner is designated as the correspondence address. As I understand it, a pracitioner must be associated with a CN that has been designated as the correspondence address in order to access private PAIR. See Q19/A19 posted at link to uspto.gov and MPEP 403, in particular, under the heading “Customer Number Practice.” CNs may be used for various purposes — designate correspondence address, fee address or submit a list of practitioners such that those associated with the CN would have POA. Applicants may use the same or different CNs for each of these if they wish. It appears that the ability to use more than one CN for an application may find useful to address the issue identified.

    Should in-house counsel not wish to be listed on the POA, they could submit documents under Rule 1.34 — just a thought. I look forward to any comments.

  2. Easy there. In a small operation, you MAY be able to do all of these things, but as you grow keeping up with every date simply becomes impossible. There’s nothing wrong with that; it just happens.

    In a large organization, there’s no way you’re tracking every date and the content of every application and response. It’s not possible.

    No one said you didn’t do anything. All I said was that in-house has too much going on (like deciding what to seek protection on, what to let go, answering executives questions, etc.) to be tracking every single date.

  3. I did and do know when things were do, and not just on the day before the 6th month deadline. My competent outside counsel (yes, I am praising my outside counsel) reported OAs and due dates within 5 days of them posting on PAIR. Within two weeks of an OA, I had either a proposed response or an email asking if this case was still important to the business.

    Furthermore, outside counsels do not know the inner workings of their client’s business, no matter how much you think you do. In fact, if you did, then you would be in-house counsel. In-house counsels need to micromanage the content of the applications because products and business strategies change. Outside counsel cannot know this information unless they were in the same meetings and same conversations with management as in-house attorneys.

    Finally, in-house counsels worth their pay know and understand all their cases because when senior management asks a spontaneous question about the status of an application of the likelihood of success of a case, we do not have the luxury of responding with “let me check with outside counsel.” If I did do this, I’d be out of a job.

  4. You’re saying that in-house knows when things are due? That would be a new experience, even for the clients I’ve used shared customer numbers with and maintained their internal database. The only thing I’ve seen that keeps dates from getting blown is me calling the in-house atty on the 6mo date.

  5. DC, I think you are right. All this suggests is that the PTO really needs to provide private PAIR access to patent owners independent of who has the power of attorney. As Dennis observes, many in house patent departments need access to private PAIR to support internal docketing systems and to obviate the expense of client reporting by outside counsel. This is, in many cases, the only reason they have inside counsel on the customer number.

  6. bad-joke: ” it’s a dereliction of duty at best and malpractice at worst to do a transfer without informing the recipient of things due within 30 days.”

    Yes, but then s— happens, and if you have control over your own apps. through PAIR, then s— does not hit the ceiling.

  7. Bad joke – in-house is referring to “emergency” provisional and that in itself is a reason to be on the customer number.

    In other words, would you be able to file the *emergency* provisional the same day if you were, say, a solo practice with in-house as your client, and were vacationing with no Internet somewhere? I guess not.

  8. I’ve received a bulk transfer like that: “Here you go!” But for the one transfer out I’ve done (waived subject matter conflict started showing up on a client’s radar as an actual conflict), we provided a schedule of due dates. In my opinion, it’s a dereliction of duty at best and malpractice at worst to do a transfer without informing the recipient of things due within 30 days.

  9. @bad joke ahead — not everyone responds as quickly as you. In fact – in my experience, most (95%) do not. We did a bulk transfer of cases from one firm to another (NIGHTMARE) – and if we had not had access to private PAIR, many cases would have gone abandoned because the previous firm was NOT reporting out USPTO communications. Likely another way to obviate this problem, but let’s just say that sometimes there are communication issues. For standing cases staying with firm – sometimes you just need the ability to check quickly as issues arise – like after hours, weekend, holiday.

  10. (1) I did claim to have communicated with “most major patent applicants,” but instead indicated that I have had informal conversations with a number of in-house counsel and outside counsel on the topic. As I wrote, my conclusion is suggested by my conversations with those attorneys.
    (2) Many major filers have internalized the prosecution docketing and that is facilitated by having Private PAIR access. In addition, as a measure to cut costs, some major filers ask law firms to avoid providing regular status update communications.

  11. I have seen this arrangement in action, and it does not lead to good results. I am curious about how you find an outside attorney that is happy to work as your spell checker when he could be applying his professional skills for someone else.

  12. I think any arrangement that might lead to confusion as to who is responsible for an application is malpractice, just asking for an error. I would never enter into any representation in which authority to communicate with the PTO, or responsibility for meeting deadlines, is not exclusive to a single firm. And Dennis, have you really communicated with “most major patent applicants?” Why would they tolerate such an ill-advised arrangement? I am truly intrigued.

  13. If you were at a firm, you’d know what a nightmare maintaining customer numbers is, especially with attorneys other than those in the firm.

    We have multiple customer numbers here, and my previous firm also used multiple customer numbers for major clients and such. I didn’t maintain them personally, but I’m sure it fell short of being a “nightmare”.

    The worst is when the company controls the number and adds outside counsel to it, because they’re so slow to add lateral associates.

    “Doctor, it hurts when I move my arm like this.”

    Seems to me that whoever is doing the bulk of the actual filing should control the number. In general, I’d probably lean toward the firm controlling it, because they’re more used to it and they have a higher turnover of people who need to be added/removed. Still, once the firm has a couple dozen agents listed on the number, does adding that recent lateral hire really make a world of difference?

  14. Why is it quicker for you to file a provisional? If we get a provisional from in-house, we file same day.

    The fact that you thought you had to micro-manage means that you should be looking for other counsel or communicating more effectively.

  15. and 40,000 out of 800,000 is a 5% sample, so (obviously) the adjective of “most” is fully warranted.

    NOT.

  16. You can not stop my Court Case! And you did! You can not punish me for a Crime i did not commit. And you can not keep me from a TRIAL. THIS IS AMERICA!

  17. I agree with Derek’s post of 17 Jan at 5:29. The infrastructure to support a docketing and filing system for anyone but the largest of companies is cost prohibitive. It is much easier and cost effective to rely on outside counsel for deadlines.

    I too have had outside counsel set up a particular customer number for my cases. This way, I could participate in any examiner interviews, get onto private PAIR, and dictate which of counsel’s associates and/or partners were allowed to participate on my cases. In rare instances, I have had to file emergency provisional applications under the joint customer number. It was quicker if I filed than wait for counsel with the added advantage that all reporting and associated docketing was then handled by counsel.

  18. How do I know this:
    I built a database of 40,000 PAIR files for pending patent cases. Those files list the attorneys that are associated with the applications and the “firm name”.

  19. This situations depends quite a bit on the company. I’ve worked as both in-house counsel and law firm person. As in-house counsel, the workload was overwhelming to the point where it was very hard just to oversee prosecution, let alone attempt to actually draft something. Put another way, it was impossible to draft anything. Plus, publication has helped this, too. I never once had to use private PAIR for a case; instead, I used public PAIR all the time.

    Also, some companies have outside counsel upload documents to a central server/docketing system. In this manner, the in-house counsel has access to all documents filed with PTO, even if the in-house counsel does not have access via the PTO.

  20. 1) No, not all POA’s are to customer numbers.

    2) In those cases that POA’s are to customer numbers, the POA is to all the attorney’s represented by the customer number, in which case each individually has the power of attorney and each individually may have full responsibility.

    Either way, your 5:29 PM post is ludicrous.

  21. Perhaps that’s why there is a Power of Attorney form signed for Outside Counsel to, well, have the Power of Attorney.

  22. If you were at a firm, you’d know what a nightmare maintaining customer numbers is, especially with attorneys other than those in the firm. The worst is when the company controls the number and adds outside counsel to it, because they’re so slow to add lateral associates.

  23. Leo, rather than leave open the question who has the ultimate authority and responsibility for prosecution, the PTO should adopt the principle that the inside counsel should be presumed to have authority over outside attorneys so that they, the inside counsel and not the outside counsel, have ultimate responsibility for the prosecution.

    Of course, corporations could change the default rule by contract with outside counsel such that inside counsel would have no authority to act without the approval of outside counsel. But ordinarily, inside counsel, by being name on the power, have full authority to act. This should also give them full responsibility.

  24. Many companies add inside counsel to customer numbers simply to provide access to private PAIR, etc.; others to provide ultimate inside authority.

    Regardless of the reason, having inside counsel on a customer number should make them legally principle attorneys regardless of whether they are or not.

    This whole conversation does illustrate that assignees need independent access to private PAIR, as I suspect that companies employing outside counsel really want them to be principle attorneys.

  25. Outside counsel allows in-house attorneys to do more big picture thinking and does provide a second layer of docketing to avoid missing deadlines. In my experience, having my reg. number associated with a customer number is most useful in the instances when I cannot access information because public pair is overloaded, or when an application is yet unpublished and therefore unavailable. If I felt that I had to step in and do the work of my outside counsel, I would be thinking about getting a new counsel…..Like your children, how much you get out of your outside counsel depends on the amount of time you help them do their job to the best of their abilities.

  26. It appears that Phil Colburn of Cantor Colburn is listed on the most customer numbers, including patents for IBM, GE, Hamilton Sunstrand, Mattel, Sikorrsky, UTC, and Baker Hughes.

    IBM apparently uses customer number to help docket its cases and has over 70 customer numbers that it uses. These are broken down by division (e.g., “Watson Rsearch” or “Tuscon Division”) as well as by law firm (e.g., Glenn Patent Group, Walder IP, Yee Associates).

  27. If PAIR was set up properly, you could put in multiple customer numbers (two) for a single application. Maybe even do one with filing authority and one with only veiwing authority.

    That sounds like it would be complicated for the PTO to implement, whereas the framework already exists for setting up additional customer numbers, listing whatever agents you want, and assigning them to whatever applications you want.

    Besides, the PTO probably wants to have a single contact point for each application, even if it’s a number of listed agents under a single customer number.

    Leave it up to the individual firms and clients to agree on who has access to the customer number and who will be doing the filing. They seem to be handling it fine.

  28. … and then send the time consuming, difficult, or problematic work outside.

    This whole unaffiliated attorneys on a single customer number thing is a debacle. In-house should either assume full responsibility for a case, or send it out. If you send it out and have a question, just ask. I’ll have an answer witin the hour.

    If PAIR was set up properly, you could put in multiple customer numbers (two) for a single application. Maybe even do one with filing authority and one with only veiwing authority.

    Yes, when something is on my name, I like to have control over it.

  29. How much did the law firm charge, Derek, if you don’t mind giving a rough number? It sounds like the law firm provided little more than docketing and an assumption of the corresponding malpractice liablity risk. I’m curious as to what that is worth on the open market.

  30. The PAIR model forces extra customer numbers on law firms and customers.

    What happens when we run out of customer numbers?

  31. I recently spent 7+ years as in-house counsel to a pharma startup. As I was the sole registered patent professional, with no secretary and no docketing software, it made good risk management sense for the company to have a law firm take primary responsibility for the cases. The firm had a customer number specifically for the company and I was associated with that number, but I made no filings directly into any nonprovisional prosecution file, though essentially every document that was filed was drafted by me and sent to the firm for review and filing rather than created by it.

  32. I my view, the answer in part depends on two factors:

    1. What stage of patent portfolio development a company is in; and

    2. How are the in-house counsels relations with the outside counsel/law firm.

    Addressing (1), it would be advisable for start-ups to list in-house counsels on the POA. This would ensure better quality control of patent prosecution, for example. Of course, this would mean taking time away from other important startup growth issues.

    For (2), simply put, if the in-house counsel knows the outside firm attorneys very well, then there wouldn’t be much gained by listing the in-house guy on the POA. However, for many organizations, this might be changing as rising patent pros. costs have led to more and more work being brought in-house.

    In short, the answer to this post would probably be determined on a case by case basis, keeping in mind what the company’s geeral IP strategy is.

  33. If the USPTO made it so a single case could have MULTIPLE customer #s associated with it, I suspect most of this practice would go away. The issue for large companies is being able to independently check the status of their applications. The PAIR model forces extra customer numbers on law firms and customers.

  34. Thanks Robert – You ask a great question – when to “outsource” patent law work. Almost all companies choose to outsource litigation, but lots of companies do the bulk of their patent prosecution work in-house.

  35. When a small business has experienced, diligent, and zealous in-house practitioners, why on Earth would they farm out to “law firm experts” with bigger case loads, less expertise in the particular technologies involved, less at stake, and above all, bigger fees? Would it be outre to raise that this post may be based on unsubstantiated bias?

Comments are closed.