Vincent Brault, is a Vice President at CPA North America (CPANA). Mr. Brault started working at CPANA in 1995 where he joined the Intellectual Property Software team. Between 1997 and 2002, he managed the U.S. software team: support, project management, and R&D. In 2002 he changed position to lead the North American Sales and Account management team. Prior to joining CPA, Mr. Brault earned a graduatedegree in International Business and an MBA, and in 2004 he obtained a post graduate degree from Harvard Business School.

BDA: Vincent, please give us an overview of CPA North America.

Mr. Brault: CPA is the leading provider of intellectual property services serving the legal community; has been in business for almost 40 years and serves 40,000 customers. Today we have 1,100 staff in 16 offices. We specialize in outsourced legal services including Intellectual Property, Litigation Support, and Contract Management solutions. CPA initially built the business around the management of IP maintenance fees for a mix of corporations and law firms. Around 2000, CPA began actively diversifying offering software to manage Intellectual Property portfolios for both law firms and corporations. CPA further broadened its product portfolio offering other capabilities such as patent searching, patent analytics, and Legal Process Outsourcing both in Intellectual Property (proofreading, illustration, docketing, and paralegal work), litigation support and contract management. Our solutions help our clients realize profitable revenue through cost reduction, increased capacity, and risk management.

BDA: Geographically, where does CPA have a presence and where are its customers concentrated?

Mr. Brault: CPA’s customer base is split evenly between Asia, Europe, and North America. CPA has 16 offices in 8 countries. Eight of those offices are in Europe; 3 in Asia; 1 in Australia; and 3 in North America.

BDA: Please discuss CPA’s maintenance fees. What kinds of issues do companies and law firms come to CPA with in terms of needing help with managing their maintenance fees.

Mr. Brault:North American Law firms and corporations have different needs when managing patent and trademark maintenance fees: A growing number of law firms view the management of maintenance fee deadlines as a high risk, low profit activity. There is a growing trend in the law firm community to remove themselves from this activity as part of the firm’s overall risk management strategy. For example, maintenance fee deadlines in countries with no restoration policy are considered by law firms and insurance companies as a high severity legal malpractice claim area with potentially fatal economic consequences to the firm. On the corporate side, the need is much simpler. Corporations have to maintain portfolios of patents and trademarks to support the business. Medium to large corporations usually look to manage this part of its business through third party organizations like CPA that are more cost-effective and specialize in this area.

BDA: Now you said for the law firms, when you help with their maintenance fees, there’s a risk involved. Do you offer any kind of risk mitigation product, or just by virtue of outsourcing to CPA do the law firms minimize their risks?

Mr. Brault: CPA provides risk management solutions to both law firms and corporations. Increasingly, law firms want to focus more on high-profit low-risk activities and move away from high-risk, low-profit activities. CPA specializes in many of the high risk administrative areas unique to intellectual property --maintenance fee payment, IP portfolio transfers, docketing and paralegal work, proofreading, data verification and workflow consulting. Many law firms are more than happy to outsource these activities along with some of the risk. CPA has helped over 80 firms worldwide get away from such high-risk low-profit activities as IP docketing and maintenance fee payment allowing them to focus on high-profit substantive works.

BDA: What is the trend? Are more companies managing their maintenance fees themselves, or are they outsourcing it to the law firms? Which is a bigger growth opportunity for you?

Mr. Brault: Historically, most corporations used their outside counsel to manage annuity and maintenance fees. Starting about 20 years ago, a few large corporations began to shift toward using specialty service providers, like CPA. Budget constraints have consistently led more and more of the medium size companies to switch from outside counsel to annuity providers. In the meantime, law firms are actively removing themselves from this activity and even small companies and inventors are working with annuity providers.

BDA: Please discuss how CPA is successful in lowering its costs of doing the outsourcing legal work and in managing its maintenance fees. Do you have offices in developing countries that enables you to do that, or is it solely a function of technology?

Mr. Brault: Both. The number one factor for realizing a lower cost is volume of payments. CPA makes 1.4 million maintenance fee payments or 36% of all maintenance fee payments worldwide. In addition, we also handle hundreds of thousands of IP recordals and data verification transactions annually. This has put CPA in a favorable position to develop an international network of excellent and cost-effective foreign agent relationships. In other words, we leverage our volume to obtain the best possible deals from agents worldwide. The second driver is technology. With over 600 software customers and over 10,000 users around the world, a significant portion of our large customers use our software solutions to manage their patent and trademark portfolios. This allows for the electronic transfer of data back and forth. Lastly, we do have some offices in lower cost countries, specifically India. By getting access to a strong talent pool, CPA has built an organization with over 350 staff to support its own processes along with those of our customers who have selected to outsource docketing, paralegal, proofreading, and prior art search functions to CPA. This has led to greater flexibility and cost savings for CPA and our customers.

BDA: Does CPA have any leverage over the various patent offices if you submit bulk maintenance fee filings? Do you get any volume discount, or do you have no leverage there?

Mr. Brault: No, our position in the market does not impact the official or government fees that are due to the PTO offices around the world; however, since annuity payments are our specialty area, we work and pay directly with as many PTO’s as possible and eliminate the need to pay a local agent. This translates into cost savings for our customers who would otherwise pay a local law firm to assist them in the renewal process. This is a perfect example of how we help companies realize cost-savings.

BDA: Now the software that you sell, does it just expedite the filing of things such as maintenance fees? Or does it also help the decision-making process in determining which patents should maintain their fees?

Mr. Brault: CPA has three software solutions. One offering is CPA Inprotech dedicated to law firms. Its user community is comprised of many of the largest law firms in the world. The second software is CPA Memotech. It’s the leading software for large corporate IP owners. And the third software is FoundationIP (FIP). It is a hosted model and serves both law firms and corporations. FIP is also the fastest selling IP software in North America today. I’ll focus on CPA Memotech and FoundationIP as these 2 solutions relate best to your audience, as quite a few members of your audience use CPA Memotech and FoundationIP. The vision behind these applications is to help corporations manage the entire life cycle of their intellectual property assets. It starts as a bridge between intellectual property and R&D. Memotech for example includes some fairly sophisticated modules to give inventors and members of the R&D team greater access and ability to communicate and collaborate with members of the IP and R&D groups. CPA Memotech also provides invention submission along with patent committee and inventor award modules. And that’s where business R&D and intellectual property meet to make better decisions around which intellectual assets to invest in. A second key aspect of supporting intellectual assets is management of the filing and prosecution work. Some of our corporate customers have over 250,000 active IP matters in their system, and need to manage a very large number of domestic and foreign agents throughout the filing process. Customers leverage CPA’s software solution to provide a collaborative and controlled environment for all parties involved. And then, finally, when you have a mature portfolio of patents, it is essential to have an IP strategy that supports the business including what assets to maintain, abandon and license. I think this is a key aspect and an often overlooked element of intellectual asset management. A lot of organizations do not understand their IP portfolio and do not know what they own. It’s often very hard for corporations to correlate their patent and trademark portfolios to the business. So that’s another significant aspect of our software, helping IP to support the business. In other words, ensuring that your intellectual property supports specific products, services, provides a competitive advantage or keeps competitors at bay, and that you are keeping the right patents alive and licensing the right technology. That is the main philosophy behind the software.

BDA: In terms of the product that facilitates communication between research and development and intellectual property, does it require a lot of effort to enter information into the software? Is there any issue with research people perhaps resisting spending a lot of time entering information into the software?

Mr. Brault: Actually, the modules you’re describing were designed to address the frustrations of R&D staff struggling to submit inventions. The idea was to develop very user-friendly profiles for inventors, R&D managers, Product Managers, and attorneys to allow them to easily submit or review relevant information with minimal training. The process is mostly driven via e-mail. So upon completion of a submission, email will be sent according to a company’s specific workflow. Inventors and attorneys receive email when questions need to be answered. They also have direct access to the inventor award module so that they know exactly where they stand and how many points they have accrued. This type of visibility has an impact on overall productivity. When inventors know exactly how their performance translates into earnings, organizations can realize increased efficiency and output from their inventors. So the idea is user-friendly access, simple workflow that allows you to gain visibility into status and how inventions are progressing or being used.

BDA: In general, do you see intellectual property being managed by increasingly senior executives at your client companies? Do you see that perhaps the chief executive officer or a CFO or very senior people are getting more involved in decision making in terms of managing their IP? Or is it still pretty much the same players as ten years ago?

Mr. Brault: Massive change. Many of the chief IP Counsels we work with are being pressured by CEO’s and CFO’s to better support the business. And not just with a reduction of costs, although IP in-house costs have typically gone up over the past few years. The idea is to better contribute, either through royalty streams, increasing revenue, or to become more effective at keeping competitors at bay, gaining operational advantages, or being able to manufacture or produce at lower costs than competitors. A compounding element is that CEOs, COOs and CFOs are also much more knowledgeable about intellectual property these days. Smaller and medium size businesses are creating IP departments and bringing more and more IP management in-house. This growing trend speaks to the increased importance placed on intellectual property in the board room and the pressure to manage and control the associated costs.

BDA: Do any of your products or services help companies value their intellectual property?

Mr. Brault: Yes, in several ways. As I mentioned earlier, our software solutions help corporations associate intellectual assets to products and services and to the associated revenue streams. CPA also assists corporations with due diligence support for IP transactions. Before selling or acquiring a portfolio, companies need to understand what they’re divesting and/or acquiring. CPA can provide analysis of the portfolio that is part of a transaction. For that type of work we leverage the expertise of our data verification, patent analytics and patent search teams who help companies understand the potential risks or identify high value patents within a portfolio. We specialize more on the technical aspect than on the financial aspect. Many companies do the financial valuation very well. That’s not our area of expertise. Our main objective is to provide quality technical information to support those M&A decisions.

BDA: Maybe you can talk a little bit about the products and services CPA offers in terms of litigation support when IP is contested in courts.

Mr. Brault: to answer your question let me take a step back. CPA provides legal process outsourcing in several areas. The first offering is built around intellectual property activities such as docketing, paralegal, prior art search, proofreading, illustration, patent term adjustment among others. This solution was developed to meet the needs of very large corporations trying to outsource those activities because of budget constraints, headcount, and administrative burden. CPA has about 350 people involved in those activities. So this was our starting point and we have since moved to the broader LPO world. CPA now provides contract management and litigation support services. In the litigation support arena, we provide document review, deposition summaries, legal research and written findings and preparation of standard litigation documents.

BDA: Is CPA a privately held company? Or is it public?

Mr. Brault: CPA was founded as a partnership 40 years ago and incorporated a year ago.

BDA: But currently it’s still…?

Mr. Brault: Privately held.

BDA: It’s privately held. Okay. Do you disclose the company’s revenues?

Mr. Brault: No. We’re pretty much a billion dollar organization.

BDA: Who would you say CPA’s closest competitors are?

Mr. Brault: It’s changing rapidly. We used to compete with organizations such as Computer Packages Inc., Master Data Center and Dennemeyer for IP software and maintenance fees. Obviously, there are many competitors in litigation support and some in patent search and legal process outsourcing, but none who compete in all areas.

BDA: Are the big consulting firms like Accenture, are they competitors, or those the kind of firms you might have alliances with?

Mr. Brault: They are not competitors; more likely to be future alliances.

BDA: Please tell us a little bit about yourself, and your background. How long have you been with CPA, and in which capacities?

Mr. Brault: I joined CPA 12 years ago in the software team to help create a software business unit at CPA, and remained on the software side for the first 8 years. I worked with a team of about 25-30 people and we implemented the first 50 software sites in North America. We also developed the first web application in the IP industry. In 2002, I made a change from the operations side to account management, sales, and business development. In the past 5 years, CPA went from 20 people in North America to over 250. I think that we now have over 6,000 customers in North America, so very fast growth. I have just changed positions about six months ago, to focus on business development in Japan and to launch a risk management program in North America.

BDA: Is there anything else you’d like to tell us about CPA or the services you offer?

Mr. Brault: Yes. Many corporations have come to realize that legal process outsourcing is a way for them to better support their business, and I think that this trend will continue to gain momentum. On a final note, I have seen CPA grow very quickly from 200 people in 2000 to about 1100 people now, and I think our growth and success came from being very customer focused and letting our customers help drive where CPA should focus. Those seem to be the strengths of CPA.

BDA: Thank you. (DW)