By, Arun Narasani, Co-founder/CEO, Brain League IP Services www.brainleague.

com

VALUE CHAIN PERSPECTIVE IN LEGAL OUTSOURCING INDUSTRY

BRAIN LEAGUE
Boutique IP services and consulting firm 50+ patent engineers and attorneys Presence in US and India across four offices Clients in US, Europe, and India 60+ partner law firms around the world Single point IP solutions

Brain League IP Services

AGENDA
Offshore outsourcing Value chain and human resources Challenges Emerging trends Example Considerations in choosing a partner

Brain League IP Services

OFFSHORE OUTSOURCING

Brain League IP Services

ONSHORE VS OFFSHORE

Regulatory framework

Risk vs reward

Experience

Incremental vs leap

Cost savings

Control vs focus

Outside cousel

Threat to bottomline vs margins

Brain League IP Services

ONSHORE VS OFFSHORE

In-house counsel
Job

security vs value addition

Capacity requirements
Stable

vs varying

Brain League IP Services

OPPORTUNITY EXPORTS IN 2011 ($BN)

700

600

500

400 Global spending 300 India exports

200

100 45 14 0 IT & Software BPO LPO 0.4

Brain League IP Services

EMPLOYMENT OPPORTUNITY 2011 (MN)

Employment
3

2.5

1.5

0.5

0 IT/BPO KPO

Brain League IP Services

Intangible assets account for up to 80% of market value in 2010

Source: Ocean Tomo's Annual Study of Intangible Asset Market Value 2010

Brain League IP Services

TRENDS LEADING TO OFFSHORING

Proliferation of patent applications worldwide

Value of patent portfolios

Lack of resources locally to handle the increase in work Exorbitant costs to do it all locally

Cost of obtaining patent rights: USD 15,000 to USD 30,000+

Difficulty in handling worldwide work centrally for some MNCs Slowing economy

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SEGREGATION OF WORK
Non core work - Repetitive, and/or - Transactional Non core portfolio - Relatively simple work, and/or - Non-strategic

Core work - Highly specialized, and/or - Strategic in nature/ involves higher risk

Core portfolio - Requires higher skill set, and/or - Strategic in nature

Brain League IP Services

VALUE CHAIN IN OFFSHORED SERVICES

Brain League IP Services

High

ITO

KPO

Software R&D

Business Services

Legal Services

IT Consulting BPO

Software

ERM Infrastructure

HRM

CRM

Low
Brain League IP Services

High
High Aptitude + Inter Disc. Exp.

Analysis
patent drafting, Landscape analysis, contract drafting, etc.

Legal Research
Information gathering, Prior art searches, litigation support, etc.

Legal Support/ Staff augmentation

Document review and formatting, transcription, paralegal services, etc.

Delivery

Quality

CRM

Low

Process
Brain League IP Services

Basic Aptitude

Aptitude + Exp.

People

PATENT SERVICES
Innovation/ Idea Generation

Disclosure Development

IP Research and Analysis

Application Preparation

Filing and Prosecution

Portfolio Maintenance

Licensing & Commercialization

Litigation

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HUMAN RESOURCE SKILLS

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INVENTOR INTERACTION
Invention Disclosure Inventor Review

Inventor Interview

Second Draft

Novel elements summary

Final Review

First Draft

Application forms preparation and Filing Start to finish in about 3 to 4 weeks

Brain League IP Services

EXAMPLES

Robotic Arm

Search method

Computer Input Device

Brain League IP Services

KEY SKILLS

Communication

Written and oral

Legal

Region specific; case law updates

Technical

Cutting edge technology

Project management

Time critical

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CHALLENGES

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CHALLENGES RESOURCES

Lack of ecosystem for IP in India

Only about 10,000 applications were being filed in India in 2002 In 2011-12, the number stands at 37,000 applications; 80% from foreign applicants

Lack of resources with inter-disciplinary skills

Social structure and pressures Lack of experience with foreign systems

Attrition

10 to 25% attrition rate due to economic growth and opportunities Attrition higher in lower segments of value Competition with other industries; captive units that pay higher salaries; obsession with IT job as a status symbol

Brain League IP Services

CHALLENGES MARKETING

Quality

Basic skills Inter-disciplinary education/understanding Consistency

Credibility

Prior data theft cases

Director of a business process outsourcing (BPO) unit for his alleged involvement in stealing medical history data in 2011 Employee of a mobile operator BPO shares data outside company in 2010

Lack of a credible IP environment

Cost savings

Diminishing labor arbitrage opportunity

Brain League IP Services

EMERGING TRENDS

Brain League IP Services

CAPTURING VALUE

Expertise Process Delivery

Organization

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EXPERTISE

Higher up in value chain

Ex:

litigation

Domain expertise
Ex:

telecom

Niche services
Ex:

patents
Brain League IP Services

PROCESS INTEGRATION

Enable self-service
Automation
Increase

efficiency

Transparency/ confidentiality/ security

Increase interaction and engagement; value addition

Brain League IP Services

DELIVERY

People

Onsite Onshore Offshore

Mode
+
Online Offline
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ORGANIZATION

Structure Incentives

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EXAMPLE

Brain League IP Services

US Office

US

US IN

CN/IN Office

India

CN

EP
JP CA AU

HK

Brain League IP Services

LEADING NICHE MOBILE PHONE COMPANY

Problem
Conceptualization in US; manufacturing in China; Design and R&D in India Distributed IP processes; multiple law firms Lack of internal resources and focus on IP

Solution
Single point IP management solution Centralized docketing and reporting Increase efficiency in terms of manpower and costs

Brain League IP Services

IP SERVICES
IP Generation & Identification IP Protection & Management IP Risk Mitigation & Commercialization

Policy and process setup Strategy services Training Disclosure development

Prior art search Application drafting Filing and prosecution Portfolio maintenance Portfolio review and analysis Agreements

FTO/ Landscape/ Infringement/ Validity Research & Analysis Open source analysis License Agreements

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CHOOSING AN OFFSHORE PARTNER

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CAPABILITIES

Team Track record References

Pilot/Test cases

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SKILLS AND PRACTICE

Understanding of foreign legal systems

People trained in foreign legal systems

Language skills

Hiring and training practices

Inter-disciplinary Continuous learning

HR practices to retain talent

Organization structure Incentives to retain

Brain League IP Services

PROCESS AND INFRASTRUCTURE

Process and Technology infrastructure

Defined

and Repeatable processes Metrics/SLAs Automation

Security/confidentiality measures
Physical,

Technology & legal

Brain League IP Services

QUALITY

Consistency Multi-step quality check Multi-layer?

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SUMMARY AND Q&A

Brain League IP Services