Improving your bottom line by reducing patent translation costs: Spanish.
Patent costs can be divided into four areas: 1) fees paid to national patent offices; 2) costs for agents; 3) translation costs. When filing for intellectual property protection in countries whose official language is different from the language in which the application was prepared, this cost can be high, especially in the case of pharmaceutical, biotechnology, or other highly technical patent applications; and 4 ) maintenance costs for applications and patents.
In this article we focus on a translation strategy to reduce the costs of pharmaceutical patents. Their extensive and complex content, together with the large number of countries where the invention will be patented, makes these a particularly expensive class of patents.
Patent Cost Reduction
In the international public arena, policies are being drafted to reduce the number of official languages. For example, in Europe, where there are more than 15 official languages, translation of application into English is sufficient, with only the claims requiring translation into French and/or German; this significantly reduces the translation costs, and therefore the cost of the patents.
In addition, many multinational corporations have opted for a cost-reduction strategy through delocalization, assigning all or most of the work of patent translation and/or filing for a particular region (Latin America) to a single regional intellectual property firm, or supporting itself using a translation agency to obtain a Spanish translation of the same invention in order to patent it in the various countries of the region designated by the applicants, retaining traditional local partners—whose services may be too costly—only for resolving the technical aspects of the substantive examination. Note that this system does not affect existing jobs in the U.S. or in Europe. The Center for Information Development Management (CIDM) confirms that delocalization and translation services do not affect the country’s economy and says that translation offshoring is better if handled by people working in their mother tongue and their native culture. “Translation/delocalization is an excellent candidate for offshoring, as it creates no loss of jobs in the United States or Europe.” A note on translation agencies is that in most cases, they assign translation jobs to freelancers, which leads to poor patent translation quality, since they are not being proofread by a patent attorney who is a native of the designated country. This may make it difficult for examiners to understand the invention. Or else, if industrial property expert partners are contracted, these agencies raise the price of the translation for IP owners, as they become resellers of the work performed in the offshoring country.
There are several options in terms of filing for companies that want to reduce patent translation costs. The most obvious option, and one that is becoming much more common, is filing the patent only in countries where the filing language is English. That means that filing in the United States, Canada, India, Australia, Israel, and the EPO (even though claims must be translated into French and German) will reach several important markets without incurring translation costs for each. Certainly, this strategy significantly reduces the total cost of patent filing; however, also means that your invention or your customers will not be protected in several major world economies and economic blocs, such as Brazil, China, Japan, Russia, Latin America, and the Gulf States, to name a few.
In Latin America, the average time to obtain a pharmaceutical patent is between three and five years
Another option to reduce patent translation costs is to concentrate on regional blocs, where one translation will cover several countries. For example, translating your patent into Arabic will allow you to submit it to the GCC (Gulf Cooperation Council), which includes Saudi Arabia, Kuwait, Qatar, and the United Arab Emirates. The same Arabic translation (with minor modifications) can also be used for filing in Egypt. Likewise, Latin America, with a single language and cultures of common origin, is a regional bloc where the translation of an invention may be used to patent the invention in all countries of the bloc at once (depending on the classification of countries by PCT or Paris Convention). In almost all of Latin America except Brazil, the official language is Spanish (excluding Haiti and Netherlands Antilles). Translating patents by regional blocks helps reduce translation costs and the total cost of the patent, and helps make the administrative process for the invention in several countries go more quickly, which means a competitive advantage for pharmaceutical companies in the technological race against manufacturers of generics.
To a large extent, the increasing use of generics is due to the sluggishness of the pharmaceutical patent granting procedure in local patent offices. In Latin America, the average time to obtain a pharmaceutical patent is between 3 and 5 years. And in countries like Mexico, only 12% of patents reach the market in the form of drugs. One of the most effective ways to counter the use of generics is to speed up the granting of patents. Handling translation by blocks, like a "production line,” reduces the time it takes to complete the same translation by 1, 2, or 10 different times in several countries who share the same official language.
In addition to the considerable savings in translation costs, placing the translation task immediately following the task of drafting the patent is advantageous in that once the patent applications are translated into Spanish, they can be administered and processed immediately in the various local patent offices throughout Latin America (and even in Spain, as is explained below), and can thus keep up pace in the invention race that is so crucial in the international patent system.
The international economic situation is not encouraging for pharmaceuticals, according to Murray Aitken, senior vice president of Perspectives in Health Care for IMS Health; “the global state of the economy is leading to greater use of generics that what has been in the past". Americans have little cash, and revaluation of the dollar has hurt overseas sales. These factors prompted a decrease in pharmaceutical sales of about US$70,000 million in 2009. Sales of prescription drugs in the United States will fall by some 2%, equivalent to about US$6,000 million. This would mark the first drop over the 47 years that IMS has collected data. The firm notes that drugs with more than US$24,000 million in annual sales are about to lose patent protection this year. To withstand the crisis, says Aitken, drug manufacturers should focus on building sales in developing countries such as China, India, Brazil, and Mexico, which contribute over half of the sector's growth worldwide. In Mexico, health spending amounts to 7% of gross domestic product, and, together with Brazil, this nation accounts for 85% of Latin America’s pharmaceutical market, with an estimated total value of US$30,000 million. Health needs, a growing middle class, and the low presence of sophisticated drugs in the country are features that Mexico offers for foreign investment in this area, since many pharmaceutical companies base their growth on sophisticated drug distribution in the countries known as "phar-mergent markets” such as Russia, China, Brazil, India, Turkey, South Korea, and Mexico. Mexico has an opportunity for 14% annual growth in the use of medications, and its health infrastructure is the most developed among the states of the region, with an estimated annual growth of 12% to 15%, compared to single-digit rates in developed countries. Certain medium-sized multinationals who recently entered into operations in Mexico have reported sales of more than US$140 million in their first year of operation, exceeding the Brazilian market in this area.
Another regional advantage of Mexico for pharmaceutical companies concerns the translation of pharmaceutical patent applications and documents, which—as noted—is key to reducing total costs for patents. Of the four largest economies in Latin America, Mexico's is the second largest, behind Brazil and ahead of Chile and Argentina. Among them Mexico is the only Spanish-speaking country that is a member of the PCT, and therefore the majority of PCT patents that are translated into Spanish are translated here in Mexico. This is not irrelevant if we consider that it is Mexican translators who are the first ones to handle the task of translating the bulk of new pharmaceutical inventions from the U.S. and/or Europe and which are subsequently validated in the rest of Latin America. Mexican translators end up "baptizing" new technical terms from inventions into Spanish, working in collaboration with and under the supervision of external patent attorneys, partners, inventors and consultants for almost 20 years since the Law on the Promotion and Protection of Industrial Property entered into force in 1991 (amended in 1994). This law granted broad protection to pharmaceutical inventions in Mexico (which at an international level has the longest patent duration known). A proof of this feedback between Mexican translators and inventors is the constant receipt of translations made in South America for their proofreading in Mexico, whether it is to adapt them or to update them to Spanish patent jargon. Mexican translators almost always note that translations made in South America are outdated, and their wording has not been refined using other research and technical documents or scientific publications and, above all, using translation memories for patent translation prepared by patent translators throughout all these years of work.
Under the Industrial Property Act, the Mexican Institute of Industrial Property does not require patent translations to be certified (as is the case in Argentina). Fees for translations made by Mexican translators are the most competitive in the region, since they do not require special certification for their work, and because they are capable of offering valid translations for the other countries in the region, e.g., Mexican translations can indeed be submitted in Argentina through an Argentine correspondent, or even in Spain through a Spanish correspondent, by means of conversion. Translations in Latin American Spanish may also be converted to European Spanish. Although there are important differences in grammar and vocabulary between Europe and Latin America, a translation using Mexican Spanish can be reviewed and used in Latin America, and likewise in Spain (and vice versa). The localization fee for the translation is only a fraction of the cost of commissioning a full new translation.
The bottom line: If you are filing and translating patent applications for Latin America, Spain, Brazil, and Portugal, you can substantially reduce your translation costs by asking whether your IP firm is able to offer a customized set of patent solutions that includes 1) an in-house translation department and an international network of partners that includes 2) translation agencies, 3) certified expert translators and 4) partnerships with industrial property consultants who are able to certify and validate a Mexican translation in other Latin American countries and Spain at no additional costs beyond the price of a single translation into Spanish, and even obtaining a discounted rate for the translation of patent documents into Brazilian Portuguese through this same network of contacts.
For these reasons, it is worthwhile to consider Mexico as geographically strategic within the region of Latin America, with proven experience in providing patent translations, as a means to reduce translation costs and hence the cost of patent applications in Latin America as a whole, as well as to expedite the process of patenting inventions in the pharmaceutical industry, which is overflowing with various requirements, procedures, and regulations that must be navigated before being able to launch a pharmaceutical product on the market. We know that some of our customers estimate savings of over US$700,000 a year in their reports using this system for the tasks of translating and filing of patent applications—relying on the same firm for the task of translation for the entire region and turning to their traditional local partners only to resolve problems arising from the patentability review. By saving on patent translation and filings, these companies have been able to avoid additional budget cuts in their patent departments and to improve their overall bottom line.
 William Hackos, Jr., PhD, “Why Do Offshore Outsourcing?” CIDM e-newsletter, February 2004.
 Pettypiece, Shannon. “Genéricos golpean a las farmacéuticas”. cnnexpansion.com June 21, 2009. CNN Expansión <http://www.cnnexpansion.com/expansion/2009/06/09/bajan-las-dosis >
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