For patent practitioners, translation is everywhere
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Language barrier For patent practitioners, translation is everywhere of enforceable patents held by other parties Patent translations involve in their firms’ target markets. some of the most technically While each of these responsibilities is different, one thing they all have in common and linguistically challenging is a frequent dependence on translation. material available, but are often an Translation plays an important but widely afterthought. As global patent filings underappreciated role in almost all of the grow, a rethink of how we approach key functions associated with managing a patent translations is needed global company’s patent portfolio and the importance of that role goes beyond its often considerable budget impact. By Matt Sekac During prosecution, translation has a bearing on grant determination and the The development, maintenance and scope of a patent application’s enforceable enforcement of a strong international coverage. Translated material informs a firm’s patent portfolio are increasing priorities assessment of its IP positioning in foreign for businesses of all sizes across a wide markets, potentially influencing decision range of industries. The World Intellectual making with regard to new product launches, Property Organisation (WIPO) reports that prospective acquisitions, enforcement actions “following a 3.9% decrease in 2009, patent or a firm’s negotiating position in licensing filings worldwide have now rebounded discussions. Should a firm face a production strongly, with accelerating growth rates – of foreign language documents during the 7.6% in 2010, 8.1% in 2011 and 9.2% in discovery phase of litigation, its case will be 2012”. This trend is being driven in part by built, its strategy developed, the case tried the growth in patent filing in developing and the outcome determined largely on the economies such as China, Mexico, Russia, basis of translated documents. Brazil and India. For globally competitive firms in IP- As patent positioning plays an intensive industries, translation should increasingly important role in the global be viewed as a critical element of the marketplace, those charged with managing portfolio management function. This and asserting a firm’s international patent article begins with an overview of the portfolio face a complex and multifaceted challenges associated with performing challenge. Applications for patents on accurate translations of the complex new innovations must be drafted, filed technical material relating to patents. It and seen through to grant. Licence goes on to explore the many different ways agreements must be pursued, negotiated that translation can affect a firm’s ability and implemented. Patent infringements to compete globally where IP positioning must be identified and, when necessary, grows more important every year. We also enforcement action must be taken to review the way that many firms go about remedy such infringements. In addition, the business of obtaining translations, patent practitioners at multinational firms which is often fragmented, decentralised must stay constantly vigilant in order to and ad hoc. Finally, it proposes a plan of protect their firms from litigation, in part action for firms to take control of this key by assessing and monitoring the landscape aspect of portfolio management. www.iam-magazine.com Intellectual Asset Management September/October 2014 77
Language barrier Translation is more than just a Figure 1. Growth in global patent filings commodity Patent texts and related documentation represent some of the most demanding 2012 9.2% source material for translation professionals. Yet experienced, capable patent translators are a scarce and valuable resource. 2011 8.1% According to 2012 data gathered by the US Bureau of Labour Statistics, the median translator classified as working 2010 7.6% in “professional, scientific and technical services” earns about 19% more than the median of translators as a whole. That -3.9% 2009 category is sufficiently broad to encompass translators who work with material of a -6% -4% -2% 0% 2% 4% 6% 8% 10% 12% less demanding nature, with less at stake and requiring less in the way of expertise Source: World Intellectual Property Organisation, World IP Indicators 2013 than the translation of patent applications, such as user manuals, marketing materials and agreements in addition to other legal texts of a non-technical nature. Although patent practice”. the bureau does not provide data on patent The language used in patent translators specifically, the extent of applications is carefully structured and training and expertise required for patent the precise terminology carefully selected, translation likely allows for many US patent in consideration of various patent laws translators to command wages approaching and regulations which are often rife with the top 10th percentile of earners in the nuance. From the same article: “complex industry. This also depends in part on a sentence structures, particularly in the translator’s individual output capacity. claims, and the need to maintain the In order to render any source text breadth, narrowness or ambiguity of the properly in another language, a translator original language also contribute to the must absorb and understand that text’s particular translation challenge posed by meaning. The text contained in patent patents.” Supreme Court Justice Henry applications often describes extremely Billings Brown was not even thinking about complex technology requiring advanced translation when he wrote, in the court’s technical expertise to be fully absorbed 1892 decision in Topliff v Topliff (140 US and understood. When translating highly 156): “The specification and claims of a technical material contained in a patent patent, particularly if the invention be application, the translator typically requires at all complicated, constitute one of the a relatively in-depth understanding of the most difficult legal instruments to draw invention’s technical field. with accuracy, and in view of the fact that To take a simple, hypothetical valuable inventions are often placed in the example highlighting the importance of hands of inexperienced persons to prepare understanding context in translation, such specifications and claims, it is no consider the different possible meanings matter of surprise that the latter frequently of the English word ‘field’. If a patent claim fail to describe with requisite certainty the referring to a ‘magnetic field’ were rendered exact invention of the patentee, and err in its translation as describing a ‘magnetic either in claiming that which the patentee meadow’, it is not hard to imagine the had not in fact invented, or in omitting potential for adverse consequences. some element which was a valuable or To capture the specific and precisely essential part of his actual invention.” defined elements of an invention disclosure Patent translators face the same in a patent translation fully and accurately, challenge. They must capture “with or research documentation pertinent to requisite certainty the exact invention of an infringement suit, both linguistic and the patentee” in a foreign language which technical competency are required. Yet might have radically different rules and these alone are not enough to achieve the conventions governing syntax and sentence best and most reliable results. As noted structure, both generally and in the in a 2010 New York Law Journal article on particular context of patent applications. translating patent applications (Vol 24, A similar level of specialised knowledge No28), truly qualified patent translators and expertise applies to translators working should understand “at least the basics of with discovery material during patent 78 Intellectual Asset Management September/October 2014 www.iam-magazine.com
Language barrier Figure 2. Patent filing growth in developing countries 2012 that firms may benefit from a careful evaluation of their translation sourcing India 3.9% practices. This is especially true in light of the pervasive ability of translation to affect a firm’s patent positioning across nearly all Brazil 5.1% portfolio management functions, which is explored in the next section. Russia 6.8% Where translations arise Foreign filing and patent prosecution Mexico 9% Translation needs arise early in the lifecycle of an international patent family. Foreign China (SIPO) 24% patent protection is most commonly sought by way of Patent Cooperation Treaty (PCT) 0% 5% 10% 15% 20% 25% 6% 30% national phase entry, direct national filing under the Paris Convention and national Source: World Intellectual Property Organisation, World IP Indicators 2013 validation of granted European patent applications. As a component of this process, firms seeking to extend protection into non-English speaking jurisdictions normally must submit a translation of litigation. Document productions may the patent application into the local contain all manner of technically demanding jurisdiction’s official language. material – from lab notebooks to research This requirement is more than a simple documentation, product specifications and formality: the IP authority in most non- development plans, quality assessments European patent jurisdictions conducts and technical performance metrics, memos its own examination based on its own and other correspondence regarding all of IP laws and regulations. In general, the the above. In addition, correspondence will translation is the controlling text both frequently blend technical material with during examination and in the event of an colloquial language and dialect-specific infringement suit. Errors in the translation idioms, introducing another level of native- of a patent application can materially language expertise to the list of required compromise a patent examiner’s grant translator qualifications. determination, as well as the scope of The translations required by patent the patent’s claims and the viability of practitioners involve some of the most enforcement action later on. While it is technically and linguistically demanding possible to file amendments correcting such material available. To execute those errors in some countries, the specifics vary translations accurately requires a roster of widely and in most cases an applicant’s highly qualified translation professionals opportunity to take corrective action is with specialised expertise. It also requires restricted to the period prior to grant a well-defined process with robust quality or earlier. Even when translation errors assurance measures and concrete metrics are identified before grant and recourse for monitoring and improving performance. is available, the preparation and filing of This process needs to be capable of handling required amendments create added expense a volatile workflow of inconsistent volume, and a longer time to grant, increasing the which potentially spans dozens of languages cost of patent ownership and delaying the and multiple technical fields. possibility of enforcement. All of which is to say that patent Translation is also a key driver of translation should not be regarded as a the expense associated with obtaining commodity. The challenging nature of patent protection in foreign countries. In the source material – together with the comments offered to the US Patent and scope and variability of a global patent Trademark Office regarding the costs faced department’s translation needs – suggests by small and medium-sized enterprises in By confronting the need for translation only when it arises, firms relegate purchasing authority to a fragmented assortment of parties www.iam-magazine.com Intellectual Asset Management September/October 2014 79
Language barrier pursuing international patent protection, Figure 3. Translator incomes the American Intellectual Property Law Association (AIPLA) noted that: “with regard to the acquisition of international 90th percentile of all translators patent rights, translation costs, annuity fees, and foreign professional fees represent significant expenses and act as barriers that often prevent small businesses from Professional, scientific and technical services applying for foreign patents.” Indeed, translation costs can escalate quickly as the list of target countries grows. The graph below provides an approximate Median translator estimate of the translation costs associated with filing a typical patent from five industry categories in Japan, Korea, Mexico, $0 $20,000 $40,000 $60,000 $80,000 $100,000 China, Brazil and Russia based on research compiled internally by Park IP Translations Source: US Bureau of Labour Statistics using data gathered from published US patent applications. Translation is also integral during prosecution when a patent examiner issues • Patents filed in multiple countries may an office action in another language or have been granted claims of differing cites a non-English piece of prior art. With scope. patentability often depending on nuanced • A holder of a foreign patent may have interpretation of granular technical details, failed to pay required maintenance fees it is important for the attorneys drafting to retain protection. the response to fully understand the precise • Some countries have unreliable meaning of the office action, as well as any enforcement regimes – there may also art that the action cites. be statutory limitations on damages in certain countries. Freedom to operate assessments Before acquiring a company or taking There is also the potential challenge of a new product to market, firms will assessing the IP positioning in the context frequently conduct a ‘freedom to operate’ of a patent landscape composed entirely analysis in order to assess the risk of of foreign language claims. The results of possible litigation arising from infringing a freedom to operate survey are a major another party’s existing intellectual factor in a firm’s evaluation of a prospective property. A comprehensive freedom to acquisition or a new product’s financial operate analysis can be costly. In this viability. Decisions regarding potentially analysis, a thorough assessment of the significant investments in the development product and the relevant marketplace and launch of a new product hinge on these is conducted. Competitors and the risk assessments. Finally, the accuracy of components of similar products are these assessments may rely heavily on the evaluated and existing licensing and accuracy of patent translations. manufacturing arrangements analysed. An In order to evaluate the danger of extensive survey of unexpired patents and patent infringement litigation posed published applications pending grant is by enforceable patents in a foreign also performed. The total cost, according jurisdiction, firms must first gain a to patent attorney and founder of popular thorough understanding of precisely what IP law blog IPWatchdog.com Gene is claimed in those patents. If the claims are Quinn, is typically “at least $10,000 and in a foreign language, that understanding sometimes substantially more”. will depend on the content of a translation. The analysis is further complicated Firms and their attorneys may engage when a firm is seeking product clearance foreign counsel for assistance and guidance for a foreign jurisdiction. The regulatory in understanding the patent claims and environment, market conditions and the broader context of applicable IP competitive dynamics can vary widely laws. However, in order to fully absorb from country to country. The same is and comprehend the conditions facing true of each jurisdiction’s laws governing a new business venture, firms will want patent protection. Many jurisdictions have to read those patents for themselves. varying standards governing patentable Their conclusions will be guided by their subject matter: understanding of translated text. 80 Intellectual Asset Management September/October 2014 www.iam-magazine.com
Language barrier Figure 4. Translation costs (BR, CN, KR, JP, MX, RU) of negotiating leverage will frequently commission translations of their own patents to ensure that such a threat is Mechanical credible – that is, to be sure that their patent claims say what they should. Electrical & electronic Litigation Drugs & medical It may seem surprising that firms spend tens of thousands of dollars on freedom to operate assessments in order to avoid Computers & communications infringement suits, until one sees the price tag of a patent infringement suit. Writing Chemical for cnet.com, Jim Kerstetter reports that a survey by the AIPLA found that in the $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 United States: “For a claim that could be worth less than $1 million, median legal Source: Park IP Research and the USPTO costs are $650,000. When $1 million to $25 million is considered ‘at risk,’ total litigation costs can hit $2.5 million. For a claim over $25 million, median legal costs Licensing negotiations are $5 million.” That is just to fight the Once a patent has been granted, it becomes battle; those numbers do not include the an asset with real business value that potential costs for defendants ordered to firms will seek to maximise. One option pay damages. for monetising a patented invention is to In addition to being expensive, patent license its use to other parties, and licensing suits are increasingly a fact of life for firms specialists perform an especially important in innovation-driven industries, especially function for global firms with large patent those doing business in the United States. portfolios and products that integrate the Due in no small part to the divisive class of use of multiple patented inventions. Steve organisations known as ‘patent assertion Jobs once said that the portfolio on iPhone entities’ and commonly referred to as components and functionality was over ‘patent trolls’, infringement litigation is 200 patents – and those are just Apple’s on the rise. In 2013 the number of patent patents (source: Intellectual Property Today, suits filed in US district courts was more November 2009). Companies such as Nokia than double the number filed just five years and Samsung also license technology to earlier. There has also been a sustained Apple, which is then integrated into the increase in Section 337 investigations at final iPhone product. Apple’s innovations the US International Trade Commission, are licensed, in turn, to companies such as another venue for patent assertion favoured Nokia and Samsung for integration into by many patent holders due to the speed of their own final products. its proceedings. The environment for licensing More than half of the money spent on professionals and the way that those patent infringement suits in the United professionals engage their environment States is spent during discovery. The scope can vary from industry to industry and of discoverable documentation in US courts from firm to firm. They are influenced by is extremely broad and litigants routinely factors such as pre-existing cross-licensing produce tens or hundreds of thousands arrangements, developments in ongoing of pages of documentation during the or prospective infringement suits, the discovery process. Those documents are evolution of new technologies, international then reviewed and assessed by a team of competitive dynamics and the firm’s attorneys and staff as they build their case. overarching business goals and initiatives. In cases where one party produces To the extent that a firm’s licensing strategy documents in a foreign language (eg, and negotiating posture depend on the 25,000 pages of Japanese emails, memos, claims of foreign language patents, that firm lab notebooks and other materials), will depend for information on the accuracy attorneys must find a resource for linguistic of language translation. support. Firms hire or engage services A firm may even require translations to provide bilingual contract attorneys, of applications filed under its own name foreign language document reviewers and that were translated by another party translators. They depend on these resources for filing abroad. Firms counting on the to identify pertinent documents, develop threat of enforcement action as a source a case on their basis and, if necessary, www.iam-magazine.com Intellectual Asset Management September/October 2014 81
Language barrier present those translated documents in In many cases, translations required in court. A failure to appreciate the relevance connection with foreign patent filings are of key foreign language documents handled by the foreign patent firms that properly or a substantive translation error serve as local counsel during prosecution. in an important exhibit can meaningfully It is easy to see how the arrangement compromise a party’s interest in a high- comes about, as patent applicants require stakes legal battle. a local agent in each target jurisdiction for guidance regarding jurisdiction-specific Fragmented and reactive buying statutes and regulations: practices • to prepare and file the required While translation is required in the service documentation on the applicant’s of very different purposes, the nature of the behalf; requirement is actually fairly consistent. • to serve as local representation before Whatever the ends being pursued, in order the applicable patent authority; and to achieve those ends, patent professionals • to assist in preparing amendments, of all stripes encounter the need for reliable, office action responses or other accurate translations of technical patent and disclosures where necessary. related documentation. In some cases it is difficult to anticipate specific instances of The administration of translation need. As an example, prior art translations requirements would seem to fit quite are required sporadically in response naturally into that slate of responsibilities, to patent office actions. New licensing which is the main reason why foreign patent discussions may generate a need for firms still handle a high proportion of translations on an ongoing basis. Litigation translations for the applications they file. and discovery are unpredictable. On the The weakness to this set-up is a major other hand, some specific translation limitation on the ability of applicant firms requirements are foreseeable. Firms know to gain visibility of and exert control over which of their applications will be coming the processes, best practices and quality due for PCT national phase entry 30 assurance measures in place to ensure months in advance of the deadline. that their patent applications are being Although a firm’s precise need for translated accurately. The possibility of translation over the course of a given year substantive translation errors represents a may be variable and unpredictable, many legitimate financial risk. Without the ability firms can anticipate in broad terms that the to monitor and influence how translations patent department will require translation are prepared – without transparency or in the service of its various functions. control – firms have no means by which to Together with the pervasive importance assess this risk or take action to mitigate it. of accurate translations, this suggests As long as a firm obtains translations that firms would benefit from a top-down for foreign patent filings from its foreign approach to managing their translation patent agents, it will face constraints needs. They should have high-level on transparency and control. Many transparency of spend and their providers. Unfortunately, this is not the case at many firms. Rather than approaching Questions to ask yourself about your translation sourcing practices translation as a key component of a portfolio management strategy, translation • What are our main priorities and • Do we have any standards or evaluation is instead regarded as more of an annoying expectations for translation and are they criteria for making sourcing decisions? inconvenience – something that represents being met? • Can we benefit from more coordination little more than another hoop to jump • How confident are we in the quality and and continuity in our sourcing through or box to check before moving on consistency of the work product we are decisions? Are we suffering from a to the real business of prosecuting a patent, receiving? downstream, reactive approach to negotiating a licence agreement, arguing • Are translation defects increasing our obtaining translations when needed? a case or evaluating a new opportunity. applications’ time to grant and are • How many providers did we buy from This attitude is evident from the fractured we incurring additional costs for filing last year and can we benefit from and ad hoc manner in which many patent amendments and corrections? consolidation? Is our pricing consistent departments make translation sourcing • Are translation defects jeopardising and does it make sense? decisions. Suppliers are engaged at the enforcement viability by misrepresenting • Is a lack of coordination among point of need by individuals managing the the true and complete scope of coverage? outside counsel resulting in redundant administrative requirements of a particular • Are there inefficiencies in the processes expenditures during litigation or creating function, with a strong bias towards and procedures by which our unnecessary challenges in managing legacy practice and little department-wide organisation obtains translations? foreign language discovery? coordination. 82 Intellectual Asset Management September/October 2014 www.iam-magazine.com
Language barrier Figure 5. Translation sourcing decisions Sourcing decisions made downstream Patent department Filing and prosecution Licensing Freedom to operate Litigation • Applications for filing • Enforceable patents • Enforceable patents • Discovery material Translation needs • Prior art references • Published applications • Licence agreements • Depositions • Office actions • Agreement text • Diligence material • Court exhibits • In-house department staff • In-house department staff • Outside counsel Sourcing decisions • Outside counsel • Outside counsel • Outside counsel • Foreign attorneys • Foreign associates organisations routinely pursue patent other services. protection in more than a dozen foreign In the model described above, sourcing countries – which means their patent decisions for foreign filing translations translations are being handled by more than are ultimately made by foreign patent a dozen foreign patent firms, each deploying firms. Should the need for translation a different set of best practices in delivering arise during the prosecution of a foreign services outside its core competency. language office action or a piece of prior art, the domestic attorney (internal or outside Foreign patent law firms are not counsel) responsible for prosecuting the language specialists – they are law firms application usually has the authority to The approach of different patent firms to procure a translation from the foreign agent delivering this service can vary widely. or an alternative resource at his or her own Some use in-house translators, some use discretion. Any translation needs arising freelance translators and some outsource to in connection with licensing activities local translation companies, passing along are similarly addressed at the time they the expense at a mark-up. emerge and by the individuals directly When organisations select foreign law involved. An outside law firm engaged to firms to represent their IP interests abroad, prepare a freedom to operate assessment they are evaluating and selecting candidates will normally procure translations, where to render legal services on the basis of their required, through its own channels, passing legal expertise. Often this occurs without along the expense as a disbursement. much consideration being given to their The same is true for translations proficiency in executing one of the most required during litigation. In the case demanding forms of language translation. of litigation, the expenditure can be Even if the information were available and considerably larger and sourcing decisions all parties were willing, few organisations still more fragmented. Firms will typically have either the expertise or the bandwidth appoint outside counsel to litigate to thoroughly scrutinise, evaluate, infringement suits on their behalf and implement and monitor compliance with larger suits will often involve multiple a unified set of best practices and quality defendants and therefore multiple co- assurance measures across a global network counsel. All parties to the suit and each of independent patent law firms. of their advocates will have some role in The broadly exhibited tendency is for reviewing the documents produced during organisations to address their need for discovery. Should the document production patent-related translations reactively, at contain foreign language material, everyone the point in time when translation needs involved in the review will have need of emerge. This usually means that purchasing translation support. authority is relegated to whichever party In addition to the potential challenge is directly engaged in performing the of documents numbering in the thousands function for which a particular translation or tens of thousands, the involvement of so is required. That party is not necessarily many parties introduces the possibility of an employee of the organisation whose redundant expenditures on uncoordinated interests are at stake. In fact, translation translation requests. In most cases, sourcing decisions are routinely made by translation support during discovery is third parties in the course of providing engaged at the discretion of outside counsel, www.iam-magazine.com Intellectual Asset Management September/October 2014 83
Language barrier often with little coordination between co- litigants and their advocates with regard Action plan to streamlining translation providers or document translation orders. The result is a A strategic approach to the impact of • take control – taking the time and situation where co-counsel A and co-counsel translation on your competitive positioning investing the energy in understanding B are on the same side reviewing the same means that you should: the role of translation in your patent production and ordering their own separate • work towards greater transparency portfolio is the most important part translations of the same key documents. – conduct a thorough review of your of taking control. Many firms will In the first place, this is problematic past year’s translation expenditures recognise the obvious benefit to some for the obvious reason that the litigants and identify all of the parties that degree of consolidation and improved are paying for multiple translations of the make buying decisions, under what continuity in sourcing translation needs. same documents. However, there are also circumstances, based on what criteria serious concerns about the possibility of a and according to what procedures; In evaluating prospective service case built on differing versions of the same • quantify spend – once you are aware providers, look for a partner instead of just key documents. If one side is working with of all the sources of your translation a vendor. Be prepared to describe your multiple translations of the same document, spend, calculate the total spend and existing procedures, systems, operating each carried out by a separate provider, how how it is allocated across the various protocols, technology and the role of each will the attorneys sort out any disparities functions of your IP department; party involved; then expect providers between the two? Translations prepared • identify improvement opportunities to engage you in a discussion on those by different parties according to different and pain points – with all of the above terms. Look for solutions that integrate with processes will lead to different work information, ask questions about your own best practices and which can products and the potential for different current practices, figure out what is be implemented with minimal disruption. interpretations of important material. working and what is not, and devise Leverage buying power and consider more Which translation is more accurate? Which means for making those practices work than price. Remember, patent translation is should be considered the controlling text? better; and not a commodity. If one version suggests a more favourable interpretation to one side, but is ultimately deemed to be inaccurate, how damaging might that be to the case? transparency of processes, best practices and quality assurance. Having evaluated Move translation sourcing upstream and identified the best-suited translation The key point is that a reactive, downstream providers, firms can be confident that they and decentralised approach to translation have taken the proper steps to minimise sourcing decisions introduces both risk and risk posed by translation errors and have waste into a firm’s portfolio management equipped their patent professionals with the functions. By confronting the need for best resources to perform their functions. translation only when it arises, firms relegate In the event that issues do emerge, firms purchasing authority to a fragmented will have the visibility and the control to assortment of parties, both internal and identify the source of the problems and take external, performing an assortment of steps to rectify them. responsibilities and with an assortment of This is about more than just avoiding evaluation criteria for selecting resources. negatives, reducing risk and cutting costs. This dilutes a firm’s purchasing power in Firms have a real opportunity to gain price negotiations and creates a great deal of an advantage over competitors which inconsistency and uncertainty. underestimate the role of translation in By moving translation sourcing intellectual property. By taking control of decisions upstream and evaluating preferred translations from the top down, you can be resources at a high level in a coordinated, more confident in the quality of your patent centralised way, firms consolidate their protection in foreign markets. You can go buying power and improve their negotiating into licensing negotiations armed with leverage. Remember, while translations better and more reliable information and are required in the service of varying be better positioned to identify, pursue and functions – and the optimal model for capitalise on new opportunities. service provider integration and workflow may differ across those functions – the basic need is largely the same. Firms can assess the competency of various providers to service those functions and negotiate favourable pricing, which can be applied consistently across all needs. A centralised approach also imparts Matt Sekac is senior director at Park IP the important benefits of consistency and Translations, New York 84 Intellectual Asset Management September/October 2014 www.iam-magazine.com
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