Alan Shatter (Dublin South, Fine Gael) | Oireachtas source

I could do that in a sentence, but I suppose I would get into trouble for doing so. I thank the committee for its willingness to deal with this matter today. It is important that Ireland is seen to be in a position to play a full part in the negotiations which have begun on both of these instruments. A positive response to the motions which have been tabled will facilitate that objective. Both proposals were presented by the Commission in July of this year. In effect, they amend proposals into which we have already opted. Their legal basis is to be found in Title V of Part Three of the Treaty on the Functioning of the European Union. In consequence, the protocol we share with the UK, whereby we have three months to exercise our option to take part in the adoption and application of relevant measures, applies. The exercise of that option is, of course, subject to the prior approval of both Houses of the Oireachtas.

We have been informed that the three-month period in respect of the proposal relating to Regulation 1215/2012, commonly referred to as the Brussels I Regulation, will expire on 18 December next. The expiry date for the other proposal has yet to be determined, but it is likely to be early in the new year. In case there is any confusion on this point, I should explain that the three-month period runs from the date on which the last official language version of a proposal was circulated to the Council. Therefore, it is not always the case that the period expires exactly three months after the date of the Commission proposal as first published. There are two motions before the committee for consideration. In the interests of efficiency, I would like to deal with both of them in this presentation. These proposals are the most recent in a long line of proposals to which the protocol applies and which have come before the Houses of the Oireachtas in recent years. Neither is especially controversial. I hope the committee will be willing to give them its support.

I will turn firstly to the proposal which has as its objective the amendment of the Brussels I Regulation. That instrument has been part of our legal order in one guise or another since the 1980s. It is widely regarded as a seminal instrument in the civil justice area. It provides a degree of certainty in relation to which court in which member state will take jurisdiction in an international case. It also provides a mechanism enabling judgments given in one member state to be recognised and enforced in each of the other member states. The most recent revision of the Brussels I Regulation took place in 2011. Those revisions are due to apply from January 2015. A key feature of the new instrument is that a declaration of enforceability will no longer be needed before a judgment coming from one member state is enforceable in another. This represents a simplification of the scheme which currently applies. The need for an amendment to Brussels I arises because certain adjustments are needed to accommodate an agreement which was reached in December 2012 on what is generally referred to as the "patents package".

In Ireland, responsibility for patents policy lies with the Department of Jobs, Enterprise and Innovation, while responsibility for the Brussels l regime lies with the Department of Justice and Equality. There are two key elements in the patents package, an EU regulation creating a unitary patent and an international agreement setting up a unified patent court, the UPC agreement. The latter was signed during the Irish Presidency in February of this year by 25 member states, including Ireland.

In order to understand the background to the new Brussels I proposal, it is necessary to say a little about recent developments at EU level in regard to patent matters. The coming into being of the unitary patent, which is a single patent valid throughout all the member states which have signed up to the relevant EU regulation, will be of immense significance for European inventors. In essence, it means that inventors will be able to file a single application with the European Patent Office, thereby securing uniform protection across participating member states without the need for further validation and subject only to a single renewal fee. This contrasts with the situation which pertains currently whereby patents granted by the European Patent Office, referred to as European patents, must also be validated by national patent offices and are subject to renewal fees which must be paid to each office where the European patent has been validated. The effect of the proposed changes is that inventors should find it easier and cheaper to protect their patents in more countries.

Another feature of the current patents regime is that litigation to protect a European patent must be taken separately in each national court where issues of infringement and validity arise. This results in a number of difficulties linked in with high legal costs, diverging decisions and overall lack of legal certainty. In order to address these difficulties, the UPC agreement will create a specialised patent court with exclusive jurisdiction for litigation relating both to unitary patents and to European patents, the latter after a transitional period of seven years. In essence, it will provide a one-stop-shop for patent litigation and its decisions will be binding on all participating member states. European Commission estimates suggest that the UPC could save businesses using the patent system in Europe sums of the order of €150 to €290 million annually.

The UPC will comprise a court of first instance, a court of appeal and a registry. The court of first instance will be composed of a central division and of several local and regional divisions in the member states which are contracting parties to the agreement. An examination is currently ongoing concerning the potential options for Ireland’s participation in the UPC. In any event, ratification of the UPC agreement by Ireland will necessitate the holding of a referendum, the timing of which will be predicated on work progressing at European level during 2014 to operationalise the UPC. I am sure the people will great with resounding applause the necessity for yet another referendum on an issue so easily understood as this with such widespread public appeal.

Turning to the proposal before the Committee, it should be noted that the UPC agreement explicitly provides that it cannot enter into force prior to amendments being made to the Brussels I regulation, which are intended to clarify the relationship between it and the latter. A key principle of the Brussels I regulation is that defendants have the right to be sued in the courts of the member state in which they are domiciled. There are some exceptions to this. For example, in tort cases, a defendant may also be sued in the courts for the place where the harmful event occurred or may occur. In the context of patent cases, this would cover infringement actions. However, with the creation of the UPC, it is envisaged that defendants could find themselves being sued in a member state other than that which would normally be designated by the current Brussels I regime. In order to address this difficulty, it is therefore being proposed that the UPC be considered as a court for the purposes of the regulation. In this way, it will be ensured that the international jurisdiction of the UPC will be set out clearly within the Brussels I regulation itself, thereby providing an essential element of legal certainty for future defendants.

It is also necessary to clarify that the UPC will have jurisdiction any time when a national court of one of the contracting member states would have jurisdiction based on the rules of the Brussels I regulation. In addition, the proposal seeks to extend the regulation’s jurisdiction to defendants domiciled in third states for matters which come within the competence of the UPC. It applies the lis pendensrule of the regulation to cases which are pending before the UPC on the one hand and the courts of non-contracting member states on the other. In essence, what those rules specify is that where proceedings involving the same cause of action and between the parties are brought in the courts of different member states, any court other than the court first seised shall stay the proceedings until such time as the jurisdiction of the court first seised is established. Finally, the proposal also specifies how the rules on recognition and enforcement of Brussels I should apply in relations between those member states which are contracting parties to the UPC agreement and those which are not.

There is a second aspect to the proposed regulation to which I will refer briefly. A key feature of the UPC is that it will be a court which is common to a number of member states. The Benelux Court of Justice is also such a court. It involves the member states of Belgium, Luxembourg and the Netherlands and was established under a treaty which dates 1965. At present, that court’s task consists mainly of giving preliminary rulings in certain cases involving rights relating to trademarks, models and designs. By virtue of a 2012 protocol, it is envisaged that the jurisdiction of the court will be expanded so that it will be competent to deal with appeal cases in the intellectual property area which were hitherto dealt with by the territorially competent national courts in the three countries in question. The provisions regulating the relationship between the UPC agreement and the Brussels I regulation are also relevant in the case of the Benelux court and they will be applied to that court by virtue of this proposal.

The technical negotiations on this proposal commenced in early September and the first reading has yet to conclude. By and large, it would be fair to say that member states do not have any problems of substance in regard to what the Commission is proposing and there is a general appreciation of the need to ensure that the proposal can be adopted within the timeframe necessary to ensure that the UPC can be up and running sometime during the course of 2015.

I will now turn to the other proposal, which is somewhat more obscure in terms of its overall objective. As it says in the title, it is a proposal which adapts to Article 290 of the Treaty on the Functioning of the European Union a number of legal acts in the area of justice providing for the use of the regulatory procedure with scrutiny. The instruments in question are five in number and concern the taking of evidence in civil and commercial matters, the creation of a European enforcement order for uncontested claims, the creation of a European order for payment procedure, the establishment of a European small claims procedure and the service of documents in civil or commercial matters. Ireland has opted into all of these instruments.

This particular proposal has been presented in parallel with another proposal which covers over 160 legislative acts. A separate proposal was required in the justice area because the legal basis of the proposals which it affects means that they do not bind all member states equally. In essence, this refers to the fact that the participation of Ireland, the United Kingdom and Denmark in these instruments, and in the proposal which is before the committee, is governed by the separate protocols which apply in this area.

In broad terms, this proposal is concerned with the mechanism for making minor modifications of a technical nature to certain annexes which are attached to each of the justice instruments referenced. Those annexes contain forms and certificates of various kinds which are important in terms of the practical functionality of the instruments. From time to time, it may be necessary to amend these forms to correct errors that may not have been noticed when they were adopted, to provide for the accession of new member states or to add or delete certain elements.

In order to bring about the necessary changes, which are directed solely towards amending non-essential elements of the basic instruments in question, a procedure known as the regulatory procedure with scrutiny currently applies. This involves the Commission coming forward with draft measures which are considered by a committee chaired by the Commission and consisting of representatives from all of the member states. The committee is empowered to deliver an opinion on the proposed measures to be taken and if that opinion is supportive of the measures, it is submitted for scrutiny by the European Parliament and by Council. Both of those bodies have the right to oppose the measures and if not opposed within a specific timescale, they are adopted by the Commission. If the opinion of the committee is not supportive of the proposed measures, a different procedure applies in regard to the engagement of Council and the European Parliament in the process.

The Treaty on the Functioning of the European Union has introduced a new system which modifies the framework for powers to be conferred on the Commission by the Council and by the European Parliament. This framework distinguishes between delegated Acts on the one hand and implementing Acts on the other. The former concerns powers delegated to the Commission to adopt non-legislative Acts of general application to supplement or amend certain non-essential elements of a legislative Act. The latter concerns powers conferred on the Commission to adopt uniform conditions for implementing legally binding Union Acts. Article 290 of the treaty relates to delegated Acts while Article 291 deals with implementing Acts. The idea behind this kind of delegation is the promotion of more efficient decision making, because it would clearly be inappropriate if each time a small change had to be made to an existing instrument, the full legislative process at EU level should apply. At the same time, it is also necessary to ensure that the prerogatives of Council and of the European Parliament are fully maintained with regard to that process.

In presenting this proposal, the Commission has taken the view that the delegated Acts approach is the one to follow for each of the instruments listed. The current proposal envisages that this power would be conferred on the Commission for an indeterminate period of time, but that it could be revoked at any time by the European Parliament or by the Council. Provision is made for delegated acts, when adopted by the Commission, to be notified simultaneously to both institutions. It is also provided that the adopted delegated Act will only enter into force if no objection has been raised by either of those institutions.

Negotiations have just begun on this proposal and it would be fair to say that member states are not completely enthused by it. Differing views have been expressed as to whether the delegated Acts approach is desirable in respect of all of the instruments and it has been suggested that the implementing Acts approach would be preferable as this involves some form of committee oversight by the member states. It has also been suggested that there is no need to modify the instruments at this time as most are due for review in the near future and a decision could then be taken on a case-by-case basis as to which model should best be followed. From this it can be seen that the debate is very open on this proposal and this underlines the importance of us opting in early to the discussion.

I have said in the past to this committee in respect of other proposals, and I will emphasise it again today, that opting into either of the proposals at this time does not mean that we necessarily agree with every aspect of them. The opt-in process merely ensures that we can be active participants in the negotiation process and this carries with it the undisputed right to make proposals to alter the texts should that seem desirable, and to participate in any votes that may arise.

Ireland has in the past taken a very positive approach to participation in the various civil law instruments which have been presented and our approach on this occasion is very much in keeping with past practice. It is important that we honour the commitment given in successive treaties that we will take part in relevant measures in the justice area to the maximum extent possible. Given that we have no fundamental difficulties with either of the proposals, we do not want to create a perception that such difficulties do in fact exist in so far as Ireland is concerned. From previous consideration of these issues, committee members will know that it is the case that, under the protocol, we may accept a proposal any time after it has been adopted. However, it has always been our considered view that in the absence of any significant policy issues, early opt-in to the discussions on particular proposals will maximise our ability to influence the shape of the final outcome.

Finally, I thank the committee for making the time available to deal with these matters today. I look forward to members' comments and I will be happy to address any questions which they may have. I hope, Chairman, that committee members will forgive me if I start croaking in a few minutes. I have had a bad throat for the last two days and I think my voice is about to give out. That may be a good thing.