Foley IP Leadership Survey Finds Majority Taking Uncertain IP Environment in Stride

Few Respondents Have Felt Significant Impact of False Marking Lawsuits or NPEs; Companies’ Legal Budgets Remained Healthy in Recent Economic Downturn.

Corporate intellectual property decision makers are taking continuing threats from non-practicing entities (NPEs) in stride and have largely avoided significant impact stemming from an increase in false marking lawsuits, according to a national survey conducted by Foley & Lardner LLP. An overwhelming majority of respondents still view IP as critically important and accordingly have kept their legal budgets mostly intact during the recent economic downturn.

Foley’s inaugural survey reveals that a majority of respondents (54 percent) have not yet felt the impact of the December U.S. Court of Appeals for the Federal Circuit decision in Forest Group v. Bon Tool. While that decision led to an increase in false marking lawsuits filed, it has not significantly impacted a majority of respondents. These respondents were also fortunate to have no contact with an NPE in the past year.

In one example of how companies are taking the much-discussed impact of false marking cases and ever-increasing threats by NPEs in stride, 86 percent of those surveyed said that, during their company’s annual strategy and budget development, they do not proactively include money and efforts to combat NPEs, false marking plaintiffs, or other “non-essential” lawsuits.

One respondent summed up the prevailing view in the industry regarding the short-and long-term impact of false marking plaintiffs or NPEs on their business by saying: “There is not a significant impact, but it does consume some time and money which is diverted from other causes.”

“While we have seen an increase in the number of false marking lawsuits filed nationwide, the Solo Cup decision requiring proof of intent may be limiting the financial impact of these cases, perhaps accounting for the confidence expressed by some respondents to our survey,” said Stephen B. Maebius, chair of Foley’s Intellectual Property Department. “Our survey reveals that the respondents clearly recognize the strategic business importance of their IP assets, though, and are primed to utilize them when necessary.”

According to Foley, the survey captured a number of interesting conclusions, including:

• Given the recent economic woes that challenged the majority of the country, a surprisingly large number of respondents (46 percent) cite that the amount of their company’s total legal or business budget stayed relatively flat in 2010 compared to 2009, while a relatively large number of respondents (22 percent) said their company’s total legal or business budget was actually higher in 2010 compared to 2009.
• A majority of those surveyed (75 percent) said they are satisfied with their company’s understanding of the importance of protecting IP assets and the company’s IP budget.
• 93 percent of respondents view the importance of IP in the recent economic downturn either higher or about the same.

“It’s very encouraging that so many respondents, across a variety of industries, continue to understand the critical importance of intellectual property rights,” said Maebius. “They, and numerous others throughout the industry not included in our survey, fall into the school of thought that intellectual property is vital for job creation and will be an important factor in our country’s economic recovery.”

The survey, conducted in August 2010, was completed by 75 executives, advisors and outside consultants within the intellectual property industry. It coincides with Foley’s 2010 “Winning a Game of Inches: Gaining Momentum Through IP,” conference to be held in New York today and attended by many of the executives included in the survey.

Comprised of more than 200 attorneys, Foley’s Intellectual Property practice is a recognized leader in IP legal services. For the eighth consecutive year, Foley was ranked by IP Today as one of the top 10 firms for the number of patents issued and by IP Law & Business magazine as one of the top patent litigation firms in the nation. These rankings make Foley the only general practice firm to appear in the top 10 for both patent litigation and patent procurement.

Foley & Lardner LLP continually evolves to meet the changing legal needs of our clients. In a recent survey of Fortune 1000 corporate counsel*, Foley ranked first for superior client service and value. We also were named to the InformationWeek 500 list for five consecutive years for our client-focused technology. With nearly 1,000 attorneys in 21 offices and more than 60 practices, Foley strives to provide high-caliber business and legal insight. Our team-based approach, proprietary client service technology, and practice depth enhance client relationships while seeing clients through their most complex legal challenges.

*The BTI Consulting Group (Wellesley, Massachusetts)