I move: "That the Bill be now read a Second Time."
In 1999 the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Tom Kitt, introduced the Copyright and Related Rights Bill which, as the Deputies know, is now on Committee Stage. The present Bill, which is a much narrower measure, relates to another major area of intellectual property, namely patents.
The granting of patents for new inventions in order to secure to the inventor the exclusive right to exploit the invention for a limited period of time is a long-established and well-known instrument of promoting technical innovation and industrial development. After the Industrial Revolution and from the nineteenth century onwards, all industrialised countries established their own patent system tailored to meet each country's industrial strategy. The desirability of some international harmonisation on patents was recognised as far back as the nineteenth century and the first International Convention for the Protection of Industrial Property or the so-called Paris Conven tion was signed in 1883. This convention has been revised several times since then and now 157 countries, including this State, are party to it. Under this convention, member countries must provide equal and reciprocal treatment in patent matters for nationals of other member countries and recognise the priority date of an application filed up to 12 months earlier in another member country. The convention also stipulates the conditions under which a country can grant a compulsory licence if a foreign owned patent is not being worked in its territory.
A further landmark in international development was the Patent Co-operation Treaty concluded in Washington in 1970 which came into force in 1978. The main objective of the treaty is to streamline patent application filing and novelty search procedures for applicants wishing to obtain patent protection in several countries belonging to the treaty. The treaty was not concerned with the establishment of an international patent but with an international procedure for sharing the work on processing patent applications in patent offices.
In Europe, efforts to create a common patent system resulted in the establishment of the European Patent Convention, EPC, in Munich in 1973. That convention established a European Patent Office in Munich whose function is to grant, on the basis of one central application to that office in any of its official languages, that is, English, French or German, patents which would be valid in each contracting state designated by the applicant. In effect a "bundle" of national patents emerge from a European patent application and in each designated country the European patent has the same legal effect as one granted by the local national patent office. European patents are granted only after an in-depth examination following a comprehensive novelty search in a collection of several million documents and, therefore, offer a high level of legal certainty.
The EPC is not limited in its membership to EU countries and includes such non-members of the EU as Cyprus, Liechtenstein Monaco and Switzerland. Most EPC contracting states have brought their national patent law into line with the EPC. Industry today operates internationally to a far greater extent than it did when the European Patent Convention was established in the 1970's. There can be little doubt about both the desirability of, and the need for, much more international agreement on patents. In 1993 a major step was taken towards world-wide harmonisation of legislative and regulatory practices with the Agreement on Trade Related Aspects of Intellectual Property Rights or TRIPs Agreement negotiated under the GATT. The TRIPs Agreement is an annex to the agreement establishing the World Trade Organisation, WTO, and compliance with the TRIPs Agreement is an essential requirement under the new world trading order. The TRIPs Agreement, which came into effect on 1 January 1995, covers all areas of intellectual property rights including patents.
The main objective of the TRIPs Agreement, as contained in the preamble of the agreement, is to reduce distortion and impediments to international trade by promoting effective and adequate protection of intellectual property rights and by ensuring that measures and procedures to enforce intellectual property rights do not themselves create barriers to legitimate trade. Article 7 of the agreement, entitled "Objectives", provides that the protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations. To achieve these objectives the agreement sets out the minimum standards of protection to be provided by each member country.
Article 3 of the TRIPs Agreement obliges each member country to accord the same treatment to non-nationals as it does to its own nationals. Article 4 includes a most-favoured nation provision according to which any advantage, favour, privilege or immunity granted by a member country to the nationals of any other country with regard to intellectual property rights has to be accorded immediately and unconditionally to nationals of all other WTO member countries.
The standard for patentable subject matter is set in Article 27 of the agreement. Patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, inventive and capable of industrial application. Patents shall be available and patent rights enjoyable without discrimination as to the place of the invention, the field of technology and whether products are imported or locally produced.
There are three permissible exemptions to the basic rule on patentability. First, inventions, the commercial exploitation of which would be contrary to "ordre public” or morality, may be exempted. Second, inventions concerning diagnostic, therapeutic and surgical methods for the treatment of humans or animals may be exempted. Third, member countries may exclude from patentability “plants and animals other than micro-organisms and essentially biological processes for the productions of plants and animals other than non-biological and micro-biological processes”.
Our existing law relating to patents for inventions is contained in the Patents Act, 1992, as amended by section 75 of the Trade Marks Act, 1996, and sections 4 and 5 of the Intellectual Property (Miscellaneous Provisions) Act, 1998. The 1992 Act enabled Ireland's ratification of the European Patent Convention and the Patent Co-operation Treaty.
In general, the 1992 Act is in compliance with the provisions of the TRIPs Agreement relating to both the standard for patentable subject matter and the subject matter which may be excluded from patentability.
The main objective of the present Bill is to update the existing law to accord with the provisions of the TRIPs Agreement. The main area where existing law needs to be updated relates to provisions concerning compulsory licences. The right given by the grant of a patent is, in essence, a right, enforceable through courts, to prevent others from making, importing, using or selling the patented product. However, the patentee need not exercise this right – he may licence others to do so.
The 1992 Act contains provisions in sections 70 to 75 concerning the compulsory licensing of patents without the authorisation of the patentee. The existing provisions of section 70(2), that the patent is not being adequately worked, the demand for a patented product in the State is being met by importation and commercial working of the invention in the State is being hindered by importation, are inconsistent with EU law and contrary to Article 27.1 of the TRIPs Agreement which provides that "patents shall be available and patent rights enjoyable without discrimination as to place of invention, the field of technology and whether products are imported or locally produced".
Essentially this means that where a patented product is exploited in any member country of the WTO and is then imported into another country in sufficient quantities to satisfy domestic demand, there a compulsory licence cannot be granted in that other country.
Additionally, pursuant to Article 31 of the TRIPs Agreement, numerous conditions must be adhered to by member countries of the WTO should such countries provide for the possibility of granting compulsory licences under a patent. Prior to the granting of a compulsory licence the applicant for the licence must show that reasonable efforts to obtain a contractual licence from the patentee have failed. The licence shall be limited as to its scope and duration and it shall be of non-exclusive nature. The compulsory licence shall be non-assignable and shall be granted predominantly for the supply of the domestic market. The compulsory licence shall be terminated if and when the circumstances which led to it cease to exist and are unlikely to recur. The patentee shall be compensated adequately depending on the circumstances of each case. The legal validity of the compulsory licences as well as any decision relating to the compensation shall be subject to judicial review.
Where compulsory licences are granted in order to permit exploitation of a second patent which cannot be exploited without infringing a first patent, three additional conditions apply – the invention claimed in the second patent shall involve an important technical advance of considerable economic significance; the patentee of the first patent shall be entitled to a cross-licence, that is, a licence to use the invention claimed in the second patent, and the licence in respect of the first patent shall be non-assignable except with the assignment of the second patent. Sections 9 to 13 of this Bill amend the existing provisions concerning compulsory licensing of patents as contained in sections 70 to 75 of the 1992 Act to bring them into line with the TRIPs Agreement.
Under section 25 of the 1992 Act, a filing of a previous application in a Paris Convention country may give rise to a priority right in a subsequent application in the Irish Patents Office. Section 5 extends the provisions of section 25 of the Act to WTO member countries which were not party to the Paris Convention. A filing in a country not party to the Paris Convention can also give rise to priority if the Government makes an order to that effect consequent upon bilateral or multilateral agreements. Two such orders made previously will become superfluous when section 5 comes into operation and accordingly section 17 provides for their revocation.
Section 16 of the Bill repeals the transitional provision set out in paragraph 4 of the First Schedule to the 1992 Act as that provision is inconsistent with Article 28 of the TRIPs Agreement which stipulates that where the subject matter of a patent is a product, the patent owner shall have exclusive right to "prevent third parties not having the owners consent from the acts of making, using, offering for sale, selling or importing" that product for those purposes.
I am also amending certain provisions of the 1992 Act by way of correction or clarification and to bring certain other provisions into line with changes effected under the European Patent Convention. The criteria as to what is patentable subject matter and the requirements of novelty as laid down in sections 9, 10 and 11, respectively, of the 1992 Act are based on the corresponding provisions of the EPC. These may be modified, under section 9(5) of the 1992 Act, by order by the Minister for the purpose of giving effect to any future amendment of the EPC. However, section 9(5) of that Act incorrectly provides that the EPC can be amended by "any international treaty, convention or agreement". In fact, the EPC can be revised only by a conference of the contracting States and section 3 effects the necessary amendment.
Another section requiring correction relates to section 58 of the 1992 Act concerning revocation of patents. Article 138 of the European Patent Convention specifies the only grounds upon which a European patent may be revoked under the laws of EPC contracting States. The permissible grounds for revocation as specified in section 58(a) to (e) correspond generally to the provisions of the EPC except in relation to section 58(d). The aim of the amendment proposed by section 7 of this Bill is to bring the existing provisions on the grounds for revocation of patents into conformity with Article 138 of the EPC.
Section 15 of the Bill amends section 120(3)(d) of the 1992 Act to take account of certain changes made to the EPC in 1997. The amendment adds a proviso to section 120(3)(d) to correspond to a similar provision in new Rule 23(a) inserted in the implementing regulations to the EPC. Section 14 of the Bill relates to translation requirements pertaining to European patent applications designating Ireland and is being included at this stage in anticipation of general agreement being reached in various international law and policy fora, including the European Patents Office, that it should be possible for applicants for European patents to lodge translations, where this is required, to one central location rather than to the patent office of each country designated in the application, as applies at present.
This is a relatively short and, I hope, non-contentious Bill. Ireland's membership of the World Trade Organisation gives rise to the main elements of the Bill. The remaining amendments are included either as a consequence of our status as a contracting party to the European Patents Convention or because of the need to clarify and correct inaccurate wording in two sections of the 1992 Act.
I commend the Bill to the House.