In a restructuring of its intellectual property practice, the large Boston-based law firm Ropes & Gray is spinning off its patent prosecution team and expects more than 100 lawyers and staff to depart and form a new entity.
The new firm, which has yet to be named, will have locations in Silicon Valley and New York and is expected to set up shop within the next two months, said Joe Guiliano, who leads the patent prosecution team and is departing to form the new firm.
“After an analysis and discussions, we concluded that housing this practice on its own would be more sensible,” said Guiliano on Wednesday.
Patent prosecution – separate from intellectual property litigation and IP rights management – focuses narrowly on the patent application process with the U.S. Patent and Trademark Office and isn’t nearly as lucrative as other IP practices.
The practice has generally been problematic resting in the business of large law firms, said one IP industry veteran who declined to be named for this story.
“Patent prosecution is low margin and high risk,” this person said.
“Conflicts can go on for years without new work coming in (as patent applications take two to three years to work through the patent office). Finally, there is seldom need for armies of partners to support this practice, so it is always resulting in a log-jam of rising lawyers.”
Yet as big law firms have snapped up IP boutiques, which contain patent prosecution teams, the only way to get the votes needed to complete the merger is to include the patent prosecution partners, this person said.
“This was part of the trade-off most firms made.”
Other big law firms — such as DLA Piper, Jones Day, Morrison & Foerster and Baker Hostetler — have patent prosecution practices.
For Ropes & Gray, the bulk of the patent prosecution team stems from the firm’s 2014 acquisition of 160-lawyer IP boutique Fish & Neave.
Ever since, Brad Malt, chair of Ropes & Gray, said that he and Joe Guiliano have been wrestling with how the patent prosecution team fits in the firm’s business model.
“It’s fair to say that over three years, Joe and I have been talking about the different aspects of IP, and in particular, the relationship between the different disciplines of intellectual property we have — including IP litigation and IP rights management,” said Malt.
“This is really a bold move to take the most price sensitive piece to the IP puzzle and put it in an environment where it can have the right overhead and cost structure and do work efficiently and effectively and cost effectively to meet clients’ needs.”
In total, the new firm will consist of between three and five partners, at least, said Guiliano. Roughly half of the 100 total departing members are associates, patent agents and technical advisors and the other half are staff: secretaries, paralegals and docketing agents.
“Most of our work is done by non-lawyers,” Guiliano said.
Malt and Guiliano said that Ropes & Gray and the new firm will continue to work closely and often refer work to one another. Some employees affected by the firm’s jettisoning of the patent prosecution practice may end up staying with Ropes & Gray, said Malt.
“There will certainly be people who will stay with the firm, not doing patent prosecution,” said Malt, who noted that the firm’s IP litigation and transactional practices aren’t going anywhere.
“People don’t come stamped ‘I’m patent prosecution and nothing else’ and many people straddle that,” he said. “There are many aspects of looking at patents that we need to be able to do in the firm — not just prosecute the patents, but evaluate them for reasons from everything to supporting our IP litigation practice to being able to advise corporate acquirers.”
Some of the clients Ropes & Gray has represented in IP matters include Apple, HP, Samsung and TiVo, according to the firm.