Intellectual Property's growing role in the Irish economy
Increasingly, the patents or intellectual property that a company has ownership of dictates its value.
Patent applications reached an all-time high last year according to the Intellectual Property Office of Ireland, which reported 193,442 EU applications designating Ireland. But this may falter soon if the Government continues to delay ratifying the EU’s new Unitary Patent Court.
The most frequent question raised by members of the HALO Business Angel network is; "have you any registered intellectual property?" And whereas HALO invests in early-stage companies across the island of Ireland, the same question is raised by large corporations when they are evaluating potential target competitors to buy. Increasingly the patents or intellectual property that a company has ownership of, dictates its value.
Some companies will buy patents in a specific field to build up their portfolio. Shorla Oncology is a typical example. Started in Clonmel in 2018, by co-founders Orlaith Ryan and Sharon Cunnigham. Last month they raised €33m from investors to accelerate the growth of their portfolio of innovative cancer treatment drugs. Investors were enticed to pump the money in, based on the potential to acquire and commercialise certain patents.
Larger corporations often buy a bunch of patents prior to moving into a new market. Huawei, which has been under attack by the US administration, bought up lots of wireless patent portfolios several years ago before moving into the US market for phones and network equipment. They needed an arsenal of Intellectual Property to get on the same playing field as their US competitors, otherwise, they would not have “chips” to trade if there was infringement.
Intellectual Property Rights (IPRs) have become increasingly important in a globalised world where intangible assets now make up most of the value of leading global companies. There is a lot of Intellectual Property (IP) held in Ireland. Some of it has been produced here, and much has been imported when the Irish arm of a global corporation buys it from another subsidiary. The Irish registered company pays a royalty for the use of the IP, which amounted to €30bn in this year’s third quarter alone, according to the Central Statics Office international accounts report. Whereas most of the IP is an asset owned by foreign corporations, the patent royalties are returned to the parent company and do not stay in the Irish economy.
However, the effective management of their IP is an integral part of their reasons for locating their production plants here. According to IDA Ireland, the number of global companies centralising their IP management in Ireland has made Ireland one of the largest exporters of IP in the world.
For many global companies, Ireland is a perfect entry point to the EU, with a strong infrastructure in place, including a workforce with IP experience supporting world-leading companies such as Apple and Pfizer, who rely not only on the protection of their IP but also the legal expertise here in dealing with infringement of their IP Rights across Europe.
Hence, it is difficult to understand why Ireland’s participation in the EU‘s United Patent Court (UPC) has still to be confirmed. Years in the making the UPC became operational on the June 1, 2023, with most member states signed on. IBEC and the Association of Patent and Trade Mark Attorneys have been urging the Government to ratify Ireland’s participation in the UPC as far back as early 2022.
Lobby groups and patent attorneys have highlighted the benefits of the UPC for businesses as the unitary patent and the EU Court to handle infringements, offers a single system which has less red tape, offers lower costs, with no need to deal with multiple national courts to enforce patent rights across Europe.
For small businesses, it is particularly relevant, as it reduces costs for patent proprietors with substantial savings on renewal fees across participating member states. The Irish government, early last year advised that it would have to ratify Ireland's entry into the UPC by means of a Referendum, as some judicial powers would have to be transferred to the UPC.
At that time the Government committed to including the UPC question in the referendum on gender equality planned for November 2023. However, the UPC referendum now looks set to be held along with the local and European elections in June 2024, but some Irish-based multinationals have already taken their patent disputes to the German UPC for resolution.
