CPA Global to merge with the ipan/Delegate Group


Only recently formed, a once ambitious competitor is to be absorbed by the CPA Global organisation, which surely already holds an overwhelmingly dominant position in the unregulated IP services sector.  This merger, hard on the heels of the acquisition of Clarivate, will allow CPA Global access to enormous amounts of client data and numerous new clients, some of whom will have moved away from CPA Global only to find themselves right back where they started.

CPA Global wolfs down another competitor


CPA Global has been shopping again and this time it has absorbed the Clarivate (former Thomson Reuters) IP renewals business, growing CPA’s already dominant position in the renewal services sector. 

Not a match

Clarivate has promoted transparency as well as boasting no Foreign Exchange (FX) mark-ups and highly competitive local fees (it also doesn’t charge any local fees in most direct pay countries).  This is completely at odds with CPA who, based on tariff data I have analysed on behalf of clients, routinely apply FX mark-ups of between 20% and 50% ; CPA also charges local fees in every direct pay country, usually with the exception of the customer’s home country.

Keeping the wolf from the door

Clarivate customers should take a close look at their invoices from now on; making sure that they have obtained and analysed a tariff of official and local fees, and that the tariff is being applied in invoices received.

Further growth of CPA’s already dominant market share is not healthy and, I suspect, is going to result in increased costs and risk for its customers. – the world’s first comparison site for IP Renewal Services


A new online service,, has been launched that gives IP owners a quick, free and discreet means of comparing the charges of selected renewal payment service providers.


IP owners are verified by Patent Annuity Costs, the operators of the service, but their identities are not disclosed to suppliers. IP owners are only expected to share the number of registered IP rights they hold and, once they have received responses from suppliers, choose whether or not to make contact.

How it works

Users upload data from recent renewal notices or invoices (manually or using an Excel template) and choose the suppliers they would like to hear from. Suppliers upload their pricing, accompanied by a message and any supporting documents. Users can download a consolidated report and supporting documents.

Peter Rouse, director of Patent Annuity Costs said:

“ brings much needed transparency to the IP renewal sector and allows IP owners to make informed choices based on price and the added value services that suppliers have to offer.

We have a good mix of suppliers who have embraced the opportunity to participate and aren’t afraid of transparency. My hope is that others will also want to join in.”

The suppliers who are participating in are: 42Patents; Allbright IP; Brandstock; and PAVIS.

Read the press release on EIN Presswire

IP Renewals – three questions you need answered by your payment provider


Here are the three questions you need answered in order to know how you are being charged:

1.      What service fee are you paying?

2.      What are the local costs charged for each country?

3.      How are foreign exchange costs being charged?

If you don’t know the answers to these questions, you will have no idea how invoice charges are arrived at and you will never be able to verify the accuracy of any invoice.

Why do these three questions, and the answers given, matter? Let me explain.

1. Service fee

I have come across too many IP owners who have been referred to a payment provider by their patent attorney and have no idea what they are to be charged per renewal. 

If you do know what the service fee is, you should consider what other suppliers would charge. For example, I have seen an IP owner charged £168 per renewal by one supplier when another major supplier would have charged £60, and yet another as little as £15. A higher service fee is no guarantee of better service and a low fee does not necessarily mean you will be less well served.

A service fee should be just that – a fee for the service provided. Costs incurred in providing the service should not be an additional opportunity for profit. That opportunity has been well and truly embraced by at least one supplier, which brings us to the next question.

2. Local costs

It is now possible to pay renewal fees direct in more than 20 countries (‘direct pay countries’). In all others, renewals can only be handled through local agents who will charge a fee for their services. Most suppliers do not charge local costs for direct pay countries; there is, however, at least one major supplier that does.

Some suppliers pass on local agent charges at cost. Others do not. If you don’t know what your suppliers’ local charges are for each country, and don’t compare costs between suppliers, you could find that you are paying considerably more than you need to.

Most suppliers charge the same local costs for patent annuities regardless of the annuity year. One notable exception charges local costs that increase with each annuity year. This is another way in which you can find yourself paying well over the odds for what should be a disbursement.

3. Foreign exchange (‘FX’)

This is the one that confounds most of us. FX is ‘smoke and mirrors’ territory and we too easily imagine it to be awash in volatility and risk. Not so, as you can read in my post here.

Among some of the major suppliers, the average FX mark-up (on inter-bank rates) is an average of 3%. This is the mark-up applied to particular currencies when converting to your chosen invoice currency.

There is one major supplier that applies mark-ups commonly ranging from 20% to over 50%. This mark-up is applied to Official Fees and to local charges and the result can be that those costs alone can be almost twice what other reputable suppliers would charge

Invoice verification

When you have answers to the three questions, you will be in a position to verify the invoices you receive.

My firm offers a Renewals Invoice Verification Tool with pricing based on IP portfolio size, starting from at as little as £500 for those with portfolios of up to 250 IP rights. To read more, and watch a very short explanatory video, please visit

Unauthorised charges for renewals payment services


Deposition of former employee opposed by CPA Global

In June this year, lawyers representing Polymer Solutions International, Inc filed an application with the US District Court of Maryland seeking to depose a former CPA Global employee in relation to claims of unauthorised charging for renewals payment services to be brought in the Island of Jersey, where CPA Global has its headquarters. The order was granted and CPA Global promptly intervened seeking to quash the order. If you have access to PACER (Public Access to Court Electronic Records) you can search using the case number 8:18-cv-01864-DKC.


US law allows for discovery orders to be made in relation to proceedings to be brought outside the US under what is called a ‘Section 1782’ procedure. This is not the first time a procedure has been instigated to obtain evidence from former CPA Global employees. In the US class action against CPA Global (see my earlier posts), also pursuing claims of unauthorised charging, an application was filed on 19 January 2017 seeking assistance from the English Courts in obtaining testimony from nine former CPA employees. This application was not pursued further as the case was settled the following month.

Stop the tide

CPA Global is throwing everything it has at the present 1782 process and doing its utmost to prevent evidence being taken from its former employee. There is plenty of fun to be had for the lawyers and countless hours will be spent arguing what are doubtless very interesting points of law. The arguments advanced by CPA Global include assertions that the former employee doesn’t have any relevant knowledge; and yet it is doing all it can to prevent him being deposed. Is it unfair to speculate that CPA Global doesn’t want any of its former employees giving evidence for fear of what they will say?

Set for another fall?

CPA Global has, one imagines, deep pockets and so can afford to throw money at stopping this discovery. It did the same when it tried to stop the Kobre & Kim law firm from using the domain, though that didn’t turn out well (see my post). The present proceedings could go to appeal and I suspect CPA Global will keep up the fight for as long as process allows. 

Business as usual

Meanwhile, CPA Global continues to charge fees for renewal payment services that are, based on comparative data I have seen, vastly more than any of its major competitors; including applying foreign exchange mark-ups to Official Fees that are commonly between 20% and 50%! With its patent renewals business reported to be 70% of CPA Global’s revenues, and with reported debt funding of £1.7bn to support, it can hardly afford to reduce charges.

If you are using CPA Global to pay your renewals, then I strongly recommend you ask to see its tariff of charges. What you will then also see, unless you have been made an exception, is that it also charges ‘Country Fees’ that, unlike any other competitor I know of, increase with each annuity year. It is time that CPA Global clients woke up to the reality of its charging practices.

The Times exposes CPA Global overcharging


Today’s issue of The Times carries an article exposing the charging practices of IP renewal services provider CPA Global that make it not only the world’s biggest payer of IP renewals but also by far the most expensive. The report, based largely on information provided by former CPA Global executives, highlights the inflated cost to innovative businesses of maintaining their IP rights.

What stands out for me is that the CPA Global response to The Times does not deny any of the allegations. Instead, it simply says, in so many words, ‘our contract terms allow us to invoice what we like, and our customers are told in advance what the charges will be so they can go elsewhere if they don’t like it’.

How expensive?

I was recently asked by a client, with a relatively small portfolio, to seek quotes from other leading suppliers to compare with estimated charges received from CPA Global for some upcoming renewals. Supplier per renewal service charges were as follows:

CPA Global: US$200 

Supplier A: US$35

Supplier B: US$10

However, after deduction of the per renewal service charges, the remaining charges were:

CPA Global: US$ 22,556

Supplier A: US$ 12,215

Supplier B: US$ 12,024

The difference is stark. These charges are for what should be disbursements, the Official Fees and other expenses incurred, and not a source of additional profit over and above the service fee for carrying out the renewal.

Why don’t IP owners move their renewals away from CPA Global?

The answer for many businesses, from the largest to the smallest, is that they have no idea how much more they are paying as they have trusted the world’s largest provider to charge fairly.

Many have also trusted their patent attorneys and law firms who have referred them to CPA Global as part of a standing arrangement from which they receive referral fees; CPA Global boasts relationships with some 3,500 firms around the world.

Some major IP owners, those with in-house IP departments, have discovered how much more they have been paying and have done their own deals with CPA Global or moved their business elsewhere. One major international business, I have been informed, saw its charges reduced by about 40% when it moved to another provider. Unfortunately, those businesses have also kept quiet and not taken steps to ensure that the wider market was made aware of the problem so as to prevent continued harm to smaller businesses ill-equipped to protect themselves from such costs.

Customer Coordination Group

For CPA Global IP renewal services customers, past and present.

The time has come to create a channel through which information may be shared, common interests discussed and, as appropriate, coordinated action taken by CPA Global customers.  I have set up a LinkedIn Group that past and present CPA Global customers can apply to join.  Here is a link to the joining page:

Group activities can include:

  • Selection of, and negotiation with, lawyers and litigation funders 
  • Making representations to regulators and Government bodies 
  • Direct negotiation with CPA Global

‘Not my problem’ – undermining personal and corporate social responsibility


Driving by

I read a BBC article today ‘Driven to his death: Mystery of motorcyclist body on M4’ about a motorcyclist who was killed by a man later convicted of causing death by dangerous driving and attempting to pervert the course of justice.

What struck me in particular was one paragraph in which it was reported that a couple had seen the motorcycle “spinning clockwise on its side in the near distance.” The woman passenger “screamed at her husband who swerves to avoid it, the bike still spinning as they pass.” There is no suggestion that this couple reported the incident to the police. 

The article does state, earlier in the piece, that a member of the public called the police saying “There's a motorbike right against the central reservation… It’s actually on the floor. But there's no sign of the driver.” The inference I draw, perhaps wrongly, is that the couple did not report the incident. It was Christmas Day, a little before 6pm. It is, unfortunately, likely that they decided not to call the police, perhaps because the driver thought he might be over the limit; or more likely because they decided that it was not their problem and did not want to ‘get involved’.

Compromise and compromised

Compromise is essential if disputes are to be resolved and allows business and personal relationships to continue in one form or another, or to have closure. Another use of ‘compromised’ is to “reduce the quality, value, or degree of something, such as one’s ideals” (Freedictionary). It is this second meaning that too often results from the first.

Compromise agreements are common in the context of employment where an employment dispute is settled, usually on the basis of a payment and commonly with a gagging clause preventing any disclosure by either party, including of the existence of such an agreement. There have been many recent examples thrown up by the #MeToo movement in which individuals report their regret at having accepted hush money and the fact that if they had spoken out a perpetrator might have been stopped sooner.

Corporate Social “Responsibility”

I have seen far too many cases in recent years of deals being done by major corporates that served their interests alone, protecting individuals and their brand from ‘reputational damage’, and allowing a situation to continue that they could have brought to public attention. Is it right that organisations that make much of their CSR efforts nonetheless turn a blind eye to wrongdoing with the result that it is allowed to continue to the detriment of others? In my view it is not.

Erosion of values

How often do we hear the question ‘how did they get away with it for so long’? The reasons are all too human and reflect the corrosive impact of social media and other modern means of public humiliation and scrutiny, which do not deter those in power, but rather those who might call them out. Most will not put their heads above the parapet for fear of the consequences. Most will look and walk the other way. Most will say to themselves and others ‘it’s not my problem’. The message that we all need to heed is much the same as we hear on public transport: ‘See it. Say it. Sorted.’ Leaving it to someone else is simply not the right thing to do.

Hope is not a strategy. Trust is not good governance.


Hope and trust are similar human traits that, in similar ways, serve to bolster our confidence that things will turn out well. Trust is more specific than hope and is commonly invested in a person or organisation. Trust implies an expectation of a particular outcome, or specific behaviour, for which another is held responsible.

I once spent an hour with Larry Light, at the time a brand consultant to Ford Motor Company and many others, and remember him speaking of the qualities of a strong brand and what he called ‘one think shopping’. His message was that trust in a brand could be enough to drive the customer’s choice.

Trust is useful as it allows us to reduce the effort we would otherwise spend on making sure that something gets done. Instead, we have an expectation and expect it to be met. If it is not, our trust is either modified - perhaps by introducing new conditions - or withdrawn.

Meeting expectations

In the world of professional services, the quality and longevity of relationships are greatly impacted by expectations and levels of trust established. For many, going to a lawyer is much like visiting a dentist: you trust in the person’s qualifications; the setting and equipment; and that you will be charged fairly for the work done. Once you have your mouth open and are being told more work is needed, you may have little choice but to mumble agreement.

There are so many demands on our time and to have to check that we are being charged correctly is a boring task we would prefer not to do. We are advised to check our utility bills, bank statements and restaurant bills. How many of us don’t bother and end up paying the price?

Don’t rely on trust

My firm recently launched a tool that verifies invoices for IP renewals. It addresses the information asymmetry that exists between customer and supplier, including the difficulty of identifying correct Official Fees for each country. 

Many responses to marketing messages have essentially said: ‘We are happy with our current supplier’ or ‘Adding verification to our process would involve extra work’. One person confirmed that her role was to authorise payment and that doing so was based entirely on trust; which surely made her role redundant. 

Though understandable at a human level, it is surprising how many organisations simply don’t bother to check invoices. Remedies for breach of contract are literally of no consequence when there is no process for establishing whether there has been a breach. As Larry Light identified, the trust that people put in brands prevents them from carrying out basic checks that the organisation is playing fair. Even when we have trust in an organisation, it’s always best to ensure they are doing what they say they will. Surely good governance includes checking your bills, doesn’t it?

B2B email marketing and GDPR – what UK businesses need to know


With the imminent advent of GDPR, UK businesses may wonder how their email marketing will be affected. Here are the four crucial things they need to know about B2B email marketing.

  1. The rules that govern electronic communications, including email, are the Privacy and Electronic Communications Regulations (PECR) (see the ICO Guide). The PECR does not cover B2B email marketing.
  2. The rules governing consent are found in the Data Protection Act 1998 (DPA) and in the General Data Protection Regulations (GDPR) that come into force in May 2018. The DPA and GDPR do not cover B2B email marketing.
  3. A business email address that contains an individual’s name, for example, will be personal data. The individual concerned has the right to opt out of further communication and, under the GDPR, to require that the sender cease processing their data. This means you must keep the data on a suppression list so that it is never used again for any purpose; if you are a commercial organisation forget what you may have read about ‘legitimate interest’, it won’t apply to you.
  4. So, this is what you need to know:
    A. You can send a first email, giving the person the option to opt out (this is how it works in the US for example). 
    B. The recipient can then opt out of further communications, so withdrawing consent.  They can go a step further and require that their personal data be suppressed (so you can’t use it again and you can’t pass it on to anyone else).

    This information is not legal advice and should not be treated as such.

CPA Global defeated in bad faith case


Fake news? No, absolutely true - CPA Global was found to have acted in bad faith in trying to prevent use of the domain “”.

You may have missed this story, reported by World IP Review (WIPR) and World Trademark Review (WTR) among others, involving the World Intellectual Property Organization (WIPO) panel decision that went against CPA Global and must have caused some embarrassment at CPA Global HQ.

What had CPA Global so concerned that it pursued such a hopeless claim? The website at states its purpose on its homepage:

“Bentham IMF has put in place funding for current and former CPA Global clients to pursue legal proceedings to recover unauthorized charges for patent annuity payment services.

Investigations have uncovered evidence that suggests CPA Global charges fees for patent renewal services that are consistently and significantly more than what is allowed for under its service contracts with clients.”

The decision by CPA Global to attempt to stop the domain name from being used brings to mind a fascinating book (mentioned in my article on unethical behaviour published on 28 March 2017) titled The Power Paradox – how we gain and lose influence by Dr Dacher Keltner. In his book, Keltner demonstrates that those who are afforded power tend to believe that the rules that apply to others don’t apply to them.

WIPR reported on the launch of in September last year when CPA Global told the publication: “CPA Global categorically and emphatically denies any wrongdoing in our business. The fees for our service are defined in our agreements with our customers, and we adhere to those agreements fully.”

It went on to say, “We consider any speculation about future litigation that might or might not take place to be a deliberate attempt to tarnish our good business reputation and, as we always have, will continue to vigorously defend ourselves against any such vexatious speculation.” 

Vigour is, happily, not enough to sway a WIPO panel. When approached by WTR following announcement of the panel decision “CPA Global declined to comment”.

FX 101 – what clients and IP professionals need to know about Foreign Exchange


I’m going to explain what you really need to know about foreign exchange ('FX'). What is in truth very straightforward, is made complicated by those in whose interests it is to do so. Read this and you won’t be FX’d by anyone ever again.

‘Spot’ FX - “I want foreign currency today please”

For a legal professional, perhaps the most common situation involves payment of charges from a foreign firm in local currency; the bill comes in and you want to pay it today. The circumstances are no different to one that we all know well and that I will use to explain the principles involved.

You turn up at the airport and need some cash for when you arrive at your holiday destination.  You have US Dollars and want UK Pounds. The exchange rate offered is to buy £1 will cost you US$ 1.4400 (FX rates are quoted to 4 decimal places).

You say “Hey, I thought the rate was 1.3400 - I looked it up on the internet this morning”.

The cashier replies “Sorry sir, the rate you are referring to was probably an interbank rate and would only have been available to you if you had exchanged a million dollars or more, and we don’t handle transactions of that size here.”

“Oh” you say, feeling a little foolish, “I only need £100” and to which the cashier replies, “the cost to you, sir, will be US$ 144.”

In the professional situation, where you are paying an invoice in foreign currency, your objective should be to get the best rate for your client. This may mean negotiating with your bank for better rates or working with some of the challenger currency providers such as CurrencyFair and Transferwise.

Profit Margin

In the example, the key difference is between 1.3400 (the interbank rate) and 1.4400 – i.e. 10 cents (or 100 basis points if you want to speak like an FX trader). The provider makes US$ 10 on the deal and the profit is built into the rate so if you change your mind and want £500 then the provider makes US$ 50.

Forward Contract - “I want a specific amount of foreign currency on a specific future date”

Example: You have to send a payment of US$ 10,000 to pay an agreed fee to a US patent agent six weeks from now and want to be sure that you collect the right amount from your client in advance. You ring your bank.

You say “I need US$ 10,000 in six weeks’ time. How much is that going to cost me in addition to the spot price?”

The bank’s FX person replies, “at this time interest rates are the same for US Dollars and Sterling for the six-week period, so the spot and forward rates are the same - I can give you a rate of 1.3100”.

“What if the interest rates had been different?” you might ask.

The answer is quite simple:

  • You always start with the spot rate on the day you negotiate the forward contract.
  • If the interest rate earned by the currency you have is higher than the currency you want then the forward contract will have a cost (a ‘hedging’ cost) and will be reflected in the rate – essentially you will get a worse rate than the spot rate.
  • If the interest rate earned by the currency you have is lower than the currency you want then the forward contract will have a gain (a ‘hedging’ gain) and will be reflected in the rate – essentially you will get a better rate than the spot rate.

Why do interest rates matter?

If you enter into a forward contract that matures in 6 weeks then it is assumed that you and the bank will each place the money on deposit for 6 weeks earning the relevant interest rate.  So, if there is a difference then that difference is applied for the period (6 weeks) and added as a cost, or as a gain, depending which currency earns more.

FX buying power

If you are regularly handling large foreign exchange transactions then the spot rates you get should be nearer to the interbank rate.  Buying power does not influence the hedging cost (or gain) in a forward contract as that is determined by interest rate differentials alone. 

Conclusion – let there be no uncertainty!

Legal service firms do not need to take risks with FX. There is no need for uncertainty.  Charging for FX risk that does not, and need not, arise must be wrong. Charging for organising FX transactions may well be a service that firms wish to charge for, in which case those charges are professional fees that should be made clear to clients in advance.

Done deal – US court approves settlement of class action against CPA Global


By order dated 6 October 2017 US District Judge TS Ellis III brought an end to the class action filed against CPA Global alleging systematic and widespread overcharging of clients for patent renewal services. Under the terms of the settlement, 2917 clients will share in US$5,600,000 after deduction of US$1,864,000 to be paid to the plaintiff’s lawyers and US$25,000 to the plaintiff.

The order sets out the factors that support the court’s determination that the settlement is fair and reasonable:

“a. The posture of the case at the time settlement was proposed;
b. The extensive nature of written discovery and document production that had been conducted;
c. The arm’s-length negotiations presided over by mediator Randall Wulff, Esq. following the exchange of mediation statements; and
d. The extensive experience of counsel.”

It also sets out the factors that support the court’s determination that the settlement is adequate:

“a. The relative strength of Plaintiff’s case on the merits;
b. The difficulties of proof or strong defenses Plaintiff would likely encounter if the case had gone to trial;
c. The anticipated duration and expense of the litigation;
d. The degree of opposition to the Settlement; and
e. The Settlement benefits being made available to Settlement Class Members.”

The order also states, in paragraph 24:

“The Settlement Agreement and this Order are not admissions of liability or fault by CPA Global or the CPA Global Released Parties, nor do they constitute a finding of the validity of any claims in the Action or of any wrongdoing or violation of law by CPA Global or the CPA Global Released Parties. The Settlement Agreement and settlement are not a concession by CPA Global or the CPA Global Released Parties, and neither this Order or Judgment, nor any of its terms or provisions, nor any of the negotiations or proceedings connected with it, shall be offered as evidence or received in evidence or used in any way in any pending or future civil, criminal or administrative action or other proceeding to establish any liability or wrongdoing of, or admission by, CPA Global, the CPA Global Released Parties, or any of them.”


  • The plaintiff’s case had “relative strength” on the merits but there were also “difficulties of proof or strong defenses”
  • CPA Global admit nothing and the settlement cannot be used in any way (in US civil, criminal or administrative process) as evidence of anything
  • Evidence submitted in support of the settlement by the plaintiff’s counsel included the statement “After excluding the Administration Fees and the direct foreign patent renewal and agent fees, we concluded that CPA Global had received roughly $11.7 million in alleged overcharges.”
  • CPA Global have paid US$5,600,000

What more need one say than 'done deal'?

Patent Annuity Costs Limited joins forces with Kobre & Kim, Baker & Partners and Bentham IMF to pursue alleged overcharging by patent renewal services company CPA Global


International law firm Kobre & Kim, along with leading Jersey law firm Baker & Partners, announced today that they have entered into a funding arrangement with Bentham IMF to investigate and possibly sue CPA Global, alleging systematic and widespread overcharging of clients for patent renewal services. The firms are also working with the patent renewals consulting business Patent Annuity Costs Limited, headed by Peter Rouse.

CPA Global is one of the world’s largest patent renewal companies, reportedly processing more than two million patent renewals per year.

The potential actions will allege that CPA Global breached standard service contracts with what may be tens of thousands of clients through concealed mark-ups, in at least one case estimated to exceed 90 percent.

The proposed legal proceedings would be commenced in Jersey, one of the UK’s Channel Islands, where CPA Global is incorporated, on behalf of CPA Global clients whose agreements select Jersey as the forum for any disputes. Bentham IMF will provide non-recourse funding to CPA Global customers who wish to pursue claims against CPA Global.

James Corbett QC of Kobre & Kim, who is leading the investigation and proposed action, said the following:

"Based on the investigation so far, the overcharging could be shocking. Based on models, the aggregate over-charges could total hundreds of millions of dollars over a ten-year claim period."

Baker & Partners’ Senior Partner Stephen Baker said:

"We engaged with Bentham IMF to help clients enforce their rights on a risk-free basis without the need to secure representation. Given the international nature of CPA Global’s business, we have partnered with a global firm to work with our experienced Jersey team to seek effective redress for claimants from around the world."

Bentham IMF Investment Manager Matthew Harrison said:

"Patent holders worldwide contract with CPA Global for the renewal of rights associated with their most valued assets. CPA Global appears to have breached those contracts. Bentham IMF’s funding will enable Kobre & Kim and Baker & Partners to rectify CPA Global’s treatment of its customers while sparing the patent holders from incurring any fees and costs to participate in the litigation."

The potential litigation is funded by Bentham IMF. Participants will not be required to pay any fees unless their claim is successfully resolved, and then only from sums awarded by the Court.

CPA Global customers, past and present, can register for the potential action without charge or obligation at To find out more about the investigation, please contact or call global toll free number +1 833 204 1724.

Read the original press release on the Business Wire website

Payments in foreign currency – disbursement or profit costs? What are the FX charges for, exactly?


FX is for many shrouded in mystery created by tales of currency speculation with millions won and lost in seconds by international speculators. For ordinary mortals, including legal professional firms, there are limited options with known costs offered by regulated intermediaries. FX need not, and arguably should never be, a matter of uncertainty or speculation for legal professionals.

Intellectual Property – inherently international

Patent and Trademark firms commonly make payments overseas on behalf of clients. These include paying fees of other professional firms; another example would be official fees charged by national patent offices where, for example, a patent renewal fee is paid direct. 

Converting Sterling to pay an invoice in another currency inevitably incurs a foreign exchange (FX) charge from the intermediary, usually a firm’s bank, making the payment.  Fortunately, many firms are in a position to secure favourable FX rates from their banks based on volume and pass on the benefits to their clients. The FX cost incurred is reflected in the Sterling amount required to cover each payment; an amount that can be invoiced to the client in the usual way.

Disbursement or profit costs – importantly different

A disbursement is generally understood to be a cost that a firm incurs and pays on behalf of a client. Profit costs, on the other hand, are charges made by a firm for its services. Each involves different obligations in relation to information to be provided to clients, and in relation to VAT.

Arranging payment of foreign agent fees could be considered a service that involves a firm’s time and resources and for which a firm might seek fees. If it does, in the UK at least, professional conduct regulations impose obligations to make clear to the client how those charges will be formulated and what actual charges are likely to be.

If a foreign agent invoice is paid on a given date, the FX transaction also takes place on that date. If a firm invoices a client in advance of payment, seeking money on account of expected costs, then the FX rate applied will be the applicable rate on the date of invoice.  Once the costs in question have been paid, any shortfall can be recovered by issuing a further invoice; equally, if there has been an overpayment it can be returned to the client by way of a credit note.

Terms and Conditions – how some leading firms deal with FX

I was able to search for and download examples of Terms and Conditions from three leading IP firms in the UK that include specific provisions with regard to FX allowing the relevant firm to charge over and above actual FX costs.

Firm A
In paragraph 6.2 of this firm’s Terms and Conditions is stated:

“(d)Where we incur charges in foreign currencies (i.e. not Sterling) or where we agree to bill you in a foreign currency, we will apply an exchange conversion rate which is based on the spot rate at the time of billing but which includes a margin to cover our conversion costs and currency risk.”

This language appears to refer to a situation where the firm has to bill before a cost is incurred. The reference to ‘spot rate’ is simply to the FX rate that the bank would have charged for the required amount of currency on the relevant date. What is not clear, to me at least, is what currency risk arises and why the firm needs to charge a margin. As already mentioned, all the firm need do is submit a further invoice for any shortfall or a credit note for any overpayment.

Firm B
In paragraph 6 of this firm’s Terms and Conditions, under the heading ‘Expenses’, is stated:

“Where disbursements are incurred in a currency other than sterling, we will apply an additional amount to reflect the cost of dealing in the foreign currency.”

If the cost of ‘dealing in the foreign currency’ is the actual cost incurred by the firm and no more, it forms part of the disbursement. If, however, the firm were to apply ‘an additional amount’ that goes beyond the actual cost incurred then such charges would be profit costs.

Firm C
In paragraph 6.5 of this firm’s Terms and Conditions is stated:

“Expenses and disbursements such as postage and packaging, courier costs, telephone call charges, faxes, photocopying and the charges (if any) paid or to be paid by us to third parties on your or the Client's behalf (such as registration or renewal fees to be paid to the trade mark or patent offices, or the charges of overseas patent or trade mark attorneys) will be invoiced in addition to the fees and will be subject to a handling charge.”

Again, this provision clearly deals with disbursements and yet there is reference to ‘a handling charge’ (that would be profit costs) but with no specifics as to what the amount will be or how it will be calculated.

In a later paragraph 7.2 is stated:

“All sums payable hereunder will be invoiced and paid in pounds sterling unless alternative arrangements have been agreed. Invoices levied in any other currency will be converted at a premium to the prevailing exchange rate. All invoices shall be paid on receipt.”

Under this provision, the firm is entitled to charge ‘a premium’ on the FX rate. This presumably arises because the firm does not know when its invoice will be paid and so includes a margin to cover the risk that the FX rate moves against the firm so that when payment is converted to Sterling the amount received is less than expected. In such a situation, it is always open to the firm to invoice for any shortfall or credit any overpayment. If, however, some or all of the ‘premium’ is retained by the firm, those charges would constitute profit costs.

Don’t forget the VAT!

If FX-related charges are not disbursements, then they are profit costs and therefore must be subject to VAT. What is not allowed, as I understand it, is to add a premium or ‘handling charge’ or other FX-related overhead or service cost to a disbursement. There is no VAT charged on disbursements; anything else, including recovering overheads, is subject to VAT and must be accounted for as such. This subject is covered in detail in a very helpful article published by the Lawyers Defence Group which includes the following:

“For the purposes of VAT, charges which are not proper disbursements must of necessity be profit costs and as such subject to a charge to VAT. Thus, even if you choose to list them separately, then you should, if you are registered for VAT, be charging VAT on them.

You may, therefore, from a VAT perspective, need to separate out those charges which you make which are recovering overheads from those which are genuinely disbursements.”

HMRC guidance in relation to invoicing in foreign currencies and VAT can be found here.

Telegraphic transfers – Solicitors Disciplinary Tribunal ruling

In a practice note produced by the Law Society as a result of a Solicitors Disciplinary Tribunal (SDT) ruling in a case* involving a firm charging more than the actual cost to them of telegraphic transfers (the respondents were fined), is stated:

“A TT fee is an expense but some practices charge more than the cost of the transfer under the heading disbursement, thereby concealing profit costs from clients.

The SDT has found that this clearly breaches rule 1 of the code of conduct, particularly in relation to the solicitor's duty to act with integrity and in the best interests of the client.

This conduct is also likely to be in breach of rule 2, client care, if any amount over the cost of the transfer is not explicitly declared to the client as profit costs.”

*The SRA Code of Conduct was revised after this decision and can now be found on the SRA website.

There are arguably parallels between telegraphic transfer and FX charges and this may therefore be a matter to which IPReg, and the SRA where firms are also offering services as solicitors, will have to turn their attention.


Firms that routinely apply mark ups to FX transactions that have no bearing on any actual or justifiable risk are charging fees and so must draw attention to and explain those fees to their clients (and charge VAT on them) or explain themselves to their clients and, potentially, to the Regulator.



Further information

IPReg – what does the Code of Conduct say?

The starting point in the Intellectual Property Regulation Board’s Code of Conduct must surely be Rule 5, which states:

"Rule 5 – Integrity

Regulated persons shall at all times act with integrity putting their clients’ interests foremost subject to the law and any overriding duty to any Court or Tribunal.

The guidance notes elaborate as follows:


5.1 A regulated person should in all professional activities:

a) practise competently, promptly, conscientiously, courteously, honestly and objectively, avoiding unnecessary expense to the client;”

The words ‘avoiding unnecessary expense to the client’ would appear to place the burden on the individual professional and firm to ensure, in relation to FX, that the best rate is achieved.

The other rule that has a bearing on the matter is Rule 6:

Rule 6 – Client Care and Service

Regulated persons shall carry out their professional work in a timely manner and with proper regard for standards of professional service and client care.”

The guidance notes (para 6.1) refer to providing the client with written terms of business “at the outset of a relationship and as often as necessary thereafter”.

Firms are required to inform clients of how they are to be charged for professional services and what future costs are likely to be. If charges are made for ‘handling’, ‘converting’ or otherwise dealing with foreign exchange then the client is surely entitled to know the details.


CPA Global overcharged clients US$11.7m, say plaintiffs in US Class Action


In an earlier article, I discussed the US Class Action and overcharging allegations against the largest provider of patent annuity payment services, CPA Global. Here, I provide an update on the case.

In documents filed with the Eastern District of Virginia on 22 September in support of an “unopposed motion for final approval of settlement and class certification”, Geoffrey Neri, lead Counsel for the plaintiffs, Run Them Sweet LLC, refers to his firm’s analysis of invoices from which “we concluded that CPA Global had received roughly $11.7 million in alleged overcharges, assuming complete success on our theories of liability and damages at class certification and trial.”

Mr Neri explains that to arrive at the figure of US$11.7m, his firm determined there were 2,917 CPA Global clients that fell within the class definition. Working from the invoices for those 2,917 clients they deducted the official fees payable; the actual agent fees paid by CPA Global; and the per renewal ‘Administration Charge’ provided for in each contract, to arrive at the total of US$11.7m.   

Based on the US$11.7m figure, the US$5.6m to be paid by CPA Global to settle is a little under half of the alleged overcharges. After deductions, if they are as much as they could be, the class will end up with about 30% of the US$11.7m. This is of course better than nothing and none of the class will have risked a penny (or a cent) to recover what they will receive. Some, however, may well feel that they should not have been subjected to the alleged overcharges in the first place.

US class action against CPA Global: latest developments

tightrope walker

A year ago today, a class action was filed against CPA Global in the US alleging a "systematic practice of overbilling and inflating fees". In March this year I reported on the settlement deal struck by CPA Global involving payment of $5.6m to deal with claims of overcharging. On June 2, documents were filed on behalf of CPA Global in support of the proposed settlement which was given preliminary approval by the court on June 9; a hearing for final approval is due to take place in October.

Who is in the class?

The settlement terms are understood to benefit US patent holders with 20 or fewer non-US patent renewals within any one year and a maximum of 40 non-US patents in any one year, between 1 January 2012 and 31 December 2016*. The CPA declaration, made by a consultant who used to work with CPA North America rather than by a CPA employee, refers to a total of 3,059 contracts that break down as follows:

  • 1,800 governed by Jersey law and courts
  • 800 governed by English law and courts
  • 400 governed by Virginia law and courts
  • 50 governed by New York law and courts
  • 8 governed by Delaware law and courts
  • 1 governed by Washington D.C. law and courts

What puzzles me, and may do others, is that the US court (Virginia) in this case can approve a deal between the parties in an action involving contracts over which they do not have jurisdiction; namely, at least, those governed by Jersey or English law and courts. Perhaps such class members will, in effect, be agreeing to amend the governing law provisions of their contracts. 

* In a supplemental briefing filed by the Plaintiff in support of the settlement, is stated:
"Settlement class members will not be releasing claims for years in which they have more than 20 foreign patent renewals."

What might class members receive?

Here are some simple assumptions, made necessary because so much important information is deliberately kept out of public records:

  • an average patent holder within the class had 10 non-US renewals per year for each year of the five years – total 50 annuities paid; and
  • the net settlement fund, after deductions including the claimant’s lawyers’ entitlement, may be only $4m assuming the lawyers get 25% (the settlement allows them 33%, amounting to $1,864,800 according to the draft notice to Class members) and there are other costs of $200,000 including $25,000 for the Plaintiff; and
  • there are 3059 claimants within in the class (one per contract) producing a total of 152,950 annuities paid over the five-year period (an average of 30,590 annuities per year); and so
  • each claimant receives $26.15 per annuity

The two annuity payments pleaded in the class action claim were alleged to be $294.52 and $311.40 more than they should have been; a total of $605.92 and an average of $302.96. If you round down the average overcharge to $300 then claimants within the class, based on the assumptions made above and the average level of overcharges claimed, would receive 8.74% of what they might have overpaid; not a great deal if my assumptions are correct.

Is a bad deal better than no deal?

It is clearly in the interests of the Plaintiff and Defendants to settle this action.  The Plaintiff (who will get $25,000) and Plaintiff’s lawyers (who will get $1,864,800 or less) will be well rewarded and CPA Global will, on the basis of assumptions which I am happy to be shown to be incorrect, have settled 3,059 claims very cheaply indeed.

The Virginia Court has apparently decided, at least on a preliminary basis, that it has jurisdiction over contracts that the parties agreed should be governed by the laws of other countries. Is anyone, I wonder, going to address this issue and will any of the class members be willing to question the deal offered to them?

where does this leave referrers?

In the CPA Global declaration, it is stated that all clients covered by the 3,059 contracts were referred to CPA Global by law firms and patent agents (this is in fact part of the definition of the class). Where does this settlement leave such firms? Should they not be looking into this case, in detail, advising their existing and prospective referral clients of the issues and risks?

Those who receive referral fees will presumably have to weigh up the reputational consequences and potential liabilities arising if the individuals they referred to CPA Global were found to have been overcharged.


Note: this post has undergone some minor corrective and supplemental amendments since first published.

Collaboration with Positive Purchasing to launch new PatentPlus program

patent plus cover image no logo.png

I'm delighted to announce my collaboration with Positive Purchasing, the specialist procurement and negotiation training and consultancy business, for our new PatentPlus program. This new venture should significantly reduce the amount patent annuity holders pay when it comes to renewal.

PatentPlus is a high impact, results-based program which can deliver immediate and significant cost savings, and increase category spend value, at no risk to the client’s business. The program is split into two phases: Diagnostic and Delivery.

During Phase 1, Diagnostic, the PatentPlus team of legal and procurement experts will review an organisation's existing patent renewal spend with suppliers, analyze and report on opportunities identified for cost reduction and improvements in patent renewal management. A best practice training workshop will also equip company teams to better manage these suppliers moving forward.

For clients choosing to proceed to Phase 2, Delivery, the PatentPlus team will support implementation of these benefits into the client organization and, where appropriate, establish new contracts with the client’s providers.

If you are interested in finding out how much you could save, contact me for advice.

Find out more about PatentPlus

Read the full press release on the Positive Purchasing website

Download a factsheet on PatentPlus (PDF)

Follow Positive Purchasing on Twitter: @pos_purchasing

What effect have the overcharging claims against CPA Global had on the sector?

In an earlier article, I discussed the US Class Action against CPA Global, the world’s largest patent annuity payment services provider, involving allegations of overcharging. In this article, I will probe a little into the impact this has on a commoditized yet stubbornly opaque service sector.


The spectre of hidden charges has been haunting this sector for some time, in large part thanks to Dennemeyer, whose US leadership team have been acting as industry Ghostbusters with webinars probing a murky world of unexplained charges. Dennemeyer certainly have an axe to grind, and who can blame them, if competitors have been indeed been making super profits from clients ignorant of the extent of apparent overcharges.

How long has this been going on?

The settlement agreed by CPA Global in the current US Class Action, brought by Run Them Sweet LLC in the summer of 2016, covers a five-year period to the end of December 2016; though this may have more to do with applicable rules governing limitation on claims than anything else. The alleged overcharging, by its nature concealed from clients, could have been going on for far longer; in some jurisdictions, this could mean that time does not begin to run for limitation purposes until a client becomes aware of a potential claim.

What of the rest?

Schadenfreude will likely abound among CPA Global’s competitors who may hope that further litigation will follow brought by claimants not covered by the very limited class defined in the current US action. However, CPA may not be the only suppliers to feel the sting of litigation and at least one other US Class Action may even now be rumbling down the track. Where does this leave patent holders who may be wondering whether they have been overcharged or whether by moving to another supplier they might end up in a similar situation?

Marketing speak

Anyone researching leading suppliers will be met with an array of marketing puff that cannot be independently verified. These include, for example, references to: “significant cost-savings” and “minimizing expenses” (Anaqua); ‘‘cost efficiency” and “no hidden or additional fees” (IPAN); “cost effectively” and “no hidden costs” (Pavis); “unmatched fee transparency” and “competitive agent fees” (Clarivate). CPI (Computer Packages Inc.) go so far as to assert that theirs is “the only transparent annuity service” and that they are “at least 10% less expensive (in total cost) than the other major annuity services.”  What is a patent holder to make of all this?

Market opacity and procurement discipline

Resistant as the legal services sector is to the involvement of procurement, perhaps because it places less emphasis on relationships and more on factors such as performance and price, the annuity payment sector is one where using a tender process is essential. This is primarily because only in the context of a properly structured tender process will it be possible to have the right questions asked and answered so that apples can be compared with apples.  Understandably perhaps, suppliers refuse to disclose essential information other in the context of a confidential tender process.

Help is at hand

My firm has teamed up with procurement industry expert Jonathan O’Brien and his Positive Purchasing firm to create the first dedicated service for patent holders who want to learn how to tackle this somewhat tricky IP service sector. Our Patent Plus service is available now to patent holders looking for value going forward, as well as clarity regarding historical charging. 

Contact me for advice

CPA Global considers £2bn sale

IP management and software company CPA Global could be put on the market for as much £2 billion ($2.5 billion).

Private equity firm Cinven, the owner of CPA Global, has invited banks to pitch for the work, according to sources speaking to The Sunday Times.

Established in 1969 in Jersey, CPA Global began as a provider of patent renewal services. It started offering trademark services in the 1980s and providing IP software in 2000.

Cinven acquired the company in 2012 for £950 million, according to the Financial Times.

CPA Global now has 25 offices across four continents and 12 countries, and an agent network of 1,300 across 200 jurisdictions.

Sister site LSIPR reported in March that CPA Global had agreed to pay $5.6 million as part of a settlement agreement in a class action lawsuit.  

In July last year, Run Them Sweet, a US medical diagnostic company, filed the class action lawsuit alleging it was overcharged for foreign patent renewal fees by CPA Global.

According to the proposed final judgment, the settlement will only benefit US patent owners with fewer than 40 non-US patents renewed in any one year between January 1, 2012 and December 31, 2016.

Peter Rouse, director of Patent Annuity Costs, said that liabilities may affect the profitability of the business and therefore the £2 billion valuation.

“If there’s any merit in these overcharging claims, and others choose to pursue similar claims, it could have a very significant impact on the valuation of CPA Global,” he explained.

Back in October last year, Thomson Reuters completed the sale of its IP and science business to Canada-based Onex Corporation and Baring Private Equity Asia, based in Hong Kong.

The business, which included trademark research and protection company CompuMark and online brand protection company MarkMonitor, was sold for nearly $3.6 billion and renamed Clarivate Analytics.

This article was previously published in World Intellectual Property Review and is reproduced with kind permission.

Read the original article