year, the Irish Government announced the end of the controversial “Double
Irish” corporate tax scheme. ‘Double Irish’ was a tax avoidance scheme that was particularly attractive to overseas companies as it allowed them to greatly
reduce their corporate tax liability from exploitation of Intellectual Property
by taking advantage of the difference between Ireland’s corporate tax rate of
12.5% and lower or nil rates in offshore jurisdictions. Companies were able to
do this by shifting profits from a substantial Irish resident corporate entity
to an Irish corporate entity tax resident offshore.
though the Irish government announced that it will modify Ireland’s corporate
tax regime to make ‘Double Irish’ redundant, Ireland will still be one of the
most attractive and stable countries to locate Intellectual Property
portfolios, particularly if these portfolios comprise European Soft IP rights
such as Community Trademarks and Registered Community Designs. This article
seeks to show why, leaving tax reasons aside, Soft IP owning businesses should
still consider Ireland as a location to manage, enforce and exploit Soft IP
is a Member State of the European Union.
is one of 28 Member States of the European Union, having joined in 1973. The
European Union is the world’s largest single market with a population of 500
million people. It is a loose confederation of sovereign European Member States
and its single open market generates 20% of global GDP in terms of purchasing
power. Exporters of branded products and
services into the European Union would therefore be well advised to implement
comprehensive strategies to ensure that their trademarks and designs are fully
protected and managed within the European Union in a cost effective and tax
efficient manner. As an integrated Member State of the European Union, Ireland
is one of the most attractive Intellectual Property Holding company
jurisdictions, especially for businesses in other English speaking Common law
is the only official English speaking country within the Eurozone.
Eurozone comprises 18 Member States of the European Union which have adopted
the EURO as their currency. Ireland is the unique position to be the only
official English speaking Member State in the Eurozone. This is significant
because the European Union Trade Marks and Designs Office (OHIM) and other bodies
of the European Union only deal in EUROs. Irish originated payments made to and
received from institutions and bodies of the European Union are therefore not
susceptible to exchange rate risk and currencies transaction fees, unlike
payments made to and from non-Eurozone countries. This also has an advantageous
bearing in relation to contentious matters brought before courts in Eurozone
Member States by Irish incorporated IP holding companies.
has a 1500 year old tradition of protecting Intellectual Property.
tradition of protecting Intellectual Property in Ireland dates back to the
sixth century case involving the Irish saints, Columba and Finnian. St Columba
copied a Psalter (a volume containing the Book of Psalms) in the possession of
St Finnian and intended to keep the copy. St Finnian disputed St Columba’s
right to keep the copy and the matter was ultimately settled before the Irish
King Diarmait who held: “To every cow belongs her calf, therefore to every book
belongs its copy”. The decision of King Diarmait is arguably the world’s
earliest recorded case law on the right to copy and is the genesis of modern
is also a country which has operated
under the Common law since its development during the reign of King Henry
II in the 12th century. For Soft IP owning businesses based in other Common law
countries, Ireland’s Common law legal system will therefore be of particular
advantage since many Common law procedures and principles will be followed and
recognised by Irish courts. Moreover, and unique with the European Union,
Ireland is the only Common law country within the Eurozone whose courts hear
and determine cases in English as a matter of course.
Commercial Court was established in 2004 and is now one of the most efficient
and technologically advanced in the European Union. The Commercial Court deals
with all types of Intellectual Property disputes, regardless of value.
Significantly the Court is designated as a Community Trade Mark and Designs
Court and can therefore hear disputes relating to the European (CTM) Trade Mark
and European Designs. Typically, it only
takes 6 weeks from the issuance of proceedings for a case to be listed in the
Commercial Court List for hearing. The Commercial Court has strict Case
Management procedures, which ensures speedy and efficient processing of
disputes. On average, 50% of cases brought before the Irish Commercial Court
have concluded within three to four months.
development and advances in the determination and ultimate resolution of
Commercial cases have occurred with the creation of the new Court of Appeal.
The court was created following a referendum and its purpose is to reduce the
backlog of appeals to Ireland’s highest court, the Supreme Court.
is the only Common law jurisdiction in the European Union with judicially
recognised written Constitutional protection for Intellectual Property Rights.
has a written Constitution and this has two very important and significant
provisions which protect property rights.
Article 40.3.2° not only protects the property rights of individual
citizens, but also corporations domiciled in Ireland. Article 43.2.1° further prohibits the State
from passing law abolishing the right of private ownership or the general right
to transfer, bequeath the private ownership of external goods.
far as the Irish courts are concerned, Intellectual Property rights secure the
same Constitutional protection as real property. This has been confirmed in two
Supreme Court decisions. Phonographic Performance (Ireland) Ltd v Cody
(1998) – established that Constitutional protection can extend to
intangible rights and Re Article 26 and the Employment Equality Bill 1996
where the Irish Supreme Court recognised that the right to carry on a business
and earn a livelihood was a property right.
both Trade Marks and Patent legislation in Ireland stipulate that registered
patents and trade marks are deemed to be property rights. Therefore, by
implication, registered patents and trade marks enforceable in Ireland fall
under the protection of the property provisions of the Irish Constitution.
is also a signatory of the European Convention on Human Rights and is therefore
bound by decisions of the European Court of Human Rights. In the case of Van
Marle v Netherlands (1986), the European Court of Human Rights recognised
that goodwill of an accountancy practice and a claim for damages in tort were
both respective possessions for the purposes of Article 1 of Protocol 1 of the
European Convention on Human Rights.
virtue of its membership of the European Union, any Intellectual Property
rights owned by Irish companies also secure protection under Article 17 of the
European Union Charter of Fundamental Rights, which explicitly protects
Intellectual Property. The Charter is automatically binding on all EU Member
States, including Ireland.
allows for more effective and streamlined enforcement of EU Trade Marks (CTMs)
that own European Union Trade Marks (CTMs) and Designs (RCDs) and which are not
domiciled or established in the European Union are likely to encounter
difficulties in enforcing these rights, particularly if an infringer is based
outside of the European Union. This is because of the complex enforcement and
jurisdiction rules laid down in the regulations with govern the CTM and RCD.
One of the most effective ways of overcoming these challenges is to locate
European Trade Mark and Design rights within the European Union. For non EU
domiciled businesses from Common law countries without an establishment in the
European Union, Ireland is arguably the best EU country to locate Soft IP
rights in view of its (i) English speaking Common law system (ii) English
speaking efficient and IP friendly judicial system and (iii) membership of the
is a signatory to most Intellectual Property conventions and treaties.
is a signatory to 58 different Intellectual Property international treaties and
conventions. Notably, Ireland recently ratified into its domestic law the
Singapore Treaty on the Law of Trade Marks 2006 and has thus harmonised its
administrative Trade Mark law in line with other signatories.
the area of Soft IP law, Ireland has comprehensive legislation which protects
both registered and un-registered Trade Marks. Unlike many countries in the
European Union, Ireland is a ‘first to use’ country. Provided you can
demonstrate goodwill and reputation in Ireland, un-registered rights can be
protected under the Common law tort of Passing off before the Irish courts.
law is primarily governed by the Copyright and Related Rights Act 2000. This
legislation was enacted to bring Ireland’s Copyright regime in line with
technological changes and advances, particularly in the digital sphere. Most
works in Ireland are now protected for the life of the author plus 70 years
and un-registered Designs in Ireland are protected under the Industrial Designs
Act 2001. Registered designs are protected for five year intervals up to 25
years. Notably, Ireland was the first country in the European Union to make a
reference to the Court of Justice of the European Union on an issue of
un-registered design right.
Ireland, pre 1996 Part A Trademark registrations have statutory immunity from
to the enactment of the Trade Marks Act, 1996, the Trade Marks Register in
Ireland was divided into two parts. Trade Marks registered in the more superior
Part A of the Register became immune to invalidity challenge after seven years
unless the registration was obtained by fraud or was deceptive at the time of
filing. As a result of the Constitutional protection afforded to Trade Marks as
property rights, all former Part A registrations maintained their immunity from
invalidity challenge when the 1996 Act became law. The effect of this is
significant because it means that an Irish or Irish based applicant applying
for an International (Madrid Protocol) registration could, where appropriate,
base their international application on an Irish pre-1996 registration to
prevent the resulting international registration being centrally attacked
during its first five years (’Dependency Period’).
unless CTM owners are domiciled or have an establishment within the European
Union, it is not possible for them to use their CTMs as the basis of an
International registration. Placing CTMs in an Irish holding company overcomes
has a flexible immigration policy to allow for relocation of non-EU IP
Ireland is a Member State of European Union, any EU national is entitled to
live and work there without the need for visas or indeed residency
registration. Even for countries outside the European Union, Ireland operates a
flexible ‘Intra Company Transfer
Employment’ permit system which
allows for the transfer of non EU senior management, key personnel and even
trainees. The advantage of this flexible system for large IP management teams
based outside of the European Union cannot be understated. By using the ’Intra
Transfer Employment’ permit, it should be
possible to transfer an entire IP management team from outside the European
Union to Ireland with relative ease.
has a highly educated workforce and one of the most respected legal education
systems in the world.
those businesses wishing to recruit Irish nationals to their IP management teams,
Ireland is the 10th most educated country in the world, according to the OECD.
Furthermore, in a European Commission study on third level education, Ireland
produced the ‘most highly employable graduates in the world’. Irish Unit Labour
costs have also been falling since 2012 and are now some of the most
competitive in the European Union. The IMD World Competitiveness Yearbook 2014
ranked Ireland No.1 for availability of skilled labour. All this makes Ireland
a particularly attractive location to build up an IP management team.
legal profession itself in Ireland will shortly undergo radical change with the
expected passing of Legal Services Regulation Bill 2014. All lawyers in Ireland
will be regulated by a single authority, the Legal Services Regulation
Authority. Significantly, all lawyers (Barristers and Solicitors) will have
easier and automatic rights of audience before Irish courts; at present only
barristers who are members of the Law Library and a small number of solicitors
tend to advocate before the higher courts. In effect, legal services will become more streamlined, accessible and
is also expected that the Legal Services Regulation Bill will allow for the
radical liberalisation of Ireland’s legal education system. Notwithstanding the
imminent changes, the existing and rigorous training and examination system for
those wishing to qualify as Irish Registered Patent Attorneys and Registered
Trade Mark Attorneys is to remain in place and will ensure that Irish Intellectual
Property Attorneys remain some of the best qualified in the European Union.
is recognised by Forbes® as the best place to do business.
2013, the leading business publication Forbes®
ranked Ireland as the best place to do business in the world. This finding is
not surprising when you consider that 9 out 10 of the world’s Global Software
and Pharmaceutical companies have located in Ireland where companies like
Google® and Facebook® now have their European headquarters.
those businesses wishing to locate their Intellectual Property Rights in
Ireland, the actual process of establishing a company is perhaps the best in
the industrialised world. It generally takes less than 10 days for the
incorporation of a company in Ireland to be completed.
any document transferring Intellectual Property to a newly incorporated Irish
IP holding company will be exempt from Stamp Duty tax. Further tapered
corporate tax relief may be gained in respect of costs incurred in transferring
IP rights to the new Irish entity.
unique combination of factors highlighted above makes Ireland one of the best
locations in the world to locate, manage and exploit Intellectual Property
rights. This is particularly so for IP rich owning companies based in other
Common law countries throughout the world.
over 20 years experience in Soft IP law, including a period gained in-house as
a Trademark advisor to an Intellectual Property Holding company in a low tax
jurisdiction, Niall Tierney has extensive expertise in advising and assisting
businesses in how to protect, manage, enforce and exploit Soft IP rights.
IP provides an ‘Acorn to Oak’ service which will advise and assist you in
corporate structure set up and governance of your Irish IP holding company;
intra-group transfers and licences; developing and/or transferring an IP
management team to Ireland; maximising full advantage of Ireland’s IP friendly
corporate tax regime as part of your overall corporate tax planning strategy.