Patent Translation Costs Vary Across Industries

welocalize August 21, 2018

Patent translation can be expensive. It requires a trained linguistic professional with a high level of specialized technical competency and working familiarity with the complex and nuanced language of patents. The daily output of a typical translator is roughly 2,000 words, which is equivalent to approximately eight pages. The average English-language PCT application is almost 9,400 words, or almost a week’s work before accounting for proofreading, reconciliation, desktop publishing and other quality assurance procedures.

Translation costs are a fact of life for all patent filing organizations. However, some industries spend more than others. Park IP prepared an analysis of over 100,000 recent English-language PCT applications, and the data suggests that patent application word counts differ significantly across technical fields.

The graph below shows a rough approximation of the cost to translate the middle 50% of applications, by word count, in each of the broad technology classifications used by WIPO. The costs are estimated using a static baseline of $0.25 per word. While that rate is on the high side for language service providers (LSPs), it is meant to account for the large share of patent translations provided by higher-cost international patent law firms (more on this below).

Translation Cost by Technology Classification

Based on Middle 50% of Application Word Counts by Class, Assuming $0.25 per Word

Looking deeper into the data, we see a much more pronounced effect across the 35 technology sub-classes. Note the wide disparity between the 25th and 75th percentile cost for chemistry applications. This category contains both “materials, metallurgy” applications, which average about 6,350 words, and “biotechnology” applications, which average over 18,400. Biotechnology applications, in fact, contain about double the number of words on average as all applications in the sample. Pharmaceutical applications aren’t far behind.

In addition to the size of the application, translation costs are driven by the number of countries in which the application is filed. Again, pharma and biotech applications are the most expensive. Based on data from tens of thousands of applications translated by Park IP, these applications are translated into roughly twice as many languages as others.

Pricing is Variable

The data above shows the range of translation costs faced by organizations filing patents in different technical fields, approximated by applying a baseline rate to the word counts. This is a useful way of visualizing the relative expense of translating an application faced by organizations doing business in different industries, but this analysis compares only the relative quantities of translated words purchased. The dollar values are roughly approximated to convey the numbers in an intuitive way. They assume that every word of translation has the same cost.

In practice, there is considerable variance in the unit prices paid by patent filers. As a result, the actual translation expenditure of individual organizations is likely to differ considerably from the above for any given application in any given country.

In part, the unit cost of patent translation varies from language to language for straightforward economic reasons: the majority of properly qualified, native-speaking translators are residents of the country for which they translate. English into Japanese translators are most prevalent in Japan, for example. As a result, the cost of translation generally tends to correlate with the per-capita income of the target country. Translation into languages like Japanese, Swedish, Dutch and Norwegian are generally expensive. Spanish, Chinese and Indonesian tends to be cheaper.

Translation rates also vary significantly within individual languages, even when accounting for the type of translation and the technical complexity of the content. There are many providers and not a lot of transparency. Also, because a large proportion of patent filing organizations haven’t focused their attention on patent translation, there is a large disparity in the rates they pay.

Prices certainly vary across translation companies; however, among dedicated LSPs the market is more competitive and the price discrepancies less pronounced. For patent translations, the biggest driver of pricing disparities faced by different organizations is the still widespread practice of relying on foreign patent firms to translate their applications. This practice is very likely to increase translation costs. For example, it isn’t especially unusual for agents in Japan to charge $0.50 or more per word for translation—more than double the higher-end baseline used in our estimates above.

The fees charged by patent firms are often high for any number of reasons. In many cases the work is simply sub-contracted to LSPs and marked up; since translation is not a law firm’s core competency, processes might be inefficient, resources ineffectively allocated and/or technology underutilized; or it could simply be that longtime clients have been paying the same rates for years without asking questions, despite the fact that market rates have changed as the industry evolved.

At the same time, it is also true that you often “get what you pay for”. While agent fees are often high for reasons related to inefficiency, excessive markups or under-scrutinized legacy pricing, among dedicated translation providers, disparities in price often reflect the work product one can expect to receive. Every industry has aggressively low-cost players that are often ill-equipped to deliver the most demanding services, and the importance of patent protection is too high to base translation purchasing decisions entirely on price.

What is needed is a partner capable of delivering balance: scalable and efficient processes, smart resource allocation, and effective utilization of technology combined with a sophisticated understanding of the patent industry and a commitment to safeguarding the value represented by the IP assets being translated. Applicants should seek to establish a long-term relationship with a dedicated legal languages service provider capable of achieving that balance of quality and competitive cost—one that gives the applicant confidence that their critical assets are in knowledgeable, capable hands.