Clare Daly (Dublin North, Socialist Party)

I have no reason to oppose the legislation. The reduction in the translation costs relating to patents is welcome and eminently sensible. However, we must ask what is the role of patents in society, who benefits from them and whether the position in respect of them could be better regulated. In the first instance, the figures produced by the Library and Research Service in preparation for this debate tell an interesting story. The 2009 report of the Irish Patents Office which deals with Irish patents lists an average figure of 320 patents granted each year between 2007 and 2009, with roughly one third of those applying being granted a patent. Of the patents granted, 250 were granted to people within the State. In a European context, the European Patent Office granted 33,844 patents with an effect in Ireland, of which only 151 were granted to applicants from within the State. If the two figures are added together, some 400 patents were granted to people within the State, a very revealing figure. It indicates a very low level of innovation and the inability of Irish people to access the system. It also indicates how far we are from the much-lauded smart economy. This is not because Irish people are not intelligent and talented or do not have good ideas, rather it is indicative of a lack of research, development and devotion to science and technology. These issues must be addressed if the economy is to be developed.

How are we proposing to address these issues? We have to consider the key recommendation made in the 2010 report of the innovation task force which indicates we will develop Ireland as a location for global intellectual property management, licensing and intellectual property services. That sounds absolutely fantastic, but what does it really mean? It is merely a continuation of the same policies applied in the past which have allowed the likes of Google, Facebook, Microsoft and others to locate patents in Ireland, particularly in the Irish Financial Services Centre, to avoid taxation liabilities running into billions of euro. The reports of organisations such as A&L Goodbody, one of Ireland's leading law firms, crowing about the process reveals what is going on. That firm advises on ways to exploit Ireland's nice taxation regime relating to patents, specifically for individuals and companies interested in maximising the available benefits under the patent royalty exemption scheme. In particular, it advises parties to consider establishing a separate company to undertake warranty work for the qualifying patent and that this company, in so far as it is commercially viable, should grant licences to an unconnected third party user. If that was to be done, the patent royalties received by the company would be exempt from Irish corporation tax, while any dividends paid by the patent-holding company would be exempt from taxation.

Billions of euro are flowing untaxed through this country with the creation of very little associated employment. In effect, this is a glorified tax avoidance scheme. Given the enterprise statistics produced by the likes of Forfás last year, is it any surprise that the second biggest category of imports in Ireland, in terms of value, at €22.5 billion or 30% of total, was under the heading of royalties and licences? That income is largely untaxed and is of no benefit whatever to the economy. This is totally ludicrous and an upside-down economic policy in promoting innovation and invention in Irish society. We should step back and examine the issue of patents.

The patent process is very expensive for an individual or small company to pursue, even allowing for the welcome reductions provided for in the London Agreement. A small company may be engaged in important investigative or exploratory work in respect of a renewable energy or wave power project, for example, which is vital in terms of the future development of the economy. To lodge an application for a patent in that research area would cost €15,000 to €20,000 per year, which amount would have to be renewed every year. It is not viable for a small company or an individual to pay such costs to protect ideas or advances in research. This leads to a process whereby an individual or a company can struggle for a few years to try to keep things going, but ultimately such parties will be hijacked and taken over by multinational corporations. However, Irish society will be left carrying the can. As the head of the Ocean Energy Development Unit stated last year, we will be left making sandwiches for those developing energy resources along the western seaboard. Given the current state of the economy, that is absolutely reprehensible. The State must take the lead in promoting research, innovation and development. This work must be led by bodies such as the ESB and other semi-State companies.

This debate touches on the question of who benefits from patents and the role they play in society. It should be the case that where the State shares the cost of educating all its citizens and providing incentives for research and development, society should share the benefits. It is not good enough that the process applied in this country means that income derived from patents is exempt from income tax to the tune of €5 million for an individual or a corporation. Such income should be liable to taxation, with the State benefiting from it. The Minister of State and the Government must begin to consider the issues the right way around and put the common good at the centre of the debate. Scientific advances should benefit humankind which should be the overriding priority, rather than leading to the privatisation of individual rights.

The patents issue is getting out of hand on a global scale. At its simplest, the patent system provides a government guarantee for an inventor granting exclusive rights to use, sell or manufacture an invention for a set period. However, this has been taken to extremes, with a dangerous wave of privatisation in terms of biological diversity. Intellectual property rights are being sought in respect of plants, animals and individual parts of DNA. There are also the ludicrous technology agreements and fees which deprive farmers of their generations-old right to hold, replant and exchange seeds. It is a form of bio-piracy and a new form of colonialism, as freely available seeds and specimens were analysed by genetic engineering companies, patented and sold back at a high price to those who had worked with them for years.

Society and the common good must be factored into the debate, as there is no doubt patents are being used to protect massive profiteering, mainly by multinational corporations. This is denying ordinary people and the world's poorest populations access to drugs, medical treatment and technology which could raise their standard of living, which is reprehensible. The pharmaceutical industry in India is a good example in this regard, as Indian companies produce generic drugs far more cheaply than many of the multinational corporations because of its patents legislation which has been designed to prevent the patenting of new uses and forms of known medicines. As a result, the pharmaceuticals produced by Indian companies are mainly used by victims of AIDS and so on. However, the multinational corporations, under the auspices of the World Trade Organization and the General Agreement on Tariffs and Trade, are muscling in to try to force India to change its patents legislation. In so doing multinational companies such as the Swiss firm Novartis are able to use their anti-cancer drugs sold under brand names to the tune of $2,500 for one month's treatment to cut across much cheaper generic drugs costing $200 per month from Indian companies. It is not that the Indian companies are not profiting or that they are charitable; many of the top billionaires in India are involved in the pharmaceutical industry. Nevertheless, this is an indication that massive amounts of money can be made from patents and exclusivity. The way in which they are being implemented at present is protecting private gain and profit rather than benefitting society and humans. The key lesson from this is that the State deserves and is entitled to a share of innovation and development. We have invested in it. Scientific development should be for the development of all, not just the profits of a few.

See this speech in context