Inappropriate outsourcing may invalidate patents

Armed with the knowledge that the US is now governed by a first-to-file patent system, and aware that an arch competitor is experimenting in the same technical area, the client emphasises the need for prompt filing. Counsel is provided with all of the information needed to adequately prepare and file the patent applications and then reaches an agreement with the client on a fixed fee for the authorised work.

Upon receipt of these comprehensive invention disclosures, patent counsel realises that the nature and critical time pressure of this project will require more resources than the firm possesses. Counsel has been approached recently by a foreign-based firm (ForeignCo) about high-quality patent preparation services at low labour rates. Counsel emails the invention disclosures to ForeignCo and reaches agreement with it at a very attractive lump sum price to prepare the applications, a sum which is low enough for counsel to realise a sizable profit based on the difference between the fixed client fee and ForeignCo’s lump sum.