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Intellectual property lawyers are in demand in Silicon Valley — at least for now. The top IP lawyer at a Milpitas, Calif., semiconductor company has written a software program that does a lot of the administrative work involved in acquiring patents usually done by IP lawyers. Sandeep Jaggi, chief intellectual property counsel at LSI Logic Corp., wrote a series of software programs that, combined with a database, helped him reduce his staff and enabled him to move most of his work out of state. While the company isn’t in a hurry to get the program to market, it could eventually help other companies do the same thing — and put a dent in the demand for IP lawyers. Jaggi is working with several companies to commercialize the program, which is owned by LSI. “It has cut down our costs so drastically,” Jaggi said of his program, which he hasn’t named. In three years, Jaggi has shrunk his team of lawyers from six to four and halved the team’s six paralegals. In all, LSI has just nine lawyers working in the company’s legal department. Since 2000, he moved 90 percent of his patent work to firms outside of Silicon Valley to places like Detroit, where rates are cheaper. His outside counsel, meanwhile, have had to accept discounted flat fees — which in many cases are acceptable in less expensive areas of the country — and give up control over the process of getting a patent. They now must be pre-authorized to perform the kinds of work they once did automatically, like return a phone call from the Patent and Trademark Office. They risk not getting paid for any work they end up doing unless it’s cleared by Jaggi’s department first. “It requires having a good, steady communication with the client,” said James Austin, a Beyer Weaver & Thomas partner in Berkeley who works on LSI patents. The upside to agreeing to adapt to the demands of LSI’s patent procedures, which became fully automated earlier this year, is a steady stream of work and quicker, more dependable payments, Austin said. Jaggi’s program performs all of the administrative tasks of assigning work to lawyers and keeping track of their progress. Once Jaggi’s team decides how to proceed with a patent for a new technology, it assigns the work and automatically generates e-mails with instructions and reminders to the lawyers. The program sends out some 400 e-mails every day, including the documents the lawyers need to do their tasks, Jaggi said. By getting rid of the paperwork, so to speak, Jaggi said the program has increased productivity by 400 percent in his department while absorbing the tasks of five people. To put that into perspective, Jaggi describes it this way — if every patent application in 1995 cost LSI $1 to produce, that cost is now 17 cents. And now there are more patents. Jaggi said the company had fewer then 1,000 in 1999. Since that time, the company has secured another 1,400 patents, and the number is growing even as its IP legal staff dwindles. The reduced department now manages in excess of 10,000 patent-related matters, and while Jaggi works with about 50 law firms, the program could track countless firms. For the lawyers still on LSI’s roster, getting up to speed on the program wasn’t a simple process. Austin said he had to make sure his lawyers were authorized to do the work they had recorded in LSI matters. In the early days, he had to ask LSI for authorization after the fact in a number of cases and hope the firm got paid. In most cases, he said, it was. “There was a transitional phase to it,” Austin said. “Possibly they were frustrated with us, but I think we accommodated each other during the transition.” The firm also had to get used to letting go of a process it usually controls, Austin said. For one thing, Austin said he likes having a complete set of documents on the matters he handles. In some cases, his staff has to contact LSI’s team for updates for his files. One of the benefits for outside counsel is faster paychecks. Lawyers billing LSI for patent work fill out online forms for the projects they complete instead of mailing an itemized bill. If the firm’s price matches the pre-authorized flat rate, a check is sent automatically. Christopher Maiorana, a solo IP lawyer in a Detroit suburb who has worked with LSI since 1999, said the program allows IP lawyers to concentrate on the art of writing applications instead of the paperwork. The impersonal process of getting projects by e-mail had an unexpected benefit, Maiorana said: LSI lawyers no longer call and try to wrestle out free advice. For Jaggi, the benefits of his program are more than financial. He can now survey the company’s patent portfolio in a matter of minutes, a process that used to take a month of calling all of the outside law firms. And the system tracks activity at the Patent and Trademark Office so Jaggi knows when someone else applies for a patent that’s closely related to one that LSI holds. “I know exactly who is trying to get into my space,” Jaggi said. “That gives me added intelligence.” Jaggi, who graduated from Santa Clara University School of Law in 1996, holds a doctorate in electrical engineering. After joining LSI Logic in 1995, Jaggi created a simple spreadsheet with the names of all of the company’s inventors. He started adding features. Then three years ago, he started to write a program to automate most of the patent application process. The company, which posted $1.8 billion in sales in 2002, spent $1,600 for computer equipment for Jaggi, who devoted countless nights and weekends to churning out the code. “We’re probably the most efficiently run IP law group in the country,” Jaggi said. “The amazing power you have when everyone is actually institutionalizing knowledge and data on a daily basis is a win-win situation.”

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