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TTOs looking to deal directly with patent annuity management firms

By Jesse Schwartz
Published: September 6th, 2017

In the classic tune “Accentuate the Positive,” composer Harold Arlen advises the listener, “Don’t mess with mister in-between.” It seems that some TTOs have taken that advice to heart when it comes to managing patent annuities.

While some TTOs still use their law firms to manage renewals, or to access and monitor third-party companies that handle the mechanics of annuity forms and fees, others have opted to deal with these companies directly, thus eliminating the “mark-ups” they must pay the law firms.

 “We took over patent annuity management effective with payments due 6/1/15,” wrote Janet Kisinger, JD, University of Arizona senior intellectual property manager, in response to a query posed on an AUTM listserv. “Prior to that, when law firms were paying the fees, we had seen add-on fees of up to $400 per payment. Now it has been only $10-$20 per payment (based on our volume of cases.)”

Responding to a similar query from another AUTM member, Gregg Banninger, the patent coordinator at the University of Illinois-Urbana-Champaign, said that a leading patent renewal firm, CPA Global, has fees that average about $200 per payment, but law firms imposed $300 to $400 plus charges when they send out renewal reminders. On top of that, “it can be $80-$100 for their paralegals” for each payment, he noted.

 “I would say there are three different approaches, and there can be hybrids of each of them,” adds Mark Kesslen, chair of the IP section of the Technology Group at the Lowenstein Sandler law firm in New York City. “You can use a law firm to do it; they can work either directly with a particular country or use the service themselves. The client may do it themselves, or they may outsource directly to one of the payment services.”

Kesslen says he sees a trend — “assuming the party is sophisticated and understands what to do” – of TTOs moving to the direct sourcing model. “You have to know what you’re getting from the Patent Office, whether to pay or not to pay, and to keep the patent or not as opposed to a knee-jerk payment,” he explains. “What you want the law firm for is to help make that decision because keeping a patent portfolio alive is very expensive.”

Clearly, finances are a critical part of decisions to work directly with annuity management providers. “[The change] allowed us to avoid the extra fee on each annuity or maintenance fee paid that the law firm would charge to handle annuities,” Kisinger says. A detailed article on reducing the cost of patent annuity management appears in the August issue of Technology Transfer Tactics. To subscribe and access the complete article, as well as the publication’s rich 10-year archive of best practices and success strategies for TTOs, CLICK HERE.

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