Ensuring a firm’s patents are protected in key territories can be essential to its success; however, the translation costs of global protection are taking their toll. Justin Simpson assesses how the London Agreement could help bolster competition in the EU.

The European Patent Office (EPO) estimates that the average cost of translating a patent into 25 languages within the 34 European member states is more than 30,000 Euros – an astonishing figure. This can be particularly excessive for small companies and inventors – especially when combined with government, attorney and annuity fees. It’s no surprise then that the sheer financial commitment of obtaining patent protection in Europe is deterring many innovators before they even start. Similarly, countries which are less frequently designated in patent applications find that they cannot benefit from the latest developments in technology or science.

But that’s not all: some industry experts argue that Europe’s global economic position is being affected by the high cost of patent protection within member states. Indeed, existing legislation arguably contradicts the EU’s pledge to ‘foster innovation and competitiveness’ and ‘reduce the burden on business by legislating better’, as stated during the UK EU Presidency of 2005.

Fortunately, these broader issues are now being recognised, leading to changes in patent legislation that should hopefully support the EU’s aim to become a competitive economic power.

Streamlining the process
While many EU member states are now funding projects to boost innovation and support creative businesses, one of the most inspiring changes to the patent system will result from ratification of the London Agreement. First drafted in 2000, its text aimed to address the cost of patenting throughout European Patent Convention (EPC) member states during the European ‘validation’ stage.

This validation stage occurs after the EPO has granted the European patent, which must then be ‘validated’ in the desired countries before it can take effect. Currently, patentees need to provide a translation of the patent specification (including the description and the claims) and pay the official fees to the national patent offices. But not only is this expensive, it also has to be completed within three months of the EPO’s publication of the decision to grant.

Industry experts argue that Europe's global economic position is being affected by the high cost of patent protection within member states.

This makes validation an administrative challenge, and the more countries the patentee designates, the more challenging it becomes – particularly when there are 25 languages to consider and agents in 34 member states to deal with. Failure to observe the relevant national provisions results in the European patent having no legal effect in that territory.

The magic eight
The London Agreement has, so far, taken seven years to come into being, because in order for it to enter into force it had to be ratified by at least eight countries, including France, Germany and the UK. The states that have ratified are Croatia, France, Germany, Iceland, Latvia, Liechtenstein, Monaco, Switzerland,Luxembourg, the Netherlands, Slovenia and the UK.

Although France had signed the London Agreement and it has been approved by its parliament, France only deposited the Instrument of Ratification with the German government at the end of January. This means that the Agreement will now enter into force on 1 May 2008 – the first day of the fourth month after the required quota has been fulfilled.

Effecting change
The effect of the London Agreement varies depending upon whether the official language of the member state in question includes one of the official languages of the EPO (English, French or German). Where the member state’s official language is one of the official languages of the EPO, the requirement for translation of both the description and the claims is waived. States in which the language is not one of the official EPO languages must indicate the EPO language in which they will accept patent descriptions and whether they require translation of the claims into one of their official languages. All of this will make for significant savings on translation costs.

Whether the Agreement will improve the EU’s global competitiveness remains to be seen. However, there are clear benefits for businesses and individual innovators, and it is estimated that, once the Agreement comes into force, the average cost of validation across Europe will be reduced by around 45%.

In the meantime, there are already commercially viable ways in which patent owners can reduce the cost and administrative strain associated with validation in Europe. For example, good suppliers who specialise in European validation will have efficient processes and special arrangements with foreign attorneys and translators. These enable them to reduce the cost of validation, often up to 50%. This reduction will continue to apply once the Agreement comes into force, increasing the cost savings that should already follow its implementation.

Get ready
In preparation for the London Agreement, patent owners should make sure that their legal counsel and/or third party supplier is fully aware of the system and any changes. Knowing which countries require translations, which don’t, or which ones will require translations of patent claims, but not whole specifications, will become a skill in itself. Amid these complexities, though, it is clear that the future of innovation in
Europe is increasingly positive.

For further information on European validation costs, visit www.epvalidation.com, or email sales@epvalidation.com.

For more information on the London Agreement, visit www.epo.org and search for ‘London Agreement’.


This article first appeared in IP Review, issue 21

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