Forbes – Why Global Companies Should Consider India For An IP Back-Office
Anant Kataria, CEO & Co-Founder @ Sagacious IP. Ensuring Sagacious’s clients’ success with excellent IP support by a global 300-member team.
Fifty years ago, companies were vertically integrated, maintaining an in-house department for every business function. Gradually, companies began outsourcing, assigning non-essential tasks to third-party service providers. Outsourcing freed up employees’ time to focus on core business functions, reducing business costs significantly.
This transition also occurred within the global intellectual property (IP) sector. At first, companies managed all IP functions internally. As IP activities required more skills, in-house IP departments shrunk. Suddenly, IP law firms began catering to companies that needed IP analysis, IP filing, IP enforcement and similar tasks.
To stay competitive, companies and law firms started outsourcing support functions such as patent searching, patent drawing and administration. Yet, finding a team with the necessary skills at the right price was no simple task.
Three Reasons To Consider An IP Back-Office
Companies are realizing the importance of innovation and solidifying their IP function. The latest USPTO data explains that individuals and corporations filed 399,055 patents in 2020 alone. But what happens when businesses fail to create and implement an IP strategy? There are three situations to be aware of:MORE FOR YOU‘We Can Control Our Own Destiny’: John Zimmer Shares Lyft’s Vision For The Company’s Future And $1 Trillion Market OpportunityFour New Microsoft Surface Computers Plus A Folding Phone—And Other Small Business Tech NewsThe LSE Alumni Turning Their University Into A Startup Powerhouse
First, I have seen that companies without proactive IP-budget optimization often have trouble controlling costs, especially upon managing a growing IP portfolio.
Second, since Return on Investment (ROI) in IP is not immediate, it is difficult for business leaders to allocate resources to IP management, resulting in less IP creation. Companies that understand the importance of IP usually budget for it. However, others might avoid IP due to seemingly high costs.
Third, while there are several tools that manage small IP portfolios, their excessive cost is not always justifiable and low accuracy necessitates intelligent human oversight. An incompatible tool or analyst can lead to bigger problems, so it can be helpful to work with a dedicated IP management team that complimentarily brings such tools. (Full disclosure, my company works as an IP back-office, as do many others.)
Building Your Team Of IP Professionals
Patent professionals include local patent attorneys, patent engineers, patent information professionals, patent illustrators and paralegals. For filing and managing trademarks, companies need local trademark attorneys, trademark search professionals and paralegals. A company can manage IP portfolio tasks internally or outsource them to a team of professionals. The latter has been a dominant choice lately, as explained in market research.
Outsourcing works with both offshore or nearshore locations. However, nearshore outsourcing has its own set of challenges. In the U.S., with a reasonable number of IP professionals, it is not difficult to find talent. However, hiring nearshore contractors can be expensive.
Conversely, there are countries where finding IP talent itself is complicated. During my company’s expansion to Sweden, I observed that firms were outsourcing patent drawing work to England despite high costs due to the scarcity of local patent draftspersons. This locally unmet requirement of low-cost technical talent prompted companies to look for offshore locations, and they evaluated India to be the aptest country.
India: An IP Back-Office Destination
India’s entry into the outsourcing market in the 2000s gradually changed the game. It offered a large pool of high-quality talent and cost-effective services. It prompted IP law firms and innovating companies to perceive India as a major outsourcing destination. Just like China is seen as “The World’s Factory,” India is known as “The World’s IP Back Office.”
So, how do companies typically outsource to India? They outsource key IP-related legal work to law firms but outsource support services such as patent analysis, analytics, infringement identification, patent portfolio management, technical drafting, paralegal support, patent drawings and patent/trademark searching to firms in India. Local IP attorneys are irreplaceable, though, as they have local legal qualifications, licenses and better knowledge of local laws/patent office guidelines and case laws. Therefore, some companies outsource all tasks to major law firms. These law firms then decide on the support services they plan to further outsource to India.
Here are some reasons to outsource IP work to India:
• High-Quality Talent: Talent has been India’s greatest strength in the IP sector. When searched on LinkedIn, India has nearly 15,000 IP professionals, including approximately 700 patent paralegals and 130 patent illustrators, serving the global industry.
• Tried And Tested Destination: Giant firms have chosen India to establish a substantial number of IP-back offices in India. Similarly, major trademark and patent support service firms have their delivery centers in India.
• Low-Cost Services: In the Indian IP service sector, depending on the type of work being outsourced, my company has observed that the cost savings can be anywhere from 50-80%.
• Time-Saving: Local attorneys handle the main legal work while outsourcing the support of IP management to another firm in India. This cuts costs and combines local knowledge of U.S. law with the dedicated support structure that attorneys need to run profitable businesses for their clients.
How To Select A Credible Outsourcing Partner
To choose the right outsourcing partner in India or elsewhere, companies can validate credibility by years of operation and third-party media ranking. To ensure good quality work, interview the partner’s employees and conduct pilot projects. Additional factors include evaluating data security and insurance policies.
IP back-office association is not transactional. Companies enter this arrangement for the long term. Accordingly, ensure that the partner is employee-friendly. You can do this by reviewing ratings on agency or third-party websites like Glassdoor. Also, check if the business has permanent employees or hires freelancers. The latter can pose data security concerns.
Companies should sign strict confidentiality and non-disclosure agreements with the partner. I also recommend keeping the jurisdictions of such agreements as your home country or a neutral third-party venue. Lastly, start outsourcing gradually by evaluating multiple suppliers over a year and committing to one thereafter.
Organizational structures are vastly different than they were 50 years ago. Modern businesses can outsource certain tasks to remain competitive and cost-efficient. With abundant and affordable IP talent, India can be a good IP back-office option for your business to help increase IP information and optimize in-house IP budgets.