CHASING INNOVATION:Legislating for new discoveries is a constant challenge that requires a fleixible approach

In a world of ever-faster change, the Government faces ever more complicated choices. Sometimes, it must regulate. On other occasions, it must display a lighter hand. Always, it needs the wisdom to know the difference.

Today, Ireland is recognised as having amongst the best intellectual property regimes in the world and, over the last decade, it has become more nimble in legislating for financial services undreamt of shortly before.

In other areas, however, the situation is not so clear cut. Some types of medical research - in-vitro fertilisation and cosmetic surgery - operate in Ireland in a landscape without rules, without regulation, dependent on the goodwill of practitioners.

In a global market, there are areas where Ireland can not operate alone, or at least not operate effectively, such as in putting in place a regulatory system to govern purchases by Irish people of drugs available over the internet.

Emphasising that both the problems and opportunities will increase, Trinity College's Marek Radomski says: "If you look at what has happened in medicine over the last 30 years, the pace has been staggering.

"People live longer, they survive diseases now that they wouldn't have before. Discoveries are moving well ahead of the legislation. The big problem is where the balance between scientific freedom and the morality and ethics should lie."

However, he warns that legislators can sometimes run ahead too quickly, interfering before the dust has settled on scientific advance.

In the United States, the Bush administration curbed stem cell research, in response to pressures from the religious right. Faced with restrictions in the US, stem cell research was pushed on in other countries, leading to developments in Japan recently where one researcher has found a way of producing stem cells without any of the moral questions posed at the beginning.

Instead of needing embryonic cells, Shinya Yamanaka has found a means to genetically reprogramme an ordinary mouse skin cell to revert to its embryonic state that can then be used to create any other kind of cell necessary.

"I would, of course, make an impassioned plea for more research," says Radomski. "Ireland's recently generated wealth should be used to advance the cause of science. For legislation to run ahead of science can backfire on science."

In general, Ireland has adopted a light regulatory touch, and sometimes no touch at all - but it is not always because of an ordered decision to stay out of the way until a clear path ahead is known, according to former senator, Mary Henry.

Though the Commission on Assisted Human Reproduction produced its report to the Government three years ago, no legislation has yet been forthcoming. Indeed, the Government has given no sign of even the direction it would like such legislation to go.

Over 1,000 babies have been born in Ireland using in-vitro fertilisation (IVF) techniques, so-called "test-tube babies", with most of the sperm coming from Danish donors.

The lack of legislation means that problems could occur in coming years when the babies born by such means try, as adults, to contact a natural parent, or if they have inherited diseases.

"In practice, the rule is caveat emptor. But after 40 years in medicine I know that people are at their most vulnerable at times like these. That is why there is a need for regulation," says Henry.

Irish cancer sufferers, in their desperate search for a cure, travelled to alternative health practitioners in Clare before the individuals concerned were eventually struck off, she points out.

"Many of them had paid €10,000, or €20,000, which many of them could ill-afford, but the problem, or one of the problems, is that the Medical Council can only act after complaints are made. And sometimes they are not made."

Cosmetic surgery, though hardly on the same plane of human suffering, has similar problems. "People are coming in here offering treatments to patients who are not referred by their general practitioners," she says.

The situation is no better regarding internet purchases of drugs. "It may have started off, or been first noticed, with talk of people buying Viagra over the internet, but it has grown. People are half-mad to buy off the internet," she says.

"Do they know what they are buying? No, they can't. Do they know whether the drugs are counterfeit, or not. Of course, they can't know.

"They have no way of doing so. But I have heard of cases where people are buying antibiotics and abortifacients on the web."

In reality, the regulation of such purchases is not something that could be done by Ireland alone, but it is, nevertheless, striking that the Government has never run a public information campaign to discourage people from doing so - particularly when it is able to run campaigns urging people to wash their hands in hospitals.

"People don't want a Nanny State, but they do want to be protected by the State when they need to be. They don't have time to read the medical journals, or the expertise necessarily to understand them," says the highly-respected Henry.

While there are issues on the medical front, there are areas where Ireland has made ground, particularly in the thorny area of intellectual property (IP) where Irish regulation is now recognised as one of the most progressive in the world.

"On the legislative side, there is arguably no country in Europe that can say it has a better statutory framework when it comes to IP," says John Whelan, a partner in A&L Goodbodys. "All of the core Irish legislation in relation to trademarks, patents, copyright and related rights have been introduced in the relatively recent past. The Copyright and Related Rights Act 2000, dealing with copyright in all the different technologically advanced forms, is one of the most sophisticated pieces of legislation in Europe."

The legal framework in place - one that replaced a 1963 piece of legislation introduced before television was even established in Ireland - "gives great comfort to companies considering either creating or managing their intellectual property assets in Ireland," says Whelan.

Indeed, the environment was so benign that it attracted the unwelcome attention of the European Commission because in its original form it would have allowed Irish and multinational firms to pay no tax on licence fees generated by their Irish-registered patents.

Following the Commission's move, the legislation was tightened so that only the first €5 million of licence fee income in any one year would be tax-exempt. "But that is still highly significant and attractive to companies," says Whelan.

Dick Kavanagh, who speaks for the Industry Research and Development Group, which is affiliated to IBEC, is equally positive about the system's ability to cope with rapid change.

"Sometimes the destination is not known, and it is better to stay out of the way until it is. But Ireland has gone from being a place where no research was done to one where it is now increasingly recognised as a place where world-class research is happening."

Though Ireland is still not spending enough on research and development it is "catching up and it is catching up quickly", says Kavanagh, who remembers days back in the early 1990s when nothing was happening.

Much of the credit for this, he gives to the fact that Ireland is small, and that the Government and civil service has become attuned to the needs of industry, and nimble enough to move quickly when the need arises.

"There is a huge awareness now in the system about intellectual property, that the future is about adding value to services. But the legislative blanket has to be light. Otherwise it will scare off development," he says.

Equally, the Government has done well coping with an avalanche of new financial products emerging from the Irish Financial Services Centre, says Pat Farrell, the chief executive of the Irish Banking Federation.

"Eight years ago this country did not have a market in asset-covered securities, but there was speedy collaboration between the industry and the policy-makers and legislation was put through quickly and effectively," he says.

One of the biggest international banks, German-owned Depfa, was attracted to establish in the IFSC because of moves such as this. "They came here because they recognised that there was a world-class legislative environment," Farrell says.