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.

Services Offshored

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.

Source:ValueNotes Research

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.

In contrast, high value jobs like infringement analysis, landscape reports, and competitive intelligence require relatively higher skill-sets/knowledge levels and a professionally qualified and experienced work force. Billing rates vary widely, from as low as $15 per hour to as high as $120 per hour for select services.

Offshore Opportunity

In 2007, more than 1.8 m patent applications were filed worldwide accounting for filing costs equivalent to about $30 b to $32 b. Companies of US origin are the largest client segment for the Indian vendors, accounting for 60% of the work offshored to India.

The current addressable value of the patent services offshoring market is estimated at $2.2 b. According to Subha Kalathur, analyst and co-author 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, they also have significant opportunity in taking on work from the Patent Offices as well."

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." Adds Neeraja Kandala, analyst at ValueNotes, "The smaller vendors will continue to focus on the process-driven, less sophisticated work. While the billing rates for such services are likely to remain stable in the near-term, the volume of work that will be offshored to India will be much higher compared to the higher value services."

Based on the extensive primary research and analysis, ValueNotes has identified top five vendors in this industry - Evalueserve, Pangea3, CPA Global, Lexadigm and Clairvolex. While some of them have already demonstrated their capabilities, others, we believe, will emerge much stronger in the next two to three years.

The above article is an excerpt from the newly released report by ValueNotes: "Offshoring Patent Services to India". The report provides an in-depth analysis of the buyer market and the Indian vendor landscape.

To read the Abstract and Table of Contents, please click here.