Fixed pricing for patent and trade mark attorney services causes problems – 28 March 2014
We do not offer fixed price or capped price servicing because, in our view, this pricing model has unsatisfactory results for everyone involved. Instead, we provide practical guidance on expected costs, both in relation to the immediate costs and the costs for future and ongoing actions.
Let’s be honest about it
Often fixed price servicing is really fixed price servicing* where “*” means that it’s fixed price until something “unexpected” happens. This is in essence the same as our approach, although in our view calling it “fixed price” is misleading. We prefer to be straightforward about it and simply to explain that our cost estimates are just that, estimates.
Whilst we routinely offer fixed quotes for actions where the costs are reasonably certain, generally speaking, pursuing patent and trade mark protection can be a long process with many unpredictable turns. At the outset, we simply don’t know what the issues will be. For example, one patent application might sail through examination with no objections, whereas another apparently similar application might face extraordinary objections that require detailed analysis and a carefully considered response. This analysis and consideration takes time and costs money.
We take the view that an invoice should never come as a surprise. In our example above, if you are the unlucky one facing the extraordinary objections, we will pick up the phone or drop you an email to discuss the options and the expected costs. This way you know what to expect and can make an informed decision as to whether and how to proceed.
Our expected costs are often expressed as a range, reflecting the genuine uncertainty that is attached to our line of work. By way of example, if the work involves interpreting a 100 page document, an hour or two to simply read the document may be sufficient. On the other hand, if the document is not clear, close reading and revisiting various ambiguous passages and careful consideration of the applicable principles of interpretation may be required. This could take a day or two. Until we start the work we simply don’t know what issues will arise.
Let’s make sure our interests are aligned
Often fixed or capped price servicing would create a serious risk of a conflict of interest for us. Routinely, the lower cost option is not in our client’s best interest.
By way of example, it is routine during patent examination to have a simple choice between:
- restricting your patent coverage, which is relatively cheap and easy; and
- arguing that your current patent coverage qualifies for patent protection, which can involve hours of work.
Fixed price servicing in this case would put us in a position of conflict, because it gives us a powerful financial incentive to follow (or encourage you to follow) option A, which might not be in your interest.
When faced with this routine situation, we will put the options to you so you can decide if the additional work is warranted.