International IP Convergence Saves DuPont Millions

For most companies, protecting intellectual property (IP) can be a time-consuming and expensive process. And when you have products and plants worldwide, managing the IP workflow can become an overwhelming task—with staggering costs to file and defend patents and trademarks.Six years ago, the DuPont IP workload was distributed to roughly 300 firms in 180 countries. The volume of IP work was growing 5 to 10 percent per year and there was no real process in place to organize workflow or control the mounting costs. John Dull, former chief IP counsel, saw a way to reign in the domestic IP process: IP convergence.

Convergence programs were not new to DuPont. In fact, DuPont Legal had recently adopted the DuPont Legal Model, a business process that allowed the legal department to focus resources, improve quality of service, cut costs and increase productivity. The new, domestic IP convergence program was modeled after the widely successful Legal Model. Later, DuPont Legal launched its international IP counterpart. This new way of doing business reduced the number of IP firms on retainer, streamlined the administrative process and is saving the company millions of dollars each year.

A Revolutionary Business Model
Similar to the DuPont Legal Model, the IP convergence process involved consolidating an extensive amount of workload in a smaller number of law firms. The main focus was to eliminate duplication among multiple firms and bring the costs back in line. For starters, DuPont Legal combined its patent and trademark processes. In the past, patent and trademark procurement had been seen as separate entities, with different firms doing the work. By converging the process, DuPont Legal was able to manage its international IP work on a coherent and coordinated basis.

DuPont Legal also set out to pare down its number of outside firms. The plan was to have one firm in each of DuPont’s top nations. Countries with a lower volume of IP work would be divided into regions that would be handled by a single firm. In doing so, DuPont Legal was able to reduce the number of firms performing the most significant IP work from 300 worldwide to 48.

To be in the select group of providers, IP firms were required to meet certain criteria set forth by DuPont Legal. They had to perform at an exemplary level, submit to regular performance evaluations and agree to discounted rates. DuPont, in exchange, promised them a larger piece of business and have their invoices paid within 30 days. They also offered the value-added potential of learning about other innovative practices from this global corporation that had been in business for more than 200 years. “To some of our foreign firms, it was a totally new concept,” explains David Gould, Corporate Trademark Counsel and International IP Firm Account Manager for DuPont Legal. “Volume discounts were anathema to many firms wedded to fixed fee schedules.”

This arrangement, however, was very attractive to a number of firms, who quickly warmed up to the idea of increased business and regular cash flow. And the benefits to DuPont were quite obvious. The company cut costs by negotiating better rates and eliminating duplication of tasks by multiple firms. It was able to streamline communication and forge solid working relationships with members of this leaner, more intimate roster of firms. And with DuPont business now representing a larger portion of each firm’s billable time, it commanded an increased level of service. “When you now represent a quarter or more of a patent firm’s business, that firm will naturally want to service the account at the highest level to protect its interests,” says Michael Walker, chief IP counsel for DuPont Legal.

Working Smarter in the Global Marketplace
IP convergence was more than just reducing the number of firms that DuPont Legal worked with. The process included the implementation of programs, such as Six Sigma, a business management process that focuses on defect elimination throughout a business process. By incorporating Six Sigma strategies, DuPont Legal was able to consolidate the workflow by reducing redundancies in work product and procedures.

A Network of Opportunity
Creating a smaller network of IP firms has fostered a surprising amount of camaraderie among the firms. Generally, IP work is done independently, with one firm handling a country or region by itself. So communication between the firms was very limited.

That was the case until DuPont Legal began hosting meetings every two years for these international firms. Started as a way for the IP firms to learn more about DuPont and its strategic business units, these meetings are now yielding other benefits to the firms: networking opportunities and referrals among them.

“Now that the IP firms are coming together at these meetings, they are getting to know each other,” says Walker. “There are actually smaller networks forming among many of the members, who are able to talk with each other and exchange ideas and even business leads. This really gives value back to the firms.”

Adding up the Results
Today, the impact of IP convergence is evident. Before the program, costs were rising 5-10 percent each year. Now, the rate of increase has slowed and overall savings have been at least 20 to 30 percent. And while the number of patents and trademarks filed continues to grow, the workload in DuPont Legal’s IP Department is much more organized and manageable.

This type of success does not go unnoticed in big business. While DuPont seems to be the only company employing such an IP convergence program, other major corporations are likely to follow. “We continue to receive calls from other large corporations and requests to visit their legal departments to present our program,” explains Walker. “It looks like IP convergence is here to stay.”