Neale Richmond (Dublin Rathdown, Fine Gael) | Oireachtas source

Tairgim: “Go léifear an Bille don Dara hUair anois.”

I move: “That the Bill be now read a Second Time.”

I welcome the opportunity to introduce the Forty-first Amendment to the Constitution (Agreement on a Unified Patent Court) Bill 2024 to the House. In line with Article 46 of the Constitution, the Bill sets out a proposal for an amendment of the Constitution and if passed by both Houses of the Oireachtas, the proposal will be submitted by referendum to the decision of the people.

Before I go through the Bill, I will first give some background and context to the legislation. The concept of the patents package has long been recognised as being of particular importance to the SME sector in the EU, as the classical European patents under the European Patent Convention are expensive to obtain and maintain. A key difficulty cited by patent owners of classical European patents is the high cost of protecting the patent against infringements and other legal challenges.

Due to the high costs involved in the national validation and maintenance of European patents, many patent owners currently only patent their inventions in a handful of countries. This makes inventions less valuable as the lack of protection in other countries makes copying them easier.

The agreement on a unified patent court, UPC, was signed on 19 February 2013 during the Irish Presidency by the then Minister for enterprise, Deputy Richard Bruton, at a ceremony in Brussels. It provides for the establishment of a specialist court to decide private party litigation with direct effect in participating EU member states.

This agreement is part of the wider unitary patent system. The unitary patent is a legal title that provides uniform protection across all participating countries on a one-stop-shop basis, providing huge cost advantages and reducing administrative burdens. It enables a single approach to patent registration and litigation across up to 24 EU member states with a combined population of approximately 400 million. The significant reduction in patent registration costs and annual renewal fees should encourage patent owners to protect their patents in more countries and reduce the risk of patents being infringed.

In July 2014, the then Government approved Ireland’s proposed participation in the unified patent court under an international agreement, and the setting up of a local division of the court in Ireland, subject to the passage of a constitutional referendum. The new system suffered various delays, including two internal constitutional challenges in Germany regarding the voting system in the Bundestag and the UK withdrawing its ratification due to Brexit. We also had the pandemic so a referendum was not feasible. One essential requirement of the agreement was that there must be at least 13 ratifications, which had to include Germany, France and Italy. Germany only filed its ratification in early 2023, enabling the UPC’s entry into force on 1 June 2023. Now that the system is operational and the UPC administrative committee announced an appropriate remedy to the Brexit issue in June 2023, with Milan replacing London to host a central division of the court, it is timely for Ireland to proceed with a referendum.

This Bill is short and I will now outline the provisions. Section 1 provides that the text set out in both the Irish and English languages in the schedule will be inserted as a new subsection 11 in section 4 of Article 29. The proposed new subsection will permit the State to ratify the agreement on a unified patent court which Ireland signed up to on 19 February 2013.

Section 2 is a standard form provision and provides that the Bill may be cited as the Forty-first Amendment of the Constitution (Agreement on a Unified Patent Court) Act 2024. If the referendum is successful, Ireland will become the 18th participating member and so the unitary patent will also have protection in Ireland. A local division of the unified patent court will be established in Ireland if we have a successful result, and this will offer users an accessible, cost-effective and more efficient option for broad patent protection and dispute resolution across Europe. If Ireland does not ratify the agreement, a company or researcher will have to register a unitary patent to protect their invention in the 17 participating countries but then also pay separately to register it in Ireland, meaning extra costs for Ireland-based patent owners. They would also have to travel to a participating country in Europe to enforce their unitary patent legal rights and incur various costs.

I will now go through some of the reasons Ireland’s ratification of the unified patent court is important. First is for the competitiveness of our small businesses, second is for our overall national competitiveness, and third is how it will enhance the science and research and development agenda. The overall reform is arguably much more important to SMEs than it is to multinationals. Larger companies can more generally afford the expense of patent protections and litigation in different jurisdictions. SMEs have far fewer financial resources. Having a specialised local unified patent court in Ireland will mean that the patent owner can enforce their rights on home ground. Small businesses and researchers would be much more keenly affected by costs if they have to travel for patent cases to other member states and engage legal professionals in other jurisdictions.

We want to ensure we put in place measures which will continue to support business growth and innovation while reducing administrative and financial burdens. Currently, the patent renewal system is quite fragmented, with different levels of annual renewal fees, individual national legal requirements and payment transactions in different currencies. The cost savings under the new unitary patent system are significant. It will cost less than €4,700 to maintain a unitary patent for an average of ten years, down from a current €30,000 today, if this agreement is validated in all 24 member states.

Lowering the costs for business is a strong underlying principle for establishing the new unitary patent. This is particularly relevant to the small business sector. If we want to help small businesses grow and scale, we need to ensure we build and maintain a level playing field for Irish businesses competing with businesses elsewhere in Europe. A streamlined, easier and cheaper Europe-wide patent protection will help Irish businesses to export to a greater number of countries across Europe, which is a key focus of the Government’s export strategy.

Enterprise Ireland-backed companies saw huge export growth to the eurozone in 2022, with the eurozone now representing 25% of all exports by Enterprise Ireland-backed companies. Exports to the eurozone increased by 28%, reaching €7.9 billion. There is huge opportunity for Irish companies to expand trade in UPC participating countries once the product has patent protection. A unitary patent covering most of the Single Market would be of immense value to an innovative SME or start-up with scalable potential.

It is important to emphasise that the unified patent court does not replace existing patent protection schemes but provides another option to our intellectual property creators. Companies can choose which patent strategy is suitable for them. Unitary patents will not replace the existing national and European patents but can be combined with these options. Many companies may, therefore, adopt their own bespoke patent strategies combining the old system and the new unitary system for different products and inventions.

Participating in the UPC is also strategically important for our national competitiveness as we are increasingly trying to attract and develop R&D activities here in Ireland. We all know that foreign-owned firms have a strong impact on the Irish economy by contributing substantially to Ireland’s exports, jobs, expenditure in the Irish economy and Exchequer funds. Our participation will enhance Ireland’s reputation as a high-tech economy with strong IP protections. This will boost our attractiveness to foreign multinational companies already established here and those that are making decisions on where to invest.

Seventeen countries have already ratified, including Austria, Belgium, Denmark, Finland, Netherlands and Sweden. These countries are our direct competitors when it comes to attracting foreign companies. Competition for American investment in Europe is intense. We must keep upping our game in terms of our value proposition. We want to ensure that Ireland remains well positioned to sustain our success in attracting FDI. Intellectual property protections are one of the factors that investors cite when making investment decisions. Our participation in the unified patent court represents for Ireland an opportunity to enhance the credibility of our messages to inward investors, namely, that Ireland is an attractive location for high-tech and research, development and innovation activities; that the Government recognises the value of intellectual property to enterprise; that it is committed to providing a supportive environment for the development of IP and for protecting and enforcing IP; and that Ireland is a serious competitor for IP-based foreign investment. I believe that if Ireland does not ratify the agreement, there would be a real risk of reputational and operational damage to Ireland’s innovation economy, as non-participation may be perceived as a legislative and structural weakness.

Perhaps less obvious but equally important to take into consideration is the work of our researchers in the higher education sector. The European Patent Office patent index 2022 reports that five of the top ten Irish applicants for European patents were from Irish universities. The main fields for patent applications from Ireland were in medtech, computer tech, pharma, electrical machinery, apparatus, energy and biotech. The number of applications is increasing, and Ireland is now ranked in eighth place in European patent applications per million inhabitants.

Establishing a local unified patent court would demonstrate that Ireland is an IP-friendly location for undertaking research and development in Ireland’s higher education and research system. It will support our science, technology and innovation ambitions. We want to provide our SMEs, entrepreneurs, inventors and researchers with the same patent legal protections that are available in other participating member states which are establishing their own talent in their own local court.

I spent this morning in University College Dublin in my constituency. It is an institution that will be familiar to many Deputies and their constituents. It was to attend an event to mark Ireland and Scotland’s collaboration in space technology. Many people smirk when they hear Ireland has a space programme but it is a programme in which 104 Irish companies are engaging with the European Space Agency. It is a key innovator in NovaUCD as well as the Tyndall institute in University College Cork. It is starting to employ hundreds, if not thousands, of people already. The technologies the programme is working on and harnessing include GPS and satellite technologies. These are genuinely life-changing technologies. One accessibility company allows a person with additional needs, say, a wheelchair user, to download an app and, using space technology, to access information indicating the exact location of parking places or accessible entrances, for example, into a football stadium, such as the Bernabéu where Real Madrid, which is a client of this company, plays. It could be Sandyford business district in my constituency, which is visited daily by hundreds of people who might be unaware that there are more than 200 wheelchair parking spaces available. They will know, however, if they download this app.

The programme is also having a huge impact on our agriculture sector in relation to transport mobility, crop protection and soil pH levels. It also has an impact on technology in sport, including on head injuries. These types of inventions using space technology are coming out of Irish institutions and are being pioneered by Irish students, postgraduates and academics. They can be patented in Ireland but we are giving them the option now to protect that patent in 17 other jurisdictions, thereby saving them money and giving them the opportunity to use their intellectual property to better society and provide a living and employment to hundreds of people.

It is a real practical example of where this is working in one sector I had not already mentioned. One issue that will always come up in any referendum, in particular where it concerns Europe, is that of sovereignty. The Government’s position is that a local division of the court in Ireland ensures we can have the administration of justice related to international patent law carried out on home ground. If we do not ratify the agreement, then Ireland will be on the outside looking in, and Irish companies and multinationals based here will need to travel to other participating member states to have their UPC patent cases heard. Those costs can be significant. It will also damage our reputation. To be clear, this new court will not diminish our sovereignty. However, it will improve the Irish intellectual property regime and our legal infrastructure for patent protection.

I know this referendum is technical in nature. The Leas-Cheann Comhairle and other have referred to the heavy technicalities of this. However, it will be important for Members of the Oireachtas interested in industry, research and development stakeholders and relevant legal professionals to explain that it will benefit Ireland’s reputation and improve costs for business, and to make the case for a "Yes" vote. I have said that the new unitary patent system is the single most important reform in the history of the European patent system since its creation in 1973. We want to make sure Ireland can take full advantage of what this new system has to offer. It is, therefore, our responsibility to ensure the electorate understands the positive impact our participation in the Unified Patent Court could have on Ireland’s reputation, on investment, innovation, research, entrepreneurship and job creation in all regions across the country. The unitary patent and the Unified Patent Court is already active in 17 other participating member states, and it is in everyone’s interest for Ireland to become the 18th participant. The way we convince everyone to back this referendum, which will hopefully be held on the same day as the local and European elections is to be clear how this will benefit small and medium enterprises across the country, and how it will benefit society more widely. Everyone in this House has campaigned in a referendum at some stage, and many of us have campaigned in European referendums over the years. I cut my teeth in the first Lisbon referendum.

One thing we always have to be aware of are the clear misinformation and disinformation campaigns. The last European based referendum in this State was the fiscal stability treaty. Research following that campaign, which saw the passing of the referendum, showed the two biggest issues that came up with voters considering that referendum were abortion and conscription on demand into a European army. That was the fiscal stability, fiscal compact treaty, which was solely based on financial matters and the outworkings of the financial crash. Neither of those issues had anything remotely to do with the referendum. However, because it was a EU referendum, actors were able to add that disinformation and misinformation into the debate. I have no doubt that will unfortunately happen again in this campaign. It is, therefore, the responsibility of all of us in this House, whether or not we support this referendum, to be clear about exactly what we are asking the people to vote for. I am clear on what I am asking people for, and that I would like them to vote "Yes".

I thank the Joint Committee on Enterprise, Trade and Employment, in particular its Chair, Deputy Quinlivan, and members of Fine Gael, Fianna Fáil, the Green Party, Sinn Féin, the Labour Party, People Before Profit Solidarity and the range of Independents who considered the matter, and for their report in December 2022. I agree completely with their supportive comments and calls to expedite the referendum on this important issue. This Bill is a priority for our small business exporters, our research system and all patent owners, and I urge cross-party support. I commend this Bill to the House.

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