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.