Trademark registration – White label virtual department

February 3, 2011

As explained in this press release we saw a need to offer a ‘virtual trade mark registration’ service for law firms due to the SRA Conduct Rules 8 and 9 (which prohibit fee sharing with non lawyers and regulate referral fees). So, if a law firm’s clients need a trademark it is not straightforward for the firm to assist their client by outsourcing the services to trade mark attorneys or other professionals.  Legal Futures picked up the story here

Law firms that do their own registration work

If the law firm refers the work out altogether, or advises the client that they will engage the services of trade mark attorneys to assist in delivering a trademark service, they signal a message to clients that this is not work which is within their competence. Yet, as trademarks are so central in business start ups nowadays, a law firm may not necessarily want to do that.

There are many advantages for clients to receive the service from the law firm that is handling their other commercial matters. The client already has a relationship with the firm who knows and understands its business.

For the law firm to run its own trademark registration department, even if it employs an IP lawyer, involves a major investment unless it only registers a handful a year (in which case there are other problems in doing the work itself, such as whether it will be giving the client the best advice as explained later).

Law firms registering more than a handful of trademarks.

If the firm is registering more than a handful of trademarks each year, as explained in this material on outsourcing trademark work it will need a reliable file management system to keep track of registrations.  It will also need appropriately qualified staff who are able to deal with the complexities that may arise, and access to research sources, and a strong IT support system to manage the heavy administrative burdens.

While a trademark may involve a simple exercise in form filing, the actual form completion aspect of the work is only a small part of it.

Danger in regarding trademarks as purely administrative

The danger in regarding trademarks as an administrative task that a non specialist can provide (perhaps with the assistance of trade mark attorneys in the background) is that this overlooks how brand protection is about much more than trademarks.  To address clients’ trademark needs, invariably also involves a good understanding of other IP rights, such as designs and copyright.

Clients expect you to be able to advise more widely, not only on logos and international issues if they’re selling worldwide via an ecommerce site, but also in a number of other ways, such as when they’re choosing keywords or domain names.

Even a straightforward registration can throw up complexities, and require the know-how which a specialist trademark lawyer offers but an administrative assistant cannot.

Being more knowledgeable about trademarks, not only enables you to offer a better service to the client, but also to generate additional instructions for work that you may not otherwise have appreciated the need for.  So, it can often be a false economy to regard trademark work as something suitable to fill a secretary’s time.  You would be better off giving the secretary some marketing work to do, while leaving the trademark work to others who are more cost effective.

Changing economic and regulatory climate

The downward pressure on fees following the recession, and regulatory changes, makes it ever more important to focus on what you’re best at, while outsourcing work that could be more profitably done for you to those who are more geared up to doing it.  This is the approach if you want to free up your time and market your services and focus.

Intellectual Property is such a broad field of work that it is uncommon for smaller IP law firms to offer trademark registration services.   So, a sole IP lawyer in a mid size firm would do better to target other work, and farm out trademark registration.

There are many benefits for law firms, and their clients in adding a virtual Trade Mark registration department rather than undertaking the work themselves. Few such firms (unless they routinely register trademarks) would be able to provide a basic search and trademark registration option in 3 classes for less than £400 for a UK trademark, or £555 for a CTM. Those prices are achievable though with good IT systems, an effective work flow, and experience of trademark registration.

Benefits of White Labelling

By outsourcing the work it is possible for a firm to add a new source of revenue without incurring overhead costs. Better still, it could add value to the trademark process as a result of its close understanding of the client’s business. So the client could end up with a more cost effective option as well as a better registration.

Spin off work

Firms considering their options should bear in mind that the initial trademark registration is often the tip of the iceberg in terms of possible further work from trademark registration. Often there will be a Madrid Protocol application for wider international protection, and there may often be opposition or litigation work arising too.

While some law firms prefer to refer trademark work out to trade mark and patent attorney firms in the hope of receiving litigation referrals, the reality is that nowadays many trade mark and patent attorneys do litigation, licensing, and even business advisory work themselves.

The old distinctions between law firms and patent and trade mark attorneys have broken down.  So, it probably makes more business sense for a law firm to do its own registration work, and generate possible litigation from it, than to sacrifice registration work for the distant hope of litigation referrals.  One situation where it may not make sense to compete with patent attorneys, though is if you hope to attract big ticket patent litigation referrals.