Ways to Control and Reduce IP Cost (Part 2)

In part 1 of this post, we talked about three ways to control and reduce cost in IP departments:

1. Bringing things under control
2. Efficient use of software
3. Patent committees and internal disclosure review meeting

In this post, we talk about several other ways for IP managers to control their department cost.

4. Patent Maintenance Payment

Maintenance payments are often ignored as it is not comparable to patent prosecution cost. However, in the US there are three times payments during the life of the patent and in most other countries this is every year. It is important to know that cost of maintaining the patent goes up as the patent gets older. This will become very expensive for large patent portfolios. Here are some tips on how to reduce this fixed cost:

• Use third party annuity service providers.  There are firms that specialize in paying patent annuities at a much lower cost. The cost will typically be lower with larger portfolios. In addition, these firms usually provide special tools to help in communicating the final decisions with them. Among the firms that provide this service with geographically wide coverage are: Computer Packages Inc (CPI); Computer Patent Annuities (CPA Global); and Thomson Reuter.

• Regular review and abandoning patents: It is always difficult to predict whether a patent application is going to be very valuable at the time of filing. However, as time goes by, it becomes easier to answer this question. Sometimes, a company’s target market changes over time or other products are introduced into the marketplace that cover the same market need, making the old patent less valuable.  As the rule of thumb, if a patent is not in use by or around the twelfth tax year, chances of becoming useful and valuable is very slim. Therefore, it makes more sense to abandon those assets before the second US maintenance payment in order to save money.

5. Electronic billing

oftentimes, law firms and legal service providers provide detailed billing, itemizing and describing hours spent by all associates every month. Historically, law firms used to mail a hard copy of the bill each month. These bills sometimes tended to be quite thick and not easily manageable by an IP manager to read and digest. Asking for an electronic bill (e.g., Excel spreadsheet) in the computer era is a reasonable request which provides easier cost tracking.  With a spreadsheet, you’ll be able to easily sort line items based on docket number or high-to-low and determine which application is consuming a large portion (potentially disproportionately) of the attorney’s time.  Then depending on the importance of that application, you can have special instructions for future handling.

6. Avoid Deadline Extension

Filing for extension is one of the areas that corporations often neglect but it results in higher overall cost especially for large portfolios. Like any other business, time management is important. It is the responsibility of the IP manager or in-house counsel to make sure all required signatures and paper work will be completed by the patent office deadline. Sometimes applications have several inventors who are located in different cities or countries, sometimes people involved in the application have busy schedules and ignore email reminders from paralegals. But it is important to setup a soft internal deadline and make sure everything is complete by that date. This is also the case for all other filings such as office actions, etc. In-house or outside counsels should be reminded to avoid unnessary extensions.