Trademark departments are getting smaller

  • Big companies are outsourcing and offshoring routine trademark work
  • Trademarks is a target area for efficiencies
  • Trademark departments are ripe for procedural simplification and the implementation of new technologies

The senior in-house trademark counsel is an endangered species. The past few years have seen big companies, including many brand owners, cut back on their trademark teams and either outsource or offshore a lot of routine work. Training and travel budgets have also been slashed. “Departments are definitely getting smaller,” says one former trademark head. “The level of experience in-house is lower and boards have been appointing more junior people.”

In-house trademark counsel report that, particularly in developed markets, budgets have been capped or even cut; procurement departments are increasingly involved in hiring decisions; and trademark teams have even become subservient to other divisions, such as patents. In some companies, trademark heads no longer have vice president status, and do not report directly to the general counsel. “That’s troubling because if the trademark head doesn’t have a direct contact, they can’t have an impact on policy,” says one former in-house lawyer. Other companies have restructured; for example, anti-counterfeiting work has been either outsourced or moved to other departments.

To some extent these things are cyclical, and the latest trend was undoubtedly triggered by the economic downturn. But many in-house counsel fear the changes are permanent. “If your position is devalued, what’s your career opportunity?” asks one. Another individual points out that some in-house counsel have had to pay their own way to attend association meetings.

The changes do not necessarily reflect a downgrading of brand protection, but they do reveal that trademarks practice is targeted as an area where efficiencies can be made, and have prompted concerns that, as one interviewee puts it, senior executives “are not supportive of the trademark function”. There are several reasons why trademark departments are being targeted in this way, of which the foremost is that they are regarded as being ripe for procedural simplification and the implementation of new technologies. As one counsel says: “You can go further with automation. General counsel will be challenging internal team leaders to look at those options. They will drive technology.” We will see how that could develop in the next chapter.

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