More than € 1.5 billion loss in earnings for the translation industry as a result of the EU-wide new patent?

According to the European Patents Office (EPO), translating patents is a juicy business for the translation industry. EPO estimates that the translation costs for a single patent (covering only 13 countries) currently averages € 14 000. If one correlates that with the 134 542 patents granted by EPO in 2009, it translates into a whooping € 1 883 588 000 cashed in by the translation industry in a single year.

Launched December 2009, an initiative to create a single system, covering 38 countries including Turkey, is currently gathering momentum.

At first glance, and in view of the EPO estimate that, under such a system the cost of a single patent translation would drop to € 680, it seems that it would translate into a serious loss of earnings for the translation industry. 

For 2009, this would mean that the translation industry yearly earnings would drop to € 91 488 560.  In other words, it would represent a loss of earnings amounting to a staggering  1 792 099 440 in a single year. At least, so it seems at first glance.

However, the prohibitive translation costs of securing a European patent are only the emerged part of the iceberg. For patent holders, the lack of unified EU wide patent system implies that they also have to hire local representative to deal with the national patent office in order to comply with all the requirements of the specific Member State, including the certification of the translation. In addition, all litigations have to be held in the country where the offense has taken place, provided the patent is valid in that country.

Regardless of the translation costs, Dietmar Harhoff, professor at the Stanford Institute for Economy Policy Research, estimated in a 2009 paper that a unified patent litigation system would save private businesses between € 148 million and € 289 million Euros each year. This, however, does not factor in the loss in business directly resulting from the uncounted patent that were never applied for because of the initial cost and the risks resulting from the lack of legal protection.

The exorbitant cost of securing a patent that grants only a relative protection from copycats is a very effective deterrent for would be entrepreneurs. It is very difficult to estimate the rise in the number of approved patents and resulting businesses that a EU-wide unified patent would generate.

 However, an optimistic view of the result of this initiative would be a healthy booster to international business within the EU and abroad, resulting into an as yet unquantified rise in the translation needs for these new enterprises.

Yet, for the segment of the translation industry that rely heavily on patent translations, it is high time to seriously consider diversifying their services.