Tuesday, June 28, 2011

European Patent: Almost There

European Union governments have been negotiating the issue of a single EU patent for decades. Taking advantage of the fast-track procedure – which came in with the Lisbon Treaty and allows a group of countries to go ahead with EU legislation even when not all 27 member states agree – Ministers met Monday and hammered out a so-called "general approach," which is the governments' position on a European Commission legislative proposal that will create a single patent for the EU. I have discussed this matter previously in this post about the creation of a European patent system.

Italy and Spain fear discrimination because patents would be filed only in English, French or German. The two countries have filed a legal challenge with the European Court of Justice (ECJ), arguing that the new enhanced co-operation procedure should not be used to bring in the patent system. In fact, efforts to get an EU-wide agreement on patents have been blocked for many years by language disputes and the lack of unanimity.

At the moment, the European patent requires validation in each member state, and a full translation of the patent in the official national language. The new single patent system is expected to be in place by 2013, and should cut the current €32,000 it costs to get a patent across the 27 EU countries (€23,000 only for translations) to €2,500 for the 25 countries participating in the project (all but Italy and Spain), and further down to €680 at the end of a 12-year transitional period. In the U.S., a patent filing costs about €1,850.

Implications for the Language Services Industry

This is not good news for LSPs, but companies have been preparing for sometime. In fact, RWS Holdings, the biggest patent translations company in Europe, mentioned in its 2010 Annual Report that "The thrust of our acquisition strategy since 2005 has been to target technical translation businesses which have zero exposure to any developments in the patent field."

Lingtech, the Danish company that developed machine translation solutions for patents into Scandinavian languages, saw its revenues dwindle since the London Agreement and was recently acquired by Kommunicera AB.

But not all is gloom.

  • Translations will still be required between English, French, and German, and in some cases into each European language. 
  • The expectation is that the number of patents registered in Europe will increase because of the cost savings. So the reduction in number of translations could be offset by the increase in the number of documents filed.
  • Asian countries file more and more patents every year. Those patents will need to be translated into European languages for filing. This means that there might be also a shift in the language pairs required for patent translations.
Even though I personally believe that the cost of translation is just a cost of doing business and that respect for linguistic diversity is a core EU value contained in the Charter of Fundamental Rights of the European Union, I think that the train has left the station and a Single European Patent will be reality LSPs will have to contend with.

Thursday, June 23, 2011

No One Wears Shoes Here

Last Sunday was Father's Day here in the United States and I spent the day catching up on my reading while the children played around me. Among a series of interesting articles and OpEds in BusinessWeek, Fortune, the New York Times, and other publications, I found an interesting column by Rana Foroohar in the Curious Capitalist section of Time Magazine called "Why the World Isn't Getting Smaller."

The spirit of the article is that globalization is not such a big thing as some of us want it to be, and — using Thomas Friedman's image — that the world is not that flat.

Rana points to some facts:

  • More than half of global trade, investment and migration still takes place within regions — much of it between neighboring countries.
  • Some 80% of global stock-market investment, for example, is in companies that are headquartered in the investor's home country.
  • Exports represent about 25% of the global economy.
  • Less than 20% of Internet traffic crosses national borders.
  • Only 2% of students attend a university outside their home country.

The author also discusses the fact that one of the effects of globalization is actually more demand for localized products as emerging markets now have money and confidence to call their own shots and demand for customized products and solutions.

My father was the son of a shoemaker from Italy and grew up in a small town in Brazil and he used to tell a joke that came to my mind as read this column. It's the story of two shoe salesmen who were sent to Africa to see if there was a market for their product. The first salesman reported back, “This is a terrible business opportunity, no one wears shoes here.” The second salesman reported back, “This is a fantastic business opportunity, no one wears shoes here.”

Whether the world is getting smaller or not doesn't really matter. The reality is that as countries become wealthier, populations start to demand products to meet their needs, and they want these products in their own language. So for the language services industry, I would say that the world is a fantastic business opportunity, no one speaks all languages here!

Tuesday, June 21, 2011

Three Takeaways from Localization World Barcelona

The European edition of Localization World ended last week in Barcelona with a record-breaking attendance of 550 participants from the supply and demand side of the language services industry. The program committee put together and excellent roster of speakers with extremely valuable content.

I was able to attend several sessions and I took note of three comments that I think are relevant for all the players in the language field:
  • Oleksandr Pysaryuk, from Research In Motion, indicated that LSPs might re-think traditional offerings and provide services around internationalization, user experience research, usability research, usability testing, acceptance testing, and local UI design. This is a clear message to LSPs who want to go beyond translation and talk about value-added services with their clients.
  • Derick Fajardo, from Nuance, in the panel that we shared about Online Bidding, mentioned a quote that he hopes will put him on the Wall Street Journal someday: "Cost rules, quality is assumed, but in the end, schedule wins." This statement confirmed a comment by Tim Young from Cisco in the morning keynote panel. When I asked him which of the several metrics that he tracked for his internal clients was the most important for them, he answered forthright: "On time delivery."
  • Danica Brinton (photo by
    Agnieszka Gonczarek)
  • Danica Brinton (photo), from Zynga presented some fascinating data about the impact that localization has in the adoption of games for this fast-growing company. But the interesting part for me was some practical information about the relative value of certain markets. Norway, with a population of less than 5 million, generates more revenue for Zynga than Indonesia, the country with 230 million inhabitants and the biggest number of Facebook users in the world. It is clear that other factors than number of internet users drive localization decisions.