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Stepping up IP strategy with external agents

Publication June 2022

Large companies with competent intellectual property departments have comprehensive and refined plans for promoting their IP strategies. Companies without such luxuries often rely on the support of external investigation companies, IP agencies and lawyers (collectively, agents) to formulate and promote IP strategies. But even companies with strong IP departments will require the support of external agents in special cases or circumstances.

Many rights holders have effectively promoted their IP strategies by engaging external agents, but some have found the results unsatisfactory. In addition to situations where external obstacles are encountered during implementation of the strategy, or an agent fails to fulfil its responsibility, also consider the possibility of a misfit between the rights holder’s strategic leadership and the agent’s expertise. Establishing and effectively implementing an IP strategy is not easy. The benefits of engaging external agents can only be capitalised on when all aspects are analysed and considered.

PLAN AND STRATEGY

In simple, clear IP cases, direct actions are generally sufficient to settle the issue, requiring just a suitable strategy. However, for complex IP disputes or when an enterprise needs to establish an IP protection system, a tailor-made strategy is likely to be needed to address the issue effectively.

To develop a tailor-made strategy, consider both the enterprise’s business development and its IP deployment. IP types that may be involved, the scope of protection, measures to be taken, conflict with major competitors and their IP layout, and existing and potential IP infringement in the market, should be determined according to various business types and development stages. For specific strategies in complex cases, consider the size of the infringer, the scope of the infringement, available action, the direction and timing of the action, and adjustments based on the other party’s responses.

EXTERNAL HELP

In practice, enterprises attaching great importance to IP protection will also have high expectations for the depth and quality of services. Inherently limited by the scope of their service, in-house legal teams generally do not have access to vast, various cases. Therefore, when encountering new types of IP cases, enterprises may improve their success rate and accumulate experience with the help of external agents. Not every enterprise is equipped with an effective IP legal team, in which case engaging external agents can effectively make up for a shortage in expertise and quickly accumulate experience. For certain cases, external agents can be a desirable, cost-effective option.

EFFICIENT ASSISTANCE

After ascertaining a need to employ external agents, the first thing is to choose the right agent that suits one’s needs. Correct professional knowledge and business capacity form the bedrock of an agent’s candidacy, but enterprises should also consider agents’ strengths and how they match their own needs.

Where external help is needed due to a lack of manpower, it is generally sufficient to choose an agent with the corresponding expertise. When outsourcing batches of cases due to cost-effectiveness, consider the agent’s overall ability to handle massive numbers of cases. When coping with complex IP cases or establishing an IP protection system, a team of experienced professionals is necessary to support the corresponding strategy and its implementation.

For the third circumstance, the final outcome may still be unsatisfactory even if a suitable agent team were identified. Apart from any unavoidable external hindrances, the following aspects merit attention.

Comprehensive communication of facts. To put forward a complex IP strategy requires a comprehensive understanding and command of the facts, and the agent will, based on the facts, arrange further investigation, collect evidence, and consider complaints, litigation or other actions. Complex IP infringements may involve multiple infringers, requiring investigation of the legal liability of all infringers, especially the infringement controller, to contain any future issues. If the client believes the agent does not need to know the overall situation, but only needs to address certain parts of its concerns, it may lead to an incomplete grasp of facts and eventually unsatisfactory results. Therefore, it is vital not to leave out any details when communicating facts.

Full exchange of ideas. An agent’s professional advice is important, but the ultimate goal of the strategy is to achieve the client’s intended objective with the help of external forces. In this process, the most important thing is to have no concealment. Only if the client expresses its goal clearly and comprehensively, and adjusts to the direction in which it can gain the maximum legal support based on the agent’s expertise, can there be highly efficient co-operation between the parties.

Timely communication of strategy changes. Adjustments in strategy may occur in response to changes in the development of cases, the business environment or the client’s goals. In complex adversarial cases, the situation can change at any time. Whether it is in response to changes in the business environment or developments in the case, either party that learns of such changes must communicate and consult with the other party in time, and adjust the strategy accordingly to cope with the new changes. The key point in the process is trust.

While it is important for enterprises to have their own well-established internal IP departments, it is also true that, in different stages of development and under different circumstances, external assistance may provide greater results with less effort. A comprehensive understanding of facts, a full exchange of ideas, and timely communication of changes on the basis of mutual trust are important factors for achieving effective co-operation and the desired results.

The original article was published in China Business Law Journal, 28 April, 2022.

Author

Head of Shanghai Pacific Legal, Partner, Intellectual property, Antitrust and competition