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When Fish & Richardson missed a patent filing deadline for client Kairos Scientific Inc. in 1999, the mistake cost the San Diego biotech company $30 million in potential licensing fees. At least that’s the dollar amount San Mateo County Superior Court Judge Carl Holm placed on Fish & Richardson’s error when he ordered the firm to pay damages to Kairos in a malpractice case last year. Fish’s appeal is pending. According to a Fish spokesperson, the firm missed the date because of human error — someone deleted the deadline from the firm’s docketing system. Still, the case highlights the importance of meeting filing deadlines, and of docketing software. These programs — used to manage filing, prosecution, and maintenance activities for patents and trademarks — have become essential tools. Malpractice insurers increasingly want to know exactly what kind of software a firm is using, says Brian Roche, director of sales for software vendor Dennemeyer & Company Inc. Software that accurately tracks filing and other deadlines with the 181 or so patent offices worldwide, and catches filing errors and inconsistencies, helps reduce the threat of getting sued. In our first IP Law & Business Technology Survey we asked the 50 largest patent firms, ranked by number of registered patent attorneys, what docketing software and annuity software they use. Most firms use both: docketing software to manage prosecution of pending patents and trademarks, and annuity software to manage payments of maintenance fees and taxes on existing patents. Docketing and annuity software developed along separate lines, and historically firms used separate software programs to manage each task. Recently, however, most of the major vendors have started offering linked systems, and many firms are slowly starting to adopt them. We also asked firms what kinds of tools — Web sites, databases, and the like — they use when conducting prior art searches for patent and trademark applications. We received responses from 38 firms. While two vendors — Computer Packages Inc. (CPI) and Master Data Center (MDC) — together provide more than half of the docketing software to the surveyed firms, they don’t have a lock on the market. Many firms are considering, or converting to, new docketing systems from other vendors including Foundation IP LLC (ranked fifth), and Computer Patent Annuities LP and Dennemeyer, which tied for third place. There are a couple of reasons for this increased competitiveness. First, there are some new vendors and products in town. Four-year-old Foundation IP, which has mostly large corporate clients, recently started marketing its services to law firms, says chief executive Leon Steinberg. Atlanta’s Kilpatrick Stockton recently opted to replace its old CPI docketing system with Foundation IP. The software “offers a lot of ease of use,” says director of IP group management Kathy Mitchell, “plus they’ve been willing to do a lot of development.” She says that the vendor won Kilpatrick Stockton’s business in part because it created a world map of a prospective client’s trademarks for a presentation by the law firm. Third-place vendor CPA has been gaining market share with sales of its new docketing software, Inprotech. The vendor says that it has picked up 20 new law firm clients just this year. CPA acquired Inprotech about two-and-a-half years ago (when it was called Inproma) from Sydney, Australia-based Maxim Technology, says Alex Cregan, a business development manager at CPA. A second reason for the new competitiveness: the marketplace itself is changing. IP boutiques or significant groups of patent lawyers are increasingly being absorbed into larger firms, and they’re bringing their software with them. Firms often find themselves with a mishmash of software, and need to update and streamline their systems. Change is inevitable, and it gives competitive vendors an opening. Jones Day, which has expanded from 80 to 300 IP lawyers (the firm has 164 registered patent lawyers) in the past five years, has been using at least six incompatible docketing software systems. Earlier this year, the firm decided to upgrade to CPA’s Inprotech, and partner Robert Ducatman, who is managing the transition from his Cleveland office, says he expects to have all offices running Inprotech by May 2005. Ducatman says CPA, which is a U.K. company with U.S. offices in Alexandria, Va., and San Francisco, offered Jones Day multilingual capability — a key requirement, as the firm prosecutes patents in 19 different offices worldwide, including Munich, Paris, London, and Brussels. Most of the major vendors are just starting to offer Web access, or say they plan to within the next year. But Foundation IP, CPA’s Inprotech, and OPSolutions Inc.’s PATTSY have the advantage of offering Web-based docketing now. “All of our law firm clients are moving to Web access or asking for it,” says CPA’s Cregan. He and others say that Web access offers direct client access to the docketing system. Clients can bypass outside counsel to get status reports and other information themselves, saving on legal fees. Number one-ranked CPI has a Web-based system in development and expects to launch it next summer, according to spokeswoman Jill Stenwall. Master Data Center recently developed a Web-based application, and expects to have upgraded “several hundred clients” by the end of the year, says vice president of sales and marketing Alex Butler. Dennemeyer launched its Web-based system for patents in late September (after we conducted our survey), according to director of sales Brian Roche. For law firms, the incentive to upgrade to Web-based systems comes from both within and without. Firms have finally begun to relax their security concerns about Web-based systems, and are seeing its advantages, says Roche. In addition, he says, “law firm clients are getting more sophisticated about what patent software can do — and more demanding.” Palo Alto, Calif.-based Gray Cary Ware & Freidenrich converted to Dennemeyer’s docketing system this past April largely on the promise of Dennemeyer’s pending Web-based system. At the time Gray Cary was looking at new systems, neither of the firm’s software providers, CPI for patents and IBM Worldmark for trademarks, were planning to offer Web access, says Barbara Hebert, Gray Cary’s manager of patent and trademark services. Hebert also says that the firm is planning to stop doing annuity work, and give this largely administrative task back to its clients. Web access isn’t everything. Although CPI doesn’t yet offer it, Chicago’s McDonnell Boehnen Hulbert & Berghoff is sticking with the Rockville, Md., vendor. The firm’s attorneys have been happy with CPI’s software, which it has used for three or four years for docketing and annuity payments, after switching from Master Data Center. The software is integrated with the firm’s case management system. “It’s a one-stop shop,” says Blair Hughes, a McDonnell Boehnen partner and supervising attorney for the prosecution support group. In the interim, the firm plans to purchase add-on software from CPI that will provide a portal for clients to view their records. Cost is another reason McDonnell Boehnen isn’t making a change. New systems don’t come cheap. Although no one interviewed for this article would reveal their costs, Chicago’s Brinks Hofer Gilson & Lione recently told IP Law & Business that it spent $100,000 overhauling its software system. The number is not small, but it’s a far cry from $30 million.

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