This month, we shift our focus to patent annuity invoices – a substantial portion of any IP rights holder’s budget. This week, we will cover the significant elements of an annuity invoice. Some vendors don’t disclose all (or any) of these elements, so next week, we’ll share our 5-minute audit that anyone can perform to identify excessive charges.
The Service Fee
This is the fee that the vendor charges for providing their service. For most organizations, the standard service fee is a modest charge representing only a tiny fraction of the total cost.
Recent years have seen the introduction of several alternative models: flat fees inclusive of currency costs, flat fees inclusive of agent costs, and even flat fees inclusive of official fees, to name just a few alternatives. Despite this, the standard model is still prevalent throughout the industry.
The Agent Fee
Some countries require annuity payments to be made through local agents, so annuity vendors have a group of agents that they will use internationally. This is a relatively small part of the total invoice cost for most clients, but it can be a place to find savings if the vendor is padding the agent fees.
The Official Fee
Every country has some form of local fee that needs to be paid. For most patent holders, this is the highest cost in the invoice. For patent holders with rights in foreign countries, getting annuity vendors to disclose details about official fees can be challenging because those details make it easy to determine the exchange rate used to convert a client’s currency into PTO currency.
Currency Conversion Charges
When trimming your annuity costs, currency conversion costs are the most significant opportunity to save money. We regularly see patent owners charged 10 to 20% (and more) above market rates for FX conversion, which can easily result in hundreds of thousands of excess spending.
As you can expect, some vendors make it difficult to identify currency charges. But stay tuned; next week, we’ll show you how to spot fx red flags in your patent annuity invoices in less than five minutes.
Want to Know What You Are Paying?
If you don’t have time to monitor invoices, we can monitor your patent annuity invoices for you. Most clients save 10 to 20 percent in the first year. Check out the service here.
