Patent Filings in Latin America

Economic growth in Latin America and the Caribbean has been sluggish over the past several years. However, Latin America is also home to a number of important burgeoning economies, and despite a modest downtick in 2016, patent filings—mainly from non-residents—have grown steadily since 2003 based on statistics from the World Intellectual Property Organization (WIPO).

Filing patent applications internationally is expensive, and translation represents a significant proportion of that expense for any foreign language. Every organization with an international patent strategy can benefit from gaining visibility into their patent translation expenditures and working with capable partners to consolidate that spend and take control.  The benefits include lower costs, more efficiency, and higher patent quality, and Latin America offers a great example of how those benefits are realized.

Welocalize Life Sciences recently interviewed Matthew Sekac, Senior Director of Sales Strategy at Park IP Translations, a Welocalize company, to discuss translation requirements in Latin America and why they matter.

Q: Patent translation is a modular component of the filing process. Why is this important?

MS: Patent translation 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.

Filing documentation must be prepared and submitted in each country by a locally registered agent.  But by segmenting the translation component and taking a centralized, holistic approach to managing language requirements, patent filers can achieve greater efficiency with better quality results. Consolidating filing translations under a single process, with the smart use of technology and broad, multi-jurisdictional expertise enables organizations to maximize buying power, minimize waste, and improve terminological consistency as well as overall accuracy.

One straightforward example of increased efficiency is maximizing the leverage of Linguistic similarities 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 Translations’ role as an IP language service provider is to understand each country’s requirements and approach every project engagement with the goal of satisfying those requirements in the leanest and most cost-effective way possible.

Q: Why does translating patents into Spanish multiple times waste money and increase risk? 

MS: For a start 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 as a non-severable component of filing an application in each country, and a different 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.

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 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.

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.

Q: Why is the length and word count of a patent application an important consideration?

MS: 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 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 (Hall, B. H., A. B. Jaffe, and M. Trajtenberg (2001). “The NBER Patent Citation Data File: Lessons, Insights and Methodological Tools.” NBER Working Paper 8498). We then looked at the word count distribution of applications in each category.

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 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.  The applications chart demonstrates the finding.

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 sciences 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.  This is even 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.

Q: What does the Latin America patent data tells us? Why is it important?

MS: This data tells us that life sciences 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 that, and given the 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.

For more information about patent filings in Latin America and Spanish translation services, contact us.