INDUSTRY PROFILE

Revenues from the Indian patent services offshoring industry are estimated at $46 m for the
calendar year 2007 and are expected to reach $206 m by end 2012.
Typically catering to the international markets, patent services outsourcing to India is still in its
infancy with a history of only about 3 to 4 years behind it. There are about 50 vendors in the
industry with an estimated 1,550 professionals employed as of end 2007. While a few vendors
have been in this business longer, this industry has gained momentum only in the last few years.
Patent services include a wide range of specific tasks or services. We have divided these services
into the following broad areas: Patent searches, Patent illustration and proofreading, Patent
drafting, Patent analytics, Patent asset management, Patent litigation support and Patent
consulting.
Among the various functions in the patent services industry, the manpower intensive and process
driven services are more easily offshored. The relatively low-value, high volume services include
prior art searches, patent illustration and patent proofreading.
Large corporations are in favor of offshoring patent related (and other legal) work to India as
they are the ultimate beneficiaries of the cost savings. The current addressable value of the patent
services offshoring market is estimated at $2.2 b. According to Subha Kalathur, analyst and coauthor of the report, Indian vendors have significant opportunity to grow as the current
addressable market is 50 times the current size of the industry. Having already established
relationships with American companies and law firms, vendors also have significant opportunity
in taking on work from the Patent Offices.
According to Arun Jethmalani, CEO, ValueNotes, "The established vendors with exposure to
high-value services will look to complete their array of offerings to attract more business from
their existing clients. They will look to leverage end-to-end solutions."
The report provides an in-depth analysis of the buyer market as well as the Indian vendor
landscape. Based on the extensive primary research and analysis, ValueNotes has identified top
five vendors in this industry - Evalueserve, Pangea3, CPA Global, Lexadigm and Clairvolex.

India is no where close to countries like US, Japan and China, when it comes to filing patents.
But it still does a significant bit in the IP space. A lot of it's happening through patent service
outsourcing in India. This means, a lot of background work for the numerous patents that are
being filed by other countries, are being done out of India.
Experts say, patent services outsourcing, the high value work of legal process outsourcing (LPO)
has been a fairly new phenomenon here, hardly four to six years old. According to estimates last
year, more than 1.8 million patent applications were filed worldwide.

And the filing costs for these was between $30 billion to $32 billion. But what's driving growth
in the worldwide patent outsourcing market is: Increased offshoring of R&D activity, lack of
manpower and the impact of the US Patent Reform Act of 2007.
A study by ValueNotes, a Pune-based research firm shows, revenues from the Indian patent
services offshoring industry are estimated at $46 million for 2007. It's expected to reach $206
million by end 2012. The study reveals the current addressable value of the patent services
offshoring market is estimated at $2.2 billion.
"We believe that the Indian patent offshoring industry will grow 35% per annum over the next
four years. As for the number of employees, our estimate is that about 6,950 people will be
employed by the end of 2012," says Subha Kalathur, senior analyst with ValueNotes.
As Navtej Saluja, head of intellectual property, Evalueserve, one of the leaders in this space,
explains, "A lot of LPO work being done in India has been glorified BPO jobs like filling up
forms etc. Patent outsourcing, on the other hand, is a more high end KPO job that requires
specific skills and understanding." It involves end-to-end search jobs before a patent is being
filed, drafting the papers, patent analytics. No wonder, vendors who do this niche job hire
engineers, scientists, lawyers and train them for IP work.
Last year, there were about 50 vendors offering patent services from India. As of now, US
accounts for 60% of the work. "IP currently accounts for over 45% of the LPO market and is
expected to lead the growth in this sector in the next three to five years," says Bhaskar Bagchi,
country head, CPA India.ValueNotes classifies the patent services offshoring industry in India
broadly into three groups: captives, third-party multi-service providers and third-party pure play
patent service providers. Third-party vendors account for more than 75% of the industry.
The good thing is, India hardly has any other competitor in this space, especially for patents
being filed in English. Eastern Europe is the frontrunner in multi-lingual patent outsourcing
service. Philippines, too, is doing some low-end work.
Kalathur feels quality issues could be a major growth inhibitor in the short term for India.
"However, availability of quality professionals will improve in the medium-to-long term, driven
by investments made by vendors in training," says Kalathur. Once that happens, the sector can
look at a bigger growth curve.
India by far is the preeminent LPO provider given its common law system, widespread use of the
English language, and huge talent pool. In fact, 300,000 Indians enroll into law schools every
year across India and the industry offers an attractive career alternative as Indias overburdened
and understaffed court system is characterized by backlogs and delays while many law firms in
the country remain family affairs.

Thus and according to a 2008 Washington Post article, Indias LPO industry has been growing
60% annually for the past three years and will employ at least 24,000 people and earn US$640
million in revenue by 2010. Meanwhile, a December 2008 Washington Times article quotes
Evaluserve as predicting that Indias LPO industry will grow from US$52 million in revenue
back in 2005 to US$970 million in 2015. The article further mentions that 70 new legal
outsourcing firms have opened in the country just in previous six months alone. In addition, a
November 2008Wall Street Journal article states that Indias LPO industry earns around US$250
million per year and further points out that starting salaries for associates at big USA firms are
often more than US$200 per hour but experienced lawyers in India bill at US$75 to US$100 per
hour or roughly what some USA based paralegals charge.
However, Indian LPO employees still need rigorous training in order to become familiar with
USA legal and judicial practices. Furthermore, Indian legal professionals are accustomed to
writing in flowery British style English and not the short and straight to the point writing style
that Americans are accustomed to using especially in the legal profession. Hence, Indian LPO
professionals will literally need to relearn English, specifically American English, before taking
on any project that involves legal writing.

Legal process outsourcing Industry often termed as LPO industry is targeting to reach US$ 1
billion in revenues in the next two years from the present levels of US$ 440 million. Of course
this seems to be an extremely ambitious target as India is no longer the only preferred destination
for outsourcing and countries like Philippines, etc too have emerged as the best alternative
destination for outsourcing. More and more business organizations across the globe are looking
to outsource to only those countries that not only offer low prices but also have the necessary
infrastructure in terms of qualified human resources, information technology and government
support. But India is still considered to be the first choice for the Law firms in US and UK that
wish to outsource legal services as India has more than 950 law schools that train approximately
60,000 law graduates and qualify them to join the legal profession who will join the 1.2 million
registered advocates in the country.
Many of the new law graduates prefer to join the LPO firms and the corporate sector rather than
opt for judicial clerkship or litigation practice. The number of LPO firms has increased to 140
from around 50 in 2005 and this has led to increased opportunities for law graduates and these
firms offer very good salaries. Litigation and judicial clerkship requires a lot of struggle to
establish reputation which students today prefer to avoid, but many industry experts and
seasoned lawyers believe that finally all the law graduates have to at some point go to courtroom
and practice. Indian LPO firms offer services like reviewing documents and basic due diligence,
to automation and process efficiency, review contracts, process loans, provide expert witness
advice on data-collection, draft patent applications and conduct litigation-readiness assessment,
etc. One of the major challenges for the LPO industry is that every country has a different legal
system and the LPO firm employees have to be trained accordingly and Indian law is mostly

based on the British Legal system so there is a basic understanding of the British law and they
can also easily understand the American Law too which is a major competitive advantage for
Indian lawyers.
Another crucial factor is the low cost and subsequent low pricing that Indian firms offer, for eg.
For drafting contracts and legal memos a US Lawyer can charge somewhere between US$ 300400 per hour but in India same work can be done with US$ 10-30 per hour. This is a major cost
advantage for the US and UK law firms and corporate legal departments in business
organizations who need to cut costs constantly to survive. The availability of skilled lawyers
along with the government support the LPO industry is hoping to cross the billion dollar revenue
mark in the next couple of years. Legal Process Outsourcing Industry in India targeting to reach
US$ 1 billion by 2015.

COMPANY PROFILE
MAXVAL-IP SERVICES PVT. LTD.

ABOUT:
MaxVal Group, Inc. is a Silicon valley based patent services company that focuses on optimizing patent lifecycle
management. It was founded in 2004 by a patent attorney to serve in-house counsel and patent

operations. It specializes in patent lifecycle management. Currently it has over 175 people
including patent attorneys, patent agents, software developers and database experts
Headquartered in the Silicon Valley with offices in Coimbatore and Chennai, India. Its founder and
CEO is Mr.D.Bommi Bommannan, PhD(UCB/UCSF), JD (Stanford).