Why ILG Requires an Advance Fee Deposit

          Clients come to us with innovative ideas, hoping to reap a profit from their inventions. In general, they are creative people who hope to develop a business, or sell or license their idea, once it is fully developed into a marketable product. They turn to ILG for its services in Transforming Ideas Into Assets™.

          Ideas are not Businesses. Ideas are Assets. While Businesses may originate with a single Great Idea, the Great Idea is only one of the assets of a Business. Businesses require a lot of other assets: financial backing; marketing plans; distribution channels; people with a wide range of skills working as a team; brick and mortar facilities, equipment to manufacture and manage, etc. A Good Idea without these pieces of the puzzle will be difficult to develop into a success.
          If you hope to get a patent, but have no intention of ever producing, marketing or distributing your invention, the costs will all be borne by you.
          But if you hope to start a business, you must start the process up front by working up a business plan. How much of the process are you willing to do? How much are you willing to pay other experts to do? Where will the money come from?
          Securing protection for your intellectual property (patents, trademarks, copyrights, etc.) is as real as purchasing a computer or a vehicle for business use. But the rewards are less immediate, because the patent process takes time.
          In order to provide you with the legal counsel you need to obtain IP protection, we require payment when we provide the services. We are not an investor in your company, and therefore cannot wait until you “make it big” to be paid. Put another way: we are not and cannot be your partner, nor do we work on “if-come” contingency.
          For your general information, there are 5-Cs of credit in the eyes of any lender (including banks, landlords, and merchants):

  1. Character: Your integrity, emotional and physical strength determine what kind of business person you are; can you stick it out in the long haul? Stamina?
  2. Capacity: Your capacity to repay debt;
  3. Collateral: Assets that you may be able to use to leverage funding;
  4. Capital: The amount you have personally invested in the business; and
  5. Conditions: What is your business plan? What are your goals for the invention/project: Who is your team? What is the time frame? Do you understand the market? Can you run a start-up business?
Because we are not a bank, we do not order a credit check on you. Instead, we require that you pre-pay an Advance Fee Deposit, based on the estimated costs of the next steps in your specific process. Advance Fee Deposits are put in a trust account. As that Advance Fee Deposit sum is spent down, we require clients to keep it “Evergreen” by replenishing it to the level commensurate with the anticipated upcoming work. That is generally dictated by the Examination responses sent us by the US or Foreign Patent and Trademark Offices, your decision to file corresponding foreign cases, or the evolving issues that arise, e.g., negotiations, business planning issues, trademarks, confidentiality agreements, additional ideas, changes in direction of development, and the like.
          You see, we need to be here when you and other clients need us. If we don’t get paid, or you delay or “defer” payment, then ILG can’t operate.
          What is particularly troublesome is when a client starts out fresh with enthusiasm over his/her/its Great Idea. In spite of our advice that patenting, licensing and/or starting up a business with the idea as its main asset is a long process and can be relatively expensive, many expect instant success with royalty income falling out of the sky. Then when the reality of the time and cost it takes to nurture the idea “baby” hits, they think they should be able to make us their partner by not paying, or promising to pay us when they hit it big by licensing or getting into production. Meantime, they are too busy with their day job, moving on to other projects, would rather watch TV, or the like.
          Accordingly, inventors must understand that ILG does not agree to a forced conversion of a pay-as-you-go representation to a contingency basis. Unfortunately, ILG has on occasion had to enforce its attorney’s lien on a client case.
          Hence, the “Advance Fee Deposit” (Evergreen Advance) approach works well for everyone. You want to stop? OK, let us know, but we are covered. Your signature on our Engagement Letter Agreement of Representation means you understand your obligation to pay us promptly, provide advance fee deposits as needed, and not ask us to do work when you have no present capacity to pay on an ongoing basis.
          Of course, if you are totally silent (or tell us “later”) in response to our advisories and requests for direction, and deadlines arise requiring our action to maintain your rights, we will make reasonable efforts to do so; however, don’t be surprised that we bill for, and you owe payment for, those services. That is, silence is not affirmative direction for us to stop work or that any further efforts of ILG to keep your rights alive are free.

          ILG does not quote fixed fee, not-to-exceed charges for obtaining a patent, issuance of a Trademark Registration, or other work. All patent and trademark application post-filing services are charged at ILG’s hourly rates.

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