Expert bought patents he was hired to value, PAC hears

AN expert employed to value the patents left over from the collapse of Media Lab was then allowed to buy them, the Dáil’s Public Accounts Committee yesterday heard.

PAC member Dan Boyle expressed surprise as he confronted Government officials over the turn of events.

Irish taxpayers were left with a €35 million bill when the hi-tech Media Lab Europe venture went under in January 2005.

Green Party TD Mr Boyle quoted a letter written by the liquidator stating a former employee of the firm, Robert Swartz, had been engaged to provide technical information and advised the cost of the remaining patents would be in excess of $5,000 (€3,959) each.

The liquidator told Mr Swartz he intended to advertise the patent portfolio for sale on a specialist internet site. One week later Mr Swartz said he was endeavouring to put together a group to buy the patents and eventually did so paying €40,000 for the 11 that remained — roughly equivalent to $5,000 each.

Mr Boyle stated that while nothing illegal had occurred it raised “double jeopardy” issues.

“There is a double jeopardy aspect to this of an adviser then being allowed to buy the patents he advised on. I don’t think this is something we should be encouraging,” Mr Boyle said.

Communications Department secretary general Brendan Tuohy said the matter touched on a complicated area of EU law.

“It is up to the liquidator. If we had done it, it would have been put out to tender,” he told the committee.

The PAC is conducting a thorough investigation into Media Lab and its collapse.

The patents incident is the latest in a series of embarrassment to emerge from the MLE venture.

The Media Lab project was intended to power the “Digital Hub”, the troubled hi-tech enterprise park set up amid dotcom hysteria in Dublin’s Liberties area in the late 1990s.

The State’s financial watchdog, the Comptroller and Auditor General, has already raised serious questions over the operation and monitoring of Media Lab.

It was intended to be self-financing through sponsorship, private contributions and research contracts from industry within five years but the C&AG considered this over-optimistic.