It has now been three years since an article entitled “Meet the Middlemen” was authored by Ron Laurie and me, and published in the February/March 2008 issue of Intellectual Asset Management (IAM) Magazine. In that often-cited article, Ron and I presented a new taxonomy comprised of seventeen IP business models in the United States IP marketplace. Although, admittedly, the taxonomy we presented was not perfect, we did feel that it adequately described what we observed as the rise of intermediary business models in the marketplace. The taxonomy included “IP middlemen” such as: Licensing Agents, IP Brokers, IP-Based M&A Advisors, IP Auction Houses, On-Line IP/Technology Exchanges, and University Technology Transfer Intermediaries.
Individual inventors and corporate IP owners are used to dealing with Accountants, Lawyers and Investment Advisors – all professionals who are governed by federal and/or state professional regulations, as well as national association guidelines. Well, the question I now pose is: What professional and ethical regulations govern the conduct of these IP middlemen? The short answer is “none!” After all, there is no IP brokerage governing body. The USPTO has bigger problems. That is, individual inventors and corporate IP owners should not feel at ease because the invention promotion industry has been the focus of an anti-scam, public awareness campaign by the USPTO. This campaign is not aimed at the IP middlemen covered by Ron and I’s taxonomy.
Further, we should all realize that IP rights are not “securities” subject to state and federal regulations. Lastly, we all know that all states’ bar associations regulate attorney conduct regardless of whether the attorney is actually “practicing law.” An informal survey I conducted, however, suggests the amount of IP middlemen who are attorneys is less than 20% – the remaining personnel have business, financial and engineering backgrounds.
Interestingly, earlier this year, the British Standards Institution (BSI) – the UK’s National Standards Body – released standard BS 8538:2011, entitled “Specification For The Provision Of Services Relating to the Commercialization of Intellectual Property Rights.” The standard aims to “set[] out for the first time good practice and principles of ethical behaviour for organizations providing services to inventors.” The British Standard specifies middlemen ethical behavior principles relating to: integrity and competence; transparency regarding fees, costs and finances; confidentiality and the disclosure of information; the declaration of conflicts of interest; and complaint handling. It also specifies a process for service provision, covering: (1) initial engagement; (2) NDAs; and (3) evaluation of the IP; and (4) commercial agreements for the provision of advice and/or services.[1]
Also intersting is that the IP Office of Singapore (IPOS), in July of this year, launched an IP Competency Framework (IPCF) initiative that will promulgate standards for IP professionals. More specifically, it will “define the competencies required for key IP professionals and practitioners in the industry and accredit the attainment of these competencies into Continuing Professional Development qualifications that are recognised by the industry.” IPOS claims that the IPCF is “the first of its kind in the world on a nationwide scale.” Under the Framework, four key IP occupational levels have been identified, with fifty-seven competency units initially created. These will be developed and validated into standards with key industry experts from the IP services sector, academia, and the legal profession over the next three years. IPOS will also accredit training providers who would certify successful program participants.
So, will a U.S. body follow the lead of the UK and Singapore? Maybe the USA chapter of the Licensing Executives Society (LES)? We’ll see who steps up to the plate!
[1] Permission to reproduce extracts from BS 8538 was granted by The British Standards Institution. The standard can be downloaded at http://shop.bsigroup.com/bs8538.
{ 3 comments… read them below or add one }
That’s right genius, IP rights are the personal product of the inventor’s mind, freely bought and sold! No one has any business regulating that. You’re premis is flawed nanny-state socialist.
It was interesting to read your referral to Ethics in the IP Profession and the publication by The British Standards Association since I had also quoted this Standard in a submission to the joint Australian and New Zealand proposal (now approved) for a single Trans-tasman regulatory Framework for Patent Attorneys. It is further interesting since some years ago the UK deregulated their IP Profession enabling anyone to prepare Patent Applications for a fee regardless of being a registered patent attorney or otherwise. Deregulation followed a speech by a senior UK patent attorney which in essence asserted that it was not ‘Rocket-Science.’ – see the 7th to 9th paragraphs below. Other comments might equally apply to patenting in many jurisdictions.
Whilst I agreed with the objectives – the proposal for a single Patent Attorney authority for Australia and New Zealand or for that matter other / all co-operating countries -the Discussion Paper was disappointing since apart from brief mention concerning providing the public with guidelines – perhaps with ‘other objectives and effects’) – regarding the skills of persons entering the patent attorney profession, endeavouring to imbue public confidence in their service, delivery and ethics / discipline, the proposal paper seemed to primarily focus upon convenience and economic benefits for the profession and administration rather than those it should exist to assist > innovator / clients.
Whilst success would breed success, innovators world wide, particularly non-corporates, are constantly disappointed in both the results of their efforts and the expenditure involved – virtually always far beyond their anticipation. Many would agree that these difficulties have to an extent shrouded patents with a dissuasive cloud and reputation not only for those concerned, who are disinclined to repeat the process but also those to whom they may convey the ‘news,’ thereby somewhat leading to a disincentive to innovate and patent – totally contra the original objective of IP – few are satisfied. We should seek to repudiate and expunge that situation.
Sadly, in an area replete with abundant misunderstandings, the profession has not assisted as far as it might.
While the objective of educating the public (rather than having the basics minimised or glossed over ad initium) as mentioned above, has always been available to the administration this doesn’t seem to have been well addressed in either literature or websites currently provided from IP offices. While clients naturally tend to leave the efficacy of the documentation in the hands of their IP professionals (especially where they are ‘unaccustomed’ to the generally lengthy and ‘intricate or confusing’ presentation), rather than studying the requirements or overseeing the production themselves, it seems unclear how such education may be achieved or catered for unless IP offices communicate with patentees / applicants directly, including at least minimal outlines of essential requirements concerning searching, inventive or innovative steps / novelty, combination inventions, description, drawing and claims etc. That would greatly enhance client’s independent ability and or likelihood in ascertaining patentability (and hopefully commercial viability / success if this aspect was also addressed).
However addressing applicants post-filing (and their expenditure) is to an extent akin to bolting the door afterwards etc – so obviously greater effort is also needed to get the message out first in the simplest basic form.
While in a business situation if someone needs to be remunerated for preparing a patent application it should (or may as well) be a person experienced in that area rather than the inventor who might be left to concentrate otherwise, though granted the wording of claims is critical, it is arguable whether a specification, particularly a provisional specification, is as difficult as it is often made out to be, despite highlighting “skills.”
Some years ago a senior UK Patent Agent, in a published address stated “I have often said to brethren in my profession that when we get a letter from a sensible client with some sketches, telling us what his invention is and asking us to file an application with a provisional specification and we draft the specification then I have sometimes thought the specification is really no better than the letter and we might just as well have made a copy of the letter and pinned it to our patent application (forms) and we would have done the client well.” Indeed in recognition of that and other factors, in the UK the profession has been partially deregulated, the relevant Act permitting anyone to file patent applications on behalf of others for gain, these others / advisors, generally charging substantially less fees and they may not describe themselves as patent agents or attorneys – but then again the majority of those describing themselves as Patent Attorneys in the UK, Australia and NZ would not be permitted to do so in the US.
While the provisions mentioned above have not been well known even in the UK and there has been some IP deregulation in Australia, it is time this avenue was scrutinised again – commencing on a trans-Tasman and then perhaps a world basis.
The British experience with deregulation has not been negative and in fact to the contrary, in reflecting that situation, earlier this year the UKIPO, endeavouring to more widely disseminate information concerning the availability of alternate IP advisors, commenced specifically advising of this aspect in replies to unrepresented applicants and also published a booklet > http://www.ipo.gov.uk/ipadvisorbooklet.pdf. – this being in addition to the new British Standard covering service providers and ethics as cited by Laurence Higgins (Google it for several reviews). The cost of lodging the equivalent of a Provisional Specification in the UK – ZERO – also warrants local consideration.
If the UK can provide filing of Provisional Specifications free so can the US and other countries – it may encourage innovation at a time when it is needed more than ever.
Despite some International IP law ‘Harmonisation’ – albeit little – one need not speculate why (see * below) – and after 40 years of the International Patent Co-operation Treaty, which adds another layer of costs, the world is still, despite numerous overseas conferences, some distance from the ideal (well at least from an applicants point of view) of a ‘World Patent’ i.e. putting the inventor first contra numerous countries duplicating efforts + squandering expertise and resources – so regardless or along with a trans-Tasman agreement, the US, New Zealand and Australia as early adopters in many fields should address another challenge – urging forward that holy grail of IP – a true innovator / client desire!
Indeed as Dennis Crouch says “The world wide perception is that the US is joining the world with a first-to-file regime that will now allow for greater co-operation,” – hopefully another step closer to a world patent, regardless of those in favour or otherwise.
While innovators are yet to publically demonstrate as a reaction to beaurocracy, neglect, apathy and inaction + their frustrations, they certainly have in the past been driven to great ‘distraction’ – sometimes tragically so.
Given the benefits of efficacious innovation for both economies and standard of living generally, if we are sincerely dedicated to that goal, while progressing the interests of the profession and administration we would do well in also seriously looking closer at combining / adopting the best features of various countries IP systems (e.g The American Inventors Protection Act + the automatically granted 8 year Australian Innovation Patent) and then the members of ‘A Lucky Profession?’ (the title of the history of the IP profession in Australia) might be credited with contributing even more to the ‘Lucky Countries’ and world.
Stan Simpson
* A Lucky Profession – ISBN 0 949873 60 8 – Judy Wing – 1996 – Page 130 – esp. lines 33- 34 concerning the disinclination to adopt the PCT as it may reduce income for IP practitioners.
Thanks for the comment. Although, voluntary professional standards to protect IP owners doesn’t seem socialistic to me!