Many IP Service providers, just like law firms, charge urgency fees for late instructions. For private practise lawyer, there are many reasons for this: the likely late hours worked to get the job done; the probability of having to rejig an ever-growing workload; the convenience to the customer for having the work turned over by the preferred deadline – to name a few. But should an IP service provider, whose work generally focuses on a specific, well-rehearsed area of services, charge urgency fees?
The recent convention-challenging blog post by IP Centrum CEO, Simon de Banke seems clear that they should not.
With service providers, the argument could still apply that urgency fees are charged for convenience. It is far from uncommon for clients in any industry to want something at the drop of a hat – particularly if the renewal date, say for a patent as an example, has completely slipped their mind. The IP world is no different.
But de Banke argues that an IP service provider like IP Centrum differs from private practice, stating: “IP Service providers are different. They have a comparatively narrow and more focused set of functional services, rather than tasks involving opinion and grey areas. This gives the opportunity to orchestrate operational scale.” Private practices must deal with many more grey areas and matters of qualified opinion, each with different and often new factors. Service providers are likely to focus on a portfolio of services, each requiring the repetition of similar tasks, even with anticipated variants. It should be a well-oiled, industrialized machine, assuming the provider’s model works as it should.
So, if the time, materials, and knowledge is accounted for, why should late instruction incur extra cost? According to de Banke, “The service provider knows they will receive urgent instructions from time to time – and therefore, at scale ALL the time. This is business as usual. […] This is something that will happen, and must therefore be planned for. The costs are therefore locked in already as part of the costs of operating the business.”
It could be argued of course that the service provider would not need to carry the costs associated with being able to deliver short-deadline solutions if clients never placed late instructions. And furthermore, that therefore those who do place late instructions should be penalized to allow clients who do not place late instructions to benefit through lower costs.
Asking Simon de Banke this question his response was that “clients do not place late instructions simply because they are lazy or disorganized. There are countless legitimate reasons for late instructions. So given that pretty much everyone will one day place a late instruction with us, we just think it’s our job to make that problem go away. That doesn’t mean it’s easy, but that’s just our job.”
He went on to say “Incidentally, we were advised strongly against taking this path many years ago, arguing that everyone will just place their instructions late. It has never worked out that way. Nobody in IP formalities wants to place a late instruction.”
Whilst this does appear to be, for the customer at least, a very appealing model, is this missing a trick? Everyday consumers pay extra for the convenience of next day delivery without question – perhaps, similarly, clients expect urgency fees to apply and are either happy to pay them or manage themselves better to avoid them in the first place! Whatever the reason, the service provider could benefit if they choose to charge.
Faye Waters, Editor- in-Chief at CTC Legal Media.