1 August 2011PatentsAdam Wylie

Mitigating risk through effective IP rights management

Anyone involved in IP will be aware that payment of patent annuities is an important and necessary part of maintaining an effective intellectual property portfolio. For law firms, it creates considerable workload and added expense if carried out directly with patent offices around the world.

For these reasons and more, the trend among law firms is to outsource the management of their clients’ IP rights to third-party IPR management service providers. Clients demand lower costs and services such as an online portal, and outsourcing is one way this can be achieved.

Patent annuity costs can represent a significant part of the overall patent expenditure. A company with just 500 patents can incur an annual spend of more than £100,000 on patent renewals. More difficult to quantify is the time spent in-house by an IP rights holder or law firm in the diligent administration of the patent renewals process.

Challenges faced for effective management of patent renewals

While in the past, a paper filing process would have been sufficient as an IP management system, it is now essential to have a comprehensive, computerised IP management system.

Monitoring and renewing intellectual property rights is time-consuming, costly and requires expertise. For companies with multiple filings in different territories around the world, the maintenance of their IP portfolio can become fragmented, through the relationship between the IP rights holder, the IP law firm, multiple foreign IP law firms and the various patent offices.

A centralised form of administration is achievable by outsourcing IPR management, which brings into play a single point of contact: the IPR management service provider.

Benefits to law firms of outsourcing IPR management

Outsourcing patent renewal management to a third party enables law firms to concentrate on core activities and serving their clients. Centralising renewal services to a third party means everything is managed by one contact. In turn, law firms are able to offer clients a better, cheaper and more secure service.

Outsourcing saves time in-house. Law firms and IP rights holders have to keep track of patent renewal dates, fees and deadlines, which vary from country to country and are subject to frequent change. An experienced renewals service provider has developed the know-how to perform these tasks efficiently and reliably, and with the increased security that comes with IP management being managed by one contact.

Markus Levlin, electronics team leader at Finnish law firm Berggren, explains: “Outsourcing of renewals has saved Berggren untold amounts of time and work as well as money. In full outsourcing mode, our renewal management provider takes care of all communication, reminders and invoicing—all the little details that at our volumes would require several pairs of hands if managed in-house.

"This arrangement allows us to avoid these personnel costs and associated business costs, removes the need for managerial time to run such an operation, and most importantly, allows us to focus in our core business.”

Qualities and attributes required in a good IPR management service provider

One of the key factors in any decision to opt for an external IPR management service provider is experience. Entrusting patent annuities to a third party demands a high level of trust between the IP rights holder or law firm, and the renewals service provider.

Firms have to be sure the third party will not miss renewal dates and allow rights to lapse. A renewals service provider will charge for their services loaded on top of standard patent office fees. Larger firms handling tens of thousands of cases each year are able to procure discounts due to the large number of renewals being handled.

"In full outsourcing mode, our renewal management provider takes care of all communication, reminders and invoicing—all the little details that at our volumes would require several pairs of hands if managed in-house."

Every end-user is different, so when choosing an IPR management service provider, the flexibility to tailor the software to suit a client’s needs is crucial. Another important consideration is product development. Understand not only how the software features meet your current requirements, but also how the service provider intends to develop the product in future.

An IPR outsourcing solution Patrafee AB provides services and software solutions for the management of intellectual property rights. The company is headquartered in Stockholm, Sweden, and was established in 1978.

Patrafee AB has more than 7,000 clients ranging from private individuals, small and medium-sized enterprises, and large multinationals. Patrafee handles in excess of 80,000 cases per year. In June 2011, Patrafee UK was formed with a management team comprising representatives from Patrafee AB, IP Pragmatics Ltd and investors.

The new London-based UK division of Patrafee will enable Patrafee to access the UK and global market via the existing client base of IP Pragmatics, an IP asset management company. Patrafee already counts a number of UK IP law firms as clients.

There are three facets to the services offered by Patrafee UK: monitoring and payment of patent renewal fees; registration and renewal of domain names; and software that enables IP portfolios to be accessed online. Patrafee’s secure monitoring and standing order service for patent maintenance fees removes the need to spend time and money on fees and watching deadlines.

Patrafee’s IPR management application, Patrawin, is a highly effective software tool that can be easily customised to a client’s specific requirements. Patrawin is a powerful and easy-to-use software solution that handles all IP matters and has been developed in close conjunction with IP law firms.

It has an integrated online customer portal, IPR Control. Peter Friedrichsen, managing director of intellectual property management consultants Bergenstrahle & Lindvall, found that a document management system such as Patrawin helps the firm save time and money.

He said: “We’d spend days walking around the place looking for a physical paper file. Of course, we didn’t have one particular clerk searching around on desks and in cabinets, but if we add up all of those five-minute strolls by our various employees, that’s a lot of time. It took us one year to shrink the paper archive— and to save 30 percent of the time we spent on the administration of files and documents.”

Law firms and corporates with a significant IP portfolio are increasingly seeing the management of IP rights as a commodity-based service. Outsourcing can be a secure, reliable and efficient way to handle the monitoring and payment of patent annuities.

For a law firm or company with a medium to large size patent portfolio, the reduction in risk and the cost savings generated from outsourcing IPR management can be significant, allowing them to concentrate on core aspects of their business.

Adam Wylie is chief executive officer at Patrafee UK Limited. He can be contacted at: adam.wylie@patrafee.com

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