Inhouse vs Outside Patent Counsel

There are Two Types of Lawyers

There are two types of patent lawyers: outside counsel and inhouse counsel. 

Each type of lawyer plays a completely different role, and the two types are at a constant battle with each other.  It is not to say that there is a war, but there are diametrically opposed interests between them.

Startup entrepreneurs typically have no idea about this.  The only people who may have an inkling about this conflict are those who directly managed a legal matter within a big company.

Big companies have inhouse counsel.  These attorneys have a single client: the company.  Their job is to look out for the best interests of the company and nothing else.

Outside counsel work for a firm.  The firm may be a single person or 10,000 attorneys, but their obligation is to the firm.

Outside counsel often have loads of experience in specific issues, and their knowledge can be very valuable.  Also, outside counsel typically has lots of grunts (called “associates”) who can do the heavy lifting.  The associates typically do all the work.

Outside counsel is concerned about getting patents.  Inhouse counsel is concerned about getting good patents.  These two things are diametrically opposed.  Outside counsel’s duty of care is only to get something through the Patent Office.  Inside counsel’s job is to make sure those patents are good.

Inhouse counsel is worried about how valuable the patents will be over the next 20 years.  They are the ones who have to live with the patents, long after outside counsel has been paid.  Inhouse counsel has a lot more skin in the game than outside counsel.

When I was outside counsel for Microsoft, the inhouse attorneys had strict guidelines for what made a patent “good” or “bad.”  They studied all the litigation and developed very sophisticated rules and best practices that they enforced on us.  Microsoft, being a software company, also developed an automated patent application analyzer that read our patent applications to check for errors and generate statistics about our performance.

If you hire outside counsel, just like Microsoft did, you are ultimately responsible for the outside counsel’s work product.

You, not the outside counsel patent attorney, need to know if the patent application was well written or not.  You, not the outside counsel, need to know if the claims are enforceable and detectable.

Most entrepreneurs think, wrongly, that hiring a patent attorney is merely all they need to do.  Magically, they are “protected.”  In reality, they merely hired a workman to do a task, and the entrepreneur needs to manage that process.