EU seeks to break patent translation deadlock

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This article is part of our special report European Business Summit.

Innovative companies could see a dramatic reduction in the cost of patenting new inventions, if a controversial European Commission plan is adopted by EU governments. The new rules could pave the way for a single European patent to be issued in one of just three languages – English, French or German.

The move is designed to make translation costs 20 times cheaper and promises to bring to a close a long-running language dispute which has scuppered efforts to streamline Europe's expensive patent system.

However, the decision to examine and grant patents in the three languages currently used by the European Patent Office (EPO) could cause friction with Spain and Italy, who are unhappy with the preferential treatment given to English, French and German.

EU Internal Market Commissioner Michel Barnier said he had earlier proposed a "five-language solution" but this had been blocked by Spain, which held the rotating EU presidency until the end of June 2010.

Barnier noted that English, French and German are working languages of the EU and the EPO. He said that at present, 48% of patents are field in French or German, with the remainder presented in English.

"I didn't invent the working languages of the European Community or of the EPO, which has been working with three languages for 30 years," he said.

In an effort to quell disquiet, the EU executive is proposing a special arrangement for member states where German, French and English are not official languages. Inventors from these countries will have the option of filing applications in their own language and having the cost of translation into a working language of the EPO reimbursed.

Barnier said the proposal "strikes the right balance" between pragmatism and linguistic pluralism.

US will still be cheaper than Europe

At present, a patent valid in, for example, just 13 European countries would cost around €20,000. Up to €14,000 of these costs arise from translating documents into multiple languages.

Barnier's plan would bring the cost of protecting intellectual property in all 27 EU member states down to €6,200, of which 10% would be due to translations. An American patent costs about €1,850.

New machine translation system in the works

As a supplement to the new arrangements, a new automatic machine translation system is currently under development at the EPO.

It will give real-time access to existing patent information free-of-charge. However, these translations will have no legal value and should be used for information purposes only.

The EU already contributes €2 million to this project through its Patent Language Translation Online (PLuTO) programme and intends to expand this.

The translation of a full patent into any EU language would still be required in the case of a legal dispute. In such cases, the patent owner would have to pay for translation into the language of the relevant court. It is estimated that approximately only 1% of all patents are disputed.

Plans for a single EU patent litigation court were tabled last year but the European Court of Justice is yet to rule on the legality of the proposal (EURACTIV 25/3/09). Its decision, according to officials, could come by the end of the year.

Practical issues remain

Some practical elements of the proposal remain to be worked through in collaboration with the EPO. The major stumbling block is that the Munich-based organisation is an independent body with 37 members and is not controlled by Brussels.

It cannot impose its will on the EPO and will have to convince the patent organisation to reimburse some translation costs for EU firms.

In cases where the EPO might reimburse the cost of translating a patent into French, English and German, Brussels wants these funds to come from the fees paid in applying for the proposed EU patent.

However, EU sources said it was not the intention to pay translation costs for non-EU countries which are members of the EPO – such as Switzerland or Turkey.

All eyes on European Council

The major stumbling block will be the European Council, where many previous attempts to break the patent impasse have fallen by the wayside due to opposition by member states.

Barnier said he would be willing to amend the text in negotiation with member states but added that he wants to be the last commissioner to announce that a single EU patent is within reach.

Commissioner Barnier said failing to clear the final hurdles to an EU patent would be unacceptable. He said a strong intellectual property system is vital to Europe's priorities: creating a knowledge economy, promoting innovation, tackling counterfeiting, completing the single market and cutting red tape for SMEs.

The regulation on translation arrangements for patents would be one of 30 proposals in the Single Market Act, which will "re-launch and deepen the internal market," the commissioner said.

Speaking no the margins of the European Business Summit, Belgian Minister for SMEs Sabine Laruelle told EURACTIV that making a final breakthrough on an EU patent would be a priority over the next six months.

She said intellectual property is a key element of Europe's efforts to boost innovation and support small businesses.

Eurochambres, an umbrella group representing chambers of commerce, said it hopes the Commission's proposal would prove to be the final breakthrough on a crucial issue.

"Heads of state can repeat their determination to create growth and jobs as often as they like, but it is specific measures like the EU patent that will really make a difference for our entrepreneurs and innovators. The vast costs and complexity of patenting in Europe are well-documented, which is why the continued absence of a single EU patent regime remains a significant constraint on businesses and thus on our economic recovery and growth," said Arnaldo Abruzzini, Eurochambres Secretary General.

He said the idea of a community patent had been floated in the 1960s but language has proven to be a major sticking point.

"It would be naïve to ignore the fact that linguistic differences present obstacles.  We feel that this proposal from the Commission presents a sensible compromise that tackles the language issue in a way that will significantly reduce the costs associated in filing a patent.  We very much hope will prove to be the final episode of the EU patent saga," Abruzzini said.

Jonathan Zuck, President of the Association for Competitive Technology (ACT), said the proposal is a "crucial milestone which can revitalize the EU patent dossier".

"Until now, language discussions have hindered the completion of this long awaited step. Political considerations on linguistic issues should not distract us from realising the full potential of innovation in Europe. Innovative small and medium size enterprises should be able to compete and fully develop their business. It is high time we eliminated unnecessary barriers and make the single patent system a reality once and for all," he said.

He said he hoped the Belgian Presidency would deliver a deal on a single EU patent system during its six-month tenure.

UEAPME, which represents small businesses, welcomed the proposal which they said will cut costs for SMEs. Secretary General Andrea Benassi called for the swift adoption of the plan by the European Council

"Today’s proposal by the European Commission is in line with our repeated calls to reduce the number of languages and has the potential to inject new momentum into the Community patent. The system proposed by Commissioner Barnier will dramatically reduce translation costs, which are often more than half of the total expenses when applying for a patent, while ensuring the possibility of submitting patent requests in all the official EU languages. Reduced costs will be particularly beneficial for innovative SMEs, which have been hampered for too long by excessive filing expenses," said Benassi.

He said more affordable patents will act as a driver for innovation and foster competitiveness in the single market and beyond. This will allow Europe to catch up on R&D and innovation with its international competitors, according to the UEAPME chief.

"The Belgian Presidency of the EU has put innovation at the forefront of its programme. We hope that it will strive to achieve unanimity on today’s proposal and make progress on all the aspects of the Community patent, also based on the breakthrough conclusions adopted under the Swedish Presidency last year. Europe cannot afford any longer a single market in which the same invention is subject to up to 27 different legal systems. The Belgian Presidency has all the elements on the table to put an end to this dysfunctional system. We trust that it will work to do so as of today," Benassi said.

Moves to develop a Community patent for the EU began in 2003. Progress has been hampered by repeated technical and legal difficulties, although the Swedish Presidency of the EU moved the issue forward at the end of last year (EURACTIV 04/12/09).

The cost of filing and protecting patents in Europe is substantially higher than in the US and Japan, and business organisations have consistently complained about the fragmented and inconsistent decisions handed down by European courts. 

Companies often have to fight legal actions in several European countries at once, and national courts regularly come to conflicting conclusions on identical cases. The plans for a single patent court will make litigation cheaper and more predictable, diplomatic sources said.

The European Commission has also said it would seek powers from EU member states to conclude an agreement on a unified patent litigation system, which would establish a court with jurisdiction over existing European patents and the future Community patent system (EURACTIV 25/05/09). 

The Belgian Presidency has said overcoming legal and linguistic problems will be a top priority during its six months at the helm of the European Council (EURACTIV 24/6/10).

  • September: Informal EU summit to give initial feedback on Commission translation plan
  • October: Competitiveness Council meets to discuss patents

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