IP Maintenance Agreement Best Practices – Part II

annuity and renewal contract

Last week, we kicked off the first of a two-part series designed to provide you with the answers to a common question we receive: “What should we include in our IP maintenance agreement to ensure control of our costs?“. 

This week, we wrap the series up with a deep dive into best practices for agent and service fees, plus a few general (bonus) tips. 

Let’s take control!

Agents and Agent fees

IP Maintenance

Many jurisdictions require payment through a local agent.

After currency costs, agent fees are typically the second largest variable cost in your invoice.

Failure to implement an effective agent cost control mechanism can lead to excessive agent fees, unnecessary agent charges and even (surprise) currency costs.

Your Agent Fee Checklist

IP Maintenance

Make sure you have the following:

  • An exhibit with the following:
    • List of countries requiring agents
    • Agreed upon agent fees in your currency
    • Agreed upon TM service costs
      • Trademarks often involve administrative services – each should be described and priced

 

Note:

Most vendors won’t give the names of their agents, but nearly all will provide country-specific agent fees.

Controlling Service Fees

IP Maintenance

Service fees are normally the smallest variable fee in an invoice, but they can add up.

As vendors have been forced to reduce FX rates, service fees have increased.

When given a choice of higher service fee or higher FX rate – always opt for the higher service fee.

In a large portfolio, 1% of FX cost is usually equal to at least 10 USD/EUR of service fee.

Your Service Fee Checklist

IP Maintenance

Make sure you have the following in your IP maintenance agreement:

  • The agreed-upon service fee
    • Expressed in your currency of choice
  • Agreed upon manual or ad-hoc fees
    • Expressed in your currency of choice
  • A currency control/audit mechanism
    • Reporting these in the invoice line item is normally sufficient

Note: Manual and ad-hoc service fees are normally negotiable for larger organizations.

Be cautious...

IP Maintenance

If your vendor won’t commit to a specific currency markup.

If your vendor attempts to bundle multiple fees together.

If your vendor says they can’t provide agent fees or says fees are confidential.

If your vendor provides you with a low service fee and a low currency markup.

Don’t Forget...

IP Maintenance

Make sure your IP maintenance agreement addresses your specific liability and insurance requirements.

If you require your vendor to utilize an eBilling system, ensure that your eBilling requirements and SLAs are included in your agreement or an exhibit.

Include a minimum of one annual vendor meeting that includes a review of the relationship and vendor performance.

This content is strictly informational and is not intended to be, and should not be relied upon as legal advice. Please consult a qualified attorney for specific advice regarding contracts and intellectual property matters.

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