The London Agreement Lowers Patent Translation Costs in Europe
In 1977 the European Patent Convention (EPC) came into force and established the European Patent Office (EPO), the function of which is to grant European patents on the basis of a centralised and standardised procedure for the contracting states to the EPC. On 1 June 1978 the first applicants filed for European patent protection with the EPO.
The major advantage of the EPO is that an applicant can currently receive a patent in over 34 European countries by filing a single application in any one of the three EPO official languages, namely English, French or German. As such, the EPC has established a uniform body of substantive patent law designed to provide easier, cheaper and stronger protection for inventions in the contracting states. In each contracting state in which a European patent is validated, a European patent provides the same rights as would be conferred by a national patent granted in that state.
European patents have a uniform wording and a uniform extent of protection for all designated contracting states and offer a high presumption of validity.
From 1980 to 2005, the EPO granted 760 700 European patents. A total of 208 500 European patent applications were filed in 2006, compared to 197 400 in 2005 (an increase of 5,6 %).
But a European patent does not come cheap. Processing fees in the European patent grant procedure are staggered, thus allowing the applicant to decide, in the light of the completed stages, whether the interest in obtaining protection at the next stage is great enough to justify the additional fee. Taking into account the total fees levied, a European patent typically costs as much as three or four national patents.
Unfortunately, the costs do not end with the central grant of a European patent by the EPO. Once a European patent is granted it is up to the proprietor to determine the geographic ambit of the patent by validating the patent in one, several or all of the designated contracting states. Until now, this validation phase included the full text of the granted patent being translated into the official language of each state in which the proprietor is seeking protection. This could place a huge financial burden on proprietors. If the average European patent is considered to be 22 pages long with 20 pages requiring translation, it would cost approximately R16 000 (€1 400) to translate the document.
If a patent proprietor wished to validate their patent in all 34 contracting states, the patent would have to be translated into 22 different languages at a cost of almost R350,000 (€30,800). On average, European patents are validated in just seven states (UK, Germany, France, Italy, Spain, the Netherlands and Switzerland) at a cost of approximately R80 000 (€ 7 000).
Failure to validate a granted European patent in a given state within the stipulated period (usually 3 months) will result in the monopoly being considered void ab initio in that state.
Translation costs have until now been a significant factor in limiting the geographic scope of a European patent. To promote the cohesion of the European market, (which is the world’s largest regional market) a simple and effective way to validate granted European patents throughout Europe was required.
Enter the London Agreement. Following the second Intergovernmental Conference in London in October 2000 (hence the ‘London Agreement’) an agreement on translation was reached. The agreement simplifies the post-grant translation regime and significantly reduces the associated translation costs. Essentially, parties to the London Agreement waive the requirement for translations of European patents to be filed in their national language. Note, however, that the agreement is optional and that currently it has been ratified by only twelve countries, namely the UK, Germany, France, Sweden, Denmark, Monaco, the Netherlands, Switzerland, Iceland, Slovenia, Lichtenstein and Latvia.
The London Agreement comes into force on 1 May 2008 and from that date, one of the following three possible scenarios will apply to a granted European patent validated in any one of the above twelve countries:
- No translation will be required;
- A translation into English, French or German (a prescribed language) will be required; or
- A translation into a prescribed language and a translation of the claims into the national language will be required.
To take advantage of the London Agreement, the mention of grant of a European patent by the EPO must occur after 1 May 2008. For cases currently on the brink of grant, this can be delayed by, for example, not paying the renewal fee or relying on the “Further Processing” procedure to gain a further two months in the prosecution of the application before the EPO.
Under the London Agreement, to protect an invention in seven states (France, Germany, Italy, the Netherlands, Spain, Switzerland and the UK) the proprietor will only need to provide two full translations and three translations of the claims at an estimated cost of R40 000 (€3 600). The reduction in costs is therefore expected to be in the region of 45%, and UK businesses alone will save an estimated £10 million annually under the London Agreement.
Whilst the London Agreement reduces the costs of validating a European patent in certain member states and as more states become party to the agreement, proprietors will be able to validate their patents in greater numbers of states without the heavy translation burden experienced up until now, it should be remembered that the agreement does not offer a complete solution to the complex and costly issue of patent translation in Europe. Several important countries are not party to the agreement and probably never will be: for example, Italy.