Seán Sherlock (Cork East, Labour)

I thank all of the Deputies who have contributed to the debate. Some have been pertinent to the legislation before us, others arguably not so. I will seek to address the points that were raised in regard to the legislation itself. As an aside, there is only one Deputy Finian McGrath and one could not patent him if one tried.

I will start with the points raised about the UK patent box regime and the royalty exemptions and other reliefs that were suggested by Deputy Eoghan Murphy and also the points raised by Deputy Donohoe. That is being considered at present under the budgetary process. I note the points, which were well made, and we should hear more about it anon. We are talking about innovation, utilising human capital and allowing for where someone who is creative and has an idea that becomes the subject of a patent to have as easy as possible a transition of that idea to commercialisation. The London agreement would facilitate that process through the translation arrangements. That is really what we are talking about in this context.

The proposed change in the legislation would result in a modest loss of revenue to the Patents Office in terms of fees for translations. In the context of this country becoming a party to the agreement, an applicant must lodge a translation in the office within six months of grant of the patent together with a fee of €35. In 2010 that came to €33,215. The level of renewal fees is likely to increase if we accede to the agreement and it is likely that owing to the lack of translation requirements, this country will be designated in more patent applications to the European Patents Office, EPO.

On Deputy Clare Daly's point on the protection system, the unitary patent protection system will address the excessive costs in Europe. That is without question.

The feasibility of the international content clearing centre, which was raised by Deputy Donohoe, is currently under examination by a group from my Department which includes Enterprise Ireland and IDA Ireland. There is a process under way in respect of that project.

Deputy Eoghan Murphy raised points on the physical manifestation of the patented invention. It could be argued that the direction patent applications are taking worldwide is that of an electronic on-line application, but I would like to hear more from Deputy Murphy on this one, perhaps at a later stage and even on Committee Stage. We can address this further if necessary in a more substantive sense. The question of tax relief on patent royalties is currently under review in advance of the next budget, and that should address Deputy Mitchell O'Connor's point on the UK regime.

There were many other points raised. Deputy O'Dea asked when the EU patent will come into effect and about the current position. The concept of the EU patent, previously Community patent, is to provide a patent system that will be affordable, especially for small and medium-sized enterprises, and will provide automatic patent coverage in all member states of the European Union. As Deputy O'Dea pointed out, as protracted negotiations over many years failed to reach agreement on the EU patent, the Commission has requested to examine the possibility of bringing a proposal under enhanced co-operation whereby unitary patent protection applying to these member states willing to participate will be introduced. So far, 25 out of the 27 member states of the EU have indicated a willingness to take part and the Commission envisages that the first unitary patent protection will issue in 2013. As is the case normally with any European initiative, I would not be held to that timeframe.

I thank the Members for their contribution to the debate. In my introductory speech, I set out the rationale for the proposed Patent (Amendment) Bill 2011 and outlined the financial burden on industry in providing the full translation of the European patent to ensure full protection of the patent across Europe. I also stated that these translations are rarely consulted and, as such, offer little or no advantage, either to the patent holder or users of the system. It is imperative, both from an Irish and European perspective, that business is not hampered by a system that is inefficient and costly. Access to a cost-effective and efficient patent system is key to stimulating innovation. Under the current regime, the high cost of translating granted patents acts as a deterrent to business and as a consequence, is a deterrent to innovation. Currently, more than 50% of all enterprises in Ireland continue to engage in considerable research and development activities in spite of the difficult economic environment. It is vital that their innovation is captured and exploited in the best way possible. A patent system in which users have limited access due to high translation costs does not serve this purpose and the cost savings from the London agreement should have a positive effect on research and development, allowing for resources saved on translations to be reallocated to further research and development and other business activities. That is the kernel of this legislation.

I hope Deputy Clare Daly, who spoke about taxation of corporates, gets the point of this legislation. It is about being able to facilitate those who are innovators, those who are Irish who want to get out into other markets and who have ideas. We facilitate that process by implementing the London agreement so that we can make that passage as easy as possible for young people, for researchers and for industry.

I hope this does not sound patronising. I suggest that every Member of this House, if they have an opportunity to do so, should engage with Science Foundation Ireland, Enterprise Ireland, IDA Ireland and all of our academic institutions to delve into, and inform themselves of, the interaction between research, intellectual property copyright and the innovation and commercialisation taking place. I have undergone such an education process. Every day one learns more about this field. Before Members come into the House and make sweeping statements about taxation of innovation, they should be well informed about the process. I say that respectfully and in a debating manner in the spirit in which we debate these issues in the House. It is not meant as a personal statement to any one person in particular. We should be careful about the language we use in implementing legislation. This is technical legislation. That is all it is. It is to the common good. There is some contention that it may not be, but I argue forcefully that it is to the common good ultimately and it will be beneficial to this country.

The more countries that sign up to the agreement, the greater the saving will be across Europe. In essence, by even one country joining up, the savings are significant. It has been estimated that since the entry into force of the London agreement in 2008, on average savings of 38% on translation costs have been achieved. The results speak for themselves. That is what we are trying to achieve here today.

On some other points raised, the Patents Office runs business seminars across the country aimed at SMEs, start-ups and entrepreneurs, and these seminars are entitled, "Building a Business on Your Ideas". That is a pertinent point. It speaks to the issue of innovation and how ordinary people can become involved in the process if they have ideas, and there is an excellent programme, through the Patents Office, that seeks to achieve that. The seminars include talks on all elements of intellectual property, IP, how to identify IP within a business and how to protect it. They also provide talks on State supports to industry and they are extremely useful.

On Deputy Clare Daly's points, the number of patent applications, originating in Ireland, to the European Patent Office was 510 in 2010, a slight increase from 498 in 2009. The latest figures for patent filings in 2010 ranked Ireland 14th of the 38 countries in the European patents organisation and we ranked 23rd in the Patent Cooperation Treaty international rankings which cover most countries worldwide.

However, it is important to make the point that the number of national patent applications is not an indicator of patent activity in Ireland. In Ireland, many of the multinational companies, which employ thousands and which undertake and fund major research and development here, patent their products on a global level. Patent applications submitted by large multinational organisations in the United States, for example, would not show Ireland as the source of the application or that the research and development has been carried out in Ireland. It is important to make that point to rebut some of what has been said by Deputy Clare Daly. There are Irish people working in multinational corporations here, or working within academic institutions that interface with those same corporations, who are producing excellent work, ground-breaking world-class research based on Irish intellectual property which will not necessarily be registered as Irish, but it is still Irish people producing the intellectual property and that is the most important point. It forms the basis, and underpins, thousands of jobs within this economy. It is important to send out a more positive message in terms of what this legislation is about.

See this speech in context