Our own Shawn Lillemo writes about how the right automation tools can provide application drafters with extra time that can be spent fleshing out additional details of the invention, exploring alternative embodiments, and telling a good story about how the invention solves a technical problem. Read more on IPWatchdog.com.
Watch Shawn’s IPO Presentation on Patent Drafting Automation below!
The Leahy-Smith America Invents Act, more commonly referred to as AIA, provided the USPTO with fee-setting authority to implement micro-entity status in addition to the previously implemented small-entity status. Both small-entity status and micro-entity status designations reduce fees for some patent filers. In general, small entities are entitled to a 50% reduction in fees and micro entities are entitled to a 75% reduction in fees. For example, the basic Utility filing fee for regular entities, sometimes termed ‘large entities’ is $300.00. In contrast the same filing fees for small entities and micro entities are $150.00 and $75.00, respectively.
The USPTO sets a set of requirements for patent filers to claim small entity status or micro entity status. In short, a small entity may qualify based on organization type (e.g., an entity that is a non-profit organization or that has fewer than 500 employees) and assignee status (e.g., an entity that has not assigned, licensed, or conveyed an interest in the invention to a non-small entity). For micro entities, the USPTO qualifications include each inventor not having been named inventor on more than 4 prior patent applications or have a gross income greater than 3 times the US median household income.
Generally, entity status is a matter of self-certification. For example, a patent attorney may file an assertion of small entity status or micro entity status for an inventor or other entity. However, the entity status must be updated if there is a change. For example, if an inventor files a patent application and qualifies as a small entity at the time of filing, but later assigns the invention to a large entity, a notification of loss of entitlement should be filed and regular fees paid thereafter.
The USPTO provides a good faith error safe harbor, but remedies are not provided for fraudulent or other non-good faith errors. A common way that entity status may change is as a result of a change in size of the patentee. In such a case, the Federal Circuit has held that when small entity status has been established in error and small entity fees have been paid in error, a patent holder can correct a good faith mistake (DH Technology, Inc. v. Synergystex International). Notably, the Federal Circuit indicated that the patent does not lapse as a result of an erroneous payment of fess and become unenforceable.
Another situation where entity status may be in question is when a patent license agreement is entered that could result in an applicant no longer being entitled to small entity status. In Outside The Box Innovations L.L.C. v. Travel Caddy, Inc, a lower court determined that an agreement between a patentee (that was a small entity) and a distributor (that was not a small entity) included a patent license clause that stripped Travel Caddy of small entity status with regard to the patent at issue. Here, the per curiam panel of the Federal Circuit found that it was reasonable for those involved in the patent prosecution to have believed that the agreement did not includes a patent license clause within the meaning of 37 CFR Section 1.27(a)(2). In a dissent, Judge Newman provided instructive guidance that an incorrect filing of small entity status should not be per se material to patentability.
Nevertheless, out of an abundance of caution, patent prosecutors and applicants can take some of the following steps to ensure an accurate assertion of entity status.
Law.com (September 10, 2019) “We allow our attorneys to work where they want, when they want, and how much they want,” managing partner John Harrity says.
Firm Name: Harrity & Harrity, LLP
Firm Leader: John Harrity, Managing Partner
Head Count: 30 attorneys, 20 professionals
Location: Fairfax, Virginia
Practice Area: Intellectual Property
Governance structure and compensation model: Management by a three-person management committee, compensation is a pay for performance model
Do you offer alternative fee arrangements? Yes
**The following answers were provided by Harrity and edited lightly for style.**
What do you view as the two biggest opportunities for your firm, and what are the two biggest threats?
Our biggest opportunity stems from the fact that we are consistently able to provide high-quality, uniform patent work in a timely and efficient manner. Other firms, especially those that are using the traditional law firm model, are struggling to compete in today’s competitive, price-conscious patent environment. While some firms think that it is impossible to provide outstanding customer service in today’s environment, we are thriving. Our biggest threat is the difficulty we have attracting superstar attorneys to join our firm. This has long been one of our challenges. Big Law firms offer high starting salaries to attorneys who have very little experience. It can be difficult for us to compete when our model is pay for performance.
Some other opportunities for our firm are related to our remote staffing model. We don’t need every attorney at the firm to operate from our central office location, so we benefit from a pool of candidates that many law firms won’t consider because the candidate is interested in working remotely, or isn’t in the geographic footprint of other firms. We also see opportunity in the price pressure that is impacting the practice of patent law—while the big law firms struggle to find profitability in this area while bowing to the price pressures mandated by the large corporations that are setting the pricing standard for patent applications, we leverage technology and process improvements to ensure efficiency without sacrificing quality or our ability to make a profit.
The legal market is so competitive now—what trends do you see, and has anything, including alternative service providers, altered your approach? Is your chief competition other mid-market firms, or is your firm competing against big firms for the same work?
We go head to head with law firms of every size. Although we don’t directly compete with alternative service providers, I would still consider them to be competition. In the patent field, we have seen pricing for patent application drafting and prosecution come down, and we don’t expect it to go back up. Law firms tend to think that Patent 300TM companies will come to understand that higher prices are required to be able to provide outstanding customer service, including outstanding quality. This just simply isn’t the case. We have been focusing on efficiencies for more than six years. When I say efficiencies, I’m talking about leaning out our process steps and creating automation tools. Being able to provide outstanding customer service while charging less for patent services is not only doable for us in today’s patent field, but we are also simultaneously able to pay our attorneys top dollar.
There is much debate around how law firms can foster the next generation of legal talent. What advantages and disadvantages do midsize firms have in attracting and retaining young lawyers, particularly millennials?
I think we have a huge advantage over the big firms with respect to attracting and retaining young lawyers, including millennials. One thing you hear about with respect to millennials is that they want freedom. So, we give it to them. We allow our attorneys to work where they want, when they want, and how much they want. This freedom is an instrumental reason why we attract such a large group of candidates for open attorney positions. In addition to this freedom, we have a pay for performance model, which allows hardworking young professionals to make substantially more than their peers at the big law firms.
Does your firm employ any nonlawyer professionals in high-level positions (e.g. COO, business development officer, chief strategy officer, etc.)? If so, why is it advantageous to have a nonlawyer in that role? If not, have you considered hiring any?
An integral (nonlawyer) member of our firm is Rocky Berndsen, who leads Harrity Patent Analytics. He oversees an analytical team using cutting-edge capabilities to analyze patent data and extract insights for clients to use when making strategic decisions regarding patent portfolios. The team recently published its inaugural Patent 300TM Report, which ranks and analyzes the top 300 companies, organizations, and universities in the patent field.
What would you say is the most innovative thing your firm has done recently, whether it be technology advancements, internal operations, how you work with clients, etc.?
In September, we introduced our Minority Firm Incubator program, established to help train, cultivate, and launch minority-owned patent law firms. The program is an integral and innovative part of our ongoing initiative to advance attorneys who will contribute to the diversity of the patent field. Our firm will select two candidates from a pool of skilled applicants, and begin training them through an exhaustive four-year program that will not only prepare them to draft and prosecute patent applications, but also prepare them to successfully run their minority-owned patent firm as a business. In addition, what makes this a truly once-in-a-lifetime opportunity is that these selected attorneys will develop, during their time at our firm, relationships with Patent 300TM companies that are part of our program. Ultimately, the selected attorneys will learn how to successfully run their law firms abiding by Harrity & Harrity’s proven best practices, then formally launch their firms assisted by the already established corporate relationships.
Does your firm have a succession plan in place? If so, what challenges do you face in trying to execute that plan? If you don’t currently have a plan, is it an issue your firm is thinking about?
As a 20-year-old firm, our leadership is far from retirement age, but that has not stopped us from putting succession framework into place. We have established training programs that will help our associates develop the leadership and management skills they need to ascend the partner ranks. We have also engaged outside resources to make sure we’re doing the things we need to do to prepare for the day—many years down the road, we hope—when the firm’s leadership will transition to a new guard. We are prepared for that, and see no imminent challenges to implementing our succession plan.
About Harrity & Harrity, LLP
Harrity & Harrity is a patent preparation and prosecution firm specializing in the electrical and mechanical technology areas and is considered a Go-To Firm for the Patent 300™. Our clients have come to trust in our high-quality work, experienced people, industry leading innovation, and outstanding service. For more information, visit harrityllp.com.
On the Clause 8 Podcast, our own Eli Mazour talked to Gene Quinn about starting and running IPWatchdog.com – the most influential IP-focused website in America. They also talked about the IP policy landscape in Washington, how to effectively impact the policy making process, and various patent issues. #IntellectualProperty #Patents #Podcast
IAM (September 10, 2019) In the latest issue of IAM our cover story “the Boston Manifesto” is a call to action for the IP industry to increase gender diversity across all parts of the market. The piece, which subscribers can read here, reflects some of the challenges that women face in reaching senior levels, particularly in-house and in private practice. The article also contains some specific areas that all stakeholders should focus on.
This is a challenge confronting all parts of the IP system as stakeholders try to increase both the gender and racial diversity in their ranks. Arguably it is most pressing among the largest law firms that have struggled to grow the diversity of their workforce, particularly at partner level.
But it’s by no means only the denizens of Big Law who are zeroing in on how they can make their workforces more diverse. Last week Harrity & Harrity, a respected IP boutique with around 30 attorneys based in Northern Virginia, announced the launch of its minority firm incubator, an initiative designed to help foster the growth of minority-owned specialist IP law firms.
Starting in January 2020, the firm will recruit two minority attorneys who will be trained over the next four years not only in the ins and outs of patent drafting and prosecution work but also on how to launch and manage their own firms. To help those fledgling firms thrive, Harrity is signing up a group of businesses as programme partners. They have committed to giving any new firms work on a trial basis as and when they get off the ground. Accenture was the first to get involved, with somewhere between three and six companies ultimately expected to join on top.
Should the Harrity recruits decide that they’d prefer not to go down the route of owning their own firm then managing partner John Harrity said he’s “not going to kick them out the door”. However, he also said that he hoped the new programme would attract entrepreneurial types willing to take the plunge.
Harrity, who established his firm with his twin brother Paul, admitted that he needed to get over some doubts among his staff, such as why they would create more competition for themselves, before getting the initiative off the ground.
“There’s more than enough work to go around,” Harrity said he told his firm’s diversity committee, but he also admitted that there are plenty of concerns to be overcome outside of his own practice.
“One of the things that I’m finding out as we go out to the industry, talking to chief patent counsel at the largest filers, there’s a perception that minority firm means a firm that’s not good and is not going to be able to perform at a high level – we’re going to change that impression,” Harrity commented.
This is by no means his firm’s first diversity initiative. Three years ago it introduced a rule whereby it must interview a female or minority candidate for every male, non-minority candidate for any position. Since then it has gone from 8% diversity at the attorney level to 30% and Harrity insisted that this has had a marked effect. “It’s amazing how my firm has grown in the last three years, as we’ve taken this diversity journey,” he remarked. He pointed to a doubling in headcount, significant growth in revenues and profits, and more innovative thinking among the workforce as clear byproducts of having a more diverse practice.
“If you expand that out to the industry in general I think you’ll see the same types of effects and we’re going to start thinking differently which is really what the legal field needs to do,” Harrity maintained. He pointed out the irony of a lack of innovation on the subject among a patent community where much of the work is grounded in new ways of thinking.
“We’re in a field of innovation, that’s what the whole thing is about, and firms don’t do anything,” he claimed. That maybe an unfair accusation to lay at all IP practices but as Harrity’s new incubator shows, there is a growing realisation that more work is required to produce clear results.
To learn more about the Minority Firm Incubator and Harrity’s other initiatives to drive diversity in the IP legal field, visit harrity.com/diversity.
Harrity & Harrity Introduces Innovative Legal Diversity Initiative
Program designed to launch minority-owned IP law firms
WASHINGTON (September 3, 2019) – Harrity & Harrity, LLP today announced its Minority Firm Incubator program, established to help train, cultivate, and launch minority-owned patent law firms. The four-year program seeks to address the growing issues surrounding the lack of diverse representation in law firm leadership across the industry.
According to a study by the National Association of Law Placement, women account for just over 12% of partner ranks in U.S. law firms, while minorities account for just 8% of all law firm partners.
“The Minority Firm Incubator program is an integral and innovative part of our ongoing diversity initiative to advance attorneys who will contribute to diversity in the patent field,” said Harrity Managing Partner John Harrity. “The statistics show the legal industry has work to do and that’s why our firm has dedicated time and resources to take meaningful action.”
The Minority Firm Incubator program is comprised of four phases:
Candidates must be from a protected, diverse class; be an attorney or a law student graduating in 2019 and have a degree in electrical engineering, mechanical engineering, computer science, physics, or a similar technical field; be registered to practice before the U.S. Patent and Trademark Office; demonstrate a record of academic and professional achievement; and have a sincere interest in starting a law firm.
Applications will be accepted from September 1, 2019 through November 18, 2019. Candidates should email their resume and an essay, limited to 500 words, as to why they should be chosen to be part of the program to incubator@harrityllp.com.
For more information, please visit https://harrityllp.com/incubator.
About Harrity & Harrity, LLP
Harrity & Harrity is the nation’s leading patent preparation and prosecution firm specializing in the electrical and mechanical technology areas and is considered a Go-To Firm for the Patent 300™. Our clients have come to trust in our high-quality work, experienced people, industry leading innovation, and outstanding service. For more information, visit harrityllp.com.
