Annuity Market Size

Part
01
of two
Part
01

Annuity Services - Market Size

Using publicly available information, we have estimated the global market size for the annuity services industry to be between $1.207 billion and $1.42 billion annually. Since many of the companies in this industry are private, revenue data is limited. Also, data on the fees charged by annuity service providers was scarce. Therefore, the market size should be considered a conservative estimation.

MARKET SIZE BASED ON NUMBER OF IN-FORCE PATENTS AND ANNUITY SERVICE FEES

According to the WIPO Statistics Database, there are about 50 million IP rights in force, as of 2016. Of these, 10.6 million are patents.

For additional context, there were 2,888,800 global patent applications in 2016, with the following breakdown by country:
China: 38.1%
US: 20.4%
Japan: 11%
Republic of Korea: 7.45%
European Patent Office: 5.5%

Patent renewals vary by country with some having annual renewals and others being more periodic. In the US, patent renewals happen every 3.5, 7.5, and 11.5 years from when the patent was granted. So, this inconsistency also factors into the difficulty in triangulating the market size.

A video by Dennemeyer dissecting the invoice of a competitor suggests that company charged a fee of $133.67 per annuity. While this number may be skewed by the sales tactic of Dennemeyer, it was the only solid figure I could find after an extensive search. So, I will use it as a proxy figure to provide a rough market calculation.

If each of the 10.6 million in-force patents is renewed annually, the total market for patent renewals would be $1.42 billion (10.5 million x 133.67).

MARKET SIZE BASED ON PATENT ANNUITY SERVICE COMPANY REVENUES

Using this list of the top patent annuity service providers, I have searched for data regarding their revenue to attempt a rough market calculation. As many companies are privately held, revenue data is limited.

CPA
According to CPA Global's 2016 annual report, they handle over 1.7 million patent renewals annually and serve 80% of the top global patent filers. As a private company, CPA's annual report does not provide revenue data. However, business aggregator Owler puts CPA's estimated revenue at $15 million.

CPI
Also a private company, CPI has estimated revenue of $27.408 million.

Dennemeyer & Associates
Privately-held Dennemeyer has estimated revenue of $117.6 million.

Delegate — Valipat and Envoy merger
In 2016, Valipat and Envoy merged. The new company boasts more than 50,000 annual IP annuities and renewals. In 2017, they rebranded as Delegate, a privately-held company. While I found no revenue data for the newly-formed company, Valipat had estimated revenue of $33.69 million. I was unable to find revenue data for Envoy.

MaxVal
Privately-held MaxVal, based in Los Altos, CA, has estimated revenue of $9 million. Its Annuity Payer product is designed to make patent renewals simpler, though pricing is not publicly available.

Thomas Reuters
In 2016, Thomas Reuters sold its intellectual property division to two private equity firms, Onex Corp OCX.TO and Baring Private Equity Asia, for $3.55 billion. However, in 2015, its IP division accounted for $1.005 billion, down from $1.011 billion in 2014.

Using these companies as a proxy for the whole industry, their total company revenues come to $1.207 billion. This figure uses the 2015 Thomas Reuters revenue figure.

CONCLUSION

In conclusion, the global market size for the annuity services industry is conservatively estimated to be between $1.207 billion and $1.42 billion annually.
Part
02
of two
Part
02

Annuity Services - Market Share

Efforts to find market reports, industry outlooks, and press releases that would allow us to calculate for the market share of relevant players in the patent annuity services market—compared to the overall industry—prove that such information is largely unavailable. After extensive research, however, we found that Dennemeyer has the biggest market share among the four relevant players identified at 69.58 percent, followed by Computer Packages Inc. (CPI), at 16.22 percent, CPA Global at 8.88 percent, and MaxVal at 5.33 percent.

METHODOLOGY

The first phase of our research involved efforts to identify key players and leaders within the patent annuity services market. After searching through industry reports and statistics databases, such as a 2016 patent market report by IP Watchdog and 2017 figures from the World Intellectual Property Organization, we found an article published by Dennemeyer about patent annuity services. The article has a section dedicated to the key players within the market. It was stated that as of 2017, key players include Computer Packages Inc., CPA Global, Dennemeyer, Envoy, Maxval, and Thomson Reuters.

Further research about these companies revealed that Thomson Reuters is the only public company with readily available financial information. In light of this, we consulted company insights databases such as Hoovers and Owler for estimates of useful financial indicators of the privately-held players. Exhaustive research has allowed us to identify estimates of the revenue of CPI, CPA Global, Dennemeyer, and MaxVal. There are no other available financial figures for these companies that could be used to triangulate for their respective market shares. This phase of our research covered all available annual reports, press releases about the sales, growth, or decline of the companies, and other SEC filings.

COMPUTER PACKAGES INC. (CPI)

Founded in Rockville, Maryland back in 1968, CPI currently provides patent annuity services to over 100 countries. CPI is currently a privately-held company and does not publicize any financial information. According to an estimate by Hoovers, CPI currently has a revenue of around $27.408 million.

CPA GLOBAL

CPA Global was founded in Saint Helier back in 1942 and is the oldest company among all the key players enumerated within this request. CPA Global is currently a privately-held company and does not publicize any financial information. According to an estimate by Owler, CPA Global currently has a revenue of around $15 million.

DENNEMEYER

Founded back in 1962 in Howald, Luxembourg, Dennemeyer has been a provider of annuity services such as IP consulting and software solutions, patent annuities, trademark renewals, and recordals for over 55 years. Dennemeyer is currently a privately-held company and does not publicize any financial information. According to an estimate by Owler, they currently have a revenue amounting to around $117.6 million.

MAXVAL

MaxVal is a California-based IP solutions provider founded in 2004. The company boasts a broad clientele ranging from startups up to Fortune 100 companies. MaxVal is currently a privately-held company and does not publicize any financial information. According to an estimate by Owler, they currently have a revenue amounting to around $9 million.

THOMSON REUTERS/CLARIVATE ANALYTICS

Thomson Reuters provides intelligence services, human expertise, and technological innovations to companies within the financial, legal, and media industries around the world. Thomson Reuters is the only public company among all key players enumerated within this request. As such, we are able to inspect their annual reports for more detailed information about their finances. According to their latest annual report, overall company revenue amounted to $11.166 billion. The SEC form 40-F of the company states that the IP services business of Thomson Reuters was sold in 2016. The business currently operates under the name Clarivate Analytics.
CLARIVATE ANALYTICS
Clarivate Analytics is a globally-recognized provider of patent analytics and regulatory standards, intellectual property management, and intelligence services. There is very limited information about the financial information of the company available within public domains. According to an estimate by Hoovers, the overall revenue of Clarivate Analytics amounts to around $211.202 million.

VALIPAT AND ENVOY

Both Valipat and Envoy were leading providers of IP administrative services. In 2016, they merged to form Valipat and Envoy. They now serve over 700 law firms, patent agencies, and IP departments worldwide. There is extremely limited information about the financial statements of Valipat and Envoy. Company insights websites such as Hoovers and Owler currently do not even have an estimate of the company’s revenue.

CALCULATIONS

For our final calculations for the market share of relevant players in the annuity services market relating to patents, we decided to omit both Thomson Reuters/Clarivate Analytics and Valipat and Envoy. This is because although we were able to find the revenue of Clarivate Analytics, we also found that they offer products beyond patent-related services. No existing reports segment their revenue specifically for their patent annuity business. CPI, CPA Global, Dennemeyer, and MaxVal all specialize in patent-related services. The lack of information about the earnings specifically from just patent-related services of Clarivate Analytics makes it impossible to render a reliable apples-to-apples comparison or estimate. We decided to exclude Valipat and Envoy as well because they have not publicized any information we can use to triangulate for their market share compared to other key players.
We found that among the identified four key players within the global patent annuity services market, Dennemeyer has the biggest market share in terms of revenue at 69.58 percent, followed by CPI at 16.22 percent, CPA Global at 8.88 percent, and MaxVal at 5.33 percent. The steps we took to arrive at these figures are listed below.
1. TOTAL REVENUE POOL
We first calculated for the total revenue of the four key players. (117,600,000+27,408,000+15,000,000+9,000,000=169,008,000)
2. PERCENTAGE OF EACH
We then found what percentage each company’s revenue is compared to the overall revenue pool.
(Dennemeyer: 117,600,000/169,008,000*100=69.58250497011893%; CPI: 27,408,000/169,008,000*100=16.21698381141721%; CPA Global: 15,000,000/169,008,000*100=8.875319511502414%; and MaxVal: 9,000,000/169,008,000*100=5.325191706901448%.)
3. ROUNDED VALUES
From there, we rounded all resulting values to the nearest hundredths. (Dennemeyer: 69.58%, CPI: 16.22%, CPA Global: 8.88%, and MaxVal: 5.33%.)

CONCLUSION

Dennemeyer has the biggest share, in terms of revenue, among the key players in the annuity services market relating to patents at 69.58 percent. Consumer Packages Inc. trails behind at 16.22 percent, followed by CPA Global at 8.88 percent, and MaxVal at 5.33 percent.

Sources
Sources

From Part 02