On 6 February 2018, Australian Securities Exchange (ASX) listed company IPH Limited (ASX:IPH) announced [PDF, 156kB] that two of its smaller group businesses – Fisher Adams Kelly Callinans (FAKC) and Cullens – are to be merged into its original and largest firm, Spruson & Ferguson (S&F). Operation under the single S&F brand is expected to commence in April 2018, with full integration to be completed by July 2018. The merger announcement comes on the heels of IPH’s settlement of its acquisition of New Zealand IP firm AJ Park on 31 October 2017 [PDF, 189kB].The merger will erase two of Australia’s oldest IP brands – Callinans and Cullens – from the marketplace, once and for all. Notwithstanding the preservation of its name within FAKC, however, the Melbourne firm of Callinans – which had over 100 years of history at the time of its merger with Fisher Adams Kelly in 2015 – is already effectively defunct given that, to my knowledge, not one of the firm’s attorneys at the time of that merger remains with FAKC. For its part, Cullens was the first patent firm in Brisbane, having been founded by George Cullen in 1936.
The new merger is significant in terms of its impact on clients’ choice of patent attorneys in Queensland. According to the Register maintained by the Trans-Tasman IP Attorneys Board (TTIPAB), FAKC and Cullens collectively employ 26 patent attorneys (and one trade marks attorney) registered at Queensland addresses, out of a total of 93 patent attorneys registered in Queensland. Following the merger, the largest patent attorney practice in Queensland will be Davies Collison Cave (five attorneys registered in the state), followed by Eagar & Martin, IP Gateway and Pizzeys (all with four Queensland patent attorneys, although Pizzeys also has six patent attorneys based in Canberra). Of these, Pizzeys is itself a member of the IPH group (though not – yet – merging with S&F) while Davies Collison Cave is Australia’s largest IP firm and a member of the QANTM IP Limited (ASX:QIP) group. Thus any client in Queensland wanting to work with a mid-tier patent attorney firm will most likely need to look interstate.
I predict that this will not be the last merger of firms within the three publicly-listed ownership groups (the third being Xenith IP Group Limited, ASX:XIP). While it is commonly believed that the scope for mergers may be limited by the need to avoid conflicts of interest between the clients of the separate firms, my own conversations with people within the groups suggest that this is not necessarily viewed as a major obstacle.
Furthermore, the updated Code of Conduct for Trans-Tasman Patent and Trade Marks Attorneys 2018, which came into effect on Friday 23 February 2018, creates a presumption of non-independence of firms within an ownership group. The Code also imposes new obligations on the firms within a group to inform clients of the arrangements, and to obtain informed consent, in writing, from clients on both sides of any contentious matter (e.g. a patent opposition) represented by different firms within the same group. It is my view that, in some cases at least, these more-onerous obligations may tip the balance in favour of merging firms, rather than maintaining separate operations.
The real question, then, is not if there will be further mergers, but who will be next?
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