Damned if you do – Damned if you don’t

Overcharging for patent annuities - the dilemma facing in-house counsel

The world’s largest provider of patent annuity payment services, CPA Global, is the subject of a Class Action in the US in which it is alleged it has been overcharging its clients. 

On 9 February 2017, Life Sciences Intellectual Property Review posted an article entitled ‘CPA Global seeks settlement after claims it overcharged patent feesin which it was reported as follows:

‘According to a January 30 order, the parties engaged in successful mediation, have agreed in principle to settlement and have signed a memorandum of understanding. In order for the parties to finalise the settlement, the district court granted their request to stay all deadlines for 30 days and cancel the case hearing, which was initially scheduled for February 17.

The case is stayed until March 1.’

One hesitates to believe that an organization of the stature, scale and longevity of CPA Global could possibly be engaged in overcharging of clients and yet one must consider the possibility that the inflation of charges may have been, and may indeed remain, systemic. 

Meanwhile, Dennemeyer, the world’s second largest provider of patent annuity payment services, has been running webinars and posted videos reporting overcharging on a massive scale by competitors. 

In March 2015 Brandstock, one of the larger European players in the IP services sector, published a report on findings from more than 100 benchmarking projects conducted on behalf of owners of some of the world’s largest patent and trademark portfolios entitled:

150 Million US$ Savings – How Far Can You Go? The why, what and how of agent benchmarking and trademark and patent cost reduction’3. In conclusions set out on page 6 of the report, it was stated:

Only from a selected group of countries had all agents been applying the correct official fees. In certain regions, many agents applied hefty mark-ups of 30 to 50% and more. Again

a strong North to South and West to East increase was identified. In addition, some providers of global services such as patent annuities made up for their ever-decreasing handling fees with decades of applying incorrect exchange rates, thereby overcharging owners of large patent portfolios by anything from 13 to 35% and resulting in millions of US$ in damages.

Damned if you do

This information places in-house counsel at risk of being held responsible for any overcharging that took place ‘on their watch’. Yet how should counsel have discovered the overcharging for themselves?

Damned if you don’t

Now that the information is out, are in-house counsel now at risk of being held responsible for not taking steps to address the risk and recover any past overpayments?

In my webinar delivered via BrightTALK on 15 February I explain the basic components of patent annuities and consider the claims against CPA Global. My firm is able to provide expert help to patent holders who are concerned to ensure that they are paying the right fees for their patent annuities.

Watch the webinar

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