Wednesday, 18 January 2012
Patents (Amendment) Bill 2012: Second Stage
I am pleased to bring before the Seanad for its consideration the Patents (Amendment) Bill 2011, the main purpose of which is to make the necessary changes to the Patents Act 1992 to provide for the ratification by Ireland of the London Agreement. The London Agreement, to which Ireland is a signatory, is aimed at reducing the cost of the European patent process to applicants by reducing the requirement to file translations of the granted patents under the European Patent Convention.
Before considering the provisions of the Bill, I wish to set out the background to it. It is clear Ireland's international competitiveness increasingly depends on marketable high-value goods and services which have strong knowledge content. In spite of the challenging economic environment, approximately 50% of all enterprises in Ireland continue to engage in significant research and development activities. A recent report shows that enterprises across all business sectors spent almost €1.8 billion on research and development activities in 2010 and to convert that investment into economic growth Ireland needs an effective patent system.
It is incumbent on the Government to provide the very best framework for these resulting innovations to be captured and exploited in a manner that will create high-value employment. Any unnecessary legal or administrative barrier in the intellectual property framework that limits access owing to high translation costs or other factors will not serve its purpose. Providing efficient and affordable access to registering patents is vital to stimulating innovation in Irish enterprises, universities and research institutions. The high cost of obligatory translations of granted European patents acts as a deterrent to filing patents and, as a consequence, to innovation. By lowering the current cost barriers to entry and enhancing SME access to the patent system, the London Agreement represents a significant step forward for the European patent system.
As for the London Agreement, the European Patent Office, established by the European Patent Organisation, is an intergovernmental institution comprising 38 European states, including the 27 EU member states. The office examines patent applications and grants a European patent, should the relevant conditions be met. Patent applications originating in Ireland and granted by the European Patent Office have been increasing steadily, underlining the importance to the Irish research sector, both public and private, of European patent protection. Since 2004, the number of Irish patent applications to the European Patent Office has risen by 48%, with grants of European patents to Irish applicants increasing by 34%. However, the patent process at European level is both complex and expensive, acting as a disincentive to innovation, especially for young innovative start-ups with limited resources. An enterprise endeavouring to protect its innovation throughout Europe will apply to the European Patent Office for a patent. At this stage, applicants can file their application in English, French or German, thus saving on translation costs at this early stage. The claim which sets out the limits of the monopoly granted is published in the three languages upon grant.
Once granted, the European patent is, in effect, a bundle of national patents and the proprietor must validate or file the patent in each state in which patent protection is required. In order to validate a European patent in a country, a full translation of the patent must be lodged in each country designated in the national language of that country. These translation costs make up a large proportion of the costs of acquiring a European patent and constitute a cost enterprises can scarsely afford at a vital stage of expensive product development. This process ensures the European patent is uncompetitive when compared with the cost of acquiring US or Japanese patents. Under the current system, a European patent validated in 13 European countries is approximately ten times more expensive than a US patent and 13 times more costly than a Japanese patent. The key cost difference is the processing and translation costs involved with a European patent. In this context, validating a patent in 27 European countries can cost up to €32,000, of which €23,000 alone is for translations. Approximately 75% of the cost differential between the granting of a European and US patent is due to translation costs.