Managing Patent Translations in Latin America and Why It Matters

ThinkstockPhotos-100597872In the following abridged article recently published in IPPro Life Sciences Magazine issue 52, Matthew Sekac from Park IP Translations looks at how Latin America is home to a number of important burgeoning economies, and patent filings, mainly from non-residents, have grown steadily since 2003. Matt looks at how important it is to proactively engage in managing the translation component of patent filing in Latin America. The view the article in full, click on the following link: Managing Translation Requirements in Latin America and Why it Matters

The official language of most Latin American countries is Spanish. Unfortunately, many organizations are routinely paying to translate patent applications into Spanish multiple times when filing in multiple Latin American countries. It is simple enough to see why. If translation is seen an a non-severable component of filing an application in each country, and a local patent firm in each country is engaged to execute the whole process, then each firm will prepare its own translation as part of its usual duties.

It is important to realize that patent translation is a modular component of the filing process. It can be managed, and indeed is best managed, separately from the filing procedures specific to each individual country. The benefits are as evident in Latin America as anywhere.

Linguistic similarities can be leveraged in preparing translations for filing in Russia and Ukraine, or Taiwan and China. In Latin America, a single Spanish translation can be used for filing in nearly every country. A key element of Park IP Translation’s role as an IP language service provider is to understand each country’s requirements and approach project engagement with the goal of satisfying those requirements in the leanest and most cost-effective way possible.

Translating Patents into Spanish Multiple Times Wastes Money and Increases Risk

In Latin America that means understanding that while there are sometimes slight variations in formal requirements, only one Spanish translation of an application text is necessary.  Paying for more than one translation needlessly multiplies filing expenses.  In addition, it potentially introduces needless risk; by commissioning separate Spanish translations prepared by separate translators according to separate processes, the result is very likely to be separate issued texts in the same language with substantive disparities that could be raised in the event of litigation.

Avoiding this sort of redundant expenditure isn’t completely straightforward.  Many Latin American countries are not members of the Patent Cooperation Treaty.  This means that applicants seeking protection in Argentina and Mexico, for example, must first file a Spanish application in Argentina within 12 months of the priority date, and then file a separate Spanish application in Mexico 18 months later, assuming the applicant is filing a PCT National Phase application.

Remembering that a particular application was previously filed in Argentina isn’t rocket science, but 18 months is a long time.  To manage the whole process efficiently, there needs to be a system in place for ensuring that a Spanish translation is properly stored, the opportunity to leverage that translation is easily identified, and the delivery of that translation to the appropriate agent(s) at a later point is streamlined.

Several Latin American countries also have some of the most complex and costly translation requirements in the world.  Argentina, Venezuela, and Uruguay, for example, require translations of all priority documents to be submitted in the form of locally “sworn” hard copies.  To some extent this is an unavoidable expense, but a savvy provider with the right resources can minimize these costs by leveraging shared text between the priority and main application and channeling the process through a lean production infrastructure.

Life Science Patents, Word Counts and Latin America

All of this is important for any organization seeking patent protection in Latin America. It is especially critical for those in the life sciences industry.  That’s because a disproportionate share of non-resident applications filed in Latin American countries are filed by life science companies, and life science applications tend to be considerably larger than the applications filed by organizations in any other industry. Not only do life science companies file the most applications in Latin America, they spend the most money on translation for each one.

Park IP Translations conducted an analysis over 220,000 patent applications filed at the USPTO between October 2011 and June of 2012 in an effort to better understand the relative translation costs faced by organizations from various industries when pursuing international patent protection.  We started by separating the applications into six major categories using each application’s US classification code and the categorization methodology developed in a 2001 paper from the National Bureau of Economic Research, The NBER Patent Citation Data File: Lessons, Insights and Methodological Tools. We then looked at the word count (WC) distribution of applications in each category.  A summary of the results is below:

Category Average WC 25th Percentile WC Median WC 75th Percentile WC Highest WC in Sample
Drugs & Medical 14,593 6,191 10,284 17,399 647,641
Computers & Communications 10,147 5,670 8,015 11,637 433,395
Chemical 9,345 4,612 7,032 11,069 302,976
Electrical & Electronic 8,045 4,349 6,348 9,447 254,756
Mechanical 7,286 3,863 5,754 8,757 151,581
Others 7,156 3,635 5,517 8,531 253,090

Most in the patent industry are probably generally aware that pharmaceutical and biotech applications tend to be the longest. This data helps bring the extent of that phenomenon into stark relief.  Applications in the “Drugs & Medical” category, (sub-classed “Biotechnology”, “Drugs”, “Miscellaneous Drgs&Med” and “Surgery & Med Inst.”) are more than 54% larger on average than the sample as a whole, and nearly 44% larger than the next largest category of “Computers & Communications”.  Since translation costs are virtually always driven by the amount of text in the source document, this means that applicants in the “Drugs & Medical” category face by far the highest costs when filing for patent protection abroad.

Moreover, applications from the “Drugs & Medical” category are also much more likely to be extremely large.  Some readers will already have noticed that the disparity in average application size between “Drugs & Medical” and other categories is much larger than the disparity in median size.  This suggests that the average size of “Drugs & Medical” applications is driven by a “long tail” where a large proportion of the sampled applications that are distributed far to the right of the median.  Click on the IPPro_Life_Sciences_issue_52_Park_IP_Latin America to review the chart.

What this means for applicants in the “Drugs & Medical” category is that any given application has a far greater likelihood of carrying a massive price tag for international filing.  Industry giants might not flinch at $250,000 to translate a single patent without any guarantee of protection; however, for smaller organizations it can be a major challenge.

Despite the extra expense, life science organizations do file more than their share of patent applications Latin American countries.  Statistics from the World Intellectual Property Organization indicate that applications from the life sciences sector represented about 23% of all US-originating PCT applications published in 2013, which accounted for nearly 31% of US-originating applications published in Latin American countries.  The effect is more pronounced for pharmaceutical applications, which made up only 6% of US-originating PCT applications while accounting for 11% of US-originating applications published in Latin America.

What the Latin America Patent Data Tells Us

This data tells us that life science organizations are more likely than others to see patent protection in Latin America as important, probably because patent protection is of greater importance to those organizations generally.  As WIPO put it in a 2006 report entitled Patents at the Core: the Biotech Business, “The growth in the number of patents in the field of biotechnology is largely due to the importance that life sciences and biotechnology companies attach to intellectual property, particularly patents.”  From the same report, the Organisation for Economic Co-operation and Development notes, “In no other field is the relationship between patent protection and the incentives to innovate so strong.”

Given the data and expenses faced by those organizations, it is extremely important that they are proactively engaged in managing the translation component of their international portfolio strategy, especially in Latin America. Doing so leads to lower costs, lower risk, higher quality, and more control.  It also helps to consult with legal and patent language service experts prior to engaging in any translation and filing in Latin America and other regions around the world.

DOWNLOAD THE FULL ARTICLE: IPPro_Life_Sciences_issue_52_Park_IP_Latin America

Matthew Sekac is Senior Director at Park IP Translations in New York.

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