Saving money by slashing patent attorney fees wastes every dollar

By Gene Quinn
May 29, 2018

The unfortunate reality is everyone has a budget. Inventors, whether they are employed by corporations or universities, are talented engineers and scientists who come up with a never-ending stream of innovations that could be patented. There is only so much money to go around. Inevitably, choices must be made regarding intellectual property protection. Which innovations should be patented? How do you control costs once you decide to pursue patent protection?

One strategy often employed, and over the past decade employed with increasing frequency, is for corporations of all sizes to simply demand more work from their outside patent counsel. Compounding matters, generally speaking those that are artificially pushing patent attorney fees lower are requiring more work. In a world where the Federal Circuit and Supreme Court demanding only more disclosure and greater sophistication with every opinion released, artificially pushing down attorneys’ fees isn’t the best, and certainly isn’t the wisest, strategy these companies could pursue.


All too frequently little thought is given by those with ultimate decision-making authority about the long-term consequences of the decisions they make today. It is easy to demand today that a patent attorney shave 10% off their 2018 rates if they want to keep doing work for the corporation moving into 2019. It is also easy to convince yourself that if that patent attorney agrees that you’ve saved the company 10%. Instead, what has happened is by pushing down the cost by 10% you’ve guaranteed that the patent attorney will spend at least 10% less time on the applications, which when you consider the cramdowns from previous years starts to really add up.

Frankly, it is no wonder there are so many patents of questionable value. You know the kind. Those patents that you read and when you get done you don’t understand the invention any better than you did when you started. What is the invention? Who knows? The patent attorney was afraid to use the word invention in the application because there is this irrational fear that the word invention will somehow limit the scope of the claims, which is simply not true despite the myth that continues to hold sway in much of the industry.

What limits the scope of the claims isn’t the use of some magic word, and it would be rather ridiculous if in a patent application the use of the word invention would somehow destroy value. After all, the entire point of a patent is to protect an invention. If we are all going to be perfectly honest, what limits the scope of the claims, and thereby limits the value of patents and can absolutely cripple the value of a portfolio should the invention become truly valuable, is shoddy drafting of the specification. Failure to disclose all variations, alternative embodiments, permutations, combinations – whatever it is you want to call them – that is what limits the scope of the claims and results in patents that don’t teach the invention. Not the use of the word invention.

But some clients have so dramatically slashed what they are willing to pay for patent applications that it is hardly surprising that they wind up with a portfolio of C-rated patents, with a smattering of B-rated patents.

You get what you pay for, and C-level executives that play the role of bean-counter and only see that they are saving money today without any consideration of the damage they are doing long-term to their patent portfolios will wind up doing real, lasting and severe damage to their corporations. It is just that simple.

Rather than having a portfolio dominated by C-rated patents with a smattering of B-rated patents, corporations should be paying more to acquire fewer patents. A-rated patents is where the value is today.

The Supreme Court and the Federal Circuit have simply created too many impediments to obtaining and keeping a patent to justify the expense of spending any part of a budget on anything other than a patent that is done properly. So, you might think you are saving money by slashing patent attorney fees yet again this year, but what you are doing is wasting every dollar you spend.

So, what is the solution? There is no need to overspend. There are numerous, highly qualified patent attorneys and patent agents all over the country. They are located in small cities rather than the large metropolitan cities where overhead is outrageous. They are also located in smaller firms, which sometimes can even be in or near large cities. The point is you’d be better off paying a fair rate to patent attorneys with competitive rates than demanding your firm of record slash their rates.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded IPWatchdog.com in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 57 Comments comments.

  1. angry dude May 29, 2018 12:44 pm

    In a healthy patent system there is no need for reduced patent attorney fees even for the poorest independent inventors with groundbreaking inventions – they’ll be able to find investors to pay legal fees or just borrow money
    It’s not that much money (used to be) anyway – just don’t buy a new car for 25K and get a patent instead (that’s what I did back in 2002 to my regret – although mostly not for 25K wasted but for the loss of valuable know-how I could keep a trade secret for decades)

    In the current system paying patent attorneys any money at all is throwing good money after bad – total waste
    Like giving cash to a drug addict

    To the morgue !

  2. Anon May 29, 2018 2:18 pm

    Mixed emotions on the article.

    While agreeing with the overall thrust, the view that patent profanity does not exist (here, the example is of the word “invention”), does a disservice to the fact that patent profanity DOES exist, and is an immediate – and very often justified – response to the courts and the courts’ attempts to “slap down” what they view as “merely scriviners.”

    I would also posit that even “A-rated” patents have a tough go with the current Court’s anti-patent ramifications.

    I would also note that since eBay, it is the natural repercussion TO the Court to include less. When the Court super-empowers a Person Having Ordinary Skill In The Art, what an applicant need include goes down. Thus, it is to be fully understood that “don’t include that” reaction – which in times past would not be present and such material to help “beef up” applications would be included. As you point out Gene, The press to pay less ends up WITH less – and the Court has provided an avenue for attorneys to “safely**” give that “less.”

    **safely, of course, being a relative term, and does not account for the overall downward pressure from the Court and any “captured” political entities.

  3. CP in DC May 29, 2018 6:37 pm

    Finally someone willing to address this problem. I attend too many CLE conferences where nothing is said about the low budgets that create the problem patents that are discussed.

    I hear from practitioners that they want out. The constant pressure from clients to bill less and less cannot be maintained. During the economic downturn/recession/depression lawyers fee dropped and clients liked it. Now they want it all the time, it’s not sustainable. Attorneys retire early or look for alternative careers rather than continue doing patent prosecution. We can’t find new lawyers to take up the work because they’d rather do litigation/IPRs where the pay is better.

    I agree you get what you pay for in patent prosecution. I know clients don’t like to hear it, but it’s true. I do life science patents and these patents can run 100 pages or more. The budgets are so strained, that people include large amounts of boilerplate or one line sentences about “one embodiment.” The problem, in Europe none of it supports a claim amendment, and in the US, you have to draft 1000 claims because no thought went into the writing. Now you have a picture claim with a broad disclosure that renders obvious all future developments. How does that help? It doesn’t, but the application looked thick and wordy for the client at a low budget.

    I rant and apologize.

    I would prefer smaller applications, but well thought out. The problems with eligibility, IPRs, and claim construction require thought, a lot of thought for each application, not a lot of words.

    Fewer and fewer patent prosecutors read the relevant case law and therefore draft straight into the problems.

    As Gene points out, lawyers simply spend less time on the application. Thinking takes time, writing well takes time, reading and understanding takes time. With less time, you may not get any of the important aspects of an application.

    This view may be unpopular with clients and inventors, but it needs to be discussed. Otherwise, we will continue to see patents with so many faults that courts will give us bad law.

  4. Invention Rights May 29, 2018 8:34 pm

    But the security of a public franchise has no relevance to the amount invested and diligence in the application for the patent. Under the Oil States public franchise doctrine, it the only thing that matters is how much influence you have with the politicians running the PTAB. Very few of the most expensive patent applications with the most thorough disclosures, most precise claims, and most references survive the PTAB. Up front investment does not correlate with PTAB results, so why spend more?

  5. Name withheld to protect the innocent May 29, 2018 9:35 pm

    You get what you pay for. Also, if a good attorney has a choice of bringing on new work from client A or from client B (both long-term clients), but client B wants to slash their rates, expect the good attorney to take as much work as possible from client A and say “I’m a bit busy right now” to client B.

    Attorneys can make choices as well, and if you (as a client) are constantly at the low end of the scale in terms of paying for work product (those kind of numbers of been published for a very long time so its no secret), then don’t expect the highest quality work. If you are OK with having sub-par work, then slash away.

    Paying (cheaply) for sub-par work is a short-term benefit. However, you’ll pay for it the long run. Sadly, many corporations only care about the numbers for next quarter and not about building valuable assets for the long-term.

  6. angry dude May 29, 2018 9:56 pm

    CP in DC@3

    “Attorneys retire early or look for alternative careers rather than continue doing patent prosecution. We can’t find new lawyers to take up the work because they’d rather do litigation/IPRs where the pay is better.”

    No kidding, dude

    You don’t have enough willing and paying customers (inventors/startups/small to mid size companies etc) on the front end of the patent meat grinder – thus patent prosecution business suffers

    Give it some time – once they kill all valuable patents issued 10-15 years ago or those patents naturally expire (like mine will soon) there will be no money on the litigation/IPR side too (unless you litigate apples vs samsungs – but how many of you can find employment there ?)

    Dudes, I told you 5 years ago where it was going… and was accused of being overly pessimistic loser

  7. exert May 29, 2018 11:05 pm

    This is true not just for the initial drafting and filing, but for amendments, too. When attorneys are getting paid for 4 or fewer hours to respond to an office action, the response will include 1, maybe 2 if you’re lucky, arguments/amendments, usually the first that pop into the attorney’s head. Not a thorough review or response by any measure. So prosecution is dragged out for many more responses than would be necessary if a good first response had been made, complete with alternative arguments and additional dependent claims.

    Anyway, I’m hoping things get better, because I put a lot of time into learning and developing these patent skills I have . . .

  8. step back May 30, 2018 12:45 am

    The trend is very clear.

    As the likelihood of seeing big returns on investment (ROI) from patent applications heads toward zero (which it is thanks to Congress/AIA, SCOTUS/eBay/Alice and PTAB), inventing entities both big and small are modifying the amount they are willing to invest in the same direction (to zero).

    We’re at a price point where the industry is near collapse. No right minded law student will want to enter into such a field of long work hours and no pay. No right minded solo inventor would want to waste time, passions and monies chasing after an illusive dream. This Game of Thrones is at completion’s end. Everybody dies. (Ring around the AIA. A tissue, a tissue, we all fall down.)

  9. Chicago IP May 30, 2018 3:10 am

    I must agree that you get what you pay for. I would also love to be able to keep raising my rates.

    I do not have a huge problem with companies dropping their OC rates. Although, I would indeed have a personal issue with getting paid less for the same work.

    The reason I do not have a huge problem with companies dropping their OC rates is because I do not feel I am entitled to their generosity.

    Basic supply and demand. If there are plenty of sources of a service, the rates will go down. If the sources are scarce, the rates will go up. If enough patent practitioners are willing to work for lower fees set by the companies, the companies will pay lower fees.

    As pointed out, if a practitioner has two clients willing to provide plenty of work, the practitioner will do more work for the higher paying client and turn away work from the lower paying client. If you want more pay, find better paying clients.

    The challenge is finding the good paying clients.

    To support part of what Gene said in the article with an anecdote, while also supporting the challenge of finding good clients, friend A of a friend B went in house at a company. Friend A noticed the patents at the company were of poor quality and found out the work was being sent to a large firm that, based on the lower pay for the work, would give the work to first year associates, new patent agents, and even tech writers, who all provided lower quality patent work. Friend A wanted to send the patent work to friend B’s firm, whom friend A personally knew would provide greatly improved patent quality at the same price. As it turned out, the head counsel had a friend at the large firm so they kept the work despite the proven poor quality for the low price.

    First point being that finding good paying clients often depends on who you know. Second point being that companies often get what they pay for. Third point being that the low pay did not necessarily mean low quality because better quality practitioners were willing to do better quality work for the same price.

    Supply and demand. Companies will pay what practitioners are willing to work for. If you don’t like what a company pays, find a better client or find a different job.

  10. Benny May 30, 2018 6:56 am

    “they wind up with a portfolio of C-rated patents, with a smattering of B-rated patents”
    I think that happens primarily because corporations want to showcase large patent portfolios but don’t have the innovation to back it up.

    The law of diminishing returns also kicks in at some point. Obviously you are not going to get a good return on a $100/H patent drafting attorney working from the extension bedroom of his parents house in the suburbs, but on the other end of the scale $800/H probably won’t get you a more watertight application than $500/H.

  11. Atlanta IP May 30, 2018 7:36 am

    Great article. Clients also need to realize that within a law firm, the caliber of associate attorneys working there can vary significantly. It is not uncommon (and to be expected) for the high-caliber associates, who are in high demand from the firm’s clients, to choose to avoid working for the clients that have the lowest budgets.

  12. EG May 30, 2018 8:22 am

    Hey Gene,

    A very sad but true statement about how myopically business management, as well as SCOTUS (especially Breyer) views application drafting. Preparing a patent application is one of the most difficult and challenging tasks in law to do properly, especially as we’re lucky if we get a month or perhaps even a few weeks to prepare one. Meanwhile, that same business management is more than willing to pay much more for litigators (many of whom have no science or technical degrees) who will spend years picking over the same words that we had very little time to choose. Very ironic and sad indeed.

  13. CP in DC May 30, 2018 8:42 am

    @ Chicago IP.

    The supply and demand theory works in an efficient market. However, law is not an efficient and transparent market.

    No one knows, what rates their competitors charge, how many hours it takes to write a tech application, a pharma application, or other application. They all take different times. We have an idea about rates but only approximations (some very inaccurate), and have no idea about discounts (yes lawyers discount their bills for some clients), and we have no idea of the collections rate (yes some clients don’t pay their bills or only offer partial payment), all these factor into a supply and demand analysis. In a transparent efficient market, supply and demand work, in an inefficient market it does not.

    As Gene and you point out, getting the work is the hardest part. Because the market is inefficient, in house counsel cannot compare quality, cost, timeliness, responsiveness, and results across multiple providers. I explain it this way: when you want to buy a polo shirt, size medium, blue and cotton, you input these variables into your search. Then the results come out and you can compare make, colors (different shades of blue), size, materials, COST, etc. After the comparison, you make your purchase. Supply and demand control the market. Not in law. No one advertises their rates (their real rates), no real firm says “we can write your patent in 20 hours” sight unseen and without knowing what you have, no firm says “you can have a patent in X years.” It’s because there are too many unknowns and predicting outcomes without knowing anything is difficult if not impossible.

    Because the law market is inefficient, then attorneys rely on “relationships” to determine who gets their work. Attorneys supplant the market efficiencies with trust in people they know, thereby diminishing competition. I’ve heard the same stories multiple times, companies keep the law firm they have because the higher up knows someone there. Quality, cost, responsiveness, and results are at best secondary if that.

    I am still studying the market dynamics to determine how to break the cycle, it’s a difficult task.

  14. EG May 30, 2018 8:42 am

    “All too frequently little thought is given by those with ultimate decision-making authority about the long-term consequences of the decisions they make today.”

    Hey Gene,

    Very sad but true. Drafting a patent application properly is one of the most challenging tasks to do in the law, more art than science to do it correctly. If we’re lucky we get may be a month to draft one but more likely only a couple of weeks at best, frequently under severe time pressure. Speaking of time pressure, is business management aware that what we do incurs some of the highest rates in professional liability insurance?

    I also find it ironic that the same business management which will only pay commodity rates for application drafting is more than willing to spend huge amounts of money for litigators (many of whom have no science or technical degrees) to pick over the words for years/months which we had only a limited amount of time to write. As the saying goes “a penny wise, and a pound foolish.”

  15. #PatentsMatter May 30, 2018 8:50 am

    Gene:

    Thanks for bringing up this topic. After practicing for 13 years and speaking to old timers, prosecution spending is a tough sell when only 5% of patents drive licensing deals.

    Prosecutors must also retrain and adapt often to new tools to get better outcomes. Businessmen in tech expect new products to command high prices while existing product prices fall as competition increases and the workforce gets more productive.

  16. in-house ip director May 30, 2018 9:33 am

    A number of thoughts on this from the in-house perspective.

    Any company active in the patent process that is not on flat/capped fees for patent prosecution tasks is doing a disservice to itself. They make budgeting a heck of a lot easier. They eliminate attorney whining in response to push back on 5 to 10% yearly (!) rate increase requests. Build in an increase every few years aligned with inflation and then neither party has to do the awkward “we think you should pay us more” “but we don’t want to pay you more” dance.

    Consider identifying the patent prosecution superstars and bring them in-house. I’ve started doing this and have 3 of them on my team. If you do the math it’s at worst a wash for the company $-wise. And you get better work product since the superstar can spend twice as much time writing the patent application/responding to the office action/whatever as she would have had as outside counsel. I’ve also noticed that patent prosecutors in their 30s are much less likely than their predecessors to want to stay in private practice and don’t care too much about the slight pay decrease.

    Requesting yearly rate/flat fee increases that *outpace* inflation is outrageous. A patent prosecutor’s ability plateaus at about year 6 or 7. That is, that person has reached her max efficiency and effectiveness at that stage. I’m not sure how a partner still writing/prosecuting patents can justify a 5% per year increase when I’m not seeing any additional value for that 5%/year.

    The talent level in patent prosecution has become startlingly bad over the past 5 to 7 years. I’ve had about 50 associates at outside firms work on our portfolio in that time frame and I can think of 3 who I’d be comfortable giving work to. Firms are paying way too much for the talent coming out of law school.

    Companies using large firms for prosecution are increasingly looking to jettison them. There’s simply no need to pay for the overhead baked into the rates. Find me a five-person shop of superstars in the suburbs of Topeka. Unless there’s some significant institutional knowledge there’s no need to use a 40 attorney “powerhouse” in downtown Chicago for routine patent prosecution. The future of patent prosecution is little shops headquartered outside of major metro areas and that have virtual docketing/admins. Prices aren’t going up, so if you big firm prosecutors can’t handle your distribution going from $500K to $425K for the foreseeable future take a look at the writing on the wall and get serious about reducing overhead. These little superstar mini-boutiques will make a killing in the coming years because they can provide superior (truly superior) quality at the same or even a lower price point.

  17. American Cowboy May 30, 2018 9:44 am

    When a corporation buys a load of widgets, they use their purchasing departments to weigh considerations of quality and price. Yes, they want the lowest price they can get, but not if it means they are buying deficient widgets. They turn over the purchasing of patent prosecution services to attorneys who, one would hope, apply at least a similar methodology. But, it seems price becomes the only consideration.
    That strategy may make sense if you are a big corporation who wins the market competition with financial heft and really has no intention of suing people for patent infringement. Instead, the goal of the patent portfolio is be as big a pile as possible that the company can point to as the source of possible patent infringement counterclaims to assert if the corporation is sued for patent infringement. The plaintiff faces the daunting challenge of wading through the morass of big corp patents as well as making its own legitimate infringement claim. Paying for numerous patents, but paying the minimum needed to get a patent number is the goal of the big corp strategy.
    The fact that that counterclaim strategy does not work against non-practicing entities is what has fired up the big corps on the patent troll theme. The deep pocketed companies spent the last decade or so rampaging against NPE’s, to preserve their favorite strategy of paying as little as possible for a defensive portfolio.

  18. Gene Quinn May 30, 2018 9:54 am

    in-house ip director @16

    Great comments. I agree all around. I’d like to use your comments during the webinar tomorrow and incorporate them into the PowerPoint presentation if you have no objections.

    Thanks.

    -Gene

  19. in-house ip director May 30, 2018 12:42 pm

    Gene, by all means go ahead.

  20. angry dude May 30, 2018 2:08 pm

    CP in DC @13

    “I am still studying the market dynamics to determine how to break the cycle, it’s a difficult task”

    :):):):)

    Keep studying, “esquire”…

    Learn some Mandarin too

    This is no rocket science, dude

    Back in 2002 I had 25K cash in my hand and had trouble finding patent attorney who would meet my stringent but very reasonable requirements

    But soon enough you’ll be like an old w$%^& looking for some wasted drunk with some cash at the after hours club – that’s where you are heading

    Nothing personal, BUT I predicted this many years ago and no one here believed me

  21. Quasar18 May 30, 2018 2:22 pm

    I am a fairly new attorney (less than 4 years experience) at a small boutique firm and even we are getting squeezed. It is not just the big firms.

    We bill by the hour and it is very hard for me to learn the ropes with the time pressure I am under. At my rates, I can only justify spending 8 hrs absolute max on a response to an Office Action. For an application, a max of 20 hrs. I simply do not have the experience to be that efficient, and once I am, I fear my annual rate increases will outpace my efficiency gains. Even the partners at the firm eat a ton of their own hours.

    So while in the short run, I think small firms will start to win out over large ones, However, over time, with the insane cost-cutting and commodification rampant in prosecution, I think even small firms will lose out due to the billable hour.

    Until there is a viable way to measure patent quality, I think these trends will continue and the work will go to firms that are willing to pay low flat rates and not completely screw up an application or a prosecution in a way that is instantly noticeable (a very very low bar)

    Do any of the more seasoned attorneys who commented above have any advice about how I can preserve my career in light of these alarming trends? I really like patent prosecution but I fear that it is in a steep decline. Is more of the work going to be moving in house? If so, would that be the best way to ensure my longevity in the field?

  22. in-house ip director May 30, 2018 3:33 pm

    @Quasar18

    Eat your time. The first year or two will suck (you’ll bill 1800 hours and eat 600 to 800 more than that) but you’ll either learn how to be good and efficient or learn that you can’t hack it and want out. Bonus points for getting “in” with the partners who won’t be losing money by having to write off your time. As much as firms say “bill all your time,” there’s a disconnect between firm policy and how partners make money. If you want a long-term career there, please the partners. If you want out in a couple years, bill like nuts and then get asked to leave after a year or two.

    Truth time, though: that’s advice I give first and second years. If you’re spending 8 hours responding to an Office Action as a 4th year you may not be able to cut it. 4 hours is more the norm these days for the vast majority of corporate clients unless you’re in pharma/biotech. (Maybe 5 hours max if your partner doesn’t bill much.)

    A pure career focus on patent prosecution is career suicide at this point unless you have (or are in with the person who has) multiple million-dollar prosecution clients. Branch out into trademarks/brand protection and privacy.

  23. angry dude May 30, 2018 4:24 pm

    Quasar18 @21

    “would that be the best way to ensure my longevity in the field?”

    Well, dude

    Getting rid of scotus (Gorsuch can stay), cafc, 90% of congress critters, many district court judges and quite a few folks in the Trump’s administration (possibly including him) would help

  24. Anon May 30, 2018 6:15 pm

    4 to 5 hours on a OA reply is not reasonable.

    It is ONLY reasonable if the OA is the only thing you do, you wrote and prosecuted the case, and the Action itself is reasonable.

    There is a serious disconnect if you as Internal Counsel has this view of your outside counsel (and you are likely getting VERY off-the-cuff responses, short-changing yourself).

  25. Pete Moss May 30, 2018 11:00 pm

    In-house patent counsel perspective.

    1. Outside counsel need to find out the client’s business reason for a patent. If the reason is to add another patent plaque to the wall, send the invention disclosure to a less expensive new associate. If the purpose is to license a second source, create a bargaining chip with a competitor, protect a recent acquisition, protect a crown jewel product, or protect a new industry standard, send the invention disclosure to an upper level associate/lower level partner. I worked at a boutique firm and as in-house patent counsel. When I was a new associate at the boutique, I never asked a single client what the client intended to do with the patent. I just focused on the law, the prior art and the claims. Big mistake.

    2. Making your gladiators wealthy hurts the bottom line and is just plain dumb, so patent litigation should be avoided at all costs. I would rather pay $600/hr to a good prosecutor who will draft a strong patent and help eliminate my need for a team of 1200/hr litigators later. Litigators have clout at firms, but I put a much higher value on skilled prosecutors.

    3. I hire attorneys, not firms. I have a stable of attorneys, each at different firms, and each attorney has a different billing rate. Each attorney gets new cases not based upon their billing rate, but based on their respective historical technical and creative strengths. It is unreasonable to think that one attorney at a Big Law firm is the answer to every new invention disclosure. No one knows everything. Play to personal strengths first and justify costs later.

    4. Patent spending should be proportional to the business being protected. If R&D, acquisition, marketing, tooling, future revenue, etc. add up to a healthy seven figures or more, spending five figures for meaningful, purposeful patent application is cost effective, especially when patent costs are amortized over 8, 15 or 20 years.

  26. Tesia Thomas May 31, 2018 1:09 am

    This is pitiful.

    Lawyers should do the job to the best of their ability if they take it.
    If you don’t agree with the price then don’t take the job.
    Don’t do a shoddy job just because the budget is low.

    If you feel like your performance deserves a particular rate of pay then demand it or decline the work.

    Low budget is no excuse for poor workmanship. Take pride in your work, attorneys.

    Because if you consider yourself an A-level patent practitioner and you regularly deliver B-level and C-level work product for ANY reason then you’re doing yourself a disservice.

    So, deny the work. Tell the client to pay for you or get lost. Don’t do a crap job then blame low budgets.

  27. Tesia Thomas May 31, 2018 1:09 am

    This is pitiful.

    Lawyers should do the job to the best of their ability if they take it.
    If you don’t agree with the price then don’t take the job.
    Don’t do a shoddy job just because the budget is low.

    If you feel like your performance deserves a particular rate of pay then demand it or decline the work.

    Low budget is no excuse for poor workmanship. Take pride in your work, attorneys.

    Because if you consider yourself an A-level patent practitioner and you regularly deliver B-level and C-level work product for ANY reason then you’re doing yourself a disservice.

    So, deny the work. Tell the client to pay for you or get lost. Don’t do a crap job then blame low budgets.

  28. Tesia Thomas May 31, 2018 1:16 am

    This really speaks to attorney integrity.
    If you’re really worth a million bucks then you wouldn’t settle for less…unless desperate, naive, or you just want to get paid a million bucks.

  29. Tesia Thomas May 31, 2018 1:17 am

    This really speaks to attorney integrity.
    If you’re really worth a million bucks then you wouldn’t settle for less…unless desperate, naive, or you just want to get paid a million bucks.

  30. CP in DC May 31, 2018 9:42 am

    Some comments are worth a closer look.

    in-house ip director proposed some conflicting information.

    The advice to Quasar18 @21 is to bill 1800 hours (reasonable estimation) but have to eat 600 to 800 hours. Well, partners never like to hear you didn’t make your hours, so Quasar18 bill 2400 so when you get cut 600 you make the 1800. Otherwise, not making hours is the easiest way to unemployment. But take a closer look at the analysis.

    There are 365 days in a year, 52 weekends, and since I’m generous I’ll give you weekends off, that’s 104 days, now we are down to 261. If you bill 2400 hours, that is 9.2 hours BILLED a day, five days a week, every week of the year. Got sick, lawyers don’t get “sick,” need to go to the doctor? well that is your weekend time. Can’t take a long lunch because billing 9.2 requires about 11 hours at the office, commuting time not included. And if you miss the mark, well we always have Saturday (there goes the weekend off). And in case you missed it, no Thanksgiving (or the Friday after), no Christmas or New Years unless they fall on your weekend. And all this doing prosecution for 9.2 hours a day, every day.

    Quasar18, your ability to move in-house is best at 4 years. Thereafter, you will be viewed as “too old” to get an entry level position and “not have in-house experience” to get a higher up position. Ask around those associate/friends you work with, especially older prosecutors you trust.

    You can see that if you are honest about analysis, it’s not pleasant. But lets not stop there.

    In-house ip director also made the following statements:

    The talent level in patent prosecution has become startlingly bad over the past 5 to 7 years. I’ve had about 50 associates at outside firms work on our portfolio in that time frame and I can think of 3 who I’d be comfortable giving work to. Firms are paying way too much for the talent coming out of law school.

    So you would give work to 3 out of 50 patent attorneys. That’s 3% of the attorneys you know. Then you hire away the talented ones (like other companies), thereby reducing that 3% to a lower number. Now here is the kicker…. “The talent level in patent prosecution has become startlingly bad over the past 5 to 7 years.” Well pay less, promote less, work harder and people notice other options. Talent level has dropped because talent has left prosecution in droves ever since the rates/fees have dropped and the workload has increased. They now do IPRs to destroy your patents. Ironic isn’t it?

    and now more.

    Requesting yearly rate/flat fee increases that *outpace* inflation is outrageous. A patent prosecutor’s ability plateaus at about year 6 or 7. That is, that person has reached her max efficiency and effectiveness at that stage.

    The pay is not related to the rate of inflation but to competition for good lawyers.
    When we have 6% (using your numbers and this is rapidly diminishing) of talented lawyers, and they have other opportunities, now you got competition in a real transparent market. Associates are not dumb, they compare salaries and pick the highest knowing the party will end soon. In life sciences, clients want PhDs, I know that’s where I work. A PhD takes years think 7 to 10, don’t include postdoc years. Law school costs 150k to 200k (you did want talent), so talent has to pay student loans. Now competition is intense and the rewards are diminishing.

    The track to partnership is longer, longer, and longer, and once their you must recruit a book of business to survive. Once it took around 5 years (well before my time) now it’s more to 12 (ask Finnegan), and patent prosecutors are rarely promoted to partner even in boutiques because it’s not as profitable. Naturally most leave and start their smaller boutiques. Not in Topeka…

    Boutiques start with former large firm people, Topeka does not have that. Also, you need access to clients because you have to recruit them. So boutiques are at the outskirts or in big cities. You need a critical mass to start a firm with specialty people, patent prosecution is highly specialized. We all understand the lower overhead, the virtual docketing and admin systems, those are already widely used. No one has libraries (or librarians), docketing departments, copying services, and much has been pushed onto paralegals (secretaries have been long gone) or attorneys (cutting into time further). I think we are reaching a breaking point.

    I could go on and on, but I won’t. I know you’re glad I stopped. But one last point.

    I’ve read on this blog how people complain about paying for patents and that getting patents is expensive. Now the courts (Supreme and Fed Cir) have made the patents valueless. So naturally people want to pay less for items of little or no value (whether real or perceived). Why are surprised fewer attorneys want to work in this field?

  31. in-house ip director May 31, 2018 9:48 am

    @Anon,

    Assuming $450/hour for a senior associate and $650/hour for a reviewing partner, that comes to about $2500 for 4 hours of associate time and 1 hour reviewing partner time. And this ignores paralegal time.

    I’m buddies with in-house folks at a big auto company that has a $1500 flat fee for office action responses. Major chip manufacturer has a $2500 flat fee for office action responses. Major aircraft manufacturer as a $2200 flat fee for office action responses. Mine are $2300. And I get great results because my team substantively reviews every response, calls out garbage, and culls firms.

    Tesia is correct: If you think you’re worth more money, prove it. If you do garbage work you will get fired once people catch on.

  32. Gene Quinn May 31, 2018 10:06 am

    Tesia @ 27

    I disagree 100%. This is simply not how business works. If the client walks in and says I’m willing to pay you $5,000 for a $10,000 job then they shouldn’t be surprised when they get $5,000 worth of service (not $10,000) worth of service. And when they get $5,000 worth of service the work product is simply not going to be as good as it would have been had the client been willing to spend more.

    It is great for those buying services to want double the service for half the price, but that is simply naive. There is nothing unprofessional or shoddy about providing the service the client pays for. That is actual quite professional and appropriate business. Clients get what they pay for.

  33. Gene Quinn May 31, 2018 10:10 am

    Tesia @27

    One more thought… Attorneys represent clients. That means the attorney acts on behalf of the client. The client comes to the attorney because they don’t want to do something themselves, or feel they can’t do something themselves. If the client gives you a budget you represent the client within that budget, period.

    I don’t know why this is a particularly shocking revelation. When a customer comes into a business and has a certain budget they are given certain services or products that fit within that budget. They are not given services or products that are double or triple their budget. Why would anyone expect lawyers to be any different?

  34. in-house ip director May 31, 2018 12:08 pm

    @ CP

    “The advice to Quasar18 @21 is to bill 1800 hours (reasonable estimation) but have to eat 600 to 800 hours. Well, partners never like to hear you didn’t make your hours, so Quasar18 bill 2400 so when you get cut 600 you make the 1800. Otherwise, not making hours is the easiest way to unemployment. But take a closer look at the analysis.”

    Most boutiques have 1800 hour requirements. 2000 is really more biglaw than anything. But substitute whatever your requirement is for the 1800. Same principle applies.

    “There are 365 days in a year, 52 weekends, and since I’m generous I’ll give you weekends off, that’s 104 days, now we are down to 261. If you bill 2400 hours, that is 9.2 hours BILLED a day, five days a week, every week of the year. Got sick, lawyers don’t get “sick,” need to go to the doctor? well that is your weekend time. Can’t take a long lunch because billing 9.2 requires about 11 hours at the office, commuting time not included. And if you miss the mark, well we always have Saturday (there goes the weekend off). And in case you missed it, no Thanksgiving (or the Friday after), no Christmas or New Years unless they fall on your weekend. And all this doing prosecution for 9.2 hours a day, every day.”

    That’s right. Work Saturday or Sunday mornings. If you want to perfect your craft, you practice your craft. I’m not seeing the issue here. You get out of it what you put into it.

    “Quasar18, your ability to move in-house is best at 4 years. Thereafter, you will be viewed as “too old” to get an entry level position and “not have in-house experience” to get a higher up position. Ask around those associate/friends you work with, especially older prosecutors you trust.”

    Agreed.

    “The talent level in patent prosecution has become startlingly bad over the past 5 to 7 years. I’ve had about 50 associates at outside firms work on our portfolio in that time frame and I can think of 3 who I’d be comfortable giving work to. Firms are paying way too much for the talent coming out of law school.

    So you would give work to 3 out of 50 patent attorneys. That’s 3% of the attorneys you know. Then you hire away the talented ones (like other companies), thereby reducing that 3% to a lower number. Now here is the kicker…. “The talent level in patent prosecution has become startlingly bad over the past 5 to 7 years.” Well pay less, promote less, work harder and people notice other options. Talent level has dropped because talent has left prosecution in droves ever since the rates/fees have dropped and the workload has increased. They now do IPRs to destroy your patents. Ironic isn’t it?”

    Your 3% is actually 6%, but yes, that’s right. There are still good ones around, but they’re harder to find.

    “Requesting yearly rate/flat fee increases that *outpace* inflation is outrageous. A patent prosecutor’s ability plateaus at about year 6 or 7. That is, that person has reached her max efficiency and effectiveness at that stage.

    The pay is not related to the rate of inflation but to competition for good lawyers.
    When we have 6% (using your numbers and this is rapidly diminishing) of talented lawyers, and they have other opportunities, now you got competition in a real transparent market. Associates are not dumb, they compare salaries and pick the highest knowing the party will end soon. In life sciences, clients want PhDs, I know that’s where I work. A PhD takes years think 7 to 10, don’t include postdoc years. Law school costs 150k to 200k (you did want talent), so talent has to pay student loans. Now competition is intense and the rewards are diminishing.

    The track to partnership is longer, longer, and longer, and once their you must recruit a book of business to survive. Once it took around 5 years (well before my time) now it’s more to 12 (ask Finnegan), and patent prosecutors are rarely promoted to partner even in boutiques because it’s not as profitable. Naturally most leave and start their smaller boutiques. Not in Topeka…

    Boutiques start with former large firm people, Topeka does not have that. Also, you need access to clients because you have to recruit them. So boutiques are at the outskirts or in big cities. You need a critical mass to start a firm with specialty people, patent prosecution is highly specialized. We all understand the lower overhead, the virtual docketing and admin systems, those are already widely used. No one has libraries (or librarians), docketing departments, copying services, and much has been pushed onto paralegals (secretaries have been long gone) or attorneys (cutting into time further). I think we are reaching a breaking point.”

    I could go on and on, but I won’t. I know you’re glad I stopped. But one last point.

    I’ve read on this blog how people complain about paying for patents and that getting patents is expensive. Now the courts (Supreme and Fed Cir) have made the patents valueless. So naturally people want to pay less for items of little or no value (whether real or perceived). Why are surprised fewer attorneys want to work in this field?

    So essentially companies should pay more to outside counsel so they can pay more to law students so more talent goes to law school?

    Nah. Figure out how to attract and retain talent yourselves. Have the equity partners take a $50K pay cut and use it to attract talent.

  35. Tesia Thomas May 31, 2018 12:40 pm

    Gene, but it is and to call yourself an A-level Attorney when you produce less than A-level work product is inconsistent.

    An A-level firm is judged by its work product. If you’re producing anything less then you’re not an A-level firm. You’re a finicky firm. Your level changes like the weather.

    If you’re a firm that needs 10k to do your very best 100% and you accept 5k to do 50% then your rating effectively becomes 75%. That’s not A-level

  36. Tesia Thomas May 31, 2018 12:43 pm

    Gene,
    No. A business with integrity would ‘no quote.’

    If you sell high end fashion but customers complain about paying $200 for socks then you tell them to go to a low end designer.
    If you stooped to produce $2 socks for them then you’re no longer high fashion and your integrity is in question.

  37. Tesia Thomas May 31, 2018 12:57 pm

    What you’re describing is a high end fashion line advertising $200 cashmere socks and keeping low end $2 polyester socks on hand for low paying customers.

    It means attorneys are desperate for any business but make amends begrudgingly for not getting the income they want from clients.

    “I’m an A-level attorney but I’ll take your C-level case because I need billable hours. I don’t care what the inconsistency does for my brand. I want money.”

  38. Tesia Thomas May 31, 2018 1:01 pm

    And that’s because a TRUE NEGOTIATION is one that gets the same value for less. If yoy can’t come to terms. No deal.

    When you buy a car and ask for money off, say 20%, do you expect them to give you 20% less of car or the 100% car you’re asking for?

    See now?

  39. Gene Quinn May 31, 2018 1:18 pm

    Tesia-

    We are going to have to agree to disagree.

    It is simply unreasonable for clients to expect a Cadillac when they pay for a Yugo. You get what you pay for. That is the reality of business, and should be hardly surprising to anyone.

  40. Tesia Thomas May 31, 2018 1:19 pm

    And that’s because a TRUE NEGOTIATION is one that gets the same value for less. If you can’t come to terms. No deal.

    When you buy a car and ask for money off, say 20%, do you expect them to give you 20% less of car or the 100% car you’re asking for?

    See now?

  41. Tesia Thomas May 31, 2018 1:22 pm

    And that’s because a TRUE NEGOTIATION is one that gets the same value for less. If yoy can’t come to terms. No deal.

    When you buy a car and ask for money off, say 20%, do you expect them to give you 20% less of car or the 100% car you’re asking for?

    See now?

  42. Tesia Thomas May 31, 2018 1:24 pm

    Yes. But that’s why Cadillac dealers set a certain price for their cars and stick to it.

    By your logic, the Cadillac dealer would give you half a car if you only paid half of its worth.

  43. Anon May 31, 2018 2:25 pm

    in house @ 31,

    You cap an action response at 5 hours and want 20% of that to be “review” from a $650.00 reviewing partner…?

    You are living in an illusion.

    By this, you may believe that you are seeing reality (and maybe seeing this “reflected” in your bills), but that is just not reality. That’s the client-presented bill after write-downs and other actions.

    CP in DC has the closest approximation to reality.

  44. Anon May 31, 2018 2:27 pm

    Gene,

    I can tell by the “double comments” that your site is still processing posts at a MUCH slower pace than just a week ago or so (people are expecting to see their posts, don’t, and repost thinking that perhaps something they did went amiss).

    I suspect this may slow over time, as people realize that there is a lag, but you do have a substantial lag issue going on.

  45. American Cowboy May 31, 2018 2:49 pm

    Pete at 25 says “Outside counsel need to find out the client’s business reason for a patent.”

    I say “Danger, Will Robinson!”

    The risk is that if the reason suggests doing a less than top-drawer job, and the client’s reason for the patent may very well change, say ten years later and lead to litigation. The deficiencies of the less than top-drawer patent make the scrivener look sloppy so he becomes the inevitable scapegoat (and potentially a malpractice defendant). So to cover his derrriere, the scrivener does a memo to the file saying “In house counsel said this case is not important so don’t do a full-budget, top-drawer job.” That memo turns up in the litigation.

    Who wants to take the blame?

  46. in-house ip director May 31, 2018 3:18 pm

    Anon @ 43,

    We’re on capped fees, actually, so we see everything, including write-offs. It usually ends up with an hour partner billed, 4 to 5 associate billed, and one or two written off. Sometimes none if the right associate is working on it. And my attorneys don’t complain. They can provide above-average product at our budgets. Others couldn’t, and they’re gone.

    If you’re spending 8+ hours writing office action responses for long-time clients—of whom you have significant institutional knowledge re: their products, their art units, and the prior art—either you’re not efficient, writing poor dissertations as responses, or filching your client. Unless you’re in pharma.

  47. CP in DC May 31, 2018 4:37 pm

    a few remarks

    In-house proposes:

    That’s right. Work Saturday or Sunday mornings. If you want to perfect your craft, you practice your craft. I’m not seeing the issue here. You get out of it what you put into it.

    But they can also work those hours doing litigation and get more money, more chances of promotion, and not the constant budget constraints. At times, I do litigation and it’s a LOT easier to bill those hours and clients don’t complain about budgets because they KNOW they are spending tons of money (not $2300 per deposition or day of discovery).

    So essentially companies should pay more to outside counsel so they can pay more to law students so more talent goes to law school?

    It’s not about putting talent through law school (those days are over). It’s about making the pay attractive enough (budgets too) to attract and KEEP talent in the field. Those lawyers you hire got trained at a firm. If a new lawyer can’t make payments on their student loans, lawyers will find other law work (did I mention litigation?).

    Nah. Figure out how to attract and retain talent yourselves.

    We can’t hire people that are not applying for the jobs.

    Have the equity partners take a $50K pay cut and use it to attract talent.

    it’s not that simple, that number is not even close.

    Don’t get me wrong, I like this profession, loved it when I started. As I go, I’ve noticed the problems. The fix is more complicated than quick fixes.

  48. Anon May 31, 2018 7:53 pm

    In house,

    Your caveat of “institutional knowledge” is already in my posts.

    As I stated, IF you do need thing else but that limited space, IF you are the one that wrote the app, IF you are the one that has seen the app through its first RCE cycle (and thus more likely to be able to meet the next), and IF the Office Action is a reasonable one – ALL mighty big IFs – THEN a 4-5 hour response with an hour written off is reasonable.

    And on top of that, IF you have a person at that level handling the response, AND you are still paying for a full hour of review, YOU are getting fleeced.

  49. EG June 1, 2018 9:44 am

    To all:

    What the client cares about most is the total cost for the work, not what the attorney’s billable hour is. For the past 9 years that I’ve been in a solo IP practice, almost all my patent prep/pros work is done on a “fixed fee” or “cost not to exceed” basis. I do have a billable hour figure, but I use that primarily to figure out what the “fixed fee”/”cost not to exceed” will be based upon how many hours I expect the work to take. (With almost 41 years of patent practice experience, I can usually figure how many hours it will take.) That allows me to focus on doing the work correctly and not worry so much about how many hours I’m spending doing it. It also avoids surprising the client with costs they didn’t expect.

    The problem with many firms (especially larger ones) that do both litigation and patent prep/pros work on a billable hour basis is that they don’t understand that the latter is better done as “fixed fee”/”cost not to exceed” project. That’s why I think patent prep/pros work is better done by small/solo IP boutiques which can focus on doing this sort of work (which more craft/art than science) correctly and efficiently. You may not make as much as litigation (frankly, I don’t care for the life style that litigation work brings with it), but you can still make a decent living, especially if you can get a sustainable volume of patent prep/pros work. (The comment by “ip director” to also do trademark practice is a good one, as I’ve been doing that now for over 20 years, after 19 years in corporate practice doing solely patent prep/pros and my initial year in small firm IP practice doing both patent prep/pros and litigation.)

  50. Anon June 1, 2018 9:53 am

    Pardon the autocorrect…

    “IF you do need thing else”

    should read:

    “IF you do nothing else”

  51. step back June 1, 2018 10:29 am

    In-house @46 writes:
    … Unless you’re in pharma.

    Absolutely correct.
    I just spoke with Justice Kennedy and he confirmed. Any 2nd year college student can do any Office action in 3 hours or less in any tech area and over the weekend “… Unless they’re in pharma.

    /end of sarcasm (as if you didn’t get that this what it is here)

  52. patent attorney 12 June 1, 2018 2:54 pm

    Great discussion. But I’m interested in others’ thoughts about any attorney ethics issues. If an attorney accepts a patent application matter at a low payment rate, is it o.k. to then go ahead and prepare a mediocre application or office action response?
    I have hazy memories of statements from my law school ethics course, saying something like: if an attorney cannot represent a client zealously for the cost that would be paid, then the representation should be declined.
    Or is my memory off there?
    Also some bar rules say that an attorney should not intentionally or recklessly fail to perform legal services with competence, and that competence means to provide legal services with diligence, learning and skill reasonably necessary for the performance of the service.
    So, if in return for a low payment rate, would the preparation of a mediocre application or office action response constitute a failure to perform a legal service with competence?
    Thanks.

  53. Tiburon June 1, 2018 6:36 pm

    Don’t bother with patents, they are worthless – especially relative to open source success examples. One needs to look no further than this very website (press CTRL-U to see HTML source). You’ll see the following open source getting pulled in to build the webpages you see:

    WordPress: 0patents
    jquery: 0patents
    OpenTracker: 0patents
    FormSwift: 0patents
    Feedburner: 0patents

    All successful not only in terms of return on investment (either acquired or generating revenue) but also the irony being relied upon by a pro-IP/anti-opensource site.

  54. Night Writer June 1, 2018 9:37 pm

    >> Instead, what has happened is by pushing down the cost by 10% you’ve guaranteed that the patent attorney will spend at least 10% less time on the applications, which when you consider the cramdowns from previous years starts to really add up.

    What the corporations are doing is keeping the fees flat or lowered by about 50% over the last decade —and—the real kicker is that they are then hiring people to insure that a good job is done. That is they are hiring people to review our work! Crazy.

  55. Anon June 2, 2018 4:39 pm

    patentattorney12 @ 52:

    This emphasis might remind you here of the ability to set the terms of the agreement:

    if an attorney cannot represent a client zealously for the cost that would be paid, then the representation should be declined.

    In other words, “zealous” is demarcated into different levels of zeal, and tied to the agreed upon cost.

    At whatever agreed upon cost level, the corresponding level of zeal is what may be agreed upon, and what may be the tender of the offer/acceptance.

    One would not reasonably expect a full “no holds bar” unless that level of zeal was met with an appropriate cost.

    Ethics is thus not impugned here.

    Of course, however “low” the expected level of zeal may be set, the “job” must still be done dutifully.

    Further, setting “zeal” commensurate with a cost does NOT implicate intentional or reckless performance/competence necessarily.

    This is similar, I daresay, to the ability to set different levels of search for third party search reports.

    Best Practice dictates only that one obtain the best possible search report for a given set of conditions. Those conditions reasonably change, and thus there are – reasonably (and ethically) – different levels of search reports.

  56. JTS June 4, 2018 12:19 pm

    CP in DC@3:

    “I would prefer smaller applications, but well thought out. The problems with eligibility, IPRs, and claim construction require thought, a lot of thought for each application, not a lot of words.”

    So true. Over the years, I’m finding myself spending several days just planning a patent, the scope of the claims, thinking about the closest art, deciding the most important aspects, distilling details, etc. A well outlined patent, even a complex one, with claims written first can be drafted in a day. When prosecuting applications written by others, 9 out of 10 lengthy specifications are garbage; the drafting attorney failed to pin down the invention and claim it.

  57. Night Writer June 6, 2018 9:15 pm

    >>in-house ip director

    We sat around talking about prosecution after a large IP meeting. Basically, the problem is that many of the corporations are like in-house ip director. They want top quality work for cut rate prices. There are also still corporations that are willing to pay us about 50 percent more than in-house. One problem is that all the good associates want to work for the reasonable rate corporations and not work for the cut-rate corporations. We also discussed how to get rid of corporations like in-house’s.

    We also discussed how fewer people are going into patent law and one reason is that the wage gap is much smaller than it was 10 years ago between an engineer and a patent attorney. An engineer is probably better off sticking with engineering and maybe getting a MS or PH.D. or MBA than getting a JD and becoming a patent attorney.

    We all generally loathed the type of work described by in-house. Basically, a slave driver cutting us as much as possible. Also, my guess is that what in-house is saying is probably wrong. The small shops have a hard time building very specialized expertise and adapting to losing and gaining clients.

    Anyway…my advice is not to become a patent attorney. My prediction is that if patent value picks back up that more of the corporations like in-house will find that they are put at the end of the queue for work. We’ve fire clients like in-house. They are miserable to work for.