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When the U.S. economy plummeted in late 2000, trademark practices were dealt a severe blow as dot-com businesses went bust. Now many believe trademark is making a slow-but-sure comeback. Philadelphia trademark attorneys said the apparent recovery following the two-year recession is only the beginning of a gradual upward climb. Before the economy began to crash in 2000, the number of trademark filings had been at its highest level as the industry enjoyed two years of tremendous growth. “They [filings] are still below where things were in 1999,” Dechert partner Glenn Gundersen said. “We hit bottom in December 2000. We’re not getting back to the bubble year.” And the numbers don’t lie. According to a new publication, called The Trademark Insider, which compiles statistics from the U.S. Patent and Trademark Office, the number of trademark applications increased for the first time in two years, up 7.4 percent for the first quarter of 2002. Caesar, Rivise, Bernstein, Cohen & Pokotilow managing partner Manny Pokotilow said that the drop in trademark filings and subsequent increase are an indication of the relationship between the economy and the trademark industry. “I think it’s a question of the economy coming back,” Pokotilow said. “It’s interesting because trademarks tend to go with the economy, and usually the amount of trademarks go down when the economy is bad. When things are at their worst, patents become much more sought after. People are looking to make some money off the patents. The trademark practice is dependent upon the economy.” Despite the recent upswing, the economy is still feeling the effects of the recession, and the trademark industry is no exception. In late May, the PTO announced it would lay off 135 trademark attorneys in response to a decrease in the number of filings. Gundersen, who compiles national trademark statistics, said the layoffs are part of a plan to restructure the PTO and accommodate the falloff in trademark filings. “The motivation for that is a decline in trademark applications after years and years of increases,” Gundersen said. “So now you’re seeing things coming back, but they are still at the levels of several years ago.” The trademark industry experienced a significant boost starting in 1999 with mergers between several profitable intellectual property boutiques and firms looking to expand their IP practices. Three years ago, the IP boutique Panitch, Schwarze, Jacobs & Nadel merged with Akin Gump Strauss Hauer & Feld, expanding the Philadelphia office’s five-attorney IP practice to 33 and 80 nationally. Panitch Schwarze partner Roberta Jacobs-Meadway was appointed to oversee Akin Gump’s firmwide trademark practice. Since the merger, Akin Gump has consistently ranked in the top 10 for trademark firms. Most recently, it placed seventh in the 2001 issue of Intellectual Property Today. In The Trademark Insider, which ranks firms according to number of trademark applications submitted to the PTO, Akin Gump ranked 11th in the country in 2001 and dropped to 15th for the first quarter of 2002. Akin Gump partner Ronald Panitch, who heads the Philadelphia office and its IP practice, said the decline could be attributed to the loss of several trademark attorneys, including the departure of Jacobs-Meadway and her husband, Jay Meadway, to Ballard Spahr Andrews & Ingersoll in March 2001. “We have seen some departures from the IP section at Akin throughout the entire organization,” Panitch said. “We lost some people in Austin, San Antonio and Dallas — those kinds of changes have an impact. I think Jay and Bobby [Roberta Jacobs-Meadway] and the departure of those two who did primarily trademark are a part of that. They are a part of the general attrition that has occurred.” Panitch said Akin Gump’s IP section had developed an overall operating plan that entails expanding the practice through the acquisition of talented individuals rather than entire boutiques or practice groups. “We are targeting very specific groups — individuals who are of excellent quality and who can add significant contributions to the practice we want at Akin,” Panitch said. “We’re not just seeking large groups at this point, but rather being very selective in the way we are going out and building our IP practice.” Jacobs-Meadway, a founding partner of Panitch Schwarze — which was an offshoot of Seidel, Gonda, Lavorgna & Monaco — came over during the merger with Akin Gump, but left the firm less than two years later. Seidel Gonda merged with Drinker Biddle & Reath at the same time that Jacobs-Meadway went to Ballard Spahr over a year ago. Since then, Drinker Biddle has jumped in The Trademark Insider‘s rankings from 50 in 2001 to 27 for the beginning of 2002, while Ballard Spahr skyrocketed from 175 to 91. “It reflects Jay Meadway and myself joining the firm just as Drinker took a dramatic jump when they got Seidel [Gonda Lavorgna & Monaco] and Akin got Panitch,” Jacobs-Meadway said. “What a big jump generally reflects is the acquisition of another trademark practice or another trademark group. Again, the acquisition of a number of trademark attorneys says something about a firm.” Jacobs-Meadway said that the huge jump Ballard Spahr had made in the rankings could be partly attributed to the nature of its client base, noting that it was relatively unaffected by the economic downturn. “Our practice was not affected tremendously by what happened,” Jacobs-Meadway said. “Our practice was never focused on the high-tech, new-economy kind of company so that the downturn had much less impact on us. I think that the companies that are around have been around and will continue to be around to file trademarks, so we can protect trademarks without much interruption.” Drinker Biddle partner Greg Lavorgna said that the firm’s number of trademark filings had remained steady despite the dot-com collapse and that the merger with Seidel Gonda last year significantly expanded the IP and trademark practices. “We effectively doubled the number of trademark applications and marks we were handling for clients in terms of prosecution and post registration,” Lavorgna said. “It has basically given us the opportunity to handle all sorts of matters that come up and gives us a little bigger reach. We are a little more geographically dispersed — it gives us a little more of a regional reach. And with the opening of offices on the West Coast, we can reach clients out there, too.” With both Panitch Schwarze and Seidel Gonda having joined large local firms in the last few years, Caesar Rivise remains one of the few IP boutiques left in the top trademark firm rankings. Pokotilow said that despite these recent mergers, the firm had no plans to either join another firm or expand substantially. “If you take a look at what the number was that was being done with the firms that merged, it’s probably similar to what they were doing when they were boutiques,” Pokotilow said. “I’m not sure if they were enhanced by the mergers. Our trademark department has really always been a substantial portion of our practice that we have represented people on this basis for a long time, and fortunately our clients have grown with us.” While some other firms have suffered as a result of the economy, Pokotilow said Caesar Rivise had sustained its position among other trademark practices. “All the experience in combination with the fact that we have a stable base while the economy has been retracting has caused our numbers to remain stable by some of the firms that have been hit by the recession,” Pokotilow said. “I think we have a lot of stability in a market that has otherwise been receding.” Blank Rome Comisky & McCauley, which has not acquired any large IP boutiques or practice groups, ranked fairly high. IP Today placed them at 59th for 2001, while The Trademark Insider showed them jumping from 56 in 2001 to 30 for the first quarter of 2002. Blank Rome partner Tim Pecsenye said that the firm’s IP practice had experienced a fair amount of success in the past year or so. “I think perhaps a number of our clients have not been as directly impacted by the dot-com crash as many firms, and it’s very possible to have been impacted by the aftereffects and downturn of Sept. 11,” Pecsenye said. “I’d like to think the IP practice [at Blank Rome] has built quite a name for itself, building one of the more significant practices in Philly, and despite a downturn in general, we are doing a significant number of filings.” Cozen O’Connor partner Camille Miller, who joined the firm in May along with Woodcock Washburn’s entire trademark practice and fellow partner Laura Miller, said that the firm’s core client base had also allowed it to remain afloat in an otherwise grim economy. Miller attributed Cozen’s focus on IP growth to the trademark and copyright attorneys who came over from Woodcock. “They didn’t have the infrastructure in place,” Miller said. “They have been so committed to developing this practice that they have put their full support in us. They are entrepreneurs, and their view has fit well with our view, so I would say it has been an excellent fit. … We instantly gave them credibility.” Cozen may be expanding and strengthening its IP practice, but according to The Trademark Insider, the firm failed to make even the top 200 for 2001. The publication, which is currently only available over the Internet, is run by a company called Name Protect Inc. The rankings are based on the number of PTO applications submitted, but some trademark attorneys said this is an inaccurate rating method. “I don’t think it’s totally accurate to list the number of applications,” Miller said. “It is probably a cost-efficient way to do it. You usually talk to the clients, look into how many litigations associated with each filing. It is a combo of all these factors which is indicative of the firms.” Pokotilow said that the rankings do not supply a realistic picture of the different trademark practices. “All these surveys [are] a gross exaggeration based on numbers only, and they really don’t tell you much,” Pokotilow said. “I’ll just pull up all of my applications that we filed in a certain time period, and I find they misspelled my name, and many of the cases I have filed don’t even come up.” Jacobs-Meadway said Ballard Spahr’s ranking seemed accurate, but she said categorizing firms by the number of trademark applications omits a major component of the industry — firms that represent large companies that have their own in-house counsel. “Frequently you have trademark firms where a lot of them do in-house because you may represent them but not necessarily do their routine filing,” Jacobs-Meadway said. “Once certain clients reach a certain size, they do it in-house, and outside counsel does the contested proceedings and handles the trademark issues that are particularly sensitive for one reason or another.” Gundersen said this method of ranking discounts firms, such as Dechert, that represent companies that do their own filings with the PTO. “This shows you only the number of trademark filings that a firm makes,” Gundersen said. “Firms that represent larger companies that have their own in-house IP counsel tend to do the filings in-house, so a ranking like this doesn’t necessarily tell you who are the most prominent — it just tells you who does the most filings.” By using a system based on the number of trademark applications, a small difference in that number can produce a large gap between the various firms. In 2001, Ballard Spahr was ranked 175, while Dechert came in at 196, yet the difference in the number of applications filed was only 17. Jacobs-Meadway said it is often difficult to make a conclusion about trademark firms with merely this evidence. “I don’t know if there is something you can conclude from someone who files 500 to someone who files 450 and 400,” Jacobs-Meadway said. “You do have, again, just in terms of firms seeing the continual trend of clients reaching a certain size doing it through in-house counsel. That doesn’t affect the total number of filings, just where they are being filed.” Publication statistics about the small turnaround in the trademark industry are consistent with what some attorneys said is only the first step in the economy’s rebound. “I think it will take a period of time, but I think it will make a recovery,” Miller said. “There was a huge growth so fast, and with the dot-com collapse and the economy, they have been forced to lay off a good number of attorneys, but it is going to take awhile.” Related Chart: Firms’ Trademark Application Rankings

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