Source: EURLEX
Language: en
Format: md

**EN**

# **EN EN**

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.** **P** **ROBLEM 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.** **S** **UBSIDIARITY**

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.** **O** **BJECTIVES**

On 3 March 2010, the Commission adopted the Europe 2020 strategy setting out 3 mutuallyreinforcing 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 the needs of innovative businesses for technological
information with costs),

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

**4.** **P** **OLICY OPTIONS AND** **A** **NALYSIS OF THEIR** **I** **MPACTS**

**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.** **C** **OMPARING 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.** **M** **ONITORING 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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