HL Deb 29 April 1948 vol 155 cc591-7

6.14 p.m.

Debate resumed.

LORD CHORLEY

My Lords, we are very gratified at the welcome which has been given to this Bill, and for the recognition of its importance. The speech of the noble Viscount, Lord Swinton, was perhaps not quite so enthusiastic as one had hoped, but I think that the reason for that was, not because he did not really welcome the objects of the Bill, but because he had some doubts as to some of the phraseology employed and was not quite sure that the objectives which were so lucidly and charmingly put before your Lordships by my noble friend were being carried into effect by the words of the Bill. I hope I may be able to satisfy him on that point, and that he will feel able to go away from your Lordships' House with a song in his heart.

I do not propose to follow the noble Viscount into the history of Sir William Perkins and the aniline dye industry, much as I should like to do so. I would assure him that I am not so closely associated with the completely laissez-faire views which are worshipped by some of my colleagues at a place which he mentioned. Then he referred to the problem of suppressed industries, about which, undoubtedly, a good deal of uninformed nonsense has been talked from time to time. There can be no doubt that there have been a number of cases—much more so in the United States than in this country—of patents having been purchased by concerns for the purpose of suppressing them. But there is certainly no widespread buying up of patents in that way. I think everybody who has taken the trouble to make a real investigation into this matter, at any rate in this country, has been satisfied of that fact.

The real problem, of course, is that to which the noble and learned Viscount, Lord Maugham, referred—namely, the problem of the man who, for one reason or another, having had a brilliant idea and having performed a considerable amount of work upon it, does not possess the financial backing which, particularly in the conditions of modern industry, is required to get it exploited, and who is not able to find a business concern which is prepared to put up that financial support. In connection with this problem of patents and inventions, the noble Viscount also referred to the question of Section 27, of the existing Patents and Designs Acts, The Patents and Designs Acts, of course, deal with patents, but the wide problem is one in relation to the efficient and successful exploitation of the inventions themselves.

As your Lordships are aware, the Swan Committee devoted a great deal of attention to that problem. Their recommendations cover a substantial part of their Report. They made careful investigation into the whole matter, and it is quite clear from what they say, and from the history of this section (which, in rather different terms, has been on the Statute Book, I think, for over thirty years), that the section is quite ineffective. I understand that there have been only four cases in which it has actually been brought into operation. The matter is receiving very close attention from my right honourable friend, the President of the Board of Trade, but, in the words used from time to time by the noble and learned Viscount on the Woolsack, it would be as much as my place is worth to give an undertaking that legislation will be introduced in the next Session. However, the noble Viscount can be quite sure that it will not be so far distant, and that real and active attention is being given to this difficult problem.

VISCOUNT SWINTON

Perhaps it is on the far horizon.

LORD STRABOLGI

Perhaps in the middle distance.

LORD CHORLEY

I should hope that perhaps it is in the middle distance. But the noble Viscount must not tempt me to forfeit my place by leading me up the garden path. The problem of Section 27 of the Patents and Designs Acts has nothing to do with the Bill which is before your Lordships' House to-day. The Corporation which it sets up will have exactly the same rights as anybody else to make use of the rather ineffective procedure which is in Section 27. Lord Strabolgi raised this question. They will certainly be in a position to apply to the Comptroller for a compulsory licence to work a patent which has not been effectively used for the reason set out in Section 27; but they will have no other rights than those of any other person. Indeed, as has been pointed out, that is the general position under this Bill. I think the noble and learned Viscount, Lord Maugham, really gave the answer to the most important question which was asked by Viscount Swinton, who wanted to be quite certain that the Bill confers no powers of compulsory acquisition of patents upon the Corporation. He kindly gave me notice of that beforehand. I have taken advice, and I am satisfied that that is so. Of course, I admit that what I say carries very little weight, compared with the opinion of one of the greatest authorities in the land, the noble and learned Viscount, Lord Maugham.

The noble Viscount, Lord Swinton, raised the question of "public interest." The Bill says, "where the public interest so requires." Of course, this part of the Bill is concerned with the sort of case which may easily arise in connection with inventions in the domain of medicine, particularly cases in which it might well be that the financial return would not warrant the expenditure by an ordinary commercial concern of the money necessary to exploit the invention, but where clearly it might be in the public interest—as was, in fact, the case during the war years—that inventions of that kind should be exploited. That is the sort of case that is particularly envisaged by these words in the Bill. The noble Viscount asked for an assurance that, so far as possible, the exploitation would take place through existing industry. I think that that assurance has already been given to him by my noble friend Lord Hall. I am glad to repeat it, but whether it would be possible to put into the Bill words which would provide for that I very much doubt. However, I shall be pleased to look at this matter with the noble Viscount. It is obviously exceedingly difficult, and it would not be right to lay down as a matter of statutory obligation that in every single case there should be, so to speak, the first right in an industry to exploit an invention. I am sure that the noble Viscount himself would hardly ask for that.

Lord Swinton referred—and very properly referred—to the fact, which is of great importance, that in those cases which involve the subsidisation of outside interests, or the setting up of works for the purpose of exploiting these inventions, the sanction of the Board of Trade must first be obtained. That, of course, is an essential element in the whole scheme con- tained in the Bill. The noble Viscount, I gather, was not altogether satisfied with the Board of Trade. I think he said that their directions were not necessarily inspired writ. That of course is so. I am sure that when he himself was President—

VISCOUNT SWINTON

They were not inspired writ, even then!

LORD CHORLEY

I was not going to say that they were completely inspired then, but perhaps they were more inspired than they have been at some other times. I am sure that the noble Viscount will appreciate that very great care and attention will always be given to these cases by the present President of the Board of Trade and by any other occupant of that high and honourable office.

The noble Viscount also referred to the question of public research, and asked about its definition. The matter is dealt with in Clause 1 (2) of the Bill. The noble Viscount was anxious to have an assurance that other public bodies would not be deprived of rights which they had acquired by the financing and carrying out of work upon inventions in connection with industry.

VISCOUNT SWINTON

I think that what I really asked was: What is the right definition of "public body"? Does that cover every research institution set up by an industry?

LORD CHORLEY

Yes, that is so, I was coming to that. I think the reason the noble Viscount asked the question was that he wanted to be assured that the work done by such associations would not be, so to speak, stolen from them by the Corporation. That, of course, is part of the same question that he put when he spoke of compulsory powers. An association like the Shirley Institute, or whoever else it may be, is in the same position as anyone else, and if the Corporation wish to make use of some invention which the association has, the Corporation can do so only after bargaining and by paying a proper consideration. I think that that is clear. The point is that in cases where an invention is a result of research of this kind, public research, the intention is that the Corporation shall do their best to enter the field. In a case where they are hoping to exploit the patent of an individual they will enter the field only when industry has not first done so. In other words, the idea is to protect ordinary industry, to give ordinary industry the first opportunity of exploiting a non-Government patent. Putting it in another form, we are going a long way to meet the outlook which noble Lords opposite represent. I am sorry the noble Viscount should be a little suspicious. I suppose he says, Timeo Danaos et dona ferentes.

VISCOUNT SWINTON

NO, I am not at all suspicious of the noble Lord. I did not appreciate that he was offering me a gift. What I should like to know is what he means by "entering the field." If he means that in all those cases where the Government have been concerned in the research, or even if he limits it to where the invention is the result of work in a Government Department, the Corporation should engage in the process of manufacture, then I think that we shall be poles apart. I leave aside the question of whether something should be done by a Royal dockyard or a Government establishment of that sort. What I think would be very wrong would be for this Corporation to set up a competing industry in order to exploit an invention, whether the invention was found in a Government workshop, in a mixed laboratory—if I may use that term—or in private enterprise. I am not now speaking of Socialism and private enterprise. What I am thinking of is the expenditure of Government money. I feel that the right thing to do would be to see wehther one of the existing industries would carry on the development of the invention. If that cannot be done, then, and then only, should the Corporation start in the business and set up manufacturing on an industrial scale.

LORD CHORLEY

I am glad to assure the noble Viscount that, in carrying out the powers conferred by this Bill, it is the general intention that the Corporation shall be in the closest touch with industry. If it appears that there are facilities in industry which can efficiently exploit a patent, whether it is obtained from a Government Department or from a trade association, the course that will be taken will be to entrust the patent to that industry.

VISCOUNT SWINTON

Then I think we are very near together.

LORD CHORLEY

The noble Lord, Lord Strabolgi, stressed the tremendous importance of this Bill. Clearly, if it is operated efficiently and with good will between the Corporation and industry it can be of tremendous importance. I was very gratified that the noble and learned Viscount, who has had so much experience both at the Chancery Bar and as a Judge in the Chancery Court in connection with patent litigation, should have felt himself able to take just as strong a line in favour of the essential importance of this Bill as my noble friend, Lord Strabolgi. The noble Lord, Lord Strabolgi, asked for an assurance in respect of the qualifications of the chairman of the Corporation and asked that he should be a full-time chairman. I do not think any final decision has been taken on that point. There is a great deal in the arguments he placed before your Lordships' House. On the other hand, it may well be, particularly in the earlier stages, that it will not be necessary to have a full-time chairman, or it may be that the ideal chairman will be a man not in a position to give whole-time service. But I assure the noble Lord that his arguments will receive careful consideration. The personnel of the Corporation will be of great importance to the effective administration of the Bill. I assure the noble Lord that the object which my right honourable friend has in view is to bring the experts into one team to carry out the intentions of the Bill.

The noble Lord, referred to the inventive genius of our people. It is undoubtedly the case that we possess that inventive genius. The patenting system itself was invented in this country. Our patenting legislation dates from the reign of James I and has been copied in many parts of the world. The isolated invention is giving way to the type of team work to which the noble Viscount referred. In many industries the isolated invention is of no importance. Invention is a matter of building up an immense expertise and "know-how" and that is a matter the Corporation will have closely in mind. The noble Viscount asked for an assurance in respect of the drafting of the Bill, particularly of Clause I, which is the most important clause in the Bill and sets out its purpose. The noble Viscount considered it was not sufficiently explicit. He said that some of the activities to which my noble friend referred in his opening speech were not set out in the words of the Bill. That is so, but they are derived from the "memorandum of association," as it were. The noble Viscount knows from his own experience that it is sometimes unwise to try to set out every single thing a trading or manufacturing company is to do. But we shall be glad to look at those words and, I hope, with his assistance, if he may be persuaded to help us, to find more satisfactory words. I assure the noble Viscount that when he says that many poor inventors have failed to receive the fruits of their efforts, we on this side of the House are very much with him. Indeed, it is one of the main objects of this Bill that inventors shall in future have a real run for their money. I ask your Lordships to give the Bill a Second Reading.

On Question, Bill read 2a; and committed to a Committee of the Whole House.