David Lee and Paul Whenman consider the cost implications of the full language translations for PCT national phase applications and put forward a deferred translation procedure to reduce national phase entry cost, and thereby provide applicants with an opportunity to proceed with more national phase applications.
Implicit in the grant of a patent is the requirement that the applicant discloses the invention, the subject of the patent grant. Whilst the extent of disclosure required varies from jurisdiction to jurisdiction, it is an absolute requirement that the extent of disclosure must be sufficient for a third party to practice the invention. A further requirement is the definition of the invention, which is to be found in the claims of a patent. The importance of the claims is that third parties must be able to determine if they infringe the rights in the patent.
Whilst not all patent applications are granted, they may still be published and are then accessible by the general public. It therefore follows that both patent applications and granted patents are available and may provide a source of information to third parties to use in further research and development.
Patent applications are usually published at 18 months after their earliest priority date, although applicants are permitted to request earlier publication.
Importantly, the language of the publication will be dictated by the jurisdiction in which the application was filed. Notable exceptions to this rule are to be found in the Patent Cooperation Treaty (PCT) and the European Patent Convention (EPC). In both instances, there exists the concept of “official languages”.
For example, the EPC provides that its official languages are English, French and German. Whilst an application may be filed in another language, a translation into an official language must be filed within a designated time frame. This means that a European patent application will be published in one of the official languages.
At grant, a European patent is published in one of the official languages and the claims (more importantly) are published in all of the official languages. Also, to give effect to a European patent in a member state, the minimum requirement is that the claims are translated into the language of that member state. In this way, a third party resident of that state is able to determine if it infringes the claims of that patent.
Given the manner in which the PCT operates, “official languages” apply only to the filing and publication stages. At publication, the PCT official languages are English, French, German, Spanish, Japanese, Chinese, Russian and Arabic. The rules of the respective national phase jurisdictions will ultimately determine the language of a further publication of a PCT application. Generally, national or regional phase entry requires a translation into the relevant national language or official language for Europe.
It is a fact that the financial cost of filing a national priority patent application, followed by a PCT application and various national and regional phase applications, represents a substantial investment in a technology by the applicant. Such a cost is exacerbated where translations of the application are required. This cost is especially important for SME applicants.
The commercial viability and granted patent scope are primary factors to be considered to determine the risk of the investment. Using the PCT examination procedure of search report, written opinion and preliminary report on patentability, an applicant will have a useful guide to determine the patent scope.
Even though the PCT provides for deferred national or regional phase entry, the timeline for the applicant’s commercial development is usually not aligned to the PCT patenting process. Helpfully, a number of countries such as the US and Canada provide reduced filing fees for “small entities”.
Still further, countries such as China and Japan assist applicants by providing for deferred filing of translations of patent applications into their national languages. However, there is still an additional cost associated with these deferred filings.
Providing a range of PCT official languages has a clear benefit in reducing the need for translations at the PCT application filing stage. However, without the existence of a treaty akin to the EPC, national phase applications must be translated into the relevant national phase language at entry or relatively soon thereafter. The cost of such translations eclipses all other costs associated with national phase entry.
Our view is that the benefit of providing a full translation of a national phase application does not always justify the financial costs involved in providing the translation. We suggest a better balance may be achieved by providing a translation of the claims only at national phase entry.
Where a country provides for deferred examination, a full translation would be required at the stage of requesting examination. Alternatively, where there is no deferred examination procedure, the timing for a full translation would be governed by the projected timing for when examination is expected to occur. The objective here would be that a full translation is available to an examiner at the appropriate time.
An important consideration is whether the later provision of a translation strikes a reasonable balance between patent applicants’ rights in its application and third parties’ rights to know the subject matter of an application. Our view is that the later provision of translation scarcely prejudices third parties’ rights whilst substantially deferring the applicant’s costs. The following factors further support our view:
Japan and Australia are examples of countries having deferred examination systems that require full translations of national phase applications. We will contrast and compare the current national phase systems versus our proposed deferred translation procedure.
The deadline for entering the national phase in Australia is 31 months from the earliest priority date. If the PCT application is not in English then an English translation must be filed when the application enters the national phase at 31 months.
Applicants are required to request examination of an application within five years of the international filing date or within two months of a direction to request examination issued by IP Australia. Typically, IP Australia issues these directions around four years after the international filing date. By using this typical “four year direction date” as an indication of the latest date by which examination can be requested, we calculate the request for examination will become due between 17 and 29 months after the national phase entry date (depending on whether or not the PCT application claims priority to an earlier application).
Therefore, if the current system were changed to allow deferral of the filing of the English translation until the filing of the request for examination, the applicant would be able to defer the costs of translation by 17 months (with no priority claim) to 29 months (with a priority claim).
The deadline for entering the national phase in Japan is 30 months from the earliest priority date. If the PCT application is not in Japanese, a Japanese translation must be filed within two months of the date on which the application entered the national phase. Assuming the applicant enters the national phase at 30 months then the Japanese translation is due at approximately 32 months from the earliest priority claim.
Furthermore, applicants must request examination of the application within three years of the international filing date of the application. Assuming that an applicant enters the national phase at 30 months and requests examination at three years after the filing date, then the request for examination would become due six to 18 months after the national phase entry date (depending on whether or not the PCT application claims priority to an earlier application).
It follows then that if the system were changed to allow for deferral of the filing of the Japanese translation until the filing of the request for examination, the applicant would be able to defer the costs of translations by four months (where no priority claim exists) to 16 months (where a priority claim exists), compared with the current two month extension for translations available at national phase entry.
We have reviewed a sample of national phase entries in Japan to determine the average translation costs incurred by our clients in a range of technologies. Across the sample, we determined the average cost of translating an English application into Japanese was approximately AUD4700 whilst the cost of translating the claims only was approximately AUD550 (being 11% of the total translation cost).
This reduction in the translation cost of national phase entry would apply to all jurisdictions in which a translation is required and would represent a significant reduction in the total cost of the national phase entry procedure. This would potentially allow an applicant to use available financial resources to enter the national phase in more jurisdictions.
It is very common for PCT applications to claim priority to an earlier application. In this situation, if translations are filed simultaneously with the request for examination (rather than at national phase entry), applicants would be given significant additional time (29 months in Australia and 16 months in Japan) in which to evaluate the commercial potential of an invention before having to decide to incur the significant costs associated with preparing a translation. This deferral of costs would lower the barrier to national phase entry and would potentially allow more applicants to enter the national phase in more jurisdictions and secure patent rights in those jurisdictions.
In this article we have considered the procedures in Japan and Australia. However, there are many other countries such as South Korea, China, Malaysia, and Canada which also require the applicant to request examination. If the PCT protocol is amended to allow translations to be filed simultaneously with the request for examination or at a time close to the expected start of examination (in those jurisdictions which do not have a deferred examination system) then the barriers to obtaining patent protection can be lowered to the benefit of applicants without significant disadvantage to third parties.