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

I welcome the opportunity to introduce the Forty-first Amendment of 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 to the Constitution and, if passed by both Houses of the Oireachtas, a proposal will be submitted by referendum to the decision of the people.

This proposal has received widespread support and we are able to consider it here today thanks to the positive cross-party engagement received during the presentation to the Dáil and the Members’ assistance in progressing the Bill thus far. I look forward to hearing the views of Members of this House on the matter. Before I go through the Bill, I will first give some background and context to it. The primary purpose of patents is to encourage innovation and to protect the rights of inventors. By granting patents, the State gives inventors exclusive rights to their inventions for a limited period. During this time, inventors have the legal authority to control who can use, make, sell or distribute their inventions. Patents therefore play a crucial role in fostering innovation, advancing technology and promoting economic development by providing inventors with the incentive and protection they need to bring new ideas and inventions to market.

There are currently a range of patent options available to inventors in Ireland depending on the jurisdictions in which they want to protect their intellectual property. In summary, these are Ireland's national system, the national system of another country and the European Patent Convention. We also have the patent co-operation treaty. This referendum is about providing a further additional option to Irish inventors who wish to protect their intellectual property beyond Ireland. This option addresses a key difficulty cited by patent owners using the international systems I have just mentioned, namely the high cost of protecting the patent against infringements and other legal challenges. Many patent owners only patent their inventions in a handful of countries due to the high costs involved in registering in each country. This makes inventions less valuable as the lack of protection in other countries makes copying them easier.

The Agreement on a Unified Patent Court creates a new type of patent that is protected across the participating member states. Inventors will be able to receive a judgment from a local division of the Unified Patent Court, UPC, and this will protect their property in participating member states. Ireland has been involved in developing this new system right from the start. The Agreement on a Unified Patent Court was signed in Brussels on 19 February 2013, during the Irish Presidency of the Council of the European Union, by the then Minister for enterprise, Deputy Richard Bruton. It is therefore time for Ireland to join the new system now that significant hurdles that were beyond our control have been overcome. The first hurdle was that two internal constitutional challenges arose in Germany with regard to the voting system in the Bundestag. One essential requirement of the agreement was that there must be at least 13 ratifications and that these must include Germany, France and Italy. Germany only filed its ratification in early 2023, enabling the UPC's entry into force on 1 June 2023. The second hurdle was that the UK withdrew its ratification due to Brexit. It had originally been agreed that London would host a central division of the court. This gave rise to a problem, which was resolved when the UPC administrative committee announced an appropriate remedy to the Brexit issue in June 2023, with Milan replacing London.

I will now turn to the Bill, which is short. Section 1 provides that the text set out in both the Irish and English languages in the Schedule will be inserted as a new Article 29.4.11°. 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 providing 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. Subsequently, the Government will propose legislation establishing a local division of the UPC and providing for its functioning and administration. The court will be established in Ireland after enactment of this legislation, meaning that we can offer inventors a further option which will be accessible, cost-effective and more efficient for broad patent protection.

The unitary patent is a legal title that provides uniform protection across all participating countries on a one-stop-shop basis. It enables a single approach to patent registration and litigation across currently 17, and potentially up to 24, participating EU member states with a combined population of approximately 400 million people. 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. The local division of the court will be a specialist court that will decide private party litigation with direct effect in the participating member states.

If Ireland does not ratify the agreement, a unitary patent will not be valid in Ireland. If Irish inventors want unitary patents for their inventions, they will have to register a unitary patent abroad to protect their invention in the 17 participating countries. They would also to pay separately to register it in Ireland, along with annual fees, meaning extra costs for Irish inventors. Having done all this, if they wanted to take a case to protect their unitary patent legal rights, they would also have to travel abroad to a participating country in and incur various legal and travel costs and encounter language challenges and other inconveniences.

Why is this referendum important? I will go through some of the reasons. First, it is important for the competitiveness of our small businesses. Second, it is important for our overall national competitiveness. Third, it will enhance the science and research and development agenda. With regard to its impact on small businesses, the overall reform is arguably much more important to SMEs than it is to larger businesses, including multinationals. Larger businesses can more generally afford the expense of patent protections and litigation in different jurisdictions. SMEs have far fewer financial resources. Having a specialised local UPC in Ireland will mean that patent owners can enforce their rights on home ground. Small businesses and researchers would be much more keenly affected by costs if they had to travel to other member states for patent cases and engage legal professionals in other jurisdictions.

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

If we want to help small businesses grow and scale, we need to build and maintain a level playing field for our Irish businesses competing with businesses elsewhere in Europe. Other countries’ small businesses will have access to the unitary patent system and so should ours. Enterprise Ireland-backed companies saw great 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 a value of over €7.9 billion. 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, particularly post Brexit. A unitary patent covering most of the Single Market would be of immense value to an innovative SME or start-up with scalable potential.

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

As I said, 17 countries have already ratified the treaty. These include Austria, Belgium, Denmark, Finland, Netherlands and Sweden. These countries are our direct competitors when it comes to attracting foreign companies. Competition for foreign investment in Europe is intense. We must keep upping our game as regards our value proposition. We want to ensure that Ireland remains well positioned to sustain our success in attracting foreign direct investment. Intellectual property protections are one of the factors that investors cite when making investment decisions. Our participation in the UPC represents an opportunity for Ireland to enhance the credibility of our messages to inward investors. If Ireland does not ratify the agreement, there will be a real risk of reputational and operational damage to Ireland’s innovation economy, particularly as non-participation may be perceived as a legal and structural weakness.

Perhaps less obvious but equally important 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 medical technology, computer technology, pharmaceuticals, electrical machinery, apparatus and energy and biotechnology. The number of applications is increasing. Ireland is now ranked eighth in the number of European patent applications per million of inhabitants. Establishing a local UPC would demonstrate that Ireland is an intellectual property-friendly location for undertaking research and development in its higher education and research system. It will also help to attract researchers and inventors to Ireland.

Often with referendums, people can have concerns regarding sovereignty. I have no doubt that there will be commentators trying to muddy the waters by claiming that a "Yes" vote will diminish Ireland’s sovereignty as we participate in this court. Let us state some facts about this. The UPC will not replace existing patent protection schemes, but, rather, it will provide another option for our inventors. Irish national patents will still be dealt with in Irish courts. Unitary patents are new and the UPC will have exclusive competence in respect of unitary patents only. In other words, we have never had jurisdiction over these patents and therefore are not losing or reducing Ireland's sovereignty. Indeed, the referendum will permit a local division of the court to be established in Ireland. Why then do we need a referendum? If an Irish inventor was unhappy with how his or her patent was being used without their permission in another participating member state, he or she could seek protection through the local division of the court in Ireland, whose judgement will have direct effect in that other member state. This is to the benefit of Irish inventors.

I will conclude here because I know there are a number of Senators to come in. I have a bit more to say. I might get to it when summing up, if that is okay. I stress that we need to join this court. It is important that we do so. I humbly seek the permission of the House to put this question to the people on 7 June. I genuinely look forward to hearing the opinions and feedback of Senators. We have already had good discussions at the joint committee and in the Dáil.