Unreasonable annual fee increase -- contract violation?

[kru]

What is the name of your state?What is the name of your state? MA

When our kid was born, we had the cord blood collected and paid
blood bank to have it frozen and stored. W/o going into details, it is
avery common thing this days in order to preserve stem cells in case the
kid ever needs it.

At the time the annual storage fee was $75
The terms of the signed contract say the following with regards to the terms
of the payment increases:

Any increase in the storage fee shall be limited to the proportionate percentage increase in material costs and to increases in the costs of living index as furnished by the United States Department of Commerce Bureau of Labor and Statisctics

In reality , in the 3 years that the we have used them, the annual fee went
from $75 to $124 a year, due to some kind of patent fees they now have to pay and some unsepcified cost insreases. This is almost doulbe of what
we signed up for, and we are talking many more years to go with who know
what they are planing to charge. To top this off, they have a huge penalty
for transferring the material to a competitor lab.

The question is, what can we do here? How can we make them honor the
agreement we signed? How can a %165 increase be considered "proportionate"?!

Thanks,

K

 

[divgradcurl]

What is the name of your state?What is the name of your state? MA

When our kid was born, we had the cord blood collected and paid
blood bank to have it frozen and stored. W/o going into details, it is
avery common thing this days in order to preserve stem cells in case the
kid ever needs it.

At the time the annual storage fee was $75
The terms of the signed contract say the following with regards to the terms
of the payment increases:

Any increase in the storage fee shall be limited to the proportionate percentage increase in material costs and to increases in the costs of living index as furnished by the United States Department of Commerce Bureau of Labor and Statisctics

In reality , in the 3 years that the we have used them, the annual fee went
from $75 to $124 a year, due to some kind of patent fees they now have to pay and some unsepcified cost insreases. This is almost doulbe of what
we signed up for, and we are talking many more years to go with who know
what they are planing to charge. To top this off, they have a huge penalty
for transferring the material to a competitor lab.

The question is, what can we do here? How can we make them honor the
agreement we signed? How can a %165 increase be considered "proportionate"?!

Thanks,

K

Funny you should mention this, I was just reading about these patent cases a few weeks ago...

Anyway, you could argue that this is not a "proportionate cost," but they could also probably argue that these new licensing fees they have to pay as a result of the patent litigation are essentially "material costs" that need to be passed on top the clients.

You could talk with a local attorney, but there is probably not much that can be done. Not only is it possible that this increase is within the letter of the contract, it might also be within the spirit -- "proportionate" is pretty vague.

If it makes you feel any better, bascially all of the cryo companies are going to end up paying licensing fees in this situation, so everyone else's prices will likely be going up as well...

BTW, here's the company that is asserting its patents against everyone else, and the reason why everyone is paying licensing fees in that industry: http://www.pharmastem.com/