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Much has changed in the IP world since we began publishing this survey in 2000: Many boutiques have disappeared, litigation has exploded, patents have become a corporate profit center. But one thing has remained stable: the firms that protect corporate America’s IP jewels. For the past six years, we have asked the Fortune 250 to name their primary IP firms, specifying who they use for litigation and prosecution. Although rankings have shifted, the top 10 has held steady over the years. In fact, the same firms have appeared in those spots since 2003. The sole exception: Chicago-based Brinks Hofer Gilson & Lione, which broke into the top 10 in 2004. In a sense, the survey’s top 10 list plays out like a division of Major League Baseball, with the same teams competing each year to take the top positions. This year Jones Day made the biggest leap, moving from 10th place to tie Kirkland & Ellis for first place. Howrey, which held the top spot last year, dropped to fourth place, tying Brinks Hofer. Finnegan, Henderson, Farabow, Garrett & Dunner held on to its second-place position, tying Ropes & Gray, which got a boost from its January acquisition of Fish & Neave. Some of the changes point toward real movement in the market. Brinks Hofer, for example, picked up two new clients in 2004. Other changes simply reflect the vagaries of the survey. Howrey lost two mentions because client General Dynamic did not respond to our survey, and client Schering-Plough dropped out of the Fortune 250. Jones Day, on the other hand, picked up mentions from one company that is new to the Fortune 250, The DIRECTV Group Inc., and it gained mentions from Abbott Laboratories and Lucent Technologies Inc., neither of which responded to our survey last year. (Lucent also named Kirkland & Ellis and Ropes & Gray.) But none of these changes could dislodge the firms at the top. That’s due, in part, to the reluctance of in-house IP lawyers to make changes in their rosters. Our survey shows that a new IP chief translates into new outside counsel less than a third of the time, or in five of 16 instances. Often, in-house counsel come from the company’s primary law firm, and they stick with the familiar. For example, TXU Corp.’s new in-house IP and litigation counsel, David Poole, had been a partner at Hunton & Williams, TXU’s go-to firm. Even though Poole made sweeping changes to his department — bringing more work in-house, centralizing trademark prosecution, coordinating with the business side on IP strategy — he has no plans to toss his alma mater. The Dallas-based power company has even adopted a policy that requires outside counsel to bid on any litigation costing $750,000 or more. But if a case came up, Poole says, “there’s no doubt I’d call Hunton & Williams,” to ask it to bid. When in-house lawyers are promoted from within the company, there’s also little movement. David Hoiriis, Honeywell’s chief patent counsel since 1999, replaced John Donofrio, Honeywell’s vice president and deputy general counsel-IP. Hoiriis says that the Morristown, N.J.-based company tries to interview more than one law firm for every case. Still, the company continues to turn to the same three firms for litigation help: Alston & Bird, Kirkland & Ellis, and Robins, Kaplan, Miller & Ciresi. Mallun Yen, Cisco Systems Inc.’s new managing director of worldwide IP, also rose through the ranks. She had served as the director of IP at the San Jose, Calif.-based networking company since 2002 and was accustomed to working with Cisco’s primary IP litigation counsel, Weil, Gotshal & Manges, where (no surprise) she had been an associate. Cisco did make one change this year, adding Orrick Herrington & Sutcliffe to its litigation roster. Yen says the change reflects new litigation the firm is handling. “For all new IP cases,” Yen says, “we typically send out a [request for proposals] to a minimum of three firms to encourage competitive bidding and to ensure we hire lawyers with the right expertise.” The head of Orrick’s IP group, William Anthony, says that his firm has actually been working with Cisco for about five years, but it still must bid for litigation work. Within the past year, Anthony says, the bidding process has become much more comprehensive. Firms are required to spell out exactly what the case will cost, and Cisco asks for a cap on fees. Even when an IP chief comes in without any prior connections to the new company, there’s no rush to find new outside counsel. For one thing, new in-house counsel “don’t necessarily come in with a change agenda,” says Daniel DiLucchio, a consultant to legal departments with Altman Weil Inc. They also have to contend with company politics, DiLucchio says: “If the business side is happy with outside counsel, [in-house lawyers] can’t just go ahead and unilaterally make changes.” The nature of IP work also contributes to the stability, says Rees Morrison, a principal at Hildebrandt, International. Patent work requires an intimate understanding of the underlying technology at issue — and by extension, the company’s business, he says: “It’s difficult and expensive to pass that knowledge on.” On the litigation side, patent lawsuits — the “root canal of litigation,” as Morrison calls them — tend to drag on. Since most companies stay with the same law firm on any particular case, one big patent lawsuit can keep a firm on the payroll for several years. And, he says, patent prosecution has become highly competitive fixed-fee work, so companies don’t stand to gain much ground by switching firms. The IP market may be stable, but it’s not frozen. Top 10 newcomer Brinks Hofer picked up three new mentions this year, from Deere & Co., on the prosecution side, and from The Progressive Corp., which named it in both categories. Brinks Hofer partner Eric Sosenko says that he has known Deere & Co.’s chief patent counsel Charles Graham for 16 years, since their days together as lawyers at Harness, Dickey & Pierce, but a potential conflict prevented Brinks Hofer from working for the company. When the conflict ended last year, he says, Deere brought in Brinks Hofer to handle prosecution work. The work for Progressive, on the other hand, came through the recommendation of a party Brinks Hofer opposed in a patent litigation, says partner Laura Miller. Other firms picked up new mentions as well. Kilpatrick Stockton won recent IP business from Georgia-Pacific Corp., the Atlanta-based paper giant. The firm has done corporate and labor work for Georgia-Pacific for years, says partner John Pratt. In 2004 it landed its first significant piece of IP litigation from the company: a false advertising arbitration against The Procter & Gamble Co., over advertisements for Bounty Paper towels that showed Georgia-Pacific’s Brawny paper towels leaking. After Kilpatrick won an injunction against P&G, Georgia-Pacific handed the firm another big case, involving a patent dispute over chalupas (a kind of fast-food taco), which is currently pending. Pratt says a Kilpatrick trademark associate who took a job at Georgia-Pacific helped the firm get the new work, but also credited “personal contact” between other firm and company lawyers. Locke Liddell & Sapp snagged a mention from Emerson Electric Co. When partner Robert McAughan Jr., jumped from Howrey’s Houston office to Locke Liddell late last year, McAughan says he took long-term client Emerson with him. Connections and lateral hires aren’t the only ways to drum up new clients. For instance, James Burdett, a partner at Washington, D.C.-based Venable, won the patent business of Viacom Inc. in the summer of 2001 in a beauty contest of more than 20 law firms. At the time, the New York entertainment conglomerate was looking to create a consistent patent strategy across its various subsidiaries and had no legacy IP firms. Since then, Viacom has used Venable as its go-to prosecution firm and as one of its top IP litigation firms as well. With the IP boom still raging, picking up this kind of new business may ultimately shake our top 10 loose. Research by Gavin Kendall Related charts: Who Protects IP America: 2005 Top IP FirmsIP LitigatorsPatent Prosecutions

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