IP theft is a €150bn-a-year black market

29 Apr 2008

Infringement of intellectual property (IP) rights is a big business, estimated at €150bn, and European Commissioner Charlie McCreevy has called on various sectors damaged by this, including technology and pharma, to unite to fight this tide.

“This is more than the gross domestic product (GDP) of 150 small countries,” McCreevy, who is European Commissioner for the Internal Market, said yesterday at a conference hosted by legal firm William Fry to mark World Intellectual Property Day.

McCreevy said that trademarks, patents, copyright, designs and domain names are all recognised forms of IP which can be successfully protected by the original owner.

“The industry sectors concerned are best placed to lead in this battle against counterfeiting and piracy,” McCreevy said.

“Industry holds the rights concerned and should take the necessary steps to preserve its assets. It should unite in the fight by developing collaboration and mutual assistance models on the basis of stakeholder agreements.

“It is industry which should partner with the authorities and provide technical expertise and information enabling the competent authorities to intervene. Such a public-private partnership is key to success,” McCreevy added.

Solicitor Carol Plunkett, speaking with siliconrepublic.com, said that over the years businesses have realised that their branding is the most important asset they have and protecting patents is crucial.

“Inventions in pharma are huge because a patent gives you a 20-year monopoly and that’s why there’s so much research – firms deserved to be rewarded and recoup the costs,” she said.

Plunkett said that Ireland has attracted some of the world’s leading IT and pharmaceutical giants because of strong Irish legislation for IP, as well as the tax breaks.

“We’re lucky the Irish Government recognised in the last 10 years that IP is important – Ireland is now known as an economy that is intellectually-based, as opposed to having an industrial basis.

“Our policies have been geared to attract pharma players like Pfizer and software companies like Microsoft. Royalties from a patent under Irish law are tax-free and there’s now a tax incentive scheme in place for people engaged in R&D.”

Plunkett agreed that the scope for R&D tax breaks for small and indigenous companies should be widened. “There is room for improvement,” she said.

Another key development has been the establishment of the Commercial Court at the High Court by Judge Peter Kelly. “This court runs cases really quickly. For example, an IP case can be over and done with within 20 weeks, where traditionally it had taken over a year or two years to resolve. Other jurisdictions around Europe take well over a year,” Plunkett said.

She cited as examples of IP disputes in the Commercial Court the current court battle between Eircom and the big four music labels over illegal downloads, the case over Fig Rolls packaging between Jacobs and McVities and the clothing design dispute between Karen Millen and Dunnes Stores.

Plunkett said that a big issue looming on the horizon is the vast amounts of unlicensed software sitting on ordinary business’ servers.

“The problem typically occurs when people update their software. It’s important that when firms buy software they either get an assignment or a licence that allows them to do everything they could want to do with the software.

“There are numerous cases where people fall foul of the law because they think because they pay for it in the first place, they are licensed to do what they want. The reality is you pay to use that software under certain terms and you need to stick to them,” Plunkett said.

By John Kennedy