Derek McDowell (Labour)

Exactly. He is generous with his money and more philanthropic than most. I am not criticising him personally but the interest of Governments and those who have a say in designing the way in which we do these things is not to make Mr. Gates incredibly rich. Our interest is in ensuring his company's products are produced and disseminated as widely and inexpensively as possible because they are essential for the functioning of any modern society.

I noted when researching this issue last night that the number of Irish applications for patents appears to have reduced in recent years. I am not sure why that is so although I appreciate the EPO deals with a number of pan-European patents, which may be an explanation. The latest figures available are for 2004 and perhaps the trend has reversed since then. However, it appears to run contrary to what the Government has been asserting recently about stimulating research and development.

I wish to make a number of points about the taxation framework which have not been mentioned thus far but which are important. In the Finance Act of 2004, stamp duty which was previously payable at 9% on the transfer of intellectual property, broadly defined, was abolished. The intention was to stimulate research and development in Ireland but I am not persuaded it has had that effect. Evidence suggests that the abolition of the stamp duty has been used and exploited by non-Irish based firms to transfer royalties and intellectual property in Ireland, with a view to reducing their tax liabilities in other jurisdictions. While I accept it is in our interest to encourage research and development in this country, we should not, even as a side effect of our actions, create a tax loophole or haven for companies which are not bringing an enormous amount of added value to this country. I would welcome the Minister's reflections on this matter. The exemption was introduced only a few years ago but I hope the Minister can assure us it is having the effect he intended, rather than the unintended effect of creating a tax haven for companies that do not add value here.

In 2004 the Minister also introduced a series of measures intended to stimulate research and development. A 20% tax cut is now available for additional work done in this country. It was asserted at that time that the Department would introduce regulations specifying what constituted additional research and development. I am not sure whether those regulations have been introduced or are sufficiently robust to ensure it is actually added value. It is important that it should be and that we are not simply allowing large companies to discount a certain amount of their tax liability if they are not doing anything which they would not be doing already. The intention of the tax reduction was to stimulate additional work. It is important we are vigilant in ensuring the purpose of that tax change is followed through on and we do obtain added value for the money.

The core of the Bill concerns compulsory licences. On balance, we have probably got it right and I appreciate that much of it repeats what is contained in the TRIPS Agreement. It is an enormously important element of the Bill. It is vital that we are in a position to provide compulsory licences and that people can obtain them in circumstances where patents are not being exploited. We cannot stand over a situation where companies sit on patents to ensure somebody else does not exploit them. The provision dates back to 1992, to the principal Act to which Senator Leyden referred earlier. I am interested in how it functions. I have read the Act but am not clear on, for example, the number of compulsory licences that are typically issued by the controller in any given year. Is the provision a threat or is it something that actively happens in practice?

With regard to the WTO, Senator Quinn's points about respecting intellectual property are correct. However, it would be naive not to be aware of the fact and accept that in many countries, such respect does not exist. While we may be conscious of our obligations, many countries — some of which produce products which are dumped here — simply do not respect patents, regardless of whether they have signed up to the WTO agreements. We must be robust in insisting that we respect intellectual property rights in order that others will do likewise.

Much of the Bill is technical in nature. I am somewhat bemused by the provisions on translation and do not see why such issues should take up our time these days. Surely, at a time when most commerce is done through English, German or French, patents in those languages should be acceptable throughout the European Union. I look forward to debating that issue further. In summary, this is a more nuanced issue than it first appears.