It is hardly a secret that corporate IP departments are under growing pressure to do more with less. Budgets are tightening, leadership increasingly expects patents to deliver measurable business value, and artificial intelligence is rapidly changing how patent work can be performed. What does this mean for the future of in-house patent teams—and for the law firms that support them?

This week on IPWatchdog Unleashed, I was joined by Sivon Kalminov, Director of Intellectual Property for Canon USA, and Fran Cruz, Senior Vice President of IP Solutions at JuriStat, for a wide-ranging discussion on how modern corporate IP departments are adapting to a rapidly changing environment.

Our conversation explores several major trends shaping patent strategy today, including the shift toward quality over quantity in patent portfolios, the growing emphasis on maintenance fee pruning and portfolio discipline, and the evolving relationship between in-house counsel and outside patent law firms. We also examine how companies are using competitive intelligence, patent analytics, and emerging tools to guide filing strategy, manage costs, and identify licensing and enforcement opportunities. We also tackle one of the biggest questions facing the IP profession: What can AI realistically do for patent practitioners today—and what can’t it do yet?

Portfolio Hygiene Is Becoming a Priority

One of the most visible shifts in corporate patent strategy is a renewed emphasis on portfolio discipline. Maintenance fees—particularly for large filers—can accumulate quickly. Budget realities are forcing IP teams to evaluate patents not only for legal defensibility but also for commercial relevance. Patents that protect key product lines, support licensing initiatives, or provide defensive coverage against competitors naturally rise in importance. And those that do not have a strong business justification just drain precious resources.

As a result of increasing fees and shrinking budgets, many companies are implementing more structured “portfolio hygiene” programs. Instead of evaluating patents only when maintenance fees come due, organizations are increasingly reviewing portfolios quarterly or semi-annually to identify low-value assets that can be abandoned without compromising portfolio scope.

This shift to jettison low-value assets is tied closely to a broader strategic move toward quality over quantity. In the not-too-distant past accumulating large numbers of patents was often seen as a competitive advantage. Today, corporate leadership is increasingly asking a different question: Do these patents actually support the business? And for organizations with thousands of patents, even small improvements in patent portfolio management can produce significant cost savings.

Rethinking the Law Firm Relationship

Budget pressure has also affected how corporations manage outside counsel relationships. According to Cruz, companies that once distributed patent prosecution work among dozens of firms are increasingly consolidating those relationships, with work flowing to a smaller core group of outside law firms. And to identify those firms who get more work, companies are analyzing performance data and narrowing their outside counsel rosters to firms that demonstrate both efficiency and quality.

Flat-fee structures are the norm for patent prosecution, and in some cases, companies are requesting year-over-year fee reductions. At the same time, in-house teams are implementing more explicit policies governing prosecution strategy—such as when to request examiner interviews, when to abandon applications, and when appeals are justified. These policies allow companies to maintain tighter control over cost while ensuring consistent prosecution practices across outside firms.

Of course, companies are wise to recognize that cost reduction has limits. As I noted during the discussion, asking firms to cut fees repeatedly without adjusting expectations about workload or quality is not a sustainable strategy. Successful partnerships require realistic economics on both sides

The Rise of Hybrid In-House Models

Another notable trend is the emergence of hybrid in-house models. Some companies are bringing portions of the patent process in house while continuing to rely on outside firms for specific aspects of prosecution.

In Canon’s case, the company handles virtually all Canon U.S.A. patent prosecution work internally while using outside counsel for other company filings and filings in other jurisdictions. That approach offers several advantages. In-house attorneys can work closely with engineers and R&D teams, gaining deeper technical insight into the inventions they are protecting. Meanwhile, outside firms can still provide specialized expertise, global filing capabilities, or additional capacity when workloads increase.

The model may also evolve further. One possibility discussed during the conversation is the concept of embedded patent counsel, where attorneys from outside firms work onsite with a client’s engineering teams while still leveraging the infrastructure of their law firm. For smaller companies that cannot justify building a full internal IP department, such arrangements could offer a cost-effective way to integrate patent expertise directly into product development processes.

Competitive Intelligence Is Becoming Critical

Another emerging trend among corporate IP teams that we discussed is the growing importance of competitive intelligence. If budget constraints limit how many patents a company can file, the strategic question becomes where to file. Understanding competitor activity—both geographically and technologically—can help guide those decisions.

IP teams are increasingly analyzing competitor patent filings, manufacturing locations, and emerging technology clusters to ensure their portfolios remain strategically aligned. For example, identifying jurisdictions where competitors are aggressively filing patents can highlight areas where a company may need stronger coverage. Similarly, understanding where future manufacturing hubs may develop can inform global filing strategies as well

AI: Enhancement, Not Magic

No discussion of modern IP practice would be complete without addressing artificial intelligence. Despite the hype surrounding AI, adoption within corporate legal departments has been cautious. Internal governance rules, confidentiality concerns, and corporate approval processes often slow the deployment of third-party tools. Nevertheless, AI is beginning to influence patent practice in meaningful ways.

Kalminov emphasized that AI should be viewed as an enhancement tool, not a replacement for human expertise. While some vendors claim that patent applications can be drafted automatically, practitioners still must carefully review any AI-generated content. While AI is proving to be valuable for certain tasks it is far from a “magic button” that replaces human expertise.

Where AI currently excels is in tasks involving large datasets. Patent searching, competitive landscape analysis, and document summarization are areas where AI can deliver immediate value by rapidly processing vast quantities of information.

Cruz described emerging tools that can map competitor portfolios, identify technology overlaps, and highlight potential licensing opportunities—tasks that once required weeks of manual research.

In short, AI is proving most useful where speed and scale matter most.

The Future of the Corporate IP Function

The evolving role of in-house patent teams reflects broader changes in how companies view intellectual property. Historically, many organizations treated IP primarily as a defensive legal function. Today, leadership increasingly expects patent portfolios to support revenue generation, competitive strategy, and business growth. Meeting those expectations requires IP teams to operate with greater strategic sophistication than ever before.

As budgets tighten and technology evolves, the organizations that succeed will be those that rethink how patents are created, managed, and deployed. The goal should not be to simply file more patents. The goal is to build the right portfolio—and to do so as intelligently and efficiently as possible.

More IPWatchdog Unleashed

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