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   Any interest in monthly payments for prosecution?
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JimIvey
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Any interest in monthly payments for prosecution?
« on: May 30th, 2005, 12:13pm »
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This thread really got me thinking:
http://www.intelproplaw.com/Forum/Forum.cgi?board=software_business;acti on=display;num=1116972511
[TinyURL: http://tinyurl.com/cxk5j]
 
I've heard of a patent attorney who writes patents for $8,000 each -- no matter what technology, client situation, no minimum no. of applications, etc.  And, he has all the business he can handle.
 
What if a firm charged $8,000 per application and, say, $50-100/month until the patent issues -- no Office fees, no $2,000 bill every time a response/brief/petition is filed, etc.
 
I'm curious to hear from both perspectives: would potential clients like that?  what would practitioners worry about?  how would one go about determining a monthly fee?
 
In short, I look at it like this:  The first Office Action is typically received at about 24 months on average and a typical cost is nearly $2,000 -- maybe more.  $75/month works out to $1,800 -- not bad since it's prepaid.  The downside is that the next Office Action will come quickly (just a few months) and would presumably be handled for only say another $225 or so.  Maybe $100/month is better.  Maybe $85 as a compromise.
 
Of course, some cases would be over compensated and others would be under compensated.  And, there are all sorts of things to worry about, such as undesirable incentives for practitioners and how to handle someone who's behind in payments.
 
All in all, what do people think?
 
Thanks.
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James D. Ivey
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Isaac
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Re: Any interest in monthly payments for prosecuti
« Reply #1 on: May 30th, 2005, 4:52pm »
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What strikes me is that the average time to a first office
action is highly dependent on what technology area is involved.
If the high backlog is indicative of areas in which you would ordinarily
be charging more, then perhaps the fee structure would seem fair
to your customers, otherwise it would seem a bit arbitrary, especially
because you don't really do any work at all during the backlog
period.
 
Also, if you were discussing the fee with a client who wanted to make
his application special, your smile as you agree to do so,
might be a bit forced.
 
I guess the idea is to ease the hit on the client's pocketbook with
some creative financing.  It seems to me that you could have a
fixed fee for the first office action and allow the client to
pay installments until time for the first action and still
create the easy on the pocketbook situation.
 
My last problem is probably not so rational, but the monthly
fee stuff sounds somewhat like pre paid legal services, and
my own view of that stuff is pretty dim.
 
Just my own off the cuff thoughts.  Keep in mind that I don't have
significant experience in running a patent business.
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Isaac
JimIvey
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Re: Any interest in monthly payments for prosecuti
« Reply #2 on: May 30th, 2005, 9:56pm »
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Thanks for the thoughts so far.  As of now, it looks like it's an interesting idea that's not going anywhere.
 
As for the application costs, I was going to charge for that separately.  So I wouldn't be out anything at the time of filing.
 
I had thought about the different backlogs in the PTO and considered a different rate per art unit.  However, the more complex arts seem to be more backed up, so it might actually work out to be fair that the more backed up technologies be fair.
 
As for a Petition to Make Special, I was going to have a specific provision for that in the contract.  However, by the time I got to that, it was becoming clear that things we're getting more complex than I wanted them to get.
 
There's also the question of what to do with the application that's pending for 36 months and then gets a first action allowance.  
 
But you're exactly right that there are some very different incentives for the practitioner here.  I haven't sorted that all out yet.
 
Like insurance, it's never guaranteed to be fair -- like the guy who pays premiums his whole life and never gets sick vs. the guy who is diagnosed with a serious chronic disease within days of starting a new policy.  It's supposed to be predictable and comfortable, not necessarily fair.
 
For what it's worth, I don't think any of my existing clients would like it.  Most are in a very precarious state, very early in the life cycle of a business and like the idea of no IP bills for about 2 years (or want the patents now and pursue a Petition to Make Special).  I have some bigger clients that are quite comfortable with the standard billing cycles of prosecuting patent applications.
 
Anyway, thanks for the feedback so far...
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James D. Ivey
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Bill Richards
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Re: Any interest in monthly payments for prosecuti
« Reply #3 on: Jun 7th, 2006, 5:26am »
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A friend in solo practice has a client with a relatively small business.  The client pays $X per month and my friend takes care of all his prep and pros work.  My friend is very efficient and finds it a good deal.  The client likes the certainty.  They are on good enough terms (so far, anyway) that when things change significantly, they renegotiate X.
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William B. Richards, P.E.
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JimIvey
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Re: Any interest in monthly payments for prosecuti
« Reply #4 on: Jun 7th, 2006, 8:54am »
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I'd be curious to know how X got calculated.  Were my very rough estimates above close?  or at least arrived at in a similar manner?
 
Thanks.
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James D. Ivey
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