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.
‘Ghostbusters’
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.