Intellectual Property (Miscellaneous Provisions) Bill 2014: Second Stage

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

I am pleased to bring before the House today the Intellectual Property (Miscellaneous Provisions) Bill 2014 for consideration and debate. This is a short but important Bill amending one section of the Patents Act 1992 and one section of the Trade Marks Act 1996. The proposed changes will alter existing patents legislation to give additional legal protection for medical research carried out prior to obtaining regulatory approval for new or generic drugs for human and veterinary use.

In the area of trade marks, this Bill will introduce a small number of changes necessary to the Trade Marks Act to allow Ireland to ratify the Singapore Treaty on the Law of Trademarks which is aimed at reducing red tape for trade mark applicants across the globe. Taken together, these legislative proposals, although modest in scope, enhance the innovative culture in Ireland to make it easier for entrepreneurs to exploit their intellectual property within and outside Ireland.

I will now set out the context in which I am bringing this Bill before the House today. Intellectual property is central to supporting innovative businesses in several ways. Patents add economic value to inventions by giving them a monopoly right for up to 20 years to enable the commercial exploitation of novel ideas in the marketplace. Trade marks ensure businesses can safeguard hard-won reputations for quality products and services by protecting their brands from illegal imitations. The pace of legislative change has quickened in the area of intellectual property in recent years. It is not sufficient to revise IP legislation once every decade or so, but it is incumbent on Government to continually examine whether our stakeholders are operating within the best possible legislative framework that, at an essential level, maintains our compliance with EU legislative obligations and also ensures that we stay ahead of best practice internationally and maintain our competitive advantage.

Ireland's strong and internationally recognised IP regime and the country's substantial research and development support offering greatly contribute to our continued success in attracting and retaining FDI. IP protection is seen to be a fundamental part of the FDI repertoire and Ireland is seen to score strongly in this area. In a 2014 report published by Grant Thornton entitled, Foreign Direct Investment in Ireland, executives and key decision-makers involved in investment decisions instanced the importance of an effective and responsive intellectual property regime combined with research and development benefits and rated this as being more important than that of tax incentives. This highlights the importance and crucial role that IP plays in our ability to continue to attract foreign investment to Ireland.

Protecting intellectual property rights has been a priority of successive Governments since the establishment of the Irish Patents Office in 1927. The current corpus of modern Irish intellectual property law was written in the 1990s and early 2000s and, with some important amendments since that time, it continues to serve our national needs and meet our international obligations. A 2013 international study carried out jointly by the European Patents Office and the Office for Harmonisation in the Internal Market, OHIM, pointed to the fact that, in Ireland, intellectual property intensive industries accounted for almost 49% of Irish GDP and 22% of employment. Future economic growth in Ireland will depend on deepening levels of creativity and innovation at all levels of enterprise be that indigenous or multinational and this is key to creating greater asset value in companies and thereby maintaining and creating sustainable jobs and employment.

The part of this Bill amending current patent legislation owes its origins to 2004 when two EU directives introduced provisions into Irish law protecting medical researchers from patent infringement for acts done while seeking regulatory approval in the course of developing a generic drug. This was introduced into Irish law in 2006 by amending section 42 of the Patents Act 1992 by means of secondary legislation. Originally, section 42 of the Patents Act protected certain acts, such as those done privately for non-commercial purposes or acts done for experimental purposes, from prosecutions as patent infringements. Section 42(g), inserted in 2006, also provides that acts done in conducting necessary studies and tests in order to satisfy the regulatory approval for medicinal products for human use and veterinary medicinal products are also not regarded as patent infringements. This provision enables generic drug manufacturers to carry out the various studies and tests that are necessary to apply for regulatory approval, known as a "marketing authorisation" so that the manufacturer can place generic drugs on the market. These acts, which involve the use of patented drugs, are not regarded as patent infringements, thus allowing the generic manufacturer to have a generic equivalent available to place on the market once the original drug's patent expires.

I would stress that these proposed changes will not affect the use or pricing of generic drugs in Ireland, but focus on enabling the pharma sector to develop such drugs while protecting them from unnecessary patent litigation. This transposition of the 2004 EU directives into Irish law was done correctly, in line with EU law, faithful to the wording of the EU directives and in line with best legislative practice. However, a number of other EU member states, including Germany, took a more expansionist approach, and adopted a broader research exemption. This greater legal certainty provided by Germany and some other EU states has been cited by medical researchers and the pharmaceutical sector as an incentive to undertake medical research and testing in those jurisdictions. In the absence of almost any case-law imposing restrictions on the scope of EU legislation in this area, this broader research exemption has grown in popularity among EU states and is now valued by the pharma sector when considering investment options in Europe.

Following consultation with stakeholders, and conscious that our nearest neighbour, the UK, has very recently implemented similar changes to their research exemption, we have moved to review existing provisions and to draft legislation aimed at expanding our research exemption. This will ensure that our pharma sector, with its significant employment and exports footprint in Ireland, continues to invest and update its facilities in Ireland under a suitable legal framework. Deputies may be interested to know that Ireland exported over €21 billion worth of medicinal and pharmaceutical products in 2013 and the Government will continue to make it its priority to preserve and enhance the regulatory environment to sustain this crucial economic sector.

The part of the Bill amending the existing trade mark legislation allows Ireland to take the first necessary step to accede to the Singapore Treaty on the Law of Trademarks. The Singapore treaty was adopted by the member states of the World Intellectual Property Organisation at a diplomatic conference in Singapore in 2006. The treaty revises and updates the previous 1994 Trade Mark Law Treaty, of which Ireland is a member. The main objective of the Singapore treaty is to create a modern and dynamic international framework for the harmonisation of administrative trade mark registration procedures. Trade marks are important business assets and trade mark rights are secured through registration. Therefore, it is important to have harmonised standards and rules in the administration of the registration process. By agreeing to the common standards in the Singapore treaty, we will establish greater certainty and bring down transaction costs for all economic operators seeking to protect their trade marks in Ireland.

Accession to the Singapore treaty would reinforce Ireland's participation in the Trade Mark Law Treaty and would allow us to benefit from future updates in any new treaty provisions. Accession would also reinforce Ireland's ongoing effort to encourage e-commerce in business. It is important that Irish legislation and practice keep pace with international developments in this area. Many of our trading partners have ratified the Singapore treaty and accession would also enable Ireland to participate in the future direction of the administration of trade mark law at an international level.

Ireland's legislation is already very much in order to accede to the treaty. The only amendment required to the Trade Marks Act relates to an aspect that deals with licences. Currently, our legislation imposes an excessively high penalty on a trade mark licensee who fails to register his or her details with the national authority within the prescribed time period. This Bill seeks to correct this imbalance to ensure that an unregistered trade mark licensee can join with a registered proprietor in infringement proceedings against a third party and receive part of the proceeds of a pecuniary remedy following a successful infringement action which is in line with the Singapore treaty.

I now wish to turn to the specific provisions of the Bill and explain what each is designed to achieve. Sections 1 and 4, which deal with the definition, the Short Title and collective citation, are standard legislative provisions, while sections 2 and 3 are at the core of the proposed legislation.

Section 2 amends section 42 of the 1992 Patents Act. That section provides for limitations on the effect of patent rights. Section 2(a) provides for an additional paragraph in section 42 after paragraph (g), namely, section 42(h). Section 2(b) inserts the key provisions of the expanded research exemption into the Patents Act 1992. It provides that acts done in conducting studies, tests, experiments and trials done in legitimate pursuit of regulatory approval, will not be considered in violation of a patent, and we deliberately took a broad, non-prescriptive approach here so as not to inadvertently narrow our new broader exemption. Section 2 extends the limitation of patents to "any act done which is required as a consequence" of the acts required to pursue marketing authorisation, ensuring again that the broader research exemption does indeed fulfil its role and allows for legal certainty and broad protection for such key medical research. The definitions of a "medicinal product for human use" and "veterinary medicinal product" derive from the relevant 2004 EU directives.

I am conscious that the effects of proposed amending legislation, even for a relatively small Bill such as this, can often be unclear. To clarify, the provisions of section 2 will affect the Patents Act 1992 in two principal ways. First, it will broaden the research exemption and bring legal certainty where there was none, by ensuring that all research on patented medical and veterinary products done for regulatory approval or "marketing authorisation" as it is known in Ireland, will be protected from patent litigation. This change will enhance the current protection of research on generic medicines to include also new and innovative medicines. Second, it expands the exemption to cover acts required for regulatory approval that occur outside of the European Economic Area - that is, beyond the EU in Iceland, Norway and Liechtenstein - provided for in EU legislation. This recognises the reality that tests, studies, trials and approval of new medicines are today often done in several different companies or units of the same pharma company across multiple jurisdictions. We would not wish to deny or limit the opportunities of the Irish based pharma sector to undertake vital research and development due to an absence of legal certainty in this area.

Section 3(1)(a) amends section 29(3)(b) of the Trade Marks Act 1996. This amendment will create legal certainty to ensure that the rights of the unregistered licensee in cases of infringements, as set out in sections 34 and 35 of the trade mark legislation, are not conditional upon the registration or recording of the trade mark licence on the trade mark register. Section 3(1)(b) amends section 29(4) of the Trade Marks Act 1996. The existing provision imposes too heavy a penalty on the unregistered licensees, which does not comply with the Singapore treaty. Heretofore, the unregistered licensee was not entitled to damages or an account of profits in respect of any infringement of the registered trade mark that occurred after the date of the transaction of the licence and before the date of the application of the recording of that licence on the register. It is proposed, therefore, to drop the requirement that recording of a licence is necessary in order for a licensee to obtain damages in an infringement action. Instead, it is proposed that recording will be required in order for a licensee to obtain legal costs in any such action, a less onerous penalty which would meet the requirements of the treaty while promoting the public policy objective of providing public information. Section 3(2)(a) sets the commencement date for the new provisions provided for under section 3 to come into effect. Section 3(2)(b) provides for the definitions of an "infringement of a registered trade mark" and a "registered trade mark" in accordance with the relevant sections of the Trade Marks Act 1996.

While the EU has long played a central role in trade marks ever since the establishment of a European trade mark back in 1994, moves towards an EU patent have taken longer. Progress towards an international unified patent court among most EU member states and a unitary patent in Europe administered by the non-EU European Patent Office will result in a compromise EU unitary patent and a unified patent court separate from EU institutions, but involving 25 EU member states. Ireland is committed to this innovative approach which, however, requires that the agreement on a unified patent court will need to be put before the people in a constitutional referendum at a date to be agreed by the Government. Neither has trade mark policy remained static at EU level with the greatest reform of the EU trade mark system in 20 years now close to agreement at EU level. These reforms in key areas of intellectual property will require further national legislation in the coming period to embed them into Irish law and ensure Ireland maintains international and EU best practice to protect and extract value from the ingenuity of researchers, inventors and designers in Ireland and ensure these intangible assets can be leveraged in the quest for greater levels of innovation to drive jobs and growth.

The Bill before us today is a short Bill but, for all that, an important one. Enacting it will enhance Ireland's intellectual property regime. The Government has listened closely to stakeholders throughout the legislative process and intends to table some amendments on Committee Stage to reflect the feedback received from stakeholders since the publication of the Bill, along with some technical drafting amendments that have, since the publication of the Bill, been proposed by the Office of the Parliamentary Counsel.

I propose to introduce other amendments to this Bill on either Committee or Report Stage to address some technical matters in the Competition and Consumer Protection Act 2014. That Act inserted a new part 3A on media mergers into the Competition Act 2002. The amendments will remove any potential ambiguity as to how one should interpret the provisions related to the full media mergers process and especially the Broadcasting Authority of Ireland's role when examining such a merger. I look forward to working with Deputies on Committee Stage, which will be taken on Tuesday, 4 November, and Report Stage and I will be happy to respond to any issues that arise. In the meantime, I commend the Bill to the House.

I congratulate the Minister of State on his appointment and wish him every success in his role.

Fianna Fáil is supporting this legislation as it enhances the ability of pharmaceutical companies based here to develop generic versions of medical and veterinary products while the derivative products continue to enjoy patent protection. It brings Ireland into line with other EU member states in providing a more liberal interpretation of restrictions on what constitutes patent infringement. It will create a level of legal certainty in Ireland similar to that enjoyed in other jurisdictions with a broader research exemption.

We also support the provision for the ratification of the Singapore Treaty on the Law ofTrade Marks. This updates legislation taking account of developments since the Trade Mark Law Treaty was developed in the 1990s, an aeon ago in terms of trade mark protection. In particular, it reflects the use of trade marks in e-commerce and the development of non-traditional marks such as sounds, three-dimensional marks and holograms. By ratifying, Ireland will be acting in concert with some of the major players in the intellectual property world such as the USA and Australia who have already ratified the treaty.

The legislation is intended to enhance the research exemption in our patents legislation to benefit companies engaged in the pharmaceutical sector in Ireland. This will be done by providing legal certainty on the aspect of immunity from patent infringement where critical research and clinical trials are carried out to develop new or generic versions of medical and veterinary products, while the derivative products continue to enjoy patent protection. This country has a hard-won international reputation for excellence in research and development. We have an excellent base from which to make further progress. Science Foundation Ireland maintains 29 world-class research centres and works with more than 400 industry partners. Shortly before his appointment, the Minister of State, Deputy Tóibín and I had the pleasure of visiting Cork to see the work under way there. Seeing the work and its impact gives an indication of the importance of this investment.

Two thirds of our research and development is in the private sector, creating new product and service innovations that will drive exports, growth, and jobs. Productive, high-calibre research undertaken by highly skilled research teams working closely with industry partners must continue to be a priority. Ireland needs a research and development framework which is competitive in both encouraging research and development activity and providing robust protection for the output from such research.

Any patents system must strike a balance between rewarding innovation and ensuring a high level of competition. Patent holders are entitled to protection for a maximum of 20 years. A patent holder can also get an extension up to a further five years. This limits the ability of manufacturers to develop generic substitutes. A recent report on the importance of generic medicines across the EU indicates that more than half the volume of EU medicines currently are generics, but this represents just 18% in value terms. The report also mentions that, to date, generic medicines in the EU have generated savings worth €30 billion. This country has been slow to take on generic medicines and to realise their value, especially in the context of our health budget.

The Action Plan for Jobs highlighted a potential restraint on the innovation capacity of the pharmaceutical or life sciences sector. It called on the Department of Jobs, Enterprise and Innovation in February 2012 to "Review Section 42 of the Patents Act 1992 with the aim of clarifying research actions that do not constitute patent infringement under Irish law in order to maintain and attract high value added Bio-pharmaceutical investment". It has been suggested that the current wording of section 42(g) places certain pharmaceutical sector companies carrying out research in Ireland at a competitive disadvantage and may interfere with Ireland's ability to attract pharmaceutical or biopharmaceutical investment.

In all EU member states, before drugs for human use are put on the market, a pharmaceutical product must have a marketing authorisation. The manufacturer of a particular drug, including generics, must be the manufacturer of a medicinal product and must submit data to prove the safety of the product. In some cases a manufacturer of a generic product may rely on data submitted by the original manufacturer when applying for an authorisation for its products. If the original product is manufactured during the course of such trials, for example, to demonstrate similarity, the generic manufacturer is legally vulnerable to an infringement action.

Directive 2004/27/EC creates an exemption from patent infringement for acts carried out by generic or bio-similar manufacturers with a view to obtaining a market authorisation for a generic or bio-similar medicinal product. There has been disparity between member states, with differing interpretations of the exemption provision in force throughout the EU, especially in relation to clinical trials and research carried out by innovative pharmaceutical sector companies.

Some member states, such as Germany, opted for a broader interpretation when implementing the exemption provision in the directive. Ireland and the UK went for a more conservative interpretation leading to restrictions on the ability of pharmaceutical companies here to develop generic products. The UK broadened the exemption during 2013 by means of a legislative reform order, leaving Ireland with a more restrictive regime.

The main benefit of the proposed new legislation would be to create a level of legal certainty in Ireland similar to that currently enjoyed in other jurisdictions with a broader research exemption. This would help level the playing field when it comes to considering locations for future pharmaceutical investment. In encouraging innovation and research and development by the pharmaceutical sector, Ireland has greater flexibility to ensure it maintains its strong position and attracts high value added investment.

The objective of the Singapore treaty is to create a modern and dynamic international framework for the harmonisation of administrative trade mark registration procedures. Its main provisions are in electronic communications and the expanded scope of trade marks and licences. The benefits of ratification include that the treaty will revise and update the Trade Mark Law Treaty, it will apply to the procedural aspects of trade mark applications, and its provisions reflect the worldwide growth in e-commerce over the past 20 years. Irish legislation and practice in recent years have encouraged the use of e-commerce in business, and ratification of this treaty would be a further step in that direction.

The strategy document, Building Ireland's Smart Economy: A Framework for Sustainable Economic Renewal, stresses the importance of intellectual property rights to Ireland's economic recovery. It is vital, therefore, that our legislation and practice are up to date and keep pace with international developments. In ratifying the treaty, Ireland will be acting in concert with some of the major players in the intellectual property world which have already ratified it. For Ireland not to ratify the treaty would put us at a commercial disadvantage.

The Minister of State referred to the necessity for a constitutional referendum on the unified patents court. This has been on the Department's agenda for some time but we do not seem to be any closer to a date. What are the difficulties in deciding on a date for setting out the referendum legislation, particularly as there are some referenda highlighted for next year? This would be a relatively uncontroversial referendum but it is important for our international standing.

I always get worried when I hear members of this Government slipping provisions relating to media mergers into legislation that has nothing to do with media. The Intellectual Property (Miscellaneous Provisions) Bill 2014 is being stretched to include matters linked to media mergers. I ask the Minister of State to give us advance sight of the proposed technical matters he intends to address on Committee Stage. I suggest they should be the subject of pre-legislative scrutiny at committee level before they are brought forward for decision during the Committee Stage debate. The Minister of State chaired the long debate that the committee had on the Competition and Consumer Protection Bill 2014. It strikes me as very odd and slightly suspicious that changes to that legislation would be stitched in under the Intellectual Property (Miscellaneous Provisions) Bill 2014.

We will put the Deputy's mind at ease.

I thank the Minister of State for his words. I assure him that we will propose amendments to reflect some of my remarks. I wish the Bill every success.

Ba mhaith liom comhghairdeas a dhéanamh leis an Aire Stáit. I hope the Minister of State's elevation to his new position will have an impact on the good people of County Meath in the short to medium term. It might be useful to note that there are two Meath men and one Mayo man in the Chamber. If Deputy Calleary is seeking insights on how to win an all-Ireland, we might be able to help him out.

It is part of the skills agenda.

Ós rud é go bhfuil an Bille seo gairid, beidh an méid atá le rá agam gairid freisin. The Bill before the House brings this country's practice into line with the practice in other international contracting parties. As the Minister of State has said, the technical amendments in this legislation will enable Ireland to ratify the Singapore trade mark treaty, which seeks to harmonise the administrative procedures of trade mark offices globally but has no substantive impact on trade mark law.

As the Minister of State outlined, section 2 removes much of the uncertainty and worry from entities engaged in research that might be concerned about being found to be in breach of existing patents. Industry commentators have noted that this amendment to existing legislation will support research by companies into generic versions of drugs while protecting patents of branded drugs. As the Minister of State has acknowledged, existing patent law provides for a research exemption. The need for legal certainty has arisen from concerns that the exemption in law does not appear to be as wide as that applied in other European states, Canada and the United States. The fear with regard to countries that have more liberal exemption regimes, such as Germany and Canada, is that research work could move if concern remains about the risk of a patent.

Everyone agrees that the pharmaceutical industry is important to Ireland. If we enable this sector to carry out research unhindered, we will give certainty to companies operating in Ireland and their subsidiaries in other countries. Ireland has invested heavily in the pharmaceutical sector. According to IDA Ireland, some €8 billion in research funding has been committed by the Government. Ireland is the eighth largest producer of pharmaceuticals in Europe. Nine of the ten top pharmaceutical companies have operations in Ireland. Dublin and Cork have been the largest beneficiaries of this successful development over the last four decades. The Government's response to the patent cliff over the last three years highlights the limitations of its economic strategy. Indeed, there is an over-reliance on existing foreign direct investment industries and companies already established in Ireland.

I have raised the need for the development of a strategy to cluster industries and skills in a way that will make regional foreign direct investment more attractive, while helping local economies to grow in equal measure. Foreign direct investment and indigenous business links need to move from theory to practice. The experience of foreign direct investment engagement in this State is far lower than that in other countries. While clustering has happened, it has been small in scale and minimal in location. Ambition is not a word associated with the Government, which prefers to tinker around the edges and keep things ticking over. Big announcements are often followed by unambitious delivery. While the impact of the patent cliff on the State's economic aggregates will subside in 2014, the clarity provided by the stated extension of the research exemption in law should help to move the figures in the right direction.

I will conclude by noting that in 2012, the Government's jobs action plan included a commitment to review section 42 of the Patents Act 1992 with the aim of clarifying research actions that do not constitute patent infringement under Irish law. This was to be done to maintain and attract high value-added biopharmaceutical investment. It would be helpful if Members could know why this review, which amounts to 26 lines of legislation, took two years to complete.

I would like to share time with Deputy Paul Murphy.

On the face of it, the introduction of this Bill seems to be a reasonably positive move. As I understand it, we are making it easier for companies to develop generic medicines without running foul of patent laws or infringing intellectual property rights. I can certainly see the value of that. The bigger context for much of this debate is the scandalous manner in which big pharmaceutical companies have used patent restrictions on life-saving drugs, such as AIDS anti-viral drugs, to prevent countries in the developing world from producing cheap generic versions of those drugs. Huge struggles and campaigns have been organised by people who are justifiably furious and angry because pharmaceutical companies are prioritising their profits, and their perceived right to control the intellectual property rights to particular drugs, rather than the lives of humans who desperately need live-saving drugs. In so far as this Bill seems to be part of a move to hasten and facilitate the development of generic and cheaper versions of drugs, it is a good thing. I can also see the advantages of this legislation from a domestic economic point of view. Many patented branded drugs can be produced more cheaply, and consequently delivered more cheaply to the people who need them, as generic products with the same biological ingredients but without the branding and the patent costs, etc. Such positive aspects of the Bill should be broadly welcomed.

A few questions that arise with regard to the whole area of intellectual property are worth discussing in this context. Why do the cost savings to the public health service that were supposed to derive from the expansion of the development of generic drugs not seem to have delivered the big dividend that this Government was talking about a few years ago? The reduction in the cost to the health service does not seem to have transpired in real terms. I would be interested to hear what the Minister of State and the Government have to say in that regard. I wonder whether some of the big pharmaceutical companies lobbied the Government to try to prevent it from accessing cheaper versions of drugs that would reduce the cost to the public health service. This, in turn, might have prevented the delivery of the big savings that were talked about at length a couple of years ago.

All discussion of them has disappeared, however, given the major crises of funding, safety and so on in the health service. What has happened to the large savings we were hoping to deliver?

Broadly speaking, this Bill is moving in a progressive direction by loosening the patent restrictions and allowing the production of certain drugs. However, it raises a wider question about intellectual property. We must start considering this important issue because the assigning of value to intellectual property is one of the key mechanisms through which large multinational corporations avoid tax. In this context, we must consider definitions and the question of how we assign value to intellectual property and allocate profits from same. The idea is seemingly being abused by large corporations to avoid paying a fair share of tax on their profits, which was the issue at the centre of the famous double Irish tax scam that the Government claims it is moving to close by demanding that the companies incorporated in Ireland now be tax liable here. I am sure the Minister of State knows that, under the double Irish, companies making large profits in Ireland would transfer those under the guise of intellectual properties to which they assigned a significant value to companies that were tax resident in Bermuda or another tax haven, thereby avoid paying tax on them.

According to the Government, we are phasing out the double Irish, but we will move towards a patent box. Many commentators other than me have asked whether we are just replacing one tax scam with another in order to facilitate large multinationals' aggressive tax avoidance by ascribing significant values to intellectual properties, thereby hiding profits. I believe much of the commentary that suggests this is the case. In response to the closing off of the double Irish, for example, the Debt and Development Coalition Ireland stated: "The Government is playing musical chairs on corporate tax. While it is welcome that the 'Double Irish' scheme will be closed, the phased approach to its closure provides corporations with 6 years to avail of new tax dodging mechanisms". We will have the patent box at the end of those six years, the practice of which in Britain, Luxembourg, the Netherlands and so on has been criticised as another mechanism to allow companies to hide profits. As such, it seems that a Bill like this one is a missed opportunity to have a serious discussion about definitions of "intellectual property" and what value can fairly be assigned to it.

It is tempting to become somewhat philosophical about what constitutes intellectual property. Despite being a student of English literature, I was unaware that one of the first people to come up with the idea of copyright, which later developed into patents and so on, was the poet William Wordsworth. It was a revolution or, rather, a counter-revolution in how ideas and intellectual property were handled. Sometimes we assume that we have always had laws that allow us to privatise and commodify intellectual property, ideas and so forth. Prior to Wordsworth and the beginning of the 19th century, though, there was no such notion. In fact, there was the opposite, a recognition that ideas were no one's property. Shakespeare would have laughed at the idea of intellectual property. His plays were a patchwork of patent infringements, as it were. He would have been sued to high heaven under the current patent laws for cogging material from the ancient Greeks and Romans, earlier writers in medieval-----

And Irish writers.

Indeed. There was an understanding at the time that ideas were no one's property. Rather, they were an accumulation of generations of developments and advancements in knowledge. Everyone was standing on the shoulders of everyone else in the development of ideas, literature, innovation, etc. That is the truth.

I do not know whether my next point is absolutely true, but I remember reading an article that claimed that the Windows system, a revolution in computer technology, was not developed by Bill Gates and Microsoft, but by a person in Xerox who did not take out a patent. Someone else patented it instead. Whoever developed Windows was standing on the shoulders of those who had come before him and had advanced our knowledge, understanding, experience, ideas, science and technology.

The idea that one can parcel intellectual property as a commodity that is owned by someone is a major problem. The serious implications of this are evident in terms of generic medicines, where companies told people dying of AIDS that, unless they paid a price assigned by the companies to their life-saving "intellectual property", then it was a case of tough luck.

While I accept that the Bill is moving a little in the direction of challenging this stance, it does not go far enough, given the stranglehold that large corporations seem to have on ideas that they claim are their private property when it is highly debatable that those ideas are instead the accumulation and advancement of human knowledge, science and technology. This might seem philosophical, but it translates on a day-to-day economic level into the restrictions placed on people when innovating and pushing the boundaries of knowledge by the claim by the companies concerned that the ideas are their property and cannot be touched or researched, otherwise they will sue. The trend of corporatisation and commodification of intellectual property and ideas to the benefit of large corporations at the expense of society and pushing the boundaries of science, technology and knowledge is a matter of concern.

Worryingly, another sector relevant to this discussion is that of food, where genetic modification poses potential dangers.

Essentially, companies are trying to force countries and regions to become dependent on particular genetically-modified food and then gain a monopoly in the production of that food at the expense of people being able to do those things themselves or to produce their own sustainable food supply. These are important issues that in some ways I am surprised have not been considered in a Bill that deals with intellectual property. In particular, I refer to the area of the patent box and how Members will define intellectual property for the purposes of assigning value and profits and so on to make sure it is not simply another tax avoidance scheme by major multinationals.

On the specifics of the Bill, in general I could be in agreement with the idea of facilitating generic medicine. It is marginal and whether it will make any real difference in the real world remains to be seen but the basic idea of facilitating experimentation and so on without danger of being sued by generic medicine corporations makes sense. There is a question over who owns the companies that produce generic medicines. Obviously, those of us on the left are in favour of generic medicines. We are in favour of people having access to medicines but they also, in turn, are run by corporations for profits and also can exploit the needs of people. This obviously points to the need for public ownership and democratic control of those generic corporations themselves.

However, this brings up a broader point about intellectual property and about what kind of patent regime one should have because intellectual property is now widely referred to as the oil of the 21st century and the direction of travel of legislation on intellectual property right across Europe and globally is clear. It is heading towards much more rigorous and strict interpretation, as well as actual legislation, regarding intellectual property whereby such property is now being more protected than was the case previously. It is being incorporated into all the free trade deals being done and intellectual property is now the key issue. The working assumption on which this is all being done - or at least the pretext - is that to have innovation in pharmaceuticals, technology, culture or anything, one must have, as Deputy Boyd Barrett mentioned, the private ownership of ideas. The premise is this is what will incentivise investment in research and development by the likes of the pharmaceutical corporations and without it, one will not have the development of science or technology. This has been summed up by the chief executive officer of GlaxoSmithKline, Andrew Witty, who stated:

The pharmaceutical industry is hugely innovative... If governments work to support, not stifle, innovation, the industry will deliver the next era of revolutionary medicine.

Therefore, and again like the ideology supported by the majority of Members, the role of the Government and the State is simply to create the environment whereby these entrepreneurial individuals and companies will invest and therefore develop new medicines for humankind.

The reality is already very different, even with the private ownership and private domination of the pharmaceutical industry. A study published in the New England Journal of Medicine by Dr. Marcia Angell concluded that more than two thirds, almost 80%, of the new molecular entities, that is, new drugs as opposed to slight variations on old drugs, which is mostly what the private corporations do, come from investment by the state. In the United States and the United Kingdom, through Government and university investment, the majority of real research, which results in real steps forward in respect of pharmaceuticals or technology comes from the state, as opposed to from private corporations. One should take the example of the Internet itself, which obviously arose from a Government-funded research in the United States. There is a large element of private corporations taking taxpayer-funded research, altering it slightly, slapping a patent on it and then having ownership over that and preventing the further development of science or medicine. In recent years, there has been an absolute explosion in the number of patents given in the pharmaceutical industry and in many industries. An important element of this pertains to tax avoidance, about which I will make a point in a moment. Arguably, the increase in the number of patents is not an illustration of an increase in the number of new medicines or new technologies being discovered but actually operates to work in the reverse. For example, researchers have argued that many of the recent trends in patents, such as an increase in upstream patents, which includes, for example, the patenting of research tools, have caused the rate of innovation to fall rather than increase, as it blocks the ability of science to move forward in an open exploratory way. Research tools are being patented by the likes of GlaxoSmithKline and the other major pharmaceutical corporations, which restricts the ability of researchers in lesser developed countries to catch up with what has already been developed and this actually hampers development.

The most basic point I will make is that the private ownership and control of ideas that are essential for all of humankind, as opposed to just the corporations or the rich who can afford the private medicines, works to the detriment of society at large. It works to the detriment of the further development of those ideas and of everybody who needs access to those medicines. From the perspective of the Anti-Austerity Alliance, this points to the need for information essentially to be free and for research to be funded by the State, as happens at present. A large amount of research is funded by the State but then is taken and privatised and the further development of ideas then is hampered. Instead, information should be free and it should be funded on a massive scale by the State. In that way, extremely significant steps forward could be taken because, precisely as Deputy Boyd Barrett noted, new ideas are built on old ideas. One takes bits of this and that, puts them together and develops them. The same is true for the pharmaceutical industry as it is in respect of culture.

The other main point I will make is on the reality of how patents are used. If one examines all the patents held in Ireland, one will find patents from corporations one would not really expect to have them such as, for example, patents from corporations like Starbucks. Such corporations, as well as those from the pharmaceutical industry, use patents in part as a means of tax avoidance. They register their patent here and by being headquartered here in Ireland they get away with paying extremely low rates of tax. There are scandalous examples of this such as the case of Gilead Sciences, which developed a new hepatitis C drug that sells for $84,000 for a course of treatment that primarily is sold to the US market. However, as it is headquartered here, it manages to pay very little tax as a result. This largely is what the patents are used for. If one examines all the current patents given, very few of them are then cited by anybody else by other corporations, thereby illustrating they do not really have any intrinsic scientific value but are a means of stating they are there and this is a means of avoiding large amounts of tax.

While this has not been incorporated in this Bill but will come later, it appears that the Government strategy to deal with criticisms of the double Irish is to go further in the direction of allowing patents to facilitate payments of tax rates that are significantly below the headline rates of tax. As there has been a huge amount of criticism in respect of the double Irish, it has been decided to phase it out over an extremely long period and to replace it with what is being described here as a knowledge box but which in Britain is called a patent box. The latter absolutely appears to be the inspiration for our knowledge box but perhaps we will have half the rate here that they levy in Britain. The Institute for Fiscal Studies in Britain, which is not a radical left organisation, has strongly criticised the patent box model. It states that "to the extent that a Patent Box reduces the tax rate for activity that would have occurred in the absence of government intervention, the policy includes a large deadweight cost" because much of this innovation simply would have happened without the need for allowing these corporations to pay little or no tax. Consequently, this is another significant subsidy by the taxpayer to private industry by facilitating it to pay extremely low amounts of tax. If the actual purpose is to develop a pharmaceutical industry here that is sustainable and can create good quality jobs and conditions for those that work therein, as well as to develop medicines, then it is more straightforward and makes more sense economically and socially to have investment by the State itself, instead of giving this massive subsidy to private industry.

In that way we could have a publicly owned, democratically controlled pharmaceutical industry. We could undertake major research, which could be connected to the universities etc., to develop the type of medicines that can be used and that could be a boon economically also.

What caught my attention reading this Bill was that it amounted to a legislative initiative to provide legal certainty to our research exemption for companies located here, presumably many of them from the United States. Exemption is the key word here. The second part of the Bill seeks to harmonise administration procedures for many of those same companies under the Singapore Treaty on the Law of Trademarks. In other words, legislation was devised to help many of these companies that do business here and facilitate as much as possible the processes involved in patents.

This is a research exemption and there has been much talk about exemptions in recent weeks. The two previous speakers mentioned them. I understand they might be on a different side of the spectrum politically from me, which is fair enough, but I have a different perspective on this. In that context, based on what was announced in the budget, and the two previous speakers mentioned the double Irish, it is important to refer to those measures announced in the budget which relate to that particular provision, which is being phased out but ended for new entrants into Ireland from January. For all intents and purposes it is a tax avoidance strategy - I think everyone knows that - by companies that use the device to lower their corporate tax liability.

In terms of the way it works, companies effectively move income from a higher tax country to a lower tax country using payments between related entities within their own corporate structures. I think everybody understands that. The fact is that Irish tax law has circumvented US transfer pricing rules and for that reason, it has made Ireland extremely attractive for large US multinational companies to locate here and at the same time create tens of thousands of jobs. It has injected large amounts of money into this economy at a time when it is badly needed. In terms of what happens now, no one is quite sure. There is huge uncertainty first, with the existing companies located here and how they will react and, second, the way prospective foreign direct investment will be affected and how those people who will be looking at Ireland might view Ireland now that the tax incentive has ended. The tax break will be closed to new entrants from January, and those companies currently enjoying the transfer pricing arrangement will see the arrangement end in 2020.

What struck me since this budget announcement are the extremes of opinion or predictions when it comes to analysing the consequences of ending this tax break. It depends on who one talks to as to how this will work itself out. When we get down to specifics, Google, for example, saved $2.5 billion last year by moving its operations here and using this tax break. That is the reason it is here. The Government has said it will soften the impact by granting additional tax breaks for patents, etc. This Bill is a good example of the Government facilitating companies further. Only time will tell how this will pan out and how adversely this will affect our economy but the truth is that it could be detrimental. There is no getting away from that.

The point I want to make is that at the same time as we are doing this, there are well-publicised plans to introduce compulsory collective bargaining. That would oblige all companies in the State to enter into negotiations with worker representatives. Currently, workers form a union but employers are not obliged to negotiate with them.

We should tread carefully from now on when it comes to prospective foreign direct investment, particularly as it pertains to those companies that come from the United States. As someone who has worked in corporate America and who has handled tax and trade issues on Capital Hill, I can tell the House that the practical reality is that US companies take into consideration mandatory labour laws and in some cases do not view favourably what they would regard as excessive requirements when it comes to unions and a mandatory requirement of negotiation. I realise this comes on foot of a ruling from the European Court of Human Rights and that provisions are proposed within the legislation to accommodate some large multinational firms, which currently deal with work councils and not unions.

The ESRI did some interesting research recently for the Department of Finance. It looked at the reasons multinational companies located here and the impact tax policy had on their decisions. The main finding was that fewer than half of the multinational companies here would have located here if our corporation tax rate was at the EU average of 22.5%. Even when that figure went down to 15%, about one-fifth of them said they would not have located here. That amounts to a lot of jobs.

The point is about what we are giving up as a result of this proposal. I have huge misgivings about doing that. It has translated into tens of thousands of well-paid jobs around the country at a time which can still be characterised as one of a relative crisis economically, and we have given it up. That is unbelievable.

We sometimes talk about piddling issues in this House. I am not casting aspersions on any individual or group but we walk out of this Chamber in protest over speaking time. The one aspect that has attracted companies that have created tens of thousands of jobs in this country in the past 20 years has been effectively ended with one statement, and we do not want to talk about it. No one has mentioned a word about it. That is unbelievable.

I have come to the conclusion that this collective bargaining measure has more to do with satisfying a political ideology within the Labour Party than with any common sense when it comes to the state of our economy. The idea seems to be to stick it on the résumé, create a junior Ministry for collective bargaining, and go to the electorate, and one's own constituency, with it before the next general election. What really annoys me is that Fine Gael agreed to this before making any decision when it came to the double Irish. That was a mistake. It was not rounded thinking when it comes to our economy as a whole and multinational companies, particularly those that come from the United States.

On the one hand, we are planning to end a huge incentive for US companies in particular to locate here without knowing how that will pan out. On the other hand, we are introducing what may seem reasonable and benign to some people but may actually act as a disincentive to companies looking to locate here. Countries throughout Europe, including the United Kingdom and the Netherlands, are reducing their corporation tax rate. They are introducing 0% patent boxes. They have been advertising that for years.

When some people in the Opposition and the Labour Party hear a Fine Gael Deputy question the wisdom of collective bargaining legislation they will immediately brand that Deputy as being anti-labour and anti-union but for once they might consider the merits of the argument I am making and the common sense around the two issues, namely, the ending of the double Irish, which I have misgivings about, and the introduction of requirements that will only act as a disincentive for some companies. The point I am making is that this might not be the wisest thing we have done when we consider everything in the whole and that, ultimately, jobs will not be created.

The compulsory bargaining legislation should be put on hold until we know the effect the budget announcement on transfer pricing or the double Irish provision will have on our recovering, but still incredibly fragile, economy.

I do not have that much to say on this legislation other than that its main provisions focus on incorporating into Irish law certain aspects of the Singapore treaty on trade-marks, amending our 1996 trade-mark legislation, providing a research exemption and giving greater legal certainty and assurances for companies carrying out pre-patent experiments and trials necessary to obtain regulatory approval. As such, I have no difficulty with supporting the legislation.

I, too, want to use this opportunity to refer to certain aspects of the budget. I have a slightly different view from the previous speaker on the provisions in the budget aimed at phasing out what is called the "double Irish" mechanism. The provision in the budget is sensible in that it does not come into effect immediately. It commences for new entrants from the start of 2015 and it provides for a phasing-out period of a number of years for existing companies in this jurisdiction.

Ireland was subject to considerable adverse publicity in the past 18 months, in particular. "Reputational damage" is the term used. Since I got my degree in economics, I have always read the finance pages. I have noted considerable adverse and negative comment on our taxation system stemming from what became known as the double Irish mechanism, to such an extent that television programmes in other jurisdictions focused on it. The mechanism was inflicting some reputational damage on our country and economy.

I agree with Deputy John Deasy that the effects of the phasing out are unclear at this stage, but I believe there is sufficient lead-in time such that the worst of the effects might be dissipated. It was interesting that Deputy Deasy referred specifically in his comments to a survey on why multinationals are in Ireland. The figures he gave all concerned the corporate taxation rate. Ever since Mr. John Bruton was Taoiseach, every Government has made it crystal clear that the corporate taxation rate is 12.5%. We have no intention of moving from this, despite what governments in other parts of the European Union, in particular, might like to see. Deputy Deasy correctly pointed out that there are thousands of jobs in all corners of the country that owe their existence in part to the certainty surrounding our corporate taxation rate. That certainty has been copper-fastened. In his budget speech, the Minister for Finance, Deputy Michael Noonan, made it quite clear that the rate is not for changing. There are some Members of this Chamber, who are not now present, who believe there would be no effect if we were to increase the rate by one percentage point. It is amazing the number of people who end up on talk shows arguing we could get a couple of billion euro extra for our public finances if we raised the corporate taxation rate by one to 1.5 percentage points. We could but it would also ensure that thousands of jobs would be lost, virtually overnight in some cases.

The majority of multinationals based in this country are here because of the certainty surrounding the corporate taxation rate. That certainty has been reaffirmed on several occasions, most recently in the budget announcement last week. I concur with the Minister's view. The introduction of the phasing out of the "double Irish" provision was a necessary measure to curtail perceived damage to the reputation of the country.

I thank the Deputies who spoke on the Bill. They made very useful contributions to the debate. I welcome the broad expressions of support for the content of the Bill. I believe everybody was on board. I remind Deputies that the focus of the Bill is to place Ireland at the forefront of developments to build a strong base for innovation and create an intellectual property ecosystem to act as a stimulus for business.

Corporation tax was referred to in many comments, including those of the last two speakers. Deputy Deasy expressed concern in regard to changes in this area. I accept there are concerns and that tax is a big issue, but many companies are telling us they do not come to Ireland for tax reasons alone; they come here because of our skills base, strong intellectual property regime and the number of developments in our research and development community. Research has intensified in recent years. It is well recognised, therefore, that companies do not come just for tax reasons. There are many other reasons and Ireland has been well established as a good location for business and in which to create jobs. While we all share the concerns, it is a question of how we react. Deputy John Paul Phelan was correct in that if we plan long enough in advance, there will not be a negative impact. This a lot more to be considered than taxation.

The Bill sends out a signal that the Government recognises the value of intellectual property and is committed to providing a supportive environment for its development and protecting and enforcing intellectual property rights. By amending, clarifying and enhancing the existing patents research exemption, we are ensuring Ireland maintains its competitiveness vis-à-vis other member states that are competing for the same investment and research and development opportunities.

Ireland's attractiveness to foreign direct investors in the pharmaceutical sector is vital to our continued success in this area. It is incumbent on the Government to act to further our best interests in this area. This amendment will send a positive signal on Ireland's interest in competing for intellectual property-based foreign direct investment and will prove a valuable selling point in attracting mobile investment, particularly in research and development projects. Equally, it is important that our legislation and practice keep pace with international developments in the area of trade marks. By amending the trade mark legislation and allowing Ireland to accede to the Singapore treaty, we will come into line with many of our trading partners that have already ratified the treaty.

Registered trade-mark rights are important business assets in world economies. It is essential to have harmonised standards and rules in the administration of the registration process. By agreeing to the common standards in the Singapore treaty, we will establish greater certainty for users and bring down transaction costs for all economic operators seeking to protect their trade-marks in Ireland.

I thank the Deputies for their remarks and look forward to the debate on Committee and Remaining Stages. I hope all the Members will have a chance to attend on Committee Stage and tease out some of their concerns.

I wish to address a few of the issues that were raised. Deputy Peadar Tóibín asked why the legislation took two years. In the action plan for 2012, it was agreed that there would be consultation on this matter and that we would look into it, but legislative priorities were such that the Bill was just not on top of the queue of all the bills that had to be drafted. However, I am glad the Bill has been introduced and that the House is supportive of it.

Deputy Dara Calleary expressed concern about our making of amendments to the media merger provision in the Competition Act 2002. The amendment is merely technical and it is to address cross-referencing that may give rise to ambiguity. To avoid any such confusion, I intend to use Committee Stage to clarify this matter. It is the first legislative opportunity we will get to address this and deal with any ambiguity. There is no reason for concern. We will make sure the Deputies are well briefed on the amendment in plenty of time before Committee Stage so any concerns can be addressed. It is important that concerns be addressed.

On the referendum on the unified patent court, the Government has a number of referendums to deal with over the next couple of years. They are on the list based on the work of the Convention on the Constitution. Commitments were made and it is important that this process be completed before the end of 2016. The Government will make a decision in the near future on when to hold the referendum on the unified patent court.

Deputy Paul Murphy made interesting comments about the importance of spending taxpayers' money on research and development. We have done a lot of that over the past couple of years. In fairness, over the past ten years Ireland has spent a great deal in this area and successive Governments have developed this sector of the offering considerably. We see it as important. The most recent budget has built on that. There has been increased expenditure in this area of research and development, through SFI, Enterprise Ireland and IDA Ireland. That is what we are trying to do.

We do not have a bottomless pit of money that we can spend on everything we would like. I agree with Deputy Paul Murphy that it would be good if the country could spend a great deal more of its resources on research and development, but I missed the point on how he wants to achieve this. The same Member does not want to have any water charges, does not want to have any property tax, does not want to have any taxes, and yet wants the Government to lead on all the research and development. These all are lovely dreams but they all are not possible. One must have some charges and taxes to be able to pay for research and development.

We find it best to have a model that encourages collaboration between industry and the educational institutions and that matches their investment in targeting funding. We use tax breaks and taxpayers' money to encourage and increase spend from companies and others involved in industry to not only achieve a benefit for society and create new products and processes and solutions to problems, but also to create jobs. We are strong on the prioritisation of applied research to ensure it leads to jobs and new products and designs. Something must back them up the Member's nice ideas. I would be keen to know how he intends to fund them all because we would be keen to do so too.

The knowledge development box was raised by a couple of Members. An impression is given that it is not necessary because companies will spend on research and development anyway. That is not necessarily always true. There are two concerns. The reason we are looking to develop a knowledge development box is to ensure that the companies locate here to develop their new policy initiatives and to carry out some of the research as well. One might say it will happen in some cases, but it might happen elsewhere and then this country would lose out on good jobs and the further products, services and companies that could spin out of that research and development. The other reason is the need to ensure that Ireland remains attractive to companies which will make decisions on where to locate their new start-ups, research and development sections of their business or the development of their products. We want to have a share of that in this country and that is why we will carefully develop a knowledge development box. That will be done in consultation, which will happen over the next number of months, and will fit within EU rules. We will certainly take note of all that is happening at the OECD to ensure we are on track there and everything is above board. That is what we intend to do. There is no doubt about that and I want to put Members' minds at ease in that regard, but it is important that we would do it.

Both Deputies Paul Murphy and Richard Boyd Barrett spoke about the importance of access to affordable medicines and drugs, but they are forgetting that it is not all rosy in that sector either. There are serious competition issues and serious concerns on the global market in the medical technologies and pharmaceutical sector, and it is not always worth one's while to develop new products. We must recognise that it all is not as simple as straightforward profits. One needs to make it attractive for multinationals of all sizes to invest and to continue developing new medical devices, products or medicines. If governments in different countries do not encourage that, it might not happen as simply as the Members think because it is not easy to make such enterprise profitable and provide employment. It is important that we support this area and spend our money wisely in it, not only for the job creation involved but to continue the development of new products, ideas and processes. As Minister of State, I have been lucky to visit many companies in this area which are developing products, designs and processes. There is a lot of interaction in the research community with engineers and the doctors and consultants, to ensure that we are designing the right products, process and devices for the future. The Deputies have a warped view of how all of this would work, and that it all will just happen. It does not work that way. Companies are there to do good and to solve societal problems, but they also must make it pay. We need to recognise that too. I have probably covered most of the comments on that aspect that I want to deal with.

To clarify in case there is any confusion, the Bill will not affect general medicines but will enhance the patient research exemption in an Irish organisation that already offers an exemption to developers of generic medicines. I think I have dealt with most of the concerns raised. If there are any more, I will deal with that at Committee Stage. I thank all the Members of their contributions. I look forward to bringing this Bill through Committee Stage and Report Stage in the month of November.

Question put and agreed to.