Synopsis

Intellectual property owners are seeking deeper, more sophisticated portfolio management services that go beyond today’s administrative-oriented annuity payments services.  We see significant market opportunity for innovative new services that provide strategic, value-oriented portfolio management.  In this TrendView™ Report, we outline current annuity service offerings and their limitations in meeting the needs of intellectual property owners.  We then discuss promising new services that have been recently introduced, and our recommendations for improved services that will enable owners to derive greater value from their portfolio management process.

Background

Services for patent maintenance fees, and for trademark renewals, (collectively, “annuities”) are well established and commonly used by intellectual property owners.  The market for these services is dominated by specialized services called “annuity services” (although law firms or agents in certain jurisdictions also provide services.) 

(Click Here) to see our list of annuity service providers.

As intellectual property becomes an increasingly business-oriented asset, intellectual property owners are looking for more sophisticated and capable services for managing their global portfolios of patents and trademarks.  The current offerings of “annuity services” are narrowly focused administrative services that compete primarily on the lowest per transaction cost for customers.  While risk mitigation is critical, these administrative services provide little strategic business value, or opportunities for value extraction.

Recently, however, a number of new services have been introduced aimed at integrating portfolio management into the annuity payment process.  These services extend current offerings by matching external data and analysis, with annuity payment information.   Owners are able to make more informed maintenance decisions, and explore possible transaction opportunities through various intellectual property marketplaces.

We distinguish these high value “portfolio management services”, as distinct from low value “annuity payment services.”  These new portfolio services represent a potentially significant resource for intellectual property owners looking to increase the value of their assets.  With greater insight and perspective, owners are better able to business-align their decision making, and evaluate internal or external value opportunities.

These new services represent a paradigm shift for traditional providers that have been oriented towards low cost, low value models. Significant market opportunity exists for providers able to envision, build and deliver these more sophisticated portfolio services.   We see market entrance opportunities for new providers bringing innovative new approaches; we likewise see challenges for existing providers unable to enhance their capabilities and offer portfolio services to their clients.

Current Market for Annuity Payment Services

Annuity payment services offer a number of advantages to intellectual property owners.  While each provider seeks to differentiate themselves on quality, risk mitigation, experience and breadth of market share, generally today’s services offer a comparable set of advantages:

§  Single service to manage all global patent and trademark rights and fee payments

§  Full management of all payments, in every country/ jurisdiction

§  Consistent, structured review and “pay / no pay” decision process

§  Single bill for all official fees, in the client’s currency (e.g., USD)

§  Selection and management of local agents when needed

§  Monitoring, audit and update of key dates and formalities

However, in working with our clients we find that payment services underperform or do not provide certain capabilities sought by clients.  These include:

§  Reliance on paper or .PDF documents, rather than true paperless process

§  Little flexibility to configure or modify decision workflow

§  Lack of supporting documents or other information

§  Lack of integration to internal docketing systems, or other client systems

§  Limited ability to organize portfolio by business classifications

§  Limited cost information, and lack of financial value to support decision making

§  Lack of transparency related to currency conversion rates and timing

§  Lack of analysis reports and tools

Although annuity providers have been highly profitable, the business model of low per payment service fees, but hidden currency arbitrage, is being threatened by clients requiring transparency and tighter financial controls.  Annuity service providers should be prepared to address client inquiries regarding total costs of their annuity services, including underlying currency conversion costs.   Loss of revenue from lower currency margins will drive either higher service fees, or require new sources of revenue.

Emerging Portfolio Management Services

The need for improved portfolio management services provides a market opportunity.  While maintaining the advantages of current services, these new offerings will enable intellectual property owners to make better, more informed decisions, and identify potential value outlets for their assets.

For example, we note CPA Global’s recently announced Patent Monetization Program.   Developed in partnership with ICAP Ocean Tomo, the new services augment the annuity “pay / don’t pay” decision process with information and analysis about the potential value of the asset.  Clients are able to list the patent on ICAP’s exchange to pursue potential sale or license.

We have also seen new or enhanced services in portfolio management from other providers. Anaqua, an IPM software vendor, recently merged with SGA2, a French-based annuity service provider.  Given Anaqua’s focus on large, sophisticated companies, we expect these services to offer a higher service level in portfolio management.  Other providers indicating expanded portfolio services include iPendo and Dennemeyer. 

Recommendations

Portfolio management services are a natural extension of current administrative-oriented annuity services.  Providers have a tremendous opportunity to extend their offerings to higher value services which can support increased fees. 

In working with both providers and clients, we have developed a number of recommendations regarding portfolio management services.  The following are our thoughts on areas where providers should invest in improving and developing new services:

§  Enhance technologies to provide web services and other integration tools that give clients a seamless process between the service provider and client

§  Ensure that the annuity provider’s systems integrate with the client’s docketing system

§  Provide true workflow tools, that can be configured for each client

§  Work more closely with government PTO’s to enhance the transfer of data between PTO systems and annuity service systems

§  Adopt new pricing models based on actively managing a client’s portfolio, not based on the number of fee payments made; e.g., an annual fee to manage the entire portfolio

§  Open transparency regarding currency rates and timing

Additional Information

Hyperion Research provides independent market research and advisory services to the legal profession, specializing in legal operations and technology.  Visit our website at www.hgpresearch.com.  For additional information, please contact Ralph Schroeder, Managing Director of Hyperion Research

Disclaimer

This report was written and produced by Hyperion Research, a unit of Hyperion Global Partners, Inc.

This report and other information published by Hyperion Research are the opinions of Hyperion Research. Errors or inaccuracies may exist. Vendor related information may or may not come directly from the vendor itself. Reports are often the result of compiling information from multiple sources. We disclaim all warranties as to the accuracy, completeness or adequacy of such information, and accept no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve the intended result. The opinions expressed herein are subject to change without notice.

In exchange for receiving this report, whether paid or free, you acknowledge and agree to the terms of this disclaimer.

Copyright © 2009-10 - Hyperion Global Partners, Inc. All rights reserved.