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Lost in translation? No more
Jonathan Zuck
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2.5.2008
Have you ever stopped a minute to wonder what is behind Apple’s iPod? With more than 141 million units sold throughout the world, it has become the most successful digital media player and an icon for an entire generation. It must have taken Apple’s engineers years to develop this cash cow, right? Wrong. The iPod was developed in just six months, faster than any other major Apple product. And its technology wasn’t invented in Apple’s headquarters in California, but brought in from the outside. It was small software shop Casady & Greene that developed SoundJam MP, a programme to manage music libraries that later became the basis for Apple’s iTunes.
And the operating system for the iPod? That came from outside contractor Tony Fadell and a company called Pixo. Apple’s own engineers eventually integrated both systems into the well-known combination of an online music library and a compatible music player.
Jonathan Zuck
The deal that led to the creation of the iPod is just one among many. SMEs tend to be more inventive than larger corporations, especially in the high-tech sector. But would the story of the iPod have been possible in Europe, too? Good question. Sadly, European tech start-ups develop more slowly than their peers in Silicon Valley, partly because inventors struggle to exploit their innovations. The fragmentation of the European patent system has made protecting IP in Europe onerously expensive.
The latest European Commission figures show that 20 years’ protection in Europe is on average nearly nine times more expensive than in Japan or the US. In large part, these costs result from translation requirements. A patent from the European Patent Office (EPO) granted in one of the EPO’s working languages — English, French or German — needed to be translated into the language of every country where it ought to be valid. Needless to say, translating all patent documents into multiple languages bumps up the costs for an EPO patent. Inventors therefore think twice before they apply for IP protection across Europe — which in turn prevents them from reaping the commercial benefits of their technology.
Winds of change
The London Agreement, which came into force on 1 May 2008, will simplify the translation requirements for European patents. It is an optional treaty and has been ratified by 13 countries so far, including Germany, France, the UK, the Netherlands and Denmark. Under the Agreement, countries which share an EPO working language will recognise EPO patents without translation. For instance, a patent granted in German could then be recognised in France, the UK and Switzerland as is — because both English and German are EPO working languages. Other signatory states will only ask for a translation of the claims — the legal description of the invention — into their national languages. Some countries will also demand an English translation of the technical description of the invention. Even with the technical translation added, this represents a significant reduction of the language requirements for obtaining patent protection in these states.
With translation costs accounting for up to 40% of the cost of a patent, the magnitude of the savings the London Agreement offers SMEs is clear.
At the same time, the Agreement acknowledges the realities of conducting business and research in Europe. In the age of globalisation, businesses serve at least a European, if not a global, market where IP protection across borders has become the norm. Reducing the cost of European patents has therefore taken on an unprecedented urgency. Moreover, most of the patent translations under the preceding system were never actually consulted and did not serve any practical purpose. To suppose that patent translations would help to inform the general public about the latest technologies is hopelessly unrealistic. A technical education is needed in order to understand patent claims and descriptions even in the mother tongue. And with university education and research integrating across Europe, engineers usually work in more than one language.
In addition, the London Agreement will lead to more competition among patent attorneys, as Walter Holzer points out in his contribution. This is good news for their SME clients, as legal fees account for the bulk of the expenditure on a patent. Small businesses with finite resources are keen to spend those on research and development rather than on their lawyers.
But most importantly, the London Agreement could pave the way to a genuine European Community Patent with additional benefits. A Community title would be automatically valid in the entire Union of 27 member states. And it would harmonise IP litigation in Europe, a source of great concern to SME innovators.
As the current European patents are a bundle of national patents, they need to be separately enforced in each jurisdiction — without any certainty that they will be consistently upheld across Europe. The London Agreement sends a signal that a genuinely European patent system is still possible. Eventually it could deliver the cost savings, simplicity and legal certainty that inventive SMEs are desperate for. Without such a system, it will be a long time before Europe can come up with a tech icon to rival Apple’s iPod.
Jonathan Zuck, President of the Association for Competitive Technology, which represents small and medium sized enterprises (SMEs) in the EU