Intellectual Property (IP) is a core part of any business and particularly is a vital part of the strategic toolkit for any business that creates value through innovation and constant iterative improvements in products and processes.
It feels like it's back to the starting block again for Ireland and the European Unitary Patent System – Right now, as part of a new patent system in Europe, 17 European countries are already on the running track, sprinting forward since the new EU patent system began on 1 June 2023.
The question is, why has Ireland pulled the plug on going ahead with the referendum that was needed to have the electorate vote on whether Ireland could join the new Unitary patent system? In other words, Ireland is still not lined up to take part in this competitiveness race with the announcement on April 15 2024 that the proposed referendum in Ireland is postponed.
Instead of being out on that running track, we are standing by and watching those 17 countries, which account for 66% of the population of the EU, enjoy a considerable head start on us in this race to win competitive advantage in today's global marketplace.
Another question we could ask at a national level is, "What impact does delayed lining up at the starting blocks have on the competitiveness of Ireland relative to other countries?" – and more fundamentally, what is the ultimate cost of that delay?
For individual Irish businesses, the question is, "What is the lost opportunity for the competitiveness of my business?" and "How much is this really costing me in lost competitive advantage?"
What is going on?
A European patent with unitary effect (i.e. the "Unitary Patent") as well as a new Court for Patent litigation for businesses in the participating EU member states, ("the Unified Patent Court") have now been up and running since June 1, 2023. Business in France, Germany and other European countries are already actively using this new European unitary patent system.
The Unified Patent Court is a single international patent court for handling patent infringement and patent validity disputes for existing European patents as well as for Unitary Patents that are available under this new system.
Since June 1 last, the Unitary Patent has been available to provide patent protection in participating EU member states, which currently are the following 17 countries: Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, and Sweden.
Other EU member states have indicated that they will participate in the future, including ourselves, as well as Greece, Romania and Slovakia, all of whom have already indicated their intention to join the new system. The Irish Government initially indicated its intention to hold a referendum on June 7 2024 (along with the local and European elections) but that has now been cancelled with no new date indicated. This brings considerable uncertainty for Irish businesses and in particular, SMEs.
Why does Ireland need to hold a referendum before we can join the UPC?
The UPC Agreement will, when and if, implemented in Ireland, result in the Irish courts giving some jurisdiction in patent litigation matters to the international patent court that is the UPC. Such a transfer of sovereignty and judicial powers to the UPC, an international body, requires a referendum under the Irish constitution. Therefore, Ireland cannot join in the system until we hold that referendum and of course, assuming that there will be a majority vote in favour of joining the new system.
Ireland has always been at the heart of EU systems:
Ireland has been a member of the European Union (EU) since 1973, following a referendum in which 83% of voters supported our joining.
The new Unitary patent system has several benefits including reduced complexity for obtaining patent protection in multiple countries. That reduced complexity results in lower costs for the businesses seeking to put up barriers to market entry to competitors by obtaining and maintaining granted patents for their innovations.
In my opinion, Irish businesses are now at an obvious disadvantage relative to their counterparts in countries that are in the UPC system. The sooner that we hold a referendum, the better; for certainty and for clarity in supporting innovation and protection of the competitive advantage that Irish innovators seek to create and maintain in the European and global marketplace. As we speak, we are literally not at the races...
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