New patent court for Ireland ‘crucial’ to securing knowledge economy

The establishment of a new court described as crucial to securing the future of the so-called “knowledge economy” will require a referendum to amend the Constitution, possibly by the end of this year or early in 2016.

Last November, the Government confirmed that a local division of the Unified Patent Court will be established in Ireland, which would allow businesses to resolve disputes around intellectual property rights (IPR) locally rather than in other EU member states.

A single court case will therefore decide on the validity of a patent throughout up to 25 states, eliminating the need for country-by-country litigation.

The European Commission has proposed the establishment of a "seamless, integrated single market for intellectual property rights", which will also include the establishment of a unitary patent for Europe.

Patent protection is essential in areas such as the development of drugs and medical equipment as well as tech devices such as smartphones and other consumer electronics. In the transport sector, the design of new fuel-efficient cars and trains relies on thousands of patents.

A 2011 commission document described intellectual property rights as “key assets of the EU economy”. But it also said the current European system was “complex, fragmented and costly”, with different decisions in different member states creating “legal uncertainty”.

The creation of unitary patent protection had to be accompanied by “appropriate jurisdictional arrangements”, which would allow patents to be enforced or revoked throughout the territory of the participating states, the commission said.

To that end, an Agreement on a Unified Patent Court was signed by 25 EU members on February 9th 2013, during Ireland's presidency of the European Council.

It will not come into effect until several conditions are met, including that it must be ratified by 13 member states. Three of these must be France, Germany and the UK, the three member states where most patent litigation is ongoing.

To date only Austria, Belgium, Denmark, France, Malta and Sweden have ratified the agreement. Spain, Croatia and Poland did not sign it. In Ireland's case, ratification is subject to a referendum because it involves a limited transfer of jurisdiction from the Irish courts.

Difficult to explain?

Given the complexity of this specialist legal area, is it likely that the necessary referendum will be a difficult one to explain to the general public?

Ann Henry, partner with the IP litigation division of Philip Lee Solicitors, believes this should not be the case.

“Voting no in relation to this referendum wouldn’t be damaging our Government; it would be damaging the livelihoods of our children and would be damaging all the work that’s gone into the enviable reputation we have as a smart economy over the years,” she said.

"When you think about companies like Intel and Google and LinkedIn and how proud we are to have them located in Ireland, one of the great advantages of having a local court is that if there are injunction proceedings that have to be brought in Ireland, it ensures that a lot of the local considerations can be more readily understood."

“International companies see Ireland as somewhere that intellectual property rights can be protected, commercialised, exploited and defended – the four cornerstones.

“In establishing a local division of the Unified Patent Court we will strengthen our ability to defend the rights of patent holders in Europe.”

Patricia McGovern, chairman of DFMG Solicitors and a former chair of the Law Society’s IP committee, said the establishment of the local division of the Unified Patent Court would have a number of positive aspects.

“It will cement our status as a country that’s proactive in terms of promoting IP and protecting IP.”

The Law Society committee believed it was crucial for Ireland to have a local division of the court, "particularly in circumstances where the Government is very much promoting Ireland as being a place for intellectual property", she said.

“We thought it was somewhat inconsistent to be saying ‘it’s a great country to protect your IP, but in fact there are certain things that if you wish to litigate you have to go outside the country’.”

On whether the referendum would be difficult to sell and explain to the public, McGovern agreed the average person probably knew nothing much about it at this point.

But she said this had probably been the case before the 2013 referendum to establish the Court of Appeal.

It would ultimately be up to the Referendum Commission to explain the issue, she added.

Timing undecided

The Government’s spring/summer legislative programme published in January indicates the heads of the Bill to amend Article 29 of the Constitution to recognise the International Agreement on a Unified Patent Court have been agreed.

But a spokeswoman for the Department of Jobs, Enterprise and Innovation said the timing of the referendum had not yet been decided.

There is some disappointment among IPR practitioners here that Ireland failed to secure responsibility for the mediation and arbitration service of the new court. One suggests that while Ireland made a pitch to host this service, it simply did so too late. Ultimately, the mediation and arbitration services were awarded to Lisbon and Ljubljana.

There is also a view that the Government should assign more resources to this area, including by increasing the number of civil servants in the Department of Jobs who specialise in it.

In an update in September 2014, the preparatory committee for the Unified Patent Court acknowledged that the court would not be ready before the end of 2015. It will publish a further update, with target dates, this year.