The decision to trust an outside provider with internal business responsibility is not taken lightly, but for a business looking to cut costs and improve efficiency, outsourcing business responsibilities to a trusted provider is not only cost-effective, but it can also be the most viable option for many of its activities. Already commonplace in the globalized IT industry, this corporate trend has begun to make its way into trade mark departments, as managements increasingly recognize the financial and administrative benefits of outsourcing trade mark renewals to a third-party company.

Outsourcing renewals is not in itself a new development. Companies have been contracting out responsibility for renewal payments for as long as renewal taxes have been paid to national patent and trade mark offices. However, the types of services offered by third-party providers have improved in recent years, as new and more efficient structures and new engagement models are put into place, yielding greater savings and higher service levels.

Advances in technology and process

Trade mark vendors have been making considerable investments in infrastructure to process renewals more cost-effectively and with less risk. These improved technologies allow the trade mark owner to benefit from secure and seamless access to their portfolio at any time. Vendors are also recognizing the importance of optimizing existing client-agent networks.

Hard cost savings

Most importantly, the growth in outsourcing has also enabled vendors to provide greater savings through economies of scale, which can then be passed on to the client.

Based on internal research, a US manufacturing company with a total portfolio of 20,000 trade marks, which processes 1,000 payments a year, can make savings of up to 30% on each trade mark renewal (figures based on an average renewal cost in major markets, including agent and official fees). But smaller enterprises too can reap the benefits of using a third party.

Soft cost savings

Soft cost savings are realized by removing the administrative burden of managing trade mark renewals in-house. By outsourcing trade mark renewals to a third party with specialized skills, a company can reduce overheads and free up resources, off-load non-core functions and improve efficiency. It will benefit from access to specialized skills and save on costs for in-house training and software. Off-loading non-core functions will allow the IP department to focus on core business functions that add value to the company, such as clearance searches, marketing support and the registration of new trade marks.

With such financial and administrative advantages up for grabs, the trend for outstanding renewals looks set to grow. Companies would be wise to investigate the cost savings available to them, no matter the size of the portfolio.

Dave Young