The top 10 mistakes in renewal invoices you should check
At PatentRenewal.com, we provide free cost analysis, which means that we analyze thousands of invoices that were issued by other IP renewal providers. We do this because we see a significant information asymmetry between IP Providers and IP Owners and we firmly believe that we can help you navigate the IP industry more efficiently.
We have seen many inaccuracies in these invoices throughout the years that you, as an IP owner, should be careful about since you might lose out to your competition if you are not aware of how the IP industry actually works.
We collected the top 10 most common mistakes in this blogpost that helps you to check and analyze your own IP renewal invoices.
1. The amount of the official fee is incorrect
One of the most common and most significant mistakes we identified is IP renewal providers applying incorrect official fees. This is extremely worrisome, since the official fees are always published by the patent offices, therefore it should always be the exact same amount at every provider!
Although the renewal fees are public information, many patent owners might have been exploited by this error. By checking our renewal fee articles here you can easily check if you are paying the correct amount of official fee in a certain jurisdiction.
2. Incorrect official fee exchange rates
You always have to pay the official fee of a patent’s renewal in the jurisdiction’s local currency. For example, in the UK it’s GBP, in the US it’s USD and in Denmark it’s DKK.
It is an industry standard that IP Owners are charged in their desired currency, however it is always important to double-check the exchange rates you IP Provider is using when calculating your renewal’s official fee. We have witnessed many cases where different providers used EUR or USD instead of the local currency in their invoices, and by checking the exchange rates they asked for more than it would have been with the local currency.
For example: your invoice states for a Danish patent the following:
Official fee: 1373 EUR, then your fee is 1373 EUR
Instead of: Official fee 10,000 DKK, then your fee is 1343 EUR.
3. Rounding up numbers
Do the numbers on your invoice end with a .00?
In most cases, they should not, considering that adding up all the different fees you pay for an IP renewal, the total almost never ends with a 0. If your numbers are rounded up, your provider most likely profits on the fees listed on your invoice.
4. Incorrect taxation
Always check the tax on your invoice! Is it calculated for the total amount or just for the service fee?
In very simple terms, you can imagine a patent renewal service as a delivery service that puts money from your pocket into the local patent office’s pocket, while ensuring all legal requirements are met.
Therefore, VAT should not be calculated on the local tax (official fee), only on the IP Provider’s service fee.
We often see invoices where the tax is calculated for the total amount, not just for the respective service fees. Of course, you will get this tax back usually one year later, however, this could lead to cash flow problems in your company in certain cases.
5. Wrong exchange rates for local agents
In many jurisdictions it is legally required that a local patent attorney pays for your patent renewals at the local patent office. We usually refer to these attorneys as “local agents”, and they charge their own fees for their services, usually in their own currency.
Many IP providers hide their local agents’ fees as they attempt to profit on these fees. One way of doing that is exchanging the amount at a much higher rate when paying for your renewals. All official fees have to be paid in local currency, therefore it is essential to be aware of the exchange rates your IP provider is using for charging you.
For example, if you wish to renew your Turkish patent, you are legally obliged to use a local patent attorney. Let’s assume that your IP Provider’s local agent charges 300 Turkish lira for renewing your patent and you see 50 USD on your invoice under the “Agent costs”, that would be equivalent to more than 750 Turkish lira at the time when this article is written.
6. Wrong due dates
Check the due dates on your renewal invoice. Are they the anniversary date of your patent’s filing / application date? Then most likely you were given an incorrect due date.
In many jurisdictions, the due date is the last day of the month of the patent’s filing date and in many countries the due date is not even based on the filing date, but on the grant or publication date. This could lead to confusion, since you might not be able to tell when your patent renewal enters the surcharge period.
For example, if your patent has been filed/applied for on 2015-07-15, then the due date in its 8th annuity year in many cases would be 2023-07-31, not 2023-07-15.
7. Patents from countries that do not need to be renewed
We received invoices where IP renewal providers listed patents from jurisdictions where they do not need to be renewed. In this case, the information asymmetry results in extra costs for you.
For example, if you have a Swiss patent, you only need to pay the renewal fee in Switzerland and not in Liechtenstein, as they have a special agreement that automatically extends to renewal to the territory of Liechtenstein as well (also vice-versa).
8. Wrong annuity years
Often, especially for renewals in New Zealand, Australia or Canada, IP renewal providers might use the incorrect annuity years on your invoices. The reason for this is simply because these jurisdictions count the years differently than other ones (the fees are backpaid as opposed to prepaid, meaning you pay for year 7 at the end of year 7 instead of at the beginning).
In practice, when you see the same annuity year on your invoice for a European patent and an Australian one, while both being applied for in the same year, then that is certainly incorrect.
For example, many times we get asked to compare prices with different providers, and when IP Owners ask for a price quote, for example, for a Canadian patent for annuity 8, their current provider gives them the price for year 7 even though it states year 8 on their invoice. Thus, your renewal provider comparison will be inaccurate as the official fees are higher in year 8.
9. Incorrect patent application/filing number
Check if your provider uses your correct patent application/filing number. Even the slightest change (putting a dot instead of a hyphen) can result in incorrect renewals, since every character in the patent application number is essential to be able to identify the right patent and thereby the right fees and due dates.
For example, many IP Providers state your patent’s application number on their invoices like this: EP12345671. However, in reality the patent’s actual number should be 1234567.1. Although it seems like a small difference, it can still result in identifying the incorrect patent.
10. Wrong country codes
There is a country code standard, WIPO ST.3, that needs to be used in the IP industry. You can easily spot the wrong country codes, since WIPO ST.3 codes are public.
If your provider does not use the country code standard, it indicates lack of knowledge of the industry and it gives reason for you to doubt whether their knowledge is up to date on how to renew a patent correctly as well.
For example, the most common mistakes we identified from other IP renewal providers were writing UK instead of GB and EU instead of EP.