Issues in Patent Renewals: A Workable Solution?

The patent renewal business is apparently undergoing some change.  Please see the press release below concerning a business attempting to address that change and provide a workable solution. 

Patentrenewal.com makes patent renewals profitable (again) for law firms  Over the past decade, there has been a race to the bottom from IP service providers to deliver the cheapest patent renewals. Falling profit margins combined with the complexity and risk of handling patent renewals globally has resulted in many IP law firms exiting the renewals industry. In an effort to reverse this trend, patentrenewal.com promises to make IP law firms’ patent renewals business profitable again.

Patentrenewal.com is a white-label web-based platform that gives IP law firms the ability to onboard their clients and sell the renewals service as if it were their own. Once a client’s patent portfolio is uploaded onto the platform, the renewal payments are automatically processed based on the client’s renewal instructions and can be viewed in real-time. Invoicing, emails and payment transfers are handled by the system, removing another administrative burden. The crucial selling-point for IP law firms is the ability to quickly scale up and onboard new clients without worrying about their administrative capacity or compromising their brand. “It’s an interesting case for automation because, contrary to the scepticism and fear surrounding technology in the legal industry, our product actually makes firms’ renewals business viable again” - Mads Jørgensen, CTO.

The strategy goes against the common trend in the IP space, but Jesper Jensen, the company’s CEO, remains bullish on the decision to integrate with firms as opposed to being another service provider: “Originally our plan was to build an automated renewals service exclusively towards IP law firms’ clients. But we soon realised that patent renewals is an important strategic touch point for clients and firms, and the connection between client and law firm was something that was being eroded by the service providers, who only focus on making payments.”

There were other reasons too, for the Copenhagen-based company to enter the market. Scepticism and paranoia have spread in the renewals market, as an entire industry has cropped up with the sole purpose of prosecuting renewal providers for malpractice after several investigations have uncovered fraudulent overcharging practices by some of the big renewals providers. In an effort to reinstate trust, the team at patentrenewal.com has focused on price transparency from the start.  All charges, down to insignificant postal fees, are shown throughout the platform and foreign exchange rates are openly advertised. “Working closely with the firms and focusing on transparency has allowed our young company to become a trusted partner and gain traction in a very short period of time.” - Frederik Wagner, CPO.

The company’s direction and focus has paid off, and after only being in the market with their product for a year, the company is responsible for more than 6000 patent renewals in 60+ countries for IP law firms in Northern Europe and has a growing waiting list of law firms. “We know that we’re up against some big forces, and we have to work hard to reestablish trust in the industry as a whole, as well as proving that our youth isn’t a disadvantage” - Nicki Friis, COO. The company continues to grow and has raised two rounds of funding (in 2017 and 2018) from private and institutional investors to quadruple their annual renewals in 2019.

For more information, visit patentrenewal.com or contact Nicki Friis at nfw@patentrenewal.com.

More Resources to the U.S. Patent and Trademark Office--Require Maintenance Fees for Design Patents

The U.S. Patent and Trademark Office (PTO) has been criticized for some time for issuing relatively poor quality patents.  Indeed, some may argue that the patent troll problem is an issue because of poor quality patents.  For some technical areas, the PTO has struggled with obtaining relevant prior art; however, there is also a question of adequate resources available to the PTO to hire and train more examiners.  While the PTO has hired many new examiners in the last five to ten years and has opened a couple of new offices, I believe the PTO could use more resources.  One source of additional resources for the PTO includes maintenance fees. 

The PTO requires that maintenance fees are paid for utility patents during the life of the patent.  If the fees are not paid, the patent may fall into the public domain.  Basically, maintenance fees without a surcharge must be paid:

Three to three and a half years after the date of issue for the first payment;

Seven to seven and a half years after the date of issue for the second payment; and

11 to 11 ½ years after the date of issue for the third and final payment.

Not only do maintenance fees provide additional resources for the PTO, they also provide the benefit of allowing some patented inventions to lapse into the public domain available for all to use.  Notably, Professor Crouch states that 50% of all granted utility patents fall into the public domain because of a failure to pay maintenance fees.  Interestingly, two types of patents do not require maintenance fees: design patents and plant patents.  37 C.F.R. section 1.362 provides: "(b) Maintenance fees are not required for any plant patents or for any design patents." 

In a recent article by Sarah S. Brooks and Salil Bali titled, "Design Patents--Taking a Closer Look at These Valuable Assets," published in the New Matter magazine in Fall 2014, the authors point to the increase in acquisition and litigation of design patents as well as the benefit of obtaining, "the total profits of the infringer [of a design patent] rather than the reasonable royalty or lost profits for a utility patent infringement."  Notably, the authors state that the number of design patents applications filed in 2006 were 25,853 and have steadily increased every year (except 2009) to 35,077 in 2013.  The number of design patents granted has increased from 19,072 in 2006 a year to 22,453 in 2013.  The number of design patents applied for and granted does pale in comparison to utility patents.  The number of utility patent applications applied for and granted in 2013 was 563,853 and 265,979, respectively. 

The recognition of the importance and value of design patents may explain the increase in filings.  While design patents are only available for 14 years, a scheme similar to the one for utility patents could be created for design patents.  That could result in additional revenue for the PTO.  Moreover, a maintenance fee scheme for design patents would have the potential benefit of having some designs fall into the public domain.  What do you think?