Commission staff working document - Summary of the impact assessment - Accompanying document to the Proposal for a Council Regulation on the translation arrangements for the European Union patent {COM(2010) 350 final} {SEC(2010) 796}
Date: 2010-06-30
Institutions: European Commission
Subjects: European Patent Office, European patent, impact study, industrial property, intellectual property, patent, translation

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EUROPEAN COMMISSION 

Brussels, 30.6.2010 
SEC(2010) 797 

COMMISSION STAFF WORKING DOCUMENT 

SUMMARY OF THE IMPACT ASSESSMENT 

Accompanying document to the 

Proposal for a 

COUNCIL REGULATION 

on the translation arrangements for the European Union patent 

{COM(2010) 350 final} 
{SEC(2010) 796} 

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SUMMARY OF THE IMPACT ASSESSMENT 

The Impact Assessment accompanies the proposal for a Council Regulation on the translation 
arrangements for the EU patent. 

1. 

PROBLEM DEFINITION 

Inventions  in  the  EU  can  be  protected  by  national  patents  granted  by  the  European  Patent 
Office (EPO) or national patent offices. There is no unitary patent providing protection across 
the entire EU. This leads to a fragmented patent system. 

Fragmentation is caused by the high costs and complexity of validating European patents in 
individual  Member  States  which  can  amount  to  40%  of  the  overall  costs  of  patenting  in 
Europe. For instance, a European patent validated in 13 countries is more than 10 times more 
expensive  than  a  patent  in  the  US  or  Japan.  Patent  proprietors  therefore  usually  limit 
protection to a few EU Member States.  

The high validation costs stem from national requirements for filing translations in the official 
languages of the countries where protection is sought:  

–  Costs  must  be  paid  to  specialised  patent  translators.  On  average,  85  EUR  is  charged  per 

translated page for a patent of typical length of 20 pages. 

–  Fees  are  charged  by  patent  agents  for  translation-related  services  e.g.  acting  as 
intermediaries  between  the  proprietor  and  the  national  patent  offices,  management  and 
verification  of  translations,  and  ensuring  compliance  with  national  laws.  These  fees  vary 
from around 150 to 600 EUR per validation.  

–  Official  fees  are  charged  by  some  national  patent  offices  to  publish  translations,  ranging 

from 25 to 400 EUR.  

Examples of typical validation costs for a European patent of 20 pages granted in German are 
as follows: 

–  no cost for Germany, France and UK as no validation requirements apply;  

–  more than 4 500 EUR for 6 EU Member States; 

–  almost 12 000 EUR for 13 EU Member States. 

High validation costs and complexity result in a European patent being validated on average 
in  5  EU  Member  States.  The  average  number  of  validations  has  decreased  over  the  last  15 
years while the number of Contracting States of the European Patent Convention (EPC) has 
risen from 17 to 37. The validation rate is very high in the 3 largest EU Member States. In 
2003, of all patents granted by the EPO, 95% were validated in Germany; 80% in France, and 
75% in the United Kingdom. By contrast, less than 40% of European patents are validated in 
other Member States. 

Low  validations  entail  a  fragmented  system  for  patent  protection  in  the  EU  with  negative 
effects  on  the  functioning  of  the  Internal  Market.  Patent  right  "borders"  are  being  erected 
around  individual  Member  States,  reducing  the  commercial  value  of  patented  inventions, 

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impeding cross-border activities and leaving business opportunities unexploited. By contrast, 
the EU patent would provide protection covering the entire EU. 

Some reform to reduce translation costs has taken place. The London Agreement entered into 
force on 1 May 2008 for 14 EPC Contracting States who have agreed to dispense entirely or 
partly with translation requirements. In 4  EU  Member  States (DE,  FR, LU, UK),  validation 
costs have been cut entirely. In 6 other Member States (DK, LV, LT, NL, SE, SI), translations 
of the claims must be supplied. However, 17 EU Member States are not party to the London 
Agreement and require a translation of the entire patent into their official languages. Although 
the  London  Agreement  has  reduced  costs,  the  different  validation  practices  could  reinforce 
selective  practices  by  patent  holders.  This  has  undesirable  effects  on  the  functioning  of  the 
Internal Market: 

•  The  localisation  of  patent  protection  in  a  few  Member  States  risks  leading  to  a 
concentration of R&D investments and technology transfer. Low patenting activity in other 
Member  States  is  likely  to  have  a  knock-on  effect  on  R&D  activity  and  innovation, 
particularly  affecting  SMEs.  This  reinforces  the  structural  differences  within  the  EU, 
affecting overall competitiveness. 

•  In relation to patent enforcement, if goods enter the EU through a Member State where a 
patent is not in force, the rights holder cannot rely on the EU Customs Code to withhold 
goods suspected of infringing the patent. These goods can then circulate within the Internal 
Market. 

2. 

SUBSIDIARITY 

The creation of European intellectual property rights to provide uniform protection throughout 
the EU and associated language arrangements are provided for by Article 118 TFEU. Only the 
EU is entitled to act to create a uniform EU patent and its translation regime. 

3. 

OBJECTIVES 

On 3 March 2010, the Commission adopted the Europe 2020 strategy setting out 3 mutually-
reinforcing  priorities:  smart,  sustainable  and  inclusive  growth.  The  first  of  these  requires 
strengthening knowledge and innovation as drivers for future growth. A key element here is 
improving  the  framework  conditions  for  businesses  to  innovate,  including  the  creation  of  a 
single EU patent and a specialised patent court. By providing for uniform protection of patent 
rights  in  the  Internal  Market,  the  EU  patent  will  improve  conditions  for  R&D  investments, 
particularly in regions with below average innovation activity. This should facilitate reaching 
the 3% target of GDP invested in R&D affirmed by Europe 2020. 

Stakeholder  consultations,  particularly  the  broad  consultation  on  the  future  patent  policy  in 
Europe  in  2006,  have  shown  that  the  creation  of  the  EU  patent  should  add  value  alongside 
national  and  European  patent  systems.  Patent  protection  should  be  more  accessible  for  all 
European businesses, including SMEs. Translation arrangements must therefore be: 

(i) 

cost-effective  (ensuring  competitiveness  with  patent  systems  in  other  major  world 
economies),  

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(ii) 

simplified  (balancing 
information with costs),  

the  needs  of 

innovative  businesses  for 

technological 

(iii) 

legally secure (avoiding uncertainty from translations having legal effect). 

4. 

POLICY OPTIONS AND ANALYSIS OF THEIR IMPACTS 

4.1. 

Introduction 

All options analysed are based on the following principles: 

1)  Central  filing  of  translations  and  electronic  publication.  On  grant  of  the  patent,  any 
translations  required  should  be  filed  centrally  at  the  EPO,  who  will  be  in  charge  of  the 
electronic publication of the EU patent and any translation of the claims. This alone will bring 
considerable cost reductions and simplification compared to the current situation. 

2)  Automatic  machine  translations.  Automatic  machine  translation  (AMT)  programs  for 
patent documents will complement manual translations supplied on grant. This will improve 
the  dissemination  of  technological  information  for  researchers  and  give  the  EU  patent  a 
multilingual character. AMT will enable access to patent applications for users when they are 
published  by  the  EPO.  Automatic  machine  translations  would  be  free  of  charge  for 
information purposes only having no legal effect.  

3) Full translation in case of dispute. In the case of a dispute relating to an EU patent, the 
patent proprietor shall provide, at his expense and at the request of an alleged infringer, a full 
translation  into  an  official  language  of  the  Member  State  in  which  the  alleged  infringement 
took place or in which the alleged infringer is domiciled. It is estimated that less than 1% of 
all patents become subject to litigation. 

4) Reimbursement of costs. An application for an EU patent may be filed in any language. 
Where this language is not an EPO official language, a translation must be provided within a 
time  period  for  the  application  to  be  processed.  For  applicants  residing  or  conducting  their 
main business in a Member State that does not have an official language in common with the 
EPO, the costs of translation shall be borne by the system. 

The following options are explored in the Impact Assessment report: 

Base-line scenario – no proposal on translation arrangements for the EU patent. 

Option 1 – EU patents are processed, granted and published in English. 

Option  2  –  EU  patents  are  processed,  granted  and  published  in  one  of  the  3  EPO  working 
languages; claims are translated into the other two working languages. 

Option  3  –  EU  patents  are  processed,  granted  and  published  in  one  of  the  3  working 
languages  of  the  EPO;  claims  are  translated  into  the  4  other  most  commonly  spoken  EU 
languages. 

Option  4  –  EU  patents  are  processed,  granted  and  published  in  one  of  the  3  working 
languages of the EPO; claims are translated into all official EU languages. 

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The analysis of the policy options concentrates on the main economic impacts of translation 
arrangements  for  the  EU  patent.  This  covers  the  users  of  the  patent  system  (overall  and 
SMEs),  innovators  in  general,  patent  information  users  and  professional  services  related  to 
translations. 

4.2. 

Base-line scenario 

If  the  Commission  does  not  propose  a  regulation  for  translation  arrangements  for  the  EU 
patent, it can never come into existence. This would take the opposite approach to the Council 
Conclusions  of  4  December  2009  and  the  Europe  2020  Strategy.  This  option  would  fail  to 
address  the  high  costs  caused  by  translation  and  validation  requirements  in  the  current 
European patent system. It would also maintain the fragmentation of the system, impeding the 
functioning of the Internal Market. 

Lower  translation  costs  might  result  from  more  Member  States  acceding  to  the  London 
Agreement.  Even  if  all  Member  States  acceded  to  the  London  Agreement,  costly  language 
arrangements for the European patent would persist due to translations of patent claims still 
being required by national laws. 

4.3. 

Option 1 

This option would use English as the language of proceedings for the EU patent and require 
no  further  translations.  Impact  on  a  significant  proportion  of  users  of  the  patent  system  in 
Europe  would  be  positive.  Those  filing  European  patent  applications  in  English  would  no 
longer have to translate claims into French and German at the time of grant. However, Option 
1 would have a negative impact on many users currently filing European patent applications 
in French and German. Around 48% of all applications originating from Europe are filed in 
French or German at the EPO. 

Option 1 would change the existing EPO 3-language regime for EU patent applications. All 
written and oral communication for grant and opposition proceedings at the EPO would be in 
English. Companies currently applying for European patents in French or German would have 
to experience significant changes to make EU patent applications. By removing the flexibility 
of the current system enjoyed by many EU businesses, Option 1 could impact on the global 
competitiveness of European industry, especially for SMEs. The EU patent may therefore not 
bring the expected benefits as its use could be low among European companies currently not 
using English at the EPO. 

Other  groups  affected,  including  patent  information  users  and  providers  of  professional 
services related to translations, would be negatively impacted. Only translators with English 
as a mother tongue would benefit as all applications and procedural documents for EU patents 
would be in English. 

4.4. 

Option 2 

This  option  corresponds  to  the  current  regime  under  the  EPC  with  proceedings  in  one  of  3 
working languages. On grant of the EU patent, the patent proprietor would provide the EPO 
with a translation of the claims into the other two working languages. The claims translations 
would not have any legal effect. 

Impact  on  users  of  the  patent  system  would  be  positive.  All  translations  and  validation 
requirements  after  grant  would  be  removed,  bringing  significant  cost  reductions  and 

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simplification. Translation costs would be about 680 EUR per patent. This corresponds with 
the  minimum  cost  of  the  claims  translations  filed  on  granting  a  European  patent.  Unlike 
Option 1, Option 2 would not affect the language regime of the EPC.  

This option would result in benefits for most groups, including all users of the patent system 
as  well  as  SMEs,  innovators  in  general  and  patent  information  users.  Only  providers  of 
translation-related professional services would be negatively affected by removing translation 
requirements after grant. 

4.5. 

Option 3 

Before  grant  of  the  EU  patent  this  option  follows  the  current  regime  for  European  patent 
applications. On grant, the claims would be translated into the 4 other most commonly spoken 
EU  languages  (i.e.  the  other  2  EPO  working  languages  and  the  2  other  most  spoken  EU 
languages, namely Italian and Spanish). 

Option  3  would  have  a  positive  impact  on  users  of  the  patent  system  in  Europe  with 
significant  simplification  and  cost  reductions.  Direct  translation  costs  would  be  about  1 360 
EUR per patent. 

Option 3 results in higher costs for the applicants per patent, but remains affordable to users 
of the patent system and innovators in general. Patent information users would be positively 
affected by the availability of claims in the most spoken EU languages. Professional services 
providers would experience a negative impact, but less than under Option 2. 

4.6. 

Option 4 

Option  4  corresponds  to  the  Common  Political  Approach  of  3  March  2003.  The  EU  patent 
would be processed, published and granted in one of the 3 EPO working languages. On grant, 
the  patent  proprietor  would  supply  a  translation  of  the  claims  into  all  required  official  EU 
languages. 

This  option  would  create  an  EU  patent  with  high  translation  costs,  counterbalancing  the 
benefits of a single EU title. Translations of the claims into the other 20 languages currently 
required by EU Member States would be about 6 800 EUR per patent. 

Stakeholders  have  unequivocally  rejected  the  Common  Political  Approach  due  to  the 
unsatisfactory  translation  arrangements.  Patent  users,  in  particular  SMEs,  clearly  state  that 
this option for the EU patent would be too expensive. They would need to submit and manage 
numerous translations over a limited time period. Furthermore, decisions affecting the unitary 
character of the EU patent would have to be made, for instance, when a translation into one 
language is not filed. 

Notwithstanding  these  inconveniences,  if  the  translations  were  available  very  early,  patent 
information would be more accessible in many European languages. Providers of professional 
services  related  to  translations  would  also  benefit  provided  such  an  expensive  EU  patent  is 
used.  There  may  also  be  insufficient  numbers  of  specialised  patent  translators  for  certain 
languages. 

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5. 

COMPARING THE OPTIONS 

Although Option 1 appears to be a simplified and cost-effective solution, it would result in a 
significant change to the current EPO system providing flexibility in procedural languages. A 
change  to  English-only  could  make  the  majority  of  European  applicants  (using  French  or 
German) reluctant to apply for an EU patent.  

Option  2  would  therefore  be  more  appropriate  as  it  maintains  the  successful  pre-grant 
linguistic regime of EPO. This option is also cost-effective, simplified and legally secure.  

The 5 language system of Option 3 would be equally simplified and legally secure as Option 
2, but with higher direct translation costs, it would be much less cost-effective.  

By  requiring  the  translation  of  claims  into  all  EU  official  languages,  Option  4  would  put 
considerable financial costs and risks on users of the system. It would not be cost-effective, 
simplified, or legally secure. 

6. 

MONITORING AND EVALUATION 

The EU patent aims to improve the conditions for innovation in Europe. Innovation activity is 
measured  by  INNO-Metrics,  comprising  the  European  Innovation  Scoreboard  (EIS)  and 
Eurobarometer.  The  Europe  2020  Strategy  also  commits  to  developing  a  new  indicator  to 
track innovation. 

The EU patent should coexist alongside the European and national patent systems. Patenting 
levels published by patent offices should therefore be monitored to ensure that these options 
meet the needs of innovators including the translation arrangements. 

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