A Parable for Risk Aversion Bias

The following article, “Safe, Rattle and Roll: A Parable for Risk Aversion Bias,” first appeared in IPPro’s Global IP Directory 2016/17, which is published by Black Knight Media Ltd. The article discusses buying patent translation services, translation of foreign patent filings and how law firms and corporate counsel are now turning to service providers, such as Park IP Translations, to deliver a centralized solution to meet their legal translation needs and manage IP in multiple countries.

CLICK HERE TO DOWNLOAD FULL PDF OF ARTICLE: Safe, Rattle and Roll: A Parable for Risk Aversion Bias by Matt Sekac Park IP Translations

“Nobody ever got fired for buying IBM.”  Many will recognize the saying, which originated in the 1970s as a sort of axiom for corporate buyers charged with the procurement of computer equipment.  The expression came to encapsulate a marketing technique characterized by Gene Amdahl as “FUD” or “fear, uncertainty and doubt.”

Amdahl left IBM in 1975 to start his own IT company, Amdahl Corporation, after which he, along with many of his corporate peers in the industry, found themselves struggling to compete with IBM’s firmly established brand.  IBM’s competitors at the time made claim to offering superior-performing products, with more features and for a lower cost.  Nevertheless, buyers kept going with IBM because it was the safer choice. The well-recognized brand had established a market position far longer than any of its upstart competitors.

In Amdahl’s telling, IBM’s salespeople were aggressive in playing to the risk-aversion of its customers’ buyers, by stoking the “fear, uncertainty and doubt” about trusting lesser-known alternatives to their longstanding mainstays.  They urged purchasing agents to worry about being held accountable if something went wrong with the product of an unproven competitor. They suggested that it was a risky proposition to switch to a new product from a new company, even if they offer better performance and more features at a lower cost.

United world economiesRisk aversion bias is a well-documented psychological phenomenon. These days, the saying “nobody ever got fired for buying IBM,” is a way of expressing the tendency of corporate buyers to play it safe and err on the side of what is comfortable, known, and established. Because if a “safe” decision goes bad, it’s forgivable.

Interestingly, if you search for the word “aphorism,” the first example you are shown is one with a similar meaning, “If it ain’t broke, don’t fix it.”  The IBM saying takes the same idea and adds an implicit threat.

With Patent Translation Services, Many Just “Buy IBM”

When it comes to translation for foreign patent filings, these aphorisms capture the mentality of many patent practitioners today for both in-house and especially in the case of outside counsel.

Before the advent of the Internet, patent translation was a capability reserved almost exclusively for foreign associates.  Translators possessing the linguistic, technical, scientific and patent-specific expertise required to translate patents are a valuable and limited resource.

For a long time, it was virtually impossible for a single organization to effectively recruit, vet and manage a sufficiently large stable of these resources to support every required language across diverse technical specialties.  It wasn’t as if one could simply flip through a phone book to find a Japanese-speaking Biomedical Engineer living in Stamford, Connecticut and, who also understood the nuanced language of patent applications and happened to translate documents for a living.

Even if you could find such a resource, there followed the small matter of making contact, trying to conduct some sort of vetting process, executing an NDA, mailing (or perhaps faxing in those days) the source text, obtaining the translation, and then somehow reliably transmitting the translated text to your agents in Japan for filing—and that’s without any measure of quality control.

As a result, translation became the domain of the local patent firms in each country.  They alone had the knowledge and access to the resources necessary to get the job done for their overseas clients wishing to foreign file patent applications.  Thus was born the legacy process for patent translation employed by many multinational organizations.

For a long time, relying on foreign patent firms to prepare translations was the only option. Times have changed. The rapidly progressing phenomenon of globalization, driven by the worldwide web, has made it possible for dedicated patent translation and language service providers to build a global network of linguistic resources capable of supplying translations to the world’s biggest patent filers into hundreds of languages and across every technical vertical.

Every year, more and more patent filing organizations are turning to the best of these service providers to deliver a centralized solution for their translation needs.  Yet, some have resisted the transition due to a perceived risk. What might go wrong if we move away from our trusted agents and task a single company with all of our translations?

The perception of many patent practitioners is that the traditional model of relying on foreign associates for translation isn’t broken, so why fix it?  Buying translations from foreign associates is like buying computer equipment from IBM in the 1970s. It’s deemed as the safe choice for those sensitive to change.

It’s hard not to sympathize with the thought process, especially for legal professionals trained to evaluate circumstances through a litigious lens.  From the point of view of a domestic patent firm, for example, it might look as if there is only a downside to deviating from the longtime status quo.  The firm is charged with advancing the international IP interests of multiple organizations for drafting, filing, and prosecuting patent applications that may be critical to those clients’ business interests.  These are extremely complex functions depending on a great deal of knowledge and expertise.  To try something new in getting those applications translated can reasonably be perceived as a needless risk that introduces meaningful liability exposure.

What if there is Something Broke That Needs Fixing?

The trouble with this calculation is that there is evidence to challenge the assumption that nothing is broken about the traditional model for handling patent translations.  In 2013, a survey conducted by Theo Grünewald and Alexander J. Wurzer of the Steinbeis-Transfer-Institute Intellectual Property Management, Munich tested four hypotheses. The first three of which are particularly salient here:

  • H1 – incorrect translations of patent applications occur frequently in practice.
  • H2 – incorrect translations of patent applications can be estimated as a latent risk for the enforceability of patents.
  • H3 – incorrect translations of patent applications cause additional internal and external costs.

The results of the survey, in the view of the authors, were definitive.  Key data points included 81% of respondents who “indicated that they had come across incorrect translations of patent applications in their practice;” 58% “rated incorrect translations of patent applications as a latent risk to the protection, validity and enforceability of patents;” 26% “indicated that they knew of cases in which an applicant’s attempt to seek protection for a patent was seriously harmed by an incorrect translation.”

Overall, the authors concluded all of the hypotheses were confirmed by the survey’s results.

  • Incorrect translations of patent applications occur frequently in practical IP management. The problem is recognized by most IP professionals, and particularly by those who enforce their patents actively against competitors.
  • Incorrect translations of patent applications can seriously harm the scope of protection of the granted patent. Such translations are regarded as a latent risk to the enforceability of patents.
  • If incorrect translations are detected in the course of the patent application process, additional internal and external costs are incurred in order to correct them.

Results suggest that translation errors constitute a legitimate risk to the viability of international patent protection and damaging consequences of such errors have been felt by a significant proportion of the IP community in the past.  Moreover, the survey suggests that the risks inherent to mismanagement of patent translation are known to a significant proportion of patent practitioners.

It’s one thing to play it safe because there’s never been a problem, it is possible that danger in fact lurks below the immediately-perceptible surface, or that newly available alternatives sufficiently outperform the status quo so as to change a “safe” decision into a complacent one. If there are problems that are widely recognized within the industry, the decision to maintain the status quo becomes less defensible.

“Fixing” Patent Translations

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With patent translation, the biggest challenge for both in-house patent practitioners and their outside counsel probably comes in trying to assess quality. North American and European patent attorneys are responsible for developing IP assets in dozens of countries around the world.  This is a major factor inhibiting the appetite for changing the way firms handle patent translations. Decision makers frequently feel as if they have no basis for evaluating the relative capabilities and quality performance of various translation options.

The difference between a translation company and its clients, as well as between an effective patent translation provider and your average foreign agent, is precisely the translation company’s purpose to sort this problem out.  One person can’t speak all the languages in the world. One person can’t be familiar with every field of technical specialty. It is important to rely on language experts.

The way to deal with the problem is straightforward. It comes down to people and process.  Capable translators with demonstrated expertise working within a well-defined, documented, centrally administered quality assurance process.  The enterprise requires a lot of people from all over the globe with extensive expertise operating as cohesively as possible: one process, one platform, one set of standards for qualifying those individuals.

The keys are consistency, transparency, and accountability.  All of these are lacking under the traditional model for patent translations, which ought to give buyers pause.  When half a dozen agents in half a dozen countries are all independently handling translation, you end up with half a dozen processes, half a dozen sets of criteria for qualifying translators, little to zero transparency, and a complex web of accountability. Risks are high for missed deadlines and quality.

There is evidence to suggest that the fragmented approach of the traditional mode is already leading to damaging consequences. When things do go wrong, the lack of transparency will generally leave the affected parties at a loss to evaluate the root cause or hold appropriate parties accountable. And that’s a real source of risk to all parties involved, whether or not we look at the foreign associates as analogous to buying based on fear, uncertainty and doubt of doing something different.

CLICK HEREMatthew Sekac TO DOWNLOAD FULL PDF OF ARTICLE: Safe, Rattle and Roll: A Parable for Risk Aversion Bias by Matt Sekac Park IP Translations

Based in New York, Matthew Sekac is senior director of strategy at Park IP Translations, a Welocalize company.

For more information on legal translation services and managing global IP portfolios, email: Matthew.sekac@parkip.com

 

 

 

 

 

 

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