All eyes on Linklaters as it closes doors on trademark filing practice
23 October 2006
Linklaters as it closes doors on trademark filing practice" />The Linklaters trademark filing practice is officially dead.
The departure of trademark filing head Roland Mallinson to Taylor Wessing called time on the team's work at the magic circle firm.
In Germany, the 25-strong filing team will leave with partner Kay-Uwe Jonas at the end of the year.
Mallinson's departure is the result of a top-level review of the IP practice, coordinated by central management.
The review concluded that trademark portfolio management was not an activity that fitted with the firm's overall strategy.
Even the fact that the practice was enjoying its best-ever year was not enough to save it. Clients will now be referred to specialist trademark agents or to Mallinson in his new practice at Taylor Wessing.
Nigel Jones, global head of IP at Linklaters, says: "The central management team confirmed everything [in the IP group] fitted with the firm's market-leadership strategy. The one exception to that was the pure trademark filing practice."
As The Lawyer has written on numerous occasions, Linklaters' strategy focuses on premium work for premium clients. The trademark filing group was undone because it could not offer as cost effective a business model compared with litigation and brand strategy.
A stand-alone trademark practice employs a number of paralegals and associates who may bring in a profit, but at not the same rate as a contentious patent or trademark practice that can employ fewer, more senior lawyers on matters lasting weeks.
The filing practice may have had premium clients, such as HSBC and other financial services companies, but never got the premium IP work.
Possible conflicts and an evolving IP market were two key considerations in making the decision.
"Part of strategic alignment is focusing on the right type of clients and part of that is avoiding conflicts," says Jones.
A long-term client of the finance or corporate practice may not take kindly to the trademark practice doing the odd registration for a bitter business rival. This is a risk of millions to the firm for a few thousand pounds extra for the IP group.
Smaller firms may see trademark filing as a foot in the door for a new client relationship. A magic circle operation such as Linklaters most likely already has that relationship and does not want to endanger it with a stray trademark filing.
Jones notes that there are more small firms ready to undercut City prices for this type of work, making the market for trademark filing more competitive.
Jones says: "It's an evolving marketplace for trademark filing. There's an increasing number of firms doing straightforward work at a lower cost."
Linklaters' move raised the question of where trademark filing fits into a magic circle firm's strategy. Opinion is divided among the City players.
By closing down its entire filing practice, Linklaters has positioned itself at the extreme end of the scale.
Clifford Chance finds the space for a stand-alone portfolio management team. Even Freshfields, which has no UK practice, files trademarks for clients from its German and Dutch office. Allen & Overy does not file trademarks, but would consider managing large portfolios if the work came along.
Clifford Chance tries to stick to big portfolios to keep the practice viable. Vanessa Marsland, trademark partner at Clifford Chance, says: "There are tiers to trademark filing. We don't do UK domestic filing because our clients think internationally. Thekey to achieving a fit with the business is to have the right kind of clients with portfolios.
"You don't get to work in a place such as Clifford Chance without running your practice like a business."
In the 10 years the Community Trade Marks (CTMs) have been available, Clifford Chance comes sixth in a list of the most active trademark filers with 3,711. Field Fisher Waterhouse is fourth, and Baker & McKenzie ranks tenth.
Freshfields takes a different approach. Its trademark filing makes up only about 5 per cent of the brand-protection group's revenue, and that figure is unlikely to change in the near future.
Freshfields avoids conflicts by keeping the practice small and filing only on behalf of core relationship clients.
Hub Harmeling, head of Freshfields' brand-protection group, says: "There will never be the internal drive to develop the trademark prosecution team into a stand-alone group."
Freshfields IP/IT head Avril Martindale says: "We don't do it in the UK - it is challenging to do on a cost-effective basis. It can divert from the core strategy to provide international legal services."
Finally, A&O takes a similar viewpoint to Linklaters, but is more upfront about the business pressures on a stand-alone filing practice.
Nicola Dagg, head of IP at A&O, says: "In terms of profit and management, it doesn't fit in particularly well. Frankly, it would be hard to meet the targets of a magic circle law firm."
Linklaters' market-leadership strategy is everything. In the four years that the firm has focused on just high-end work, profit has soared from £650,000 per equity partner to more than £1m.
The Linklaters trademark practice did come a very respectable 13th in the survey of top European trademark filers in the past 10 years. This shows that Linklaters' central management will be unsentimental about the way in which it implements the firm's strategy.
Other magic circle non-contentious trademark practices might find central management begins to turn up the heat on their annual reviews if Linklaters' approach works.
Magic circle stance
Has a portfolio management team with around six trademark attorneys in London, Hong Kong and other major jurisdictions. Barclays and Mars are among the group's largest clients.
Closed practice and does not file trademarks.
The German and Dutch offices respectively handle EU portfolios for relationship clients such as Colgate-Palmolive, Yum! and Rothschild. Does not have trademark filing practice in the UK.
Allen & Overy
Does not have a trademark registration practice.