Tips From In-House IP Counsel on Developing a ‘Rational IP Strategy’ at IPWatchdog LIVE

From Left: Cynthia Deal-Mitchell, Bob Stoll, Carlo Cotrone and Leo White.

Legal professionals making corporate IP portfolio management decisions must have the ability to cut costs from underperforming assets while also making significant investments to protect market share. On Day 3 of IPWatchdog LIVE 2023, top legal officers for several companies currently navigating global markets offered their insights during a panel titled “The Hallmarks of a Rational IP Strategy.” While the panel discussion revealed no one-size-fits-all template for legal professionals to follow when building valuable IP portfolios, it underscored the need for IP attorneys to firmly grasp their clients’ business needs when determining which IP rights to obtain and where they should be leveraged.

Featured on this panel were Carlo Cotrone, Chief IP Counsel for Techtronic Industries; Cynthia Deal-Mitchell, Associate General Counsel and Head of Global IP for ZimVie, Inc.; and Leo White, Chief IP and Associate General Counsel for The Duracell Company. Serving as the panel’s moderator was Robert Stoll, Former Commissioner for Patents at the U.S. Patent and Trademark Office and currently Partner and Co-Chair of the IP Group at Faegre Drinker.

Balancing ‘Curtailment’ with Significant Investments in Obtaining IP Rights

In the last 10 to 15 years, many companies have dealt with a growing amount of downward pressure pushing them to “trim the hedges” of their IP portfolios, Deal-Mitchell noted at the top of the panel discussion. Stoll told panelists he had increasingly been hearing of “curtailment” as a mechanism for rationalizing patent practice by balancing product protection with C-suite desires to reduce costs. White responded that, in his experience, companies protecting innovation at the beginning of a product lifecycle don’t properly focus their filing efforts when choosing countries. “We have a narrow focus on where we file,” White said, indicating that several factors influence Duracell’s choice of filing countries, including those with IP enforcement systems effective enough to provide a successful outcome against infringers.

Representing a wide range of industries, the panelists provided different perspectives on how IP portfolio building practices should be tailored based on current business realities. Cotrone advocated for legal professionals practicing a reflective mindset so that portfolio decisions are rooted in changes to competitor behavior or the current stage of corporate growth. Broad-based patent application filing programs established by many companies are inclusive but can rely too heavily on mindsets that aren’t rooted in the business’s true value, he added. Cotrone and Deal-Mitchell both spoke about the usefulness of “checkerboarding,” a process of identifying countries where relevant activities by competitors, consumers, suppliers and counterfeiters are located to develop a corporate IP strategy.

The type of intellectual property rights used to protect a company’s competitive advantage in the marketplace is heavily informed by industry realities. White said that trade secrets in combination with contractual provisions were effective at securing several of Duracell’s proprietary developments in battery materials, processing and recycling. Cotrone noted that Techtronic had developed trademark strategies to respond to counterfeiting issues related to lithium-ion battery packs for power tools, although the company was cautious in pursuing rights in countries representing the market’s esoteric fringe. Both Cotrone and Deal-Mitchell reported their company’s use of copyright protections to enforce against online counterfeit sales using official product images, although Cotrone added that copyright matters were not as frequent for Techtronic as they might be at other companies.

Don’t Treat Outside Counsel as an End-Point for Outsourcing Legal Work

While outside counsel offering patent application drafting and prosecution services can help to lower IP budget expenditures, Deal-Mitchell said that she prefers to work with firms offering services at a higher flat fee inclusive of all costs. She noted that invoicing practices around trademark prosecution in particular are notorious for inclusion of extra costs that were not covered in the initial fee. While Duracell’s legal department employs lean business practices, White acknowledged it was important to enter into fee arrangements that were ultimately fair to outside counsel involved in prosecution or litigation. “If you’re on either side of a negotiation or relationship and one side gets all of the benefit, that’s going to be horrible in the long term,” White told attendees. Cotrone agreed, opining that outside counsel should not simply be treated as an end-point for outsourcing legal work.

Competitor activity will go a long way in determining a corporation’s IP strategy, but competitive activity may not be readily evident until it eats into a company’s bottom line. Paraphrasing the famed heavyweight boxer Mike Tyson, White told attendees that “strategy is great until you get punched in the mouth.” Along with the normal competition for market share from companies offering rival products to consumers, IP strategies must also be informed by bad actors. This includes diverters taking advantage of arbitrage situations in which licensed products in foreign countries are improperly resold back into the United States, not just counterfeiters trying to profit from sales of knock-off products. White remarked that over the past five years, Duracell had seen its most substantial wins in asserting trademark rights against parallel importers.

Artificial intelligence was a hot topic throughout IPWatchdog LIVE 2023 and each of the panelists have increasingly grappled with AI considerations in their corporate roles. While White reported that Duracell was taking a relatively slow approach to the adoption of AI, Cotrone noted that Techtronic had incorporated some AI into the development of certain power tool developments based on user data and protected by trade secrets. While Deal-Mitchell felt that current AI systems weren’t optimal for product design, she did see a use case in orthopedic surgery to develop tools that were less taxing on surgeons’ bodies, adding that such products could enable surgeons to have long careers and open up the field to more women doctors. Later, Deal-Mitchell also acknowledged that AI could be used to identify patent profanity to be removed from applications prior to filing.