Patents
The Patents Act 1992 is the principal legislation governing the area of patents in Ireland. There are two types of patent protection available under the 1992 Act, a full-term patent and a short- term patent.
The Act contains statutory prohibitions against both direct infringement of a patent and indirect or contributory infringement. The provisions on contributory infringement prevent unauthorised third parties from supplying or offering to supply the “means” relating to an essential element of the invention, for putting the invention into effect.
Patents that are effective in Ireland are granted either by the Patents Office in Ireland or by the European Patent Office (EPO) (provided the applicant has designated Ireland in the application it files with the EPO). Applications designating Ireland can also be filed through the Patent Co-Operation Treaty (PCT).
Full-term patent
The duration of the full-term patent is 20 years from the date of filing, provided that annual renewal fees are paid and the patent is not revoked at any stage. The term of a patent can be extended for a maximum of five years where the patent is for a medicinal product for human or animal use, or for plant production products.
Short-term patent
The criteria for a short-term patent are the same as for a full-term patent, except that there is a lower threshold for inventiveness as the test for the short term patent is that the invention must not clearly lack an inventive step. A short-term patent requires disclosure of the best method of performing the invention known to the applicant. An applicant is not required to carry out a state-of-the-art review at the time of application. The period of protection for a short-term patent is 10 years and as with full-term patents supplementary protection certificates may be obtained.
Trade Marks
The Trade Marks Act 1996 is the principal piece of legislation governing the area of trade marks in Ireland. Ireland is a party to the Community Trade Mark (CTM) System, which permits trade mark protection across the twenty-seven EU member states.
A trade mark registration under the Act confers on the proprietor exclusivity of rights and there is no requirement to prove a reputation in order to obtain registration. The Act protects the proprietor in relation to the unauthorised use of goods embraced by the trade mark and against unauthorised use of an identical or similar sign on goods or services similar to that covered by the trade mark registration.
Ireland is a party to five international conventions in the area of trade marks, including the Madrid Protocol, the Paris Convention for the Protection of Industrial Property and the Nice Agreement.
Copyright
In Ireland, copyright law is contained in the Copyright & Related Rights Act 2000. This protects:
- original literary, dramatic, musical and artistic works (traditionally called the “classical” copyrights)
- films, sound recordings, broadcasts and the typographical arrangement of published editions (often called related rights, because they involve the exploitation of “classical” works)
- “moral” rights in such work (such as the right to be attributed as author)
- computer software and original databases
- performances and performer’s rights.
There is no system of registration for copyright protection in Ireland as copyright arises automatically on the creation of an original work. A work is protected automatically from the time it is first written down or recorded in some way, provided that it has resulted from the creator's skill and effort and is not simply copied from another work. In most cases, copyright lasts for the creator's lifetime plus seventy years.
Designs
The Industrial Designs Act 2001 is the principal legislation governing the area of designs in Ireland. There are two sources of legislative protection for design rights in Ireland;
The Industrial Designs Act 2001
The definition of a design in the Irish Industrial Designs Act 2001 focuses on the appearance of an article rather than the mechanism by which it functions. The legislation provides that a design that is new and has individual character is registerable under the Act. A grace period provision allows designers to test the success of products on the market before embarking on the registration process.
EU Registration: The Community Design Rights
- Registered Community Design Right: Since 1 April 2003 it has been possible to obtain Registered Community Designs (RCDs) in Europe. The system is administered by the Office for Harmonisation in the Internal Market. The Community Designs systems works in addition to Ireland’s national laws concerning registered designs.
- Unregistered Community Design Right: The new Community unregistered design right, covering the whole of the European Community, came into effect from 6 March 2002. The unregistered design right comes into existence automatically when a new design is first made available to the public within the European Community and lasts for three years from that date.
- The Irish High Court recently found that the unregistered design rights of a UK retailing group had been infringed in the first Community unregistered design right case involving clothing to be taken in Europe. While the case is under appeal to the Supreme Court, it offers useful legal guidance and shows the willingness of the Irish courts to protect creativity in industries with a high product turnover.
Litigating in the Commercial List of the High Court – A specialist IP court
The advent of the Commercial Court in 2004 was a positive step towards making Ireland a centre for IP management. Generally a claim has to be valued at €1m or more before it can be heard in the Commercial Court, however there is no financial threshold where proceedings are brought under IP legislation. The Commercial Court also focuses on case management which has resulted in substantially quicker times for the completion proceedings and hearings which may be determined at trial in a space of a few months. We were the first Irish law firm to issue proceedings in relation to an IP case before the Commercial Court and have brought actions in relation to copyright, trademarks, patents and unregistered community design rights.
Taxation of Intellectual Property
The issue of taxation is discussed in the Tax section but it is worth also summarising here the key tax issues which have had a positive effect on Ireland as an international centre for locating IP, in particular:
- the holding company regime whereby gains on the disposal of shares in subsidiary trading companies, which are tax resident in the EU or a treaty partner country, are not liable to capital gains tax;
- the improved tax credits in respect of expenditure on R&D;
- the widening of the qualification for companies to benefit from the credit for foreign tax on dividends;
- the exemption from stamp duty on disposals of IP.
Patent Royalties - Zero %
The existing tax exemption in relation to income earned from patent royalties is an extremely beneficial aspect of the Irish taxation system for IP.
Low Corporation Tax
If the case can be made that an IP holding company’s activities qualify as trading activities it will benefit from the 12.5% rate.
Double Taxation Agreements
Another attractive feature of the Irish tax regime is the fact that 45 double taxation agreements are currently in force which protect from double taxation on flows of IP income to and from an Irish company and four more have been signed in respect of which domestic tax benefits are already available. Further agreements are expected soon.
Competitiveness
Other countries such as Switzerland are often viewed as attractive competing jurisdictions for services in light of their favourable tax regimes. Switzerland’s main feature is that it offers a zero tax rate for corporations but this rate is subject to several qualifications and the relief is only available for a limited time. In Ireland, the low rate of 12.5% corporation tax is available without limit of time and is only subject to the condition that the taxable income must be Irish “trading income”.
Lack of Restrictive Tax Legislation
The absence in Ireland of general transfer pricing legislation, controlled foreign corporations and thin capitalisation is seen as an added bonus by potential investors in Ireland.