Publicly Traded International Patent Firms

by Dennis Crouch

In October 2022, Canada’s largest intellectual property firm became a publicly traded entity.  Smart & Biggar, a firm that includes 100+ Canadian patent attorneys and agents (most of whom are also registered with the USPTO) was purchased by the Australian company IPH Limited.  The holding company trades on the Australian stock exchange with a market valuation of $1.8 billion Australian dollars ($1.2 billion USD).

IPH already owns five Australian IP-focused law firms (consolidated from 10), including offices in New Zealand, Singapore, China, Malaysia, Indonesia, and Thailand.   With one firm having 32% of the Australian national phase market, you might think that conflicts would get a bit tricky. A bit more on that below.

What is the benefit of selling for Smart & Biggar? Presumably money today.  The purchase price was $350 million Canadian dollars ($250 million USD).  That includes $241m cash to the old owners (i.e., the partners) along with $45m in IPH shares and another $66m in deferred IPH shares (presumably for partners who stay for two years).  The old partners continue to have some management rolls at the firm but will be employees of IPH rather than owners.  “Canada’s Intellectual Property Firm” is now owned by the Australians.

Like the U.S., Canadian law generally requires that law firms be owned by lawyers.  To avoid this hiccup, Smart & Biggar divided its firm into two parts – an “IP Agency Practice” involving patent preparation and prosecution; and a “Law Practice” handling litigation and other legal issues.  The IP Agency Practice apparently “does not practice law” and therefore is not controlled by the lawyer-ownership rule.  As the deal was structured, IPH owns the IP Agency Practice without any problem because they are “not practicing law.”  The Law Practice is partially owned by the IP Agency Practice which is somehow sufficiently owned by lawyers, even though IPH owns the IP Agency Practice.  This clever approach apparently satisfies Canadian restrictions except for Alberta where Smart & Biggar’s law practice remains “wholly owned by individual lawyers.”  Still, at least according to the website, the Smart & Biggar Alberta branch is operating as part of IPH.

Back in Australia we have had some interesting events that began a decade ago when the country began to permit patent attorneys to incorporate in public firms. Shelston IP was the first IP firm to list itself on the Australian Stock Exchange back in 2015.  In 2019, IPH bought Shelston in a hostile takeover. Shelston has now been merged into Spruson & Ferguson as have Fisher Adams, and Cullens. Other IPH brands include Pizzeys; AJPark, & Griffith Hack.  Collectively, this is about 1/3 of the Australian national-phase market. What this means to me is that there is a good chance that competitors are are hiring co-owned firms to do their Australian work.

Throughout this time, there has been lots of turmoil for attorneys themselves, with a substantial percentage moving firms.  IPH has repeatedly sued its former employees who left to start their own firms — seemingly for “stealing” clients.

Australian patent attorney Mark Summerfield has been writing about these issues for the past several years on his excellent Patentology blog.

Could this happen in the US: The ABA model rules as well as USPTO rules prohibit law firms being owned by non-lawyers.  But, some states are moving forward with experiments.  So far, the USPTO has not suggested any changes.

14 thoughts on “Publicly Traded International Patent Firms

  1. 5

    Actually, Shelston IP was not the first firm to list on Australia. That honour went to Spruson & Ferguson, which formed IPH Ltd. Shelston came about a year later, creating Xenith IP Ltd, which was the listed entity acquired by IPH in what you describe as a “hostile takeover”, although the reality when it comes to listed entities is never quite so black and white. Shareholders are perfectly able to make their own decisions as to what is in their best interests.

    Thank you for linking to my blog. Interested readers will find much of my commentary and analysis under the tag patent attorney profession. Australia is an interesting case, but I would caution against pre-judging whether it is a good or bad example for other jurisdictions.

  2. 4

    What the US case on agents – Sperry v Florida? SCOTUS said that patent agents do engage in the practice of law in a limited sphere, but since it’s before a federal agency federal law preempts state law and thus patent agents can do whatever it is the uspto authorizes them to do, regardless of what state law says about the practice of law.

    On the other hand, the USPTO has warned agents that they’re not authorized, for example, to prepare assignment documents, since those are governed by state law, even though they’re authorized to record those documents before the USPTO.

    At any rate, I don’t see this becoming an issue in the US with respect to patent practitioners.

    1. 4.1

      The vector is in the opposite direction of Sperry in that Many States (for Access to Justice reasons) are the ones seeking to allow non-barred personnel to do legal work (and thereby Weakening the control of lawyers over their domain).

      If this sense of weakening continues to gain momentum, then the Animus behind the American rule against non-attorneys truly running law firms Greatly dissipates.

      1. 4.1.1

        OTOH, there was similar momentum back in the 90’s wrt allowing the big-6 (at the time) accounting firms to do routine corporate governance tasks. Then Enron happened … and people remembered why lawyers are different than other professionals.

      1. 4.2.1


        But have any of the items critical to Sperry changed such that case would have its holding or rationale no longer controlling or viable?

      2. 4.2.2

        Did I miss the ruling in which SCOTUS changed Sperry? If so, could you please point me to it?

        If SCOTUS hasn’t overruled Sperry, could you say what your point is?

  3. 3

    If the patent prosecutors in Canada are not practicing law, this suggests to me that the advice they provide to clients is not privileged. Perhaps there’s an argument that patent prosecutors who graduated from law school and passed the legal bar exam (as opposed to the patent bar exam) can provide advice that is privileged, but I would be concerned that any communications with patent agents is not privileged.

    1. 3.1

      No Larry – the Sperry case certainly establishes that US patent agents ARE practicing law.

    2. 3.2

      The Canadian patent and trademark agent legislation establishes patent agent and trademark agent privileges that privilege certain communications in the same way as solicitor-client privilege.

  4. 1

    But, some states are moving forward with experiments.

    I think that the bigger experiments are in the name of “Access to Justice” with attorney legal work performed by non-attorneys.

Comments are closed.