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Monday, 10 January 2011

Unrepresented patent applicants: some in-depth comment

Going it alone ...
Following last Thursday's post ("Unrepresented patent applicants: a little thought", here) there has been a great deal of interest among readers, generating over 20 comments -- some of which are highly perceptive and based on experience, reflecting a variety of views.  The Kat has also received several longer comments by email, which are excerpted here:

Peter Ellis (Browne Jacobson LLP) writes:
"Your posting regarding unrepresented applicants arrived just after Nick McDonald and I had spent some time discussing a situation involving an unrepresented applicant. Experience of our case teaches us that there is another cause of unrepresented applicants, namely the various unqualified enterprises which hold themselves out as being capable of offering advice on securing and protecting patents. 
Our particular 'babe in the wood' sought advice from an organisation which charged a sum of such significance that a loan was required to pay it. Some searches were performed and the standard patent office appliation form was supplied. The client then prepared and filed an application in November 2010 but, having received no advice from the consultant on how to express either the specification or claims, it is highly likely the application will fail. Nor was the applicant advised to seek advice from a patent attorney. We were consulted yesterday because the client requires advice on an NDA as a large reputable company has expressed interest in the invention. 
We have advised the client to speak to a firm of patent attorneys in the hope that they might be able to salvage the application. We have called the patent attorney concerned and effectively asked him to carry out a repair job almost pro bono. The sadness is that the sum borrowed to pay the unregulated consultant would have been more than enough to pay both us and the patent attorney for good preliminary advice on the patentability and exploitation of the invention. 
We may wonder how many other unrepresented applicants have received initial inadequate advice from such consultants who are free to practise and do not have the same regulatory burdens as solicitors and patent attorneys".
The IPKat would dearly like to know how many parasites and scammers are operating in the UK and beyond, how much money they leech from the system and what our legislators propose to do about them.

An anonymous correspondent writes:
"I have the impression (and I underline that word) that drafting the patent is THE most expensive bit of the business, and that quoted drafting charges are often reduced from the real figure and the difference made up by spreading it over other service charges (e.g., the cost of even sending out a reporting letter) and the absurdity practised by many private firms of charging renewal fees on a sliding scale, even though the work and the associated bit of paper for renewing a patent is the same at year 20 as it is at year 5. If drafting were charged at cost, that cost might be so frighteningly high that more people would be dissuaded from seeking advice or drafting.

I have no doubt that drafting patent applications, particularly claims that are going to stand up in litigation, if need be, is a skill that takes much practice and heartache to learn. I note that one of the comments on IPKat on the 'origin' of one of his correspondents was that he appeared to be looking down on amateurs.  However - and I make no apologies for saying this - this is NOT a game for amateurs, and only a professional can really do justice to it.

Of course, we then drift into a consideration of what exactly is the real "cost" for drafting. This crashes into patent attorney (particularly partner) remuneration expectations, a somewhat contentious area. Well, let's say it's contentious among those of us who disagree with the profession-wide expectation that a partner is entitled to an absolute fortune (this is what keeps all those often underpaid technical assistants in place, the thought that someday this could all be yours, young (wo)man - and their work is often charged out at partners' rates, even if the partner only glanced briefly at it).  Win Eyles, late of Burmah Castrol, said in so many words in a CIPA Journal last year that patent attorneys' charges are too high. I agree entirely.

Having said all that, one way round is to charge a flat fee for drafting an application, no matter how big or small it is. For this, you need a basis for averaging out the costs. It has the disadvantage that the client whose job takes 3 hours pays the same as the one whose job took 30, which is hardly fair. Perhaps it would be a more reasonable position to take if patent attorneys charged a reasonable rate, as opposed to an exorbitant rate.

There's no doubt that an unrepresented applicant CAN manage alone, but s/he will need to do a fair amount of homework and have some facility with the concepts, not to mention a bit of luck on his or her side for that almost-inevitable time when things go wrong. The patent offices with whom I've dealt with directly I've found to be extremely helpful and obliging, but, as you say, this is not their job - their hand-holding can only go so far. In addition, from my experience, what the inventor thinks the invention is is often NOT what finally appears in the patent application, which argues for a more professional, experienced eye".
Chris Torrero comes to the topic from a different perspective:
"Can a non-attorney comment? Specifically someone who saw the process in the Patent Office as was through "allocating" (i.e. determining the appropriate examining group for incoming applications) for the best part of ten years.

Unrepresented applicants ("Private applicants" in Office jargon) are indeed a drain on office resources, both in terms of the need to correct errors in filing and because the applicants tend to take up staff time (I once had a 45 minute call from an applicant. He had been told, correctly, by an agent that his application for a perpetual motion machine would be rejected by the Office. Upon hearing my confirmation that it was true that the Patent Office did not grant such applications, I then received a lengthy rant from him about how Britain was falling behind the rest of the world).

In the Office (at least in 1996 when I left), the "shell" was marked with a large "P" to designate "Private applicant". Private applicant cases were forwarded directly to examining groups upon application, unlike other applications which would only be forwarded on filing of Form 9. This may have changed, since the abolition of the fee for Form 1 means that anything sent to the Office which indicates that the applicant wants a patent now constitutes a valid application. The applicant would be sent a booklet explaining in some detail how to apply for a patent and any applicant obviously not going to get a patent would be offered a refund of the fee paid.

The decision not to use an agent is in part governed by a failure to understand the role of an agent (certainly the use of terms such as "Claim" and especially "Priority" confuses applicants), but I suspect is more down to cost (and in some cases the fact that an agent has advised the applicant not to proceed).

Offices are indeed limited in the assistance that they can provide both by resources and public policy.

There were a few cases where an applicant has dispensed with the agent after filing. These often produce arguments because the agent has, quite properly, drafted the claims broadly and the applicant refuses to narrow the claims as the agent would have done in response to the examiner's citations. One such case made it to the Patents Court and then to the Fleet Street Reports (to the fury of the Patent Office Senior management). Another example of the sort of case that can cause problems can be found here.

In many cases, the failure of the applicant to use an agent essentially prevented the applicant from getting a useful patent. The applicant would tend to describe their prototype, specifying for instance the use of aluminium when any lightweight rigid material would do and thus ending up with a patent that was too narrow to be enforced.

Private applicants can of course succeed, but they are very much the exception".

6 comments:

Anonymous said...

Exorbitant fees? Personally I think most patent attorneys offer remarkably good value, given the rare skills required for the job (highly analytical, literate scientists), and the potential value to a company of decent patent protection.

Fees seem comparable with other professionals operating at a similar level (commercial solicitors, actuaries, private doctors, etc.), and much lower than those charged by city bankers.

Ultimately, attorneys' fees will be determined by what the market will bear.

As for attorneys subsidising drafting costs and recouping the fees later, if this does occur, it would seem to work in the clients' favour - effectively being a loan on which the client is free to default.

Such offsetting would only occur to a very limited extent in any case, or else patentees would routinely switch firms after an application is drafted in order to benefit from lower prosecution costs at another firm.

Anonymous said...

I think the fees charged by Attorneys are largely justified. Yet 'billing' is not a simple issue that could be reduced and objectively [if such was even possible] discussed within a blog discussion, without taking sides. In any case, how much fees would be "fair", and how can people who don't know how much work is involved, for a particular action, be in any position to comment on how much fees should be chargeable for that type of work, or whether such fees are "exorbitant"

On a different note, I think it is ignorant to bundle unregulated IP firms / consultants with scammers / parasites. That would probably make Trevor Baylis into a scammer and parasite. If I remember correctly[and please correct me if I am wrong], he did help inventors draft Patents in the past.

There are many who operate with good intentions, yet it appears that the legal framework has been somewhat slow to accommodate them [If at all that will be possible in practice].It will be interesting to see how this develops.

Anonymous said...

The legislator is actively encouraging these scammers. The Patents Act allows it. There is a further desire to drive down costs and de-regulate the market. Only the qualified attorneys are regulated, but even their qualification standards are expected to drop through possible changes.

Dr Mark Summerfield said...

Your anonymous correspondent demonstrates that impressions can be misleading.

Admittedly, I have heard tales of firms that will do a cheap, fixed-price, provisional application and then allegedly make up the costs at later stages of the process.

But if this does truly occur, I doubt that it is sustainable business model for a reputable firm. Being the cheapest at the 'input end' only attracts the least desirable clients. If those cheap provisionals do not have a high conversion rate into national and/or international patent applications, then you will never make up the losses. And there is, as the first comment notes, nothing to stop clients from cherry-picking, by switching to alternative representation when they start to hit the bigger-ticket items.

In short, the model does nothing to build client relationships, or loyalty. Transparency is, in my view, the better strategy.

As for sliding-scale renewal charges, if anonymous correspondent thinks that there are not real costs associated with the escalation in the official fees, then s/he clearly does not understand how bank overdrafts and the international money markets work. If an agent pays a renewal fee, and then has to wait (perhaps months) for the client to pay the bill, then that costs real money, and will cost more the larger the fee is. By way of example, the firm at which I work charges the same modest amount for attending to every renewal, so long as the client is willing to pre-pay. If the client wishes to post-pay, then the agent charge increases by a factor of less than three over the life of the patent, while the Australian Patent Office fee increases by a factor of eight!

I will avoid wieghing in on the general issue of charges and remuneration, except to say that I have seen no evidence here in Australia that would support anonymous correspondent's allegations. To say more would be unseemly, I think!

Anonymous said...

I recall that CIPA used to issue a set of recommended charges (the "Red Book"?), but the OFT or its predecessor ordered its withdrawal.

Craig Opperman said...

A few quick comments:
1. On the sliding scale point:
Annuities are charged on a sliding scale by the Patent Offices. Each year or group of years the charges go up, sometimes quite a lot. Attorneys pass on those fees.
2. Fixed fee work is a very dangerous thing. It creates incentives for patent attorneys to do less work for each patent application. Imagine expeting the builder of a house always to charge the same for every house that is built. Any builder would find it a ridiculous concept or build small low quality houses.
3. Back to the housing analogy and going it alone: anyone can build their own house using manuals, friends' advice, etc. But, how many untrained novices could build a really good fort that will protect their inventions? [Remember the 3 little pigs and how secure the one felt in the straw house...?]
4. There are pitifuly few home grown patents that have been licensed/litigated successfully and even fewer drafted by novices.
5. Like open heart surgery, I don't recommend it for novices...
6. PS before anyone accuses me of protecting patent attorneys, let me make it clear: I am unashamedly about quality patent applications. Anything else is a waste of money, in my opinion. Not, I am on record as saying that there are way too many junk patents out there, many drafted by fully qualified patent attorneys.

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