At last !! The French government has finally managed to get its act together and vote for ratification of the London Protocol - Welcome to the 21st century! With a whopping 280 votes in favour, and only 33 votes against, the French Senate has confirmed the trend set by the parliament a few weeks ago, and finally practiced what the government has been preaching about stimulating economic growth in France.
As a French patent attorney, I personally welcome this decision, which has been all too slow in the coming. Many of my French colleagues, including the professional body that represents us, the CNCPI, do not, and have always opposed moves to reduce costs for the hands that feed us, i.e. our clients, instead of focussing on what we are supposed to be doing, i.e. counselling. Those very same clients are the ones that would file European patent applications, and then could not afford to validate the granted European patent in the various designated states because of the cost of translations. What would be the advice that we gave them ? Well, limit your choices to those countries where you either have an actual business activity (commercial or production), or to those where infringement might be a possibility. This often meant a drastic reduction in the playing field, and many a client quite reasonably questioned me on the rationale of having filed an European application in the first place.
Aside from the immediate consequences of this vote, there will be a significant impact on the revenue streams of many French IP outfits that basically depended on translation activity for survival, and that either refused to look ahead and leave some eggs out of the basket, or just simply buried their heads in the sand (ostrich for dinner, any one ?). That behaviour in itself now turns out to have been a major strategic business error, which additionally was, in my opinion, totally foreseeable.
The fallout of this decision, however, does not stop at the IP boutiques : patent translation firms have flourished over the past 20 years in France, and these firms are all going to be hit by the ratification. Rather unsurprisingly, the representative bodies of these firms also attempted to put pressure on the government not to ratify the London Protocol.
So what is the likely outcome of the present decision, once it comes into effect ? As I see it, and I may be wrong (nobody is perfect, after all), a fairly sizable number of small IP firms in France will simply go bust, because they didn't have the foresight to address this issue before it became a reality. Others will undoubtedly be so weakened that they will be forced into buyouts or mergers with larger firms, probably on not so friendly terms, since the global value of the boutique will be diminished (and this, irrespective of the size of the firm). Even the mammoths of the French IP world will be hit, although they will probably have the resources and variety of work that will enable them to weather the storm and come out battered, but essentially unbroken. Nonetheless, layoffs are in all likelihood to be expected and we may see a good deal more job postings for administrative staff seeking work.
Another thing that will have to change will be the daily life of the junior or trainee attorneys, who used to spend a lot of their early days in law firms proofreading the translations before they were filed with the French PTO (INPI). My own personal recollection is that it was an extremely unrewarding and entirely unprofitable experience period in my life, especially once I learned the statistics relating to who actually read the damn things in the first place, i.e. virtually nobody. Some of my fellows might say, and even did, "All character building stuff", to which I would reply : "Characters could be better built by teaching trainees to "counsel" clients, rather than force feeding them with sales pitch." Unfortunately, our profession in particular, seems to feel that it has had for the past 20 years an unwritten duty to "sell" rather than "advise".
Of course, even the most basic of IP entrepreneurs understands that we are in it to make money (and I am no exception), otherwise we would all be working for the Citizen's Advice Bureau or some other such freebie quango (which we already do, by the way, to the extent provided by the law), but there is a distinct difference between making a client pay for a service to which real value, of use to the client, has been added, e.g. counselling with all of the experience and business acumen that goes with it, and the opposite end of the spectrum where one simply takes the client's money because it is easy to do so and facilitated or obligatory from the legislative perspective. Perhaps it has also got something to do with the fact that many French IP professionals have either very little or no strategic industrial experience, and so feel ill at ease offering advice that truly corresponds to a client's business strategy. I'm being naturally provocative here, but I do suspect that there is some degree of truth in what I write, and this is certainly true from my own personal experience of many of those whom I have had cause to meet along the way.
In response to the impending crisis, I sometimes hear IP firms saying : "We'll develop new "products" to sell to our clients and generate new income". My own response to that kind of thinking is that (a) it would appear to be rather late in the day to begin thinking about new products, (b) how precisely does one propose to sell these products to these clients, I mean, why buy this new "product", when the client was (dis)satisfied with what we were already doing, (c) other than counselling, exactly which new products can one come up with - it's not as if we are selling vacuum cleaners or bathroom detergents - and (d) even if all of the above were possible, the number of "products" created would have no market penetration in the timeframe required to offset the drop in income due to the London protocol.
So, how many French IP firms will go bust or be acquired during 2008 ? Well I really don't know, but would hazard a guess at say 25-30% of all French firms. A quarter to a third of the profession, now that's something to think about. As it stands, we currently do not even have enough young professionals working in French IP to cover the projected retirement of a third of the profession over the next 10 years, a situation which is yet again of our own making (and on which I shall no doubt rant in a separate entry). Whatever happens, there will necessarily be a radical change in the IP landscape in France in the coming year. We had it coming guys (and girls), and as usual, we've only got ourselves to blame.