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In 11 December 2012, the European Parliament approved a set of three proposals to reshape the way IP is protected in Europe, simplifying and reducing the costs of protection.

(1) A new European “unitary” patent valid across 26 of the 38 European Patent Convention member states is to be introduced

(2) There will be a simplified language regime for patents

(3) The unified patent court will come into being to hear infringement disputes

This agreement comes after more than 30 years of negotiation. Although some details remain unclear, proponents of the new system believe it will bring about a reduction in administrative costs of obtaining a unitary patent.

This article explores the implications for anyone currently ordering high quality manual translations for use in European Patent Offices.

The current EPC system

At present, an applicant wishing to secure patent protection in Europe must file a single patent application at the European Patent Office (EPO). If the application adheres to the European Patent Convention’s (EPC) rules and procedures, the EPO will grant the application and thereafter, the approved application becomes a bundle of national patent rights in each of the EPC Contracting States that are selected by the applicant. The initial application may be filed in English, German or French. Once the application is granted, a significant number of the EPC Contracting States require that the application is translated into their national language.

It is widely recognized that the translation costs and national renewal fees (a yearly fee for each country where the patent is in force) are a significant burden on small and medium-sized entities. The European Commission estimates that under the current system, despite cost reductions arising from the 2008 London Agreement, the cost of having a patent recognized in each of the 38 EPC countries is approximately €30,0001. Translation costs account for 50% of this figure2.

The new unitary system

Applications will have to be filed in English, French or German. If an application is filed in another language it will have to be accompanied by a translation into one of the three languages. After grant, no further translations will be submitted by the applicant, and a high-quality electronic translation will be available for informing third parties on the content of the patent.

However, for a transitional period – of up to twelve years until the machine translation system is fully operational - where the language of the proceedings before the EPO is French or German, a full translation of the patent specification must be provided in English, or, if the language of the proceedings is English, into any official language of the European Union. This translation must be filed by the patentee together with the request for unitary effect.

Implementation Date

The system cannot go live until the Unified Patent Court (UPC) is operational. The UPC Agreement was signed by 25 of the EU member states on 19 February 2013. By June 2016, 26 of the 28 EU member states had signed up for the Unitary Patent (Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Sweden and the UK) with Spain and Croatia opting out at present.

However, the UPC will only come into effect four months after 13 member states (including the UK, France and Germany) ratify the agreement. To date only ten states have ratified the Agreement (Austria, Belgium, Bulgaria, Denmark, Finland, France, Luxembourg, Malta, Sweden and Portugal) so the UK, Germany and one other are still required to ratify the Agreement1.

The Netherlands are close to ratifying it and Ireland have a referendum in 2016 on the subject. One might have expected Germany to be one of the early signatories but they have still not yet signed. The UK was held up by their 2015 national elections and of course, at present the prospect of a Brexit (Britain exiting from the European Union) looms large. If the UK votes to leave the EU, there would need to be some rethinking about the location of the UPCs amongst other things. So the implementation date is by no means certain.

The new process is unlikely to be in force until 2017. Furthermore, the testing and implementation of the new IT systems and training of court officials would all need to take place before the UPC could become fully operational.

Implications for patent applicants

When the new process does come into force for new applications, it will:

  • Reduce the volume of translations from English, French and German into other European languages used by 26 of the 38 EPC signatory states;
  • Eliminate the need to translate the patent claims of granted unitary patents into English, French and German (the three official languages);
  • Make machine translation tools available to translate from the published language to the other two official languages so only one official language will need to be supplied

However:

  • Whilst the new approach may come into force during 2017, it may well take longer to come into effect;
  • Even when it comes into effect, there will be a backlog of 18 months of more material in the pipeline which will not be subject to the new provisions:
  • For a transitional period of up to twelve years, until the proposed new machine translation system is fully operational:

           - EPO applications filed in French or German will, upon grant, still need to be translated into English;

           - EPO applications filed in English will, upon grant, will need to be translated into any official language of an EU member state.

Furthermore:

  • Applications not originating in English, French or German (e.g. Italian, Chinese, Japanese, Korean etc ) will still need to be translated to English, French or German;
  • Applications by a non-Spanish or non-Croatian assignee may need to be translated into Spanish or Croatian if they are to be filed in Spain or Croatia;
  • Applications which need protection in member states in the EPC which have not opted for the unitary patent (e.g. Switzerland and Turkey amongst others) may still need to be translated into a local language even if submitted using one of the official unitary patent languages;
  • National patents (NPs) would still be available via national patent offices alongside the unitary patents and may be chosen for strategic reasons alongside or instead of the unitary route and hence require translation;
  • During the transitional period, the applicant will be able to choose whether to obtain the traditional bundle of national patent rights alongside or instead of unitary patents. This will mean that, in addition to the above translation requirements, applications which need protection in current EPC member states will need translation according to current National Phase requirements.

Following the existing EPC route may be considered preferable for some patent applicants because:

  • It may take a while for the new unitary process to settle in;
  • The unitary approach arguably makes a company’s patents more vunerable in law. Under the classic EPC route, a patent could be opposed and revoked centrally within nine months of its publication. After that nine month period it was expensive and complex to seek revocation as it was necessary to seek revocation through each of the relevant national patent courts. With the UPC, the process of revocation is simpler. A patent can now be challenged and revoked centrally via the UPC. This may not be an attractive prospect for some assignees. Although, of course, central simplified enforcement through the UPC route will be a distinct advantage to some;
  • It may be more expensive to obtain a unitary patent, for example, if validation in only three EPC countries is required. This is because renewal fees are unlikely to decline over time in the way that they can under the current process by letting some country renewals lapse.

Although, of course, the renewal fees relating to a large number of countries could conversely be considerably cheaper through the unitary route. The fees are to be based on the combined fees for the UK, France, Germany and the Netherlands (the 4 countries with the largest volume of validations). The fees are yet to be confirmed but some latest indications are that after ten years - the average lifetime of a European patent - the cost of renewing a unitary patent could be less than €5,000 with the cumulative cost over the full twenty year term being in the region of €35,000. This may sound a lot but it is 80% cheaper that the current fees for all member states combined, where the costs over ten years are €29,500 with the cumulative cost over the full twenty year term being in the region of €159,0002.

Bottom Line

It is too early to say when exactly the new scheme will come into force. Even when fully established, it is difficult to estimate the level of uptake. How many corporations will decide to switch to the new approach immediately or watch from the sidelines and learn from other applicants?

An Amercian, Asian or European company may be an applicant or a challenger in Europe. Depending on their circumstances and their IP strategy, they may or may not decide to be an early adopter of the new unitary process. Will they see the UPC as a threat to their portfolio, potentially making it more easily opposed, or an opportunity to undertake more patent opposition cases? Will their filing strategy benefit from cost-reductions as a result of the new unitary approach or will it be largely unaffected?

Despite these elements of uncertainty, one thing does seem certain. Progress towards the implementation of the unitary patent is finally nearing its final stages. It will bring opportunities for simplification and cost-reduction to filing in Europe. However, equally throughout the transition period and beyond there will be a continued need for high quality European translations performed by experts.

Find out how Thomson Reuters IP Translation Services can support you with your patent translations in line with the Unitary Patent System.

Email ts.translations@clarivate.com or visit our web page.