Articles in this report: Reflections on New Zealand; Climate change - more than hot air; The viability of IP; Financial advisors under the spotlight; Duncan Cotterill on international stage (firm profile); Chris Heilbronn Kensington Swan
ALB takes a look at how IP firms in New Zealand are responding to the credit crunch
In the sleek new offices of Hudson Gavin Martin, the three partners of the practice - Wayne Hudson, Mark Gavin and Simon Martin - recline comfortably on lounges. Quirky proverbs - arranged in threes - are framed on the walls. Nearby sits a table with three hats and an apple. "It's the theme of three," explains Wayne Hudson, pointing out himself and his two colleagues. The apple remains a mystery.
Hudson Gavin Martin is certainly not a typical law firm. The firm's website, for example, opens rather unexpectedly with a slideshow featuring a rock, a sheet of paper and a pair of scissors, followed by the words 'shake, rattle and roll'.
"It's all about the area of law we practice in," says Wayne Hudson. "It's creative, looking to the future and fun. We're not selling ourselves to the law firms - we're selling ourselves to the public."
But how is the sales pitch going in the context of the credit crisis? Not surprisingly, intellectual property firms aren't feeling the pinch in the same way that an M&A practice might.
"True, you can hold off doing an acquisition until times are better," says Wayne Hudson,
"But you can't run a business without intellectual property protection and outsourcing and putting in place appropriate contracts and systems for running that business."
Greg Arthur, managing partner at AJ Park, is another partner optimistic about his firm's prospects for the rest of 2008. "The start of year would suggest we're going to have another good year. But we need to keep an eye on the economic indicators. The effect of the credit crunch hasn't been felt yet." Again, it's the nature of work done by IP firms that is relevant here. "Intellectual property is a long term investment. Businesses can't afford to drop the ball and leave their IP unsecured - they have to take a long term view." Arthur suggests that businesses may well cut back on their research and development budgets and this might result in less patent work "However, this is purely speculative," he says. "The truth is we don't know how the economic situation will pan out."
NEW ZEALAND IP LAW - OUT OF DATE?
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New Zealand intellectual property legislation is outdated and in need of wide-ranging reform, says Greg Arthur, managing partner of AJ Park. "We've seen some examples of reform already, but the process is slow and piecemeal," says Arthur. A summary of the status of the main legislation is as follows:
- Patents Act 1953 - new Patents Bill expected to be introduced into Parliament this year. Introduction of international novelty requirements rather than the present local novelty requirements.
- Trade Marks Act 2002 - some amendments proposed to update this Act, including implementation of the Madrid Protocol, which allows New Zealand to be included on an international trade mark application.
- Designs Act 1953 - not under review but in need of revision to bring the law into the 21st Century. Current Act perceived by business to be inflexible.
- Plant Variety Rights Act 1987 - has had several amendments but further amendments required to comply with international treaty obligations.
- Copyright Act 1994 - significant amendment made to reflect movement to digital technology. Further amendments proposed.
Source: AJ Park
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The cost factor
"It's worth making the distinction between transactional work and operational work," says Mark Gavin, "In other words, we're talking about the distinction between the big one-off transactions where clients are prepared to pay top dollar for the work, versus the day-to-day work where the client is more likely to look closely at how much it's costing. Take technology advice, for example - clients see that as an expense. They're a lot more cost-focussed."
Cost, says Hudson, is one of the key differentials. "We're more accessible to clients. They feel able to use us because they don't have the traditional expenses or difficulties of working with a big firm. When I was working at a top firm, I battled for years to get new clients."
Rob Fisher, chairman of Simpson Grierson, has a different take on the situation. "We see our IP practice as a boutique group within the firm. We find our clients appreciate the commerciality of our IP practice because it sits right within our commercial department." When asked about the cost differential with boutique firms generally, Fisher raises his eyebrows. "No-one has suggested to me that boutique firms are cheaper," he comments.
Commerciality in IP practices is the theme du jour - even for boutique firms. "In the old days, you'd have firms which did nothing but the registration side of things," says Simon Martin, "What we're about is the bigger picture - the commercialisation of IP rights. In other words, a client has a brand or an idea - what do we do with it? So we're talking work like onselling, licensing, capital raising, equity deals, franchising, joint ventures just to name a few."
If boutique firms such as Hudson Gavin Martin can indeed offer such a one-stop shop, clients may well be attracted by the idea of working with a smaller and perhaps more personable firm. However, Rob Fisher is unconvinced. "Regardless of how big or small you are, or what industry you are in, quality of service is paramount. It is nonsense for boutiques to claim that they can offer a higher level of service than a big firm. A boutique can't claim by right a guarantee of quality - certainly the definition of 'boutique' only focuses on smallness and specialisation."
Fisher raises the perennial marketing question: is the move to boutiques driven by the demands of clients or by the needs of individual lawyers? It's not the first time the question has been raised and, as the rise-fall cycle of boutique firms continues, it won't be the last.
A CASE OF IDENTITY
| A case of identity A recent case handled by Hudson Gavin Martin demonstrated the dangers of using generic terms in branding. DB Breweries, which produced a beer known as Summer Ale, took exception to a rival product launched by brewer Lion Nathan under the name Mac's Sun Dance Summer Ale. DB sought an injunction restraining Lion from marketing or distributing Mac's Summer Ale, but was unsuccessful.
"The case is in many senses a traditional Fair Trading Act/passing off case, but it's significant as it was the first time in over 20 years the two major breweries had faced-off in court proceedings of this kind," says partner Mark Gavin, "What the case demonstrates is the inherent problem and danger in selecting brand names which are generic or descriptive of the goods or the key characteristics of those goods. Here Summer Ale was identified as a light, refreshing beer for summer and the use by Mac's for its Sun Dance beer was in a descriptive sense only."
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