Trade Marks Bill [H.L.]

HL Deb 24 February 1994 vol 552 cc728-70

3.40 p.m.

Lord Strathclyde

My Lords, I beg to move that this Report be now received.

Moved, That this Report be now received.—(Lord Strathclyde.)

Baroness Hamwee

My Lords, it would clearly be of great inconvenience to your Lordships and to many other people if the Report were not received, but I wonder whether the Minister could at least give some assurances as regards further stages of the Bill and how the Government will deal with amendments. Those of your Lordships who have seen the Marshalled List of amendments to be debated today will have seen that 60 of the 73 amendments are government amendments.

This is a highly technical Bill and all of us who have been involved with it have been pleased to deal with it in an entirely non-partisan manner. However, we had hoped to have received government amendments rather earlier than Tuesday—or even perhaps late on Monday—of this week, given that the Committee stage of the Bill concluded on 20th January. I hope that the Minister will at least acknowledge that this has caused a great deal of difficulty for those outside your Lordships' House who are much involved with the detail of this matter and who wish to ensure that the Bill is a good Bill. However, they have not had adequate time to consider the amendments which the Government have put down.

Lord Strathclyde

My Lords, I understand that the government amendments were put down on Monday evening but that they may not have been received by the noble Baroness until Tuesday. However, I would say in response to the substantive point that we are dealing with a detailed Bill and we decided to put down all the amendments en bloc rather than in a piecemeal fashion so that people could see how they melded together. These amendments have been put down in answer to questions that were raised in Committee, as I believe the noble Baroness will discover if we obtain the agreement of the House to continue to Report stage.

On Question, Motion agreed to.

Clause 3 [Absolute grounds for refusal of registration]:

The Earl of Harrowby moved Amendment No.1: Page 2, leave out lines 16 to 19.

The noble Earl said: My Lords, this amendment seeks to leave out three particular lines. However, I do not wish to leave out three lines at all. What I want to do is to place on record my view that certification trade marks are not the same thing as trade marks in generality, and that it is unwise to incorporate them and let them be covered by the clause to. which I refer.

I am anxious to hear the response of my noble friend the Minister. He knows the point that I am going to make. Because the certification trade marks are excluded under paragraph 3 of Schedule 2, I personally would have preferred that the certification trade marks were excluded altogether from the effects of the clause that we are discussing. If I had to make any particular amendment— I would have liked the Minister to do so as he could have provided the proper wording— I would have added the final words,"provided also that a certification trade mark shall not be refused by virtue of paragraph (c) above". I fear that in times to come we shall regret the inclusion of certification trade marks in this prohibition, although I cannot give any examples of where that might arise. Nevertheless I cannot see that excluding them altogether from this particular clause can do any harm. I wanted to place that view and the Minister's reply to it on record. I beg to move.

3.45 p.m.

Lord Strathclyde

My Lords, I recognise that my noble friend does not wish to remove the lines listed in his amendment. I understand that he is more particularly concerned about the position of certification marks under the Bill. I assure him that there is nothing in Clause 3, and in particular subsection (1) (c), which will make it difficult for such marks to continue to be registered. The reference to quality is a very direct one. It is intended to prevent registration, prima facie, of marks which consist of words such as "Best" and "High Grade", which would directly indicate the quality of goods and services sold under the mark, in other words, where the meaning of the words which make up the mark is actually to do with quality. The quality and reputation of goods or services provided under certification marks arise not from any inherent reference in the mark itself but from the standards laid down in the regulations governing their use.

My noble friend mentioned certification marks. Certification marks such as, for example,"Sheffield","Stilton" and the "Woolmark" would all qualify for registration under the Bill in the same way as they did under the present Trade Mark Act. While the goods which bear these marks have to comply with certain quality standards, the words of which the marks consist do not indicate or designate quality. They do not therefore fall foul of Clause 3(1) (c). In any case, Clause 3(1) is a directive obligation, and we cannot change it. The directive does contain some special provision relating to certification marks, concerning such marks with a geographical connotation. Full advantage has been taken of these special provisions in paragraph 3 of Schedule 2.

I know that my noble friend's intention was to place his view on record. I hope that my response has clarified the position and has given him some comfort. I hope that on that basis he will feel able to withdraw his amendment.

The Earl of Harrowby

My Lords, I thank my noble friend the Minister for his reply. However, with regard to the examples that he has given, were "Woolmark" to come up afresh, it would be banned under the present regulations. That is an example of what I am talking about. As I hope my noble friend will turn this matter over in his mind, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 5 [Relative grounds for refusal of registration]:

Lord Strathclyde moved Amendment No.2: Page 3, line 33, leave out from ("because") to end of line 37 and insert:

1. (a) it is identical with an earlier trade mark and is to be registered for goods or services similar to those for which the earlier trade mark is protected, or
2. (b) it is similar to an earlier trade mark and is to be registered for goods or services identical with or similar to those for which the earlier trade mark is protected,").

The noble Lord said: My Lords, in moving Amendment No.2. I wish to speak also to Amendments Nos.3 and 7. As I said in Committee, our aim must be to use the wording of the directive whenever possible in the Bill in order not to introduce ambiguity as between United Kingdom law and other Community national law, also to ensure that the interests of UK owners of trade marks are not put at risk. But, where it would be appropriate in all the circumstances to use a different term we would seek to do so. Two amendments in this group illustrate the point.

Clause 5 sets out the relative grounds on which an application for registration may be refused. Clause 9 sets out what constitutes infringement. In subsection (2) of these clauses the same tests apply. In Committee the noble Lord, Lord Peston, drew our attention to the fact that in subsection (2) of Clauses 5 and 9 the words "identity" and "identical" were used as were the words "similar" and "similarity". He was concerned lest the lawyers stumbled over the meaning of these words. He urged us to consider using only "identical" and "similar". I have so considered and am satisfied that the amendments which I have put down meet his points. The amendments clarify the clauses by improving their grammar, but they do so without in any way affecting the purpose of the clauses, or indeed their alignment with the directive. I was therefore most grateful to the noble Lord, Lord Peston, for drawing this to the Committee's attention. I hope that the amendments meet with your Lordships' approval.

The second amendment, to subsection (3) (b) of Clause 5, is necessary to meet fully our obligations under Article 6 bis of the Paris Convention to protect well-known marks, which is implemented by Clause 52. As it stands, the subsection applies only to marks which are actually registered. By replacing the word "registered" with the word "protected", the clause will fully reflect our obligations under the Paris Convention and enable well-known marks, whether or not they are registered in the United Kingdom, to oppose the registration of the same or similar mark by another party. I beg to move.

Lord Peston

My Lords, Amendment No.3 makes perfectly good sense and obviously one must support it. However, the other two amendments in the group, Amendments Nos.2 and 7, are, as the Minister has said, the Government's response to an amendment which I tabled at the Committee stage. I welcome them and I am grateful to the Minister for responding positively and constructively to my concerns. We shall discuss later several other amendments in the name of the Minister which similarly reflect the Government's willingness to respond to other issues which I placed before them. I hope that noble Lords will agree therefore that it would not be discourteous of me, but would be in the interests of the efficient dispatch of business, if I simply thank the Minister now en bloc, so to speak, for all the subsequent amendments and do not jump up and down some 10 times repeating exactly the same speech.

On Question, amendment agreed to.

Lord Strathclyde moved Amendment No.3: Page 3, line 43, leave out ("registered") and insert ("protected").

On Question, amendment agreed to.

Lord Strathclyde moved Amendment No.4: Page 4, line 1, after first ("the") insert ("European").

The noble Lord said: My Lords, in speaking to Amendment No.4 I should like to speak also to Amendments Nos.13,30 to 32,38,60,62 to 64 and 73.

These amendments form a group of what I would like to describe as European amendments. For example, Amendments Nos.31 to 73 insert into Clause 47 and into the Title of the Bill the full title of the Community trade marks regulation, which has been adopted since the Bill was introduced. Amendments Nos.13 and 38 are consequential on the coming into being of the European Economic Area. The remaining amendments in the group are essentially drafting amendments to various references to the European Community. I beg to move.

On Question, amendment agreed to.

Clause 8 [Rights conferred by registered trade mark]:

Lord Peston moved Amendment No.5 Page 5, line 24, at end insert ("In particular, the proprietor has the exclusive right to use the mark on or in relation to the goods or services for which it is registered in the course of business so as to indicate a commercial connection with such goods or services.").

The noble Lord said: My Lords, I placed this amendment before your Lordships in Committee, when it was discussed. It relates to the question of whether we ought to make clear on the face of the Bill the function of a trade mark. I argued that perhaps we should. The Minister was doubtful and he went away to think about the matter.

I believe that it is still his view, as he will say in a moment, that the amendment is not necessary. However, I tabled the amendment again because in the preamble to the directive and in the Government's own White Paper statements are made which make it clear what the function of a trade mark is. Therefore, I have put the matter before your Lordships for a second time in the hope that the Minister can convey some, if not all, of the meaning in his own words, from the directive and from the White Paper, so that it appears formally in your Lordships proceedings. I believe that that is important. I beg to move.

Lord Strathclyde

My Lords, I thank the noble Lord, Lord Peston, for his introductory comments on the amendment. I know that he expressed some concern on this issue during the Committee stage. I am grateful to him, therefore, for giving me the opportunity to say why the Government cannot accept the amendment.

Article 5 of the directive sets out the rights conferred by registration on the owner of a trade mark, together with the right to take action for infringement. The rights conferred by registration, which are mandatory, are implemented in Clause 8 and are the same rights as conferred by registration in all other member states. The amendment seeks to qualify the rights given by registration in Clause 8 by adding a sentence which points to the fact that the use of the mark must be in the course of business and "to indicate a commercial connection" with the goods or services for which the mark is registered. In summary, what he is suggesting is that the use of the mark is what is known as "trade mark use".

As a matter of general trade mark law it is implicit that use of a registered trade mark must be trade mark use in order that the rights given by the Bill may be enforced. The content of the 15th recital to the directive also makes that quite clear.

Therefore, in our view the amendment is unnecessary. Importantly, too, to put a gloss on the directive in the way suggested by the amendment would introduce ambiguity and uncertainty as between the directive and United Kingdom law.

This is an area where we seek to adhere to the directive. On the basis of the explanation I have given to the House I hope that the noble Lord, Lord Peston, will feel able to withdraw his amendment.

Lord Peston

My Lords, perhaps I may ask the noble Lord whether he wishes to add another remark about the fact that this matter is dealt with in the White Paper. Will he confirm that what is said in the White Paper on this matter is the Government's view?

Lord Strathclyde

My Lords, with the leave of the House, I am in a position to confirm that that is the case.

Lord Peston

My Lords, I thank the noble Lord for that confirmation. I beg leave to withdraw the amendment.

Amendment by leave, withdrawn.

Lord Strathclyde moved Amendment No.6: Page 5, line 35, leave out ("fraudulent use, & c. of trade mark") and insert ("unauthorised use of trade mark, & c.").

The noble Lord said: My Lords, in moving Amendment No.6, I wish also to speak to Amendments Nos.39 to 43,46 and 49. The substance of the amendments concerns Clause 86. The matter is being raised at this early stage in the Report stage only because Amendment No.6 makes a consequential amendment in Clause 8.

The amendments are grouped with an amendment in the name of the noble Lord, Lord Monson, who will no doubt wish to speak in a moment.

Clause 86 as introduced was criticised as going too far in that it could have caught the innocent infringer. Reaction in Committee to the revised version, which was better focused on acts of deliberate counterfeiting, suggested that although the policy was right there was still some criticism of the drafting. In particular, some noble Lords were critical of the use of the word "fraudulently". It was suggested that that might make the offence difficult to prove. Accordingly, Amendments Nos.40 to 42 replace the word "fraudulently" in subsections (1) to (3) in Clause 86 by the words of the word-saving provision presently found in subsection (4). Amendment No.43 merely removes subsection (4) since it becomes redundant.

A similar change will be made to the title of Clause 86 in the margin of the Bill. It will refer instead to "unauthorised use of a trade mark". That change can be made editorially. However, it is necessary to amend those other provisions which refer to Clause 86. That is the effect of the other amendments in the group.

I shall obviously have an opportunity when I wind up the debate to reply in detail to the points that will be raised by the noble Lord, Lord Monson. I beg to move.

Lord Monson

My Lords, I am grateful to the noble Lord, Lord Strathclyde, for explaining Amendment No.6 and the consequential amendments. I have not had an opportunity to study them but I am sure that they are a great improvement on what went before.

Nevertheless, I am worried by subsection (4) of Clause 86, which makes it an offence punishable by a substantial term of imprisonment to make, sell, or even to have in one's possession with a view to eventual sale, goods with a bogus or misleading trade mark without the consent of the proprietor of the registered trade mark, either with intent to gain for oneself or another, or with intent to cause loss to another, or both.

It is quite right to make it an offence if there is any intention to cause loss to another. I would not dispute that for one moment. But is it right to make it an offence merely because the prospective vendor seeks to make a gain for himself or another which may be a trivial gain—10 pence an item, perhaps— without any intent to cause loss to another and without actually causing loss to anybody else?

There are at least two, and perhaps more, circumstances where that could arise. The first is where those in possession of what one might term suspect goods do not succeed in selling any. The second is where the fake goods are so obviously bogus that they fool nobody and are sold at a price which reflects their relatively trivial value and not at a price which reflects the value of the genuine goods. The purchaser will buy them because he gets a kick from sporting bogus goods, but neither he nor anybody else is fooled into mistaking them for the genuine article. For example, it is rather like stencilling a Bentley Continental logo on to the boot of a Mini or Ford Fiesta.

I should be grateful to hear what the noble Lord has to say on that point.

Baroness Hamwee

My Lords, can the Minister clarify one matter which relates loosely to his amendment? Replacing the word "fraudulently" with the words on the Marshalled List may suggest to the reader of the Bill that in some way that is no longer the offence which it was. My question, which may have been raised with the Minister previously, relates to police enforcement.

Clause 88, which is also the subject of an amendment in this group, deals with enforcement by trading standards officers. There appears to be some anxiety that the provision means that the police are out of the frame entirely when it comes to enforcement. Will the Minister confirm whether or not it remains a matter for the police as well as for trading standards authorities?

4 p.m.

Lord Strathclyde

My Lords, perhaps I may deal briefly with that point before responding to the more substantive amendment in the name of the noble Lord, Lord Monson. It is my understanding that because it will be a matter of general law, the matter is perfectly capable of being enforced by the police authorities. I believe it is quite right that that should be so. The noble Baroness will no doubt remember that in Committee I defended valiantly the use of the word "fraudulently" and the way it was interpreted in the clause. I came under sharp criticism from many Members of the Committee for doing so. It was on that basis that I believed we might try to find another way of defining the issue. This is tie view we have now taken.

I do not believe that the provision substantially alters the meaning of the clause as we discussed it in Committee. It is another way of wording the matter and removes the rather emotive word "fraudulent" from the main part of the clause. That is why we have made the change.

I am most grateful to the noble Lord, Lord Monson, for speaking to his amendment at this stage. It makes it easier to deal with the issue of principle. I understand the point that the noble Lord makes. However, removing the requirement of "intent to cause loss" in the offence of unauthorised use of a trade mark in relation to goods would be a substantial change to the clause and might well send the wrong signals to counterfeiters, enforcement authorities and the courts. At present it is an offence to apply unauthorised trade marks to goods. However, if we were to accept the amendment of the noble Lord Lord Monson, it would be necessary to prove, in order to gain a conviction, that actual loss had occurred when the act of applying the mark itself took place. At present intent is also considered a key requisite of the offence of counterfeiting so as to ensure that the provision of the clause does not bite on the "innocent infringer".

The noble Lord, Lord Monson, makes a point on which perhaps I may reflect between now and Third Reading. In the meantime, I hope that he will allow our amendments to go forward and will not move his amendment when we reach it.

On Question, amendment agreed to.

Clause 9 [Infringement of registered trade mark]:

Lord Strathclyde moved Amendment No.7: Page 5, line 42, leave out from ("because") to end of line 2 on page 6 and insert: ("—

1. (a) the sign is identical with the trade mark and is used in relation to goods or services similar to those for which the trade mark is registered, or
2. (b) the sign is similar to the trade mark and is used in relation to goods or services identical with or similar to those for which the trade mark is registered,").

On Question, amendment agreed to.

Lord Strathclyde moved Amendment No.8: Page 6, line 26, at end insert: ("() Nothing in the preceding provisions of this section shall be construed as preventing the use of a registered trade mark by any person for the purpose of identifying goods or services as those of the proprietor or a licensee.

But any such use otherwise than in accordance with honest practices in industrial or commercial matters shall be treated as infringing the registered trade mark if the use without due cause takes unfair advantage of, or is detrimental to, the distinctive character or repute of the trade mark.").

The noble Lord said: My Lords, during Committee there was a lively debate on the subject of comparative advertising. At that time I indicated that any government amendment which might be set down on this provision of the Bill was likely to deregulate and be more liberal than the existing proposal. That, however, is not the purpose of the amendment before your Lordships.

The Government intend to allow comparative advertising with proper safeguards for the owner of a registered trade mark. Our policy has been clear since the White Paper on trade mark law reform in 1990. Noble Lords supported this approach in Committee. However, on further reflection we believe that the provision and its relationship with the directive would be clearer if it were set out in Clause 9, which deals with infringement and enacts Article 5 of the directive, rather than in Clause 10.

Paragraph 5 of Article 5 of the directive allows national provisions to protect the use of signs, other than for the purposes of distinguishing goods and services where use of that sign, without due cause takes unfair advantage of, or is detrimental to, the distinctive character or repute of the trade mark. Thus we believe that Article 5(5) enables us to provide for comparative advertising but to make dishonest comparative advertising an infringement of the trade mark. The provision therefore sits more appropriately in Clause 9 which deals with infringement than in Clause 10 which limits the effect of a registered trade mark.

The new subsection continues to make clear that use of a registered trade mark in comparative advertising must be in accordance with honest practices in industrial or commercial matters but that it will be an infringement of the registered mark if, without due cause, it takes unfair advantage of, or is detrimental to, the distinctive character or repute of the trade mark.

The amendment ensures that the provision fully squares with the directive and is consistent in its principles. It also confirms the Government's approach to a liberalising but fair approach in respect of comparative advertising; that is, allowing it with safeguards.

Amendment No.8 is grouped with Government Amendment No.10 and with Amendment No.11 in the name of my noble friend Lord Reay. If the noble Lord cares to speak to that amendment, I should like to reply on that basis. I beg to move.

Lord Airedale

My Lords, my noble friend Lady Hamwee wishes me to inquire whether it will be the first instance in an Act of Parliament that a paragraph begins with the word "But".

Lord Reay

My Lords, I should like to speak to this group of amendments, in particular Amendment No.11 which stands in my name. Although the noble Lord on the Woolsack did not say so— perhaps he will do so later—I believe that Amendment No.11 will fall if Amendment No.10 in the name of my noble friend Lord Strathclyde is adopted. Amendment No.11 is an amendment to a subsection which he proposes to take out of the Bill. My amendment is therefore an amendment to the Bill as drafted. I suspect that it should have been an amendment to Amendment No.8. If I had realised that my noble friend was recasting that part of the Bill in the way that he has, my amendment no doubt would have been tabled accordingly.

Amendment No.11 is a probing amendment which I do not intend to press. If the Government decide to incorporate the principle of my amendment into the Bill, having heard the argument for doing so, I have no doubt that a way can be found to do so at a later stage.

Clause 10 of the Bill (it is Clause 9 in my noble friend's amendment) opens the door for comparative advertising but makes it subject to two provisos. Those provisos are contained in the Bill as drafted in Clause 10(1) (a) and (b) and in my noble friend's amendment in the single paragraph, which constitutes the last paragraph of new Clause 9. Indeed, not only is that a single paragraph, it is also a single complex and somewhat inelegant sentence. I suggest that it represents a deterioration rather than an improvement on what we had before with regard to clarity and comprehensibility.

At Committee stage I sought to introduce a third proviso which would have required anyone wishing to use another proprietor's trade mark to obtain the prior consent of that proprietor. The Minister expressed the view that that would be too restrictive. Amendment No.11 does not go so far as that. It provides that any would-be user of another's trade mark must first give written notice to the proprietor of that trade mark of his intention to use it.

The CBI has considerable reservations about Clause 10(1) of the Bill as drafted (the last two paragraphs of the new Clause 9). It has considerable reservations about the provisions appearing in the Bill. The extension of comparative advertising is certainly not required by the EC directive on trade marks. It is presumably in the Bill in anticipation of the proposed EC directive on comparative advertising which I understand the European Commission has now announced that it intends to reintroduce later this year. It seems to me unwise to seek to anticipate the final provisions and wording of an EC directive which has not yet been agreed.

It seems to me that it would have been much more sensible if the Government had waited until they knew what the new law would be before seeking to change our law. We now run the risk of having to change it twice. Let there be no doubt that the Bill will change our law. At present comparative advertising is not permitted under UK law. Under the Trade Marks Act 1938, a trade mark owner can sue and obtain an injunction to prevent the use of his trade mark. So comparative advertising, when it does take place— for example, in the motor trade— does so apparently as a result of an agreed convention between manufacturers not to sue each other.

This Bill, however, will enable comparative advertising to take place subject to the provisos contained in the last paragraph of my noble friend's amendment and, if my noble friend were to accept my amendment, subject to the proviso that it contains. The requirement that a would-be user of a trade mark should first notify the proprietor would at least enable the proprietor of that trade mark to take any action that he thought appropriate to protect his trade mark and to mitigate any unfavourable effects that its use by a third party might have.

I might add that this is the direction in which the law on the subject seems to be moving on the continent of Europe. Under recent French law, a trade mark may only be used for purposes of comparative advertising after there has been a period of consultation between the owner and the would-be user. I understand that UNICE, the European employers' federation, would like to see a notification clause in the European Commission directive. So, also, I believe would the French and Dutch Governments and so also would the CBI.

If the Government are not prepared to wait until the EC directive on comparative advertising is agreed before legislating in the area, then at least it seems to me that the next most sensible thing they could do is to legislate in the direction favoured by the main thrust of European opinion in the field. I beg to move.

Lord Strathclyde

My Lords, I am grateful to both noble Lords who have just spoken. I accept what the noble Lord, Lord Airedale, said: this could well be the first time that a paragraph in a Bill starts with the word "But". I cannot confirm that that is the case because I do not know, but I am sure that the parliamentary draftsmen would not have allowed it through if they did not feel it to be an entirely appropriate word to use in this instance. But my noble friend Lord Reay suggested that in any case it was rather an inelegant sentence.

I have to say to my noble friend that we have come a long way since Committee. I accept that his amendment is not entirely trying to draw the potential sting of comparative advertising; in fact it accepts the premise that comparative advertising is here to stay.

My noble friend makes much of the fact that we are not following the European directive in the matter and we are not waiting for any future European legislation, but that is because this is inspired not by a Europeanisation of our United Kingdom law but an entirely freestanding and liberalising measure which we, as a government, believe is in the best interests of competition and therefore in the interests of the consumer.

Perhaps I may specifically turn to my noble friend's amendment. He seeks to insert a requirement that the owner of a registered trade mark should be informed in advance of any use of his mark in comparative advertising. While this, on the surface, may seem to be quite fair, I have some reservations and difficulty in understanding how such a requirement could be enforced. What, for example, is a reasonable period of notice? Which of the parties will determine what the reasonable period of notice is?

More generally, the amendment would not be helpful. The provision in the amendment that I put forward this afternoon states that use should be, in accordance with honest practices". I think that as a matter of principle we should leave industry and commerce to determine those matters themselves. They are usually in the best position to be able to deal with such issues themselves and I therefore have to say to my noble friend Lord Reay that if he moves Amendment No.11, I shall be obliged to resist it. However, he said that it was a probing amendment and I hope that he accepts what I have to say.

Lord Peston

My Lords, before the noble Lord sits down and we end the discussion, I ought to go on record as saying how much I agree with the Minister on the question of competition and the consumer and the use of trade marks. It seems to me to be essential to the competitive process in a modern market economy that one ought to be able to say: "My product"— naming its name— "and its trade mark are better than that product"— naming its name— "and its trade mark". I take an example from the newspaper this week which looked at food processors. The consumer page ranked them in order, using trade marks. I cannot remember which was rated as the five-star best, but nonetheless it seems to me perfectly reasonable, in the interests of the consumer— and I emphasise that— that the owners of the product should be able to say: "This newspaper said that ours was the best— better than the others".

Therefore if any of us believes— I certainly do and I am glad that the noble Lord does— that the consumer is essential to the issue, one ought to resist the amendment of the noble Lord, Lord Reay (I say that unhappily, but I have to say it). Equally, I am extremely disappointed to hear from him that his amendment is supported by the CBI. If there were a body that ought to take the other view in favour of competition and the consumer, I should have thought that it was the CBI.

On Question, amendment agreed to.

4.15 p.m.

Lord Strathclyde moved Amendment No.9: Page 6, line 27, leave out subsection (6).

The noble Lord said: My Lords, in moving Amendment No.9, I should like, with leave, to speak also to Amendments Nos.61 and 67.

During Committee we considered what was at that time Amendment No.25A, tabled by my noble friend Lord Reay. He drew attention to the fact that Clause 9(6) is somewhat restricted in its scope. It is limited to providing that the spoken use of the words making up a trade mark (for example, by a salesman or in a television advertisement) is an infringement. My noble friend pointed out that it is expected to be possible to register as trade marks distinctive sounds such as musical jingles. He therefore proposed a broader provision which would catch any audible use of a mark.

Perhaps I should refer in passing to the fact that the idea of registering audible trade marks was questioned by some noble Lords. It might therefore be helpful if I briefly explain the position as the Government understand it. Clause 1 requires that a trade mark be: capable of being represented graphically". That does not necessarily mean that the trade mark must be graphical. As the White Paper, Reform of Trade Marks Law explained, citing the Commission's own Explanatory Memorandum, the definition of what constitutes a mark is intended to be open-ended. It is up to the Patent Office or ultimately the courts (including possibly the European Court of Justice) to decide whether that interpretation of the directive is correct.

To return to these amendments, the issue here is not audible use, but the use of a trade mark in a form other than the graphic representation which appears on the register. The proposed new subsection (2) to be included in Clause 99 therefore covers not only audible use, but any use of a trade mark which is by other than graphic representation. That would, for example, apply where a trade mark is encoded electronically in a video cassette. It is not visible at the time of sale, and only becomes so when the purchaser plays it. Another instance which has been mentioned is where goods, for example, jewellery, are actually made in the shape of a protected trade mark. All those would be caught by the new provision.

Moreover, by dealing with the matter in Clause 99 rather than Clause 9, and making it apply for all purposes of the Bill, it applies to other situations besides civil infringement. That definition of use will apply also to Clause 86, dealing with the criminal offence of trade mark counterfeiting. I wish to draw attention to the fact that the new provision which the amendment will add refers to: use (or any particular description of use). Thus, for example, it applies to any of the forms of use mentioned in Clause 86(1); namely, applying the mark to the goods or their packaging, selling the goods or otherwise dealing in them, or possessing such goods with a view to dealing in them.

It will also mean that a proprietor will be able to rely on any non-graphic use which he himself or a licensee has made in order to defend himself in an action for revocation on the ground of failure to use the mark. I am sorry to have to explain the amendments at rather great length, but I hope that they meet with the approval of the House. I beg to move.

Lord Reay

My Lords, I am extremely grateful to my noble friend. My amendment seems to have stimulated some creative thinking from him and his department. He has come up with an amendment which deals not only with the point that I had to make at Committee stage, but also much more widely with a number of other instances which he and his department have managed to think of. I am very grateful. It fully takes care of the point that I have and I thank the Minister for what he has done. I support the amendment.

On Question, amendment agreed to.

Clause 10 [Limits on effect of registered trade mark]:

The Deputy Speaker (Lord Aberdare)

My Lords, as the noble Lord, Lord Reay has already stated, if Amendment No.10 is agreed to I cannot call Amendment No.11.

Lord Strathclyde moved Amendment No.10: Page 6, line 31, leave out subsection (1).

On Question, amendment agreed to.

[Amendment No.11 not moved.]

Lord Strathclyde moved Amendment No.12: Page 6, line 37, at end insert: ("() A registered trade mark is not infringed by the use of another registered trade mark in relation to goods or services for which the latter is registered (but see section 43(6) (effect of declaration of invalidity of registration)).")

The noble Lord said: In moving this amendment I shall speak also to Amendment No.69.

The noble Lord, Lord Peston, brought to our attention in Committee the fact that Section 4(4) of the 1938 Trade Mark Act states that, where two or more identical or similar trade marks are registered, infringement action cannot be taken by the owner of one mark against use of the others. He pointed out that this Bill did not contain such a statement. The Government had in fact thought it was unnecessary.

However, on reflection, we can accept that there is justification for including a substantive provision, as suggested by the noble Lord. I am happy therefore to move Amendment No.12. In consequence, there is no longer any need to continue to provide in the transitional arrangements for those marks registered under the provisions of Section 12(2) of the 1938 Act. By including a provision in the substantive part of the Bill, the rights of the proprietors of such registrations are fully protected. Therefore, a consequential amendment is proposed to Schedule 3, omitting the final sentence of paragraph 4. I beg to move.

On Question, amendment agreed to.

Clause 11 [Exhaustion of rights conferred by registered trade mark]:

Lord Strathclyde moved Amendment No.13: Page 7, line 17, leave out ("Community") and insert ("European Economic Area").

On Question, amendment agreed to.

Lord Strathclyde moved Amendment No.14: After Clause 13, insert the following new clause:

Order for erasure, & c. of offending sign (".—(1) Where a person is found to have infringed a registered trade mark, the court may make an order requiring him

1. (a) to cause the offending sign to be erased, removed or obliterated from any infringing goods, material or articles in his possession, custody or control, or
2. (b) if it is not reasonably practicable for the offending sign to be erased, removed or obliterated, to secure the destruction of the infringing goods, material or articles in question.

(2) If an order under subsection (1) is not complied with, or it appears to the court likely that such an order would not be complied with, the court may order that the infringing goods, material or articles be delivered to such person as the court may direct for erasure, removal or obliteration of the sign, or for destruction, as the case may be.").

The noble Lord said: Amendment No.14 introduces a new clause which makes clear that a court can order the obliteration of the infringing trade mark as an alternative to delivery up.

During discussion on Clause 14 in Committee there was a feeling that the remedy of delivery up in Clause 14 as drafted would, in some circumstance at least, be too draconian. The Committee felt that the list of remedies which were available to the court when considering action to be taken following infringement proceedings should include the possibility of having the trade mark removed from the infringing goods.

The new clause is effectively declaratory of the court's inherent jurisdiction. It is at present within the court's inherent jurisdiction to make such an order for obliteration of the mark as an alternative to one for delivery up. Clause 13(2) was intended to preserve that power. The feeling in Committee was, however, that express provision should be made, and that has been done by introducing a new clause in Amendment No.14. I beg to move.

On Question, amendment agreed to.

Clause 16 [Rights and remedies of exclusive licensee]:

Lord Strathclyde moved Amendment No.15: Leave out Clause 16.

The noble Lord said: I beg to move Amendment No.15, and in so doing to speak to Amendments Nos.16,17,19 to 22,24 to 29,65,66,70 and 71.

There are good reasons for this very large group of amendments. In Committee a number of comments and submissions were made on what are complex and detailed provisions. The Government, having agreed to consider these, have concluded that rather than amend the Bill piecemeal the licensing provisions should be restructured. In so doing, five clauses have been deleted to be replaced by four. I shall explain as concisely as I can the reason for, and the effect of, these changes.

The first of the new clauses therefore introduces the idea that a trade mark may be licensed. This largely follows existing Clause 23, but with a small but significant change in subsection (1). It now provides that a licence may be limited "in particular" as to goods or services, or manner or locality of use. In other words, this is a non-exhaustive indication of the ways in which a licence may be limited.

In Committee we considered an amendment from the noble Baroness, Lady Hamwee, that would have made explicit provision for a licence to be limited in time. As I told the Committee, there has never been any doubt that a licence can be limited in this way, and the way in which the provision is drafted is not intended to preclude it. We are however inhibited from making explicit provision for time-limited licences, because this provision implements Article 7 of the directive. The amended clause, however, makes clear that the forms of limitation to which it refers are by way of example.

The second of the new clauses supersedes Clause 24. It maintains the idea of an exclusive licence; that is, a licence under which no one other than the licensee (not even the proprietor) is entitled to use the trade mark. The new clause makes clear that an exclusive licence, like a non-exclusive licence, can be either general or limited. Thus, the proprietor may grant exclusive rights in respect of certain goods to the licensee and exclusive rights in other goods to another licensee; or he may grant a franchisee the exclusive right to run a restaurant under his mark, within, say,20 miles of Brighton, with other franchisees having similar exclusive rights in other localities. That was always the intention of Clause 24, but it had been suggested to us that there could be doubt. The new clause removes that doubt.

Another change to which these amendments give effect concerns the rights of exclusive licensees. In Committee we considered two amendments— one from my noble friend Lord Reay, and one from the noble Baroness, Lady Hamwee— which bore on this subject. The effect of those amendments would have been that Clause 16 (which provides for the rights and remedies of an exclusive licensee) would have been subject to the terms of the licence contract.

The Government took the view that an exclusive licensee should have the same rights and remedies as the proprietor. This was because, in granting an exclusive licence (which entails the proprietor disclaiming the right to use the trade mark himself) the proprietor has, in effect, placed the licensee in sole control of the mark. It was felt illogical that, at the same time, he should retain the right, for example, to decide on the launching of infringement proceedings. The Government have, however, listened to the views expressed in this House and elsewhere and do not wish to second-guess trade mark owners and licensees. Accordingly, the third of the four new clauses is cast in general terms and deals with the rights of all licensees, whether exclusive or non-exclusive. It also takes account of points made by the noble Baroness, Lady Hamwee, in Committee that where the proprietor refuses to take action the licensee need not wait before bringing proceedings himself.

This does not mean, however, that no special provision is needed to deal with exclusive licences. This is the subject of the fourth of the new clauses. I draw the attention of noble Lords to the fact that it provides for an exclusive licensee to have the same rights as if the licence had been an assignment, but only to such extent as may be provided by the licence. In other respects, this new clause largely repeats what is at present in Clauses 16 and 17.

The remaining amendments in this group are consequential on the changes which I have described. Paragraphs 12 and 14 of Schedule 1 and paragraph 14 of Schedule 2 deal respectively with the rights of authorised users of collective and certification marks. These are persons whose goods or services comply with the regulations governing the use of the collective or certification mark. An authorised user of such a mark is analogous to a licensee under an ordinary trade mark. The effect of Amendments Nos.28 and 29 is to adapt the relevant paragraphs of Schedules 1 and 2 in line with the new clauses on licensing.

Amendments Nos.22,65,66,70 and 71 are purely consequential on the renumbering of the clauses, with no substantive effect.

That leaves Amendment No.19 to Clause 21. This provision is not about licensing at all, but about jointly-owned trade marks. In subsection (5), however, it provides that a co-proprietor "is not liable" for costs. Analogous provisions in the clauses on licensing have been changed to say "shall not be made liable", and Amendment No.19 achieves the same result here.

I apologise to the House for having spoken at such length and in such detail. However, these provisions are important and the changes fully reflect the points made to the Government. With, as I hope, the agreement of the House, I beg to move.

Lord Reay

My Lords, the amendment which I had down at Committee stage and to which my noble friend the Minister referred, sought to ensure that an exclusive licensee had the same rights and remedies as the proprietor unless the licence provided otherwise. Those last five words, though common in other parts of the Bill, were missing from Clause 16(1). That meant that in the Bill as it originally stood, there was no way for a proprietor to avoid handing over to a licensee all rights with respect to the protection of his trade mark, including, for example, decisions to take legal action, even though such decisions might run counter to the proprietor's policy toward his trade mark and its protection and even though he would have to be brought in at a later stage.

Under the new Clause 27(1), the licensee's rights and remedies will depend upon provisions in the licence. Therefore my point has been covered and am grateful to the noble Lord for taking it on board. I support the amendment.

4.30 p.m.

Baroness Hamwee

My Lords, it would be churlish not to thank the Minister for having taken on board the points that I made in Committee. That is not to try to claim credit but truly to express gratitude. I am sorry that we still have to have a list of examples of a limited licence. As I believe I said in Committee, it would be a pity if we should start to go down the American route, which cannot resist giving examples of almost everything. However, if we are required to follow that course, so be it.

I feel that the amendments will prove to be extremely helpful. I tabled some amendments almost as a matter of instinct and was told afterwards that I had alighted on points that I had not appreciated were quite so important.

On Question, amendment agreed to.

Clause 17 [Exercise of concurrent rights]:

Lord Strathclyde moved Amendment No.16: Leave out Clause 17.

On Question, amendment agreed to.

Clause 18 [Rights of non-exclusive licensees in relation to infringement]:

Lord Strathclyde moved Amendment No.17: Leave out Clause 18.

On Question, amendment agreed to.

Clause 21 [Co-ownership of registered trade mark]:

The Earl of Harrowby moved Amendment No.18: Page 11, line 22, leave out paragraph (b).

The noble Earl said: My Lords, I am in the same position as for Amendment No.1. I am scheduled to move that Clause 21(4) (b) be omitted. I do not want it to be omitted. I want first of all to point out that in certain circumstances it is not capable of implementation. Secondly, given that fact, it is necessary to add some proviso to deal with the situation. For instance, in a receivership, a liquidation or a bankruptcy the paragraph could not be implemented.

I do not believe that one ought to argue that an Act of Parliament, especially a new Act which we are placing on the statute book, should be left incomplete. It must be qualified by covering the situation. Nor can it be legitimately argued that the matter is covered in the bankruptcy Acts and therefore it does not matter. One might ask which of them takes precedence.

The Government have to face up to the issue. I was not prepared to table an amendment, largely because I would get the wording wrong. I hope, however, that my noble friend the Minister will be prepared to look once again at the issue. I beg to move.

Lord Strathclyde

My Lords, I am always keen to consider the points made by my noble friend. The Bill deals only with the general law governing trade marks. Clauses 21 to 27 establish that a registered trade mark is an object of personal property and also that it may be assigned, licensed, charged, and so on, as are other forms of property. Clause 21 lays down how the trade mark as an object of personal property is to be disposed of, in the absence of any agreement to the contrary, when it is owned by two or more persons.

My noble friend is concerned that subsection (4) of Clause 21 does not accurately reflect what would happen, for example, in a bankruptcy situation. In the event of one co-proprietor being declared bankrupt, any personal property which is part of the bankrupt's estate would vest in a trustee in bankruptcy without the consent of the other co-proprietor. That is because the provisions in the Bill do not prejudice the operation of any other statute which may bear on the trade mark as an object of personal property.

My noble friend Lord Harrowby may well have a point here which I am willing to consider further. But the best advice that I have at the moment is that the position is as I have laid it out. With the assurance that I shall continue to consider my noble friend's point, I hope that he will agree to withdraw his amendment.

The Earl of Harrowby

My Lords, I thank my noble friend the Minister for his helpful remarks. I should be most grateful if he would look again at the matter. It is wrong in principle to lay down something in an Act of Parliament which would lead to difficulties. I am grateful to him for saying that he will look at the matter again. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Strathclyde moved Amendment No.19: Page 11, line 28, leave out ("is not") and insert ("shall not be made").

On Question, amendment agreed to.

Clause 23 [Licensing of registered trade mark]:

Lord Strathclyde moved Amendment No.20: Leave out Clause 23.

On Question, amendment agreed to.

Clause 24 [Exclusive licences]:

Lord Strathclyde moved Amendment No.21: Leave out Clause 24.

On Question, amendment agreed to.

Clause 25 [Registration of transactions affecting registered trade mark]:

Lord Strathclyde moved Amendment No.22: Page 13, line 21, leave out ("16 or 18") and insert ("(General provisions as to rights of licensees in case of infringement) or (Exclusive licensee having rights and remedies of assignee)").

On Question, amendment agreed to.

Clause 26 [Trusts and equities]:

Lord Strathclyde moved Amendment No.23: Page 14, line 4, leave out subsection (2) and insert: ("(2) Subject to the provisions of this Act, equities in respect of and other rights in relation to a registered trade mark may be enforced in like manner as in respect of or in relation to other personal or moveable property.").

The noble Lord said: My Lords, the purpose of Clause 26(1) is to make it absolutely clear that the trade marks register does not contain details of all possible rights and interests in and under a registered trade mark. Subsection (2), however, provides for such rights and interests to be enforceable in the normal manner.

Amendment No.23 is a technical amendment to clarify the wording, so that the effect of the clause in Scotland is the same as that in the rest of the United Kingdom. In order to achieve that, the former definition of the rights covered, which was contained in the expression "equities" has been enlarged, since this is a term not used in Scottish law. I beg to move.

On Question, amendment agreed to.

Lord Strathclyde moved Amendments Nos.24 to 27. After Clause 27, insert the following new clause:

Licensing of registered trade mark (".—(1) A licence to use a registered trade mark may be general or limited. A limited licence may, in particular, apply—

1. (a) in relation to some but not all of the goods or services for which the trade mark is registered, or
2. (b) in relation to use of the trade mark in a particular manner or a particular locality.

(2) A licence is not effective unless it is in writing signed by or on behalf of the grantor. Except in Scotland, this requirement may be satisfied in a case where the grantor is a body corporate by the affixing of its seal. (3) Unless the licence provides otherwise, it is binding on a successor in title to the grantor's interest. References in this Act to doing anything with, or without, the consent of the proprietor of a registered trade mark shall be construed accordingly. (4) Where the licence so provides, a sub-licence may be granted by the licensee; and references in this Act to a licence or licensee include a sub-licence or sub-licensee.").

After Clause 27, insert the following new clause:

Exclusive licences (".—(1) In this Act an "exclusive licence" means a licence (whether general or limited) authorising the licensee to the exclusion of all other persons, including the person granting the licence, to use a registered trade mark in the manner authorised by the licence. The expression "exclusive licensee" shall be construed accordingly. (2) An exclusive licensee has the same rights against a successor in title who is bound by the licence as he has against the person granting the licence.").

After Clause 27, insert the following new clause:

General provisions as to rights of licensees in case of infringement (".—(1) This section has effect with respect to the rights of a licensee in relation to infringement of a registered trade mark. The provisions of this section do not apply where or to the extent that, by virtue of section (Exclusive licensee having rights and remedies of assignee) (1) below (exclusive licensee having rights and remedies of assignee), the licensee has a right to bring proceedings in his own name. (2) A licensee is entitled, unless his licence, or any licence through which his interest is derived, provides otherwise, to call on the proprietor of the registered trade mark to take infringement proceedings in respect of any matter which affects his interests. (3) If the proprietor—

1. (a) refuses to do so, or
2. (b) fails to do so within two months after being called upon, the licensee may bring the proceedings in his own name as if he were the proprietor.

(4) Where infringement proceedings are brought by a licensee by virtue of this section, the licensee may not, without the leave of the court, proceed with the action unless the proprietor is either joined as a plaintiff or added as a defendant. This does not affect the granting of interlocutory relief on an application by a licensee alone. (5) A proprietor who is added as a defendant as mentioned in subsection (4) shall not be made liable for any costs in the action unless he takes pan in the proceedings. (6) In infringement proceedings brought by the proprietor of a registered trade mark my loss suffered or likely to be suffered by licensees shall be taken into account; and the court may give such directions as it thinks fit as to the extent to which the plaintiff is to hold the proceeds of any pecuniary remedy on behalf of licensees. (7) The provisions of this section apply in relation to an exclusive licensee if or to the extent that he has, by virtue of section (Exclusive licensee having rights and remedies of assignee) (1), the rights and remedies of an assignee as if he were the proprietor of the registered trade mark.").

After Clause 27, insert the following new clause:

Exclusive licensee having rights and remedies of assignee (".—(1) An exclusive licence may provide that the licensee shall have, to such extent as may be provided by the licence, the same rights and remedies in respect of matters occurring after the grant of the licence as, if the licence had been an assignment. Where or to the extent that such provision is made, the licensee is entitled, subject to the provisions of the licence and to the following provisions of this section, to bring infringement proceedings, against any person other than the proprietor, in his own name. (2) Any such rights and remedies of an exclusive licensee are concurrent with those of the proprietor of the registered trade mark; and references to the proprietor of a registered trade mark in the provisions of this Act relating to infringement shall be construed accordingly (3) In an action brought by an exclusive licensee by virtue of this section a defendant may avail himself of any defence which would have been available to him if the action had been brought by the proprietor of the registered trade mark. (4) Where proceedings for infringement of a registered trade mark brought by the proprietor or an exclusive licensee relate wholly or partly to an infringement in respect of which they have concurrent rights of action, the proprietor or, as the case may be, the exclusive licensee may not, without the leave of the court, proceed with the action unless the other is either joined as a plaintiff or added as a defendant. This does not affect the granting of interlocutory relief on an application by a proprietor or exclusive licensee alone. (5) A person who is added as a defendant as mentioned in subsection (4) shall not be made liable for any costs in the action unless he takes part in the proceedings. (6) Where an action for infringement of a registered trade mark is brought which relates wholly or partly to an infringement in respect of which the proprietor and an exclusive licensee have or had concurrent rights of action—

1. (a) the court shall in assessing damages take into account—
   1. (i) the terms of the licence, and
   2. (ii) any pecuniary remedy already awarded or available to either of them in respect of the infringement;
2. (b) no account of profits shall be directed if an award of damages has been made, or an account of profits has been directed, in favour of the other of them in respect of the infringement; and
3. (c) the court shill if an account of profits is directed apportion the profits between them as the court considers just, subject to any agreement between them.

The provisions of this subsection apply whether or not the proprietor and the exclusive licensee are both parties to the action; and if they are not both parties the court may give such directions as it thinks fit as to the extent to which the party to the proceedings is to hold the proceeds of any pecuniary remedy on behalf of the other. (7) The proprietor of a registered trade mark shall notify any exclusive licensee who has a concurrent right of action before applying for an order under section 14 (order for delivery up); and the court may on the application of the licensee make such order under that section as it thinks fit having regard to the terms of the licence. (8) The provisions of subsections (4) to (7) above have effect subject to any agreement to the contrary between the exclusive licensee and the proprietor.").

The noble Lord said: My Lords, I beg to move Amendments Nos.24 to 27 en bloc.

On Question, amendments agreed to.

Schedule 1 [Collective marks]:

Lord Strathclyde moved Amendment No.28: Page 46, line 41, leave out paragraph 12 and insert: ("12.—(1) The following provisions (which correspond to the provisions of section (General provisions as to rights of licensees in case of infringement) (general provisions as to rights of licensees in case of infringement) have effect as regards the rights of an authorised user in relation to infringement of a registered collective mark.

1. (2) An authorised user is entitled, subject to any agreement to the contrary between him and the proprietor, to call on the proprietor to take infringement proceedings in respect of any matter which affects his interests.
2. (3) If the proprietor—
   1. (a) refuses to do so, or
   2. (b) fails to do so within two months after being called upon, the authorised user may bring the proceedings in his own name as if he were the proprietor.
3. (4) Where infringement proceedings are brought by virtue of this paragraph, the authorised user may not, without the leave of the court, proceed with the action unless the proprietor is either joined as a plaintiff or added as a defendant. This does not affect the granting of interlocutory relief on an application by an authorised user alone.
4. (5) A proprietor who is added as a defendant as mentioned in sub-paragraph (4) shall not be made liable for any costs in the action unless he takes part in the proceedings.
5. (6) In infringement proceedings brought by the proprietor of a registered collective mark any loss suffered or likely to be suffered by authorised users shall be taken into account; and the court may give such directions as it thinks fit as to the extent to which the plaintiff is to hold the proceeds of any pecuniary remedy on behalf of such users.").

On Question, amendment agreed to.

Schedule 2 [Certification marks]:

Lord Strathclyde moved Amendment No.29: Page 49, line 35, leave out paragraph 14 and insert: ("14.—(1) The following provisions (which correspond to the provisions of section (General provisions as to rights of licensees in case of infringement) (general provisions as to rights of licensees in case of infringement) have effect as regards the rights of an authorised user in relation to infringement of a registered certification mark.

1. (2) An authorised user is entitled, subject to any agreement to the contrary between him and the proprietor, to call on the proprietor to take infringement proceedings in respect of any matter which affects his interests.
2. (3) If the proprietor—
   1. (a) refuses to do so, or
   2. (b) fails to do so within two months after being called upon, the authorised user may bring the proceedings in his own name as if he were the proprietor.
3. (4) Where infringement proceedings are brought by virtue of this paragraph, the authorised user may not, without the leave of the court, proceed with the action unless the proprietor is either joined as a plaintiff or added as a defendant. This does not affect the granting of interlocutory relief on an application by an authorised user alone.
4. (5) A proprietor who is added as a defendant as mentioned in sub-paragraph (4) shall not be made liable for any costs in the action unless he takes part in the proceedings.
5. (6) In infringement proceedings brought by the proprietor of a registered certification mark any loss suffered or likely to be suffered by authorised users shall be taken into account; and the court may give such directions as it thinks fit as to the extent to which the plaintiff is to hold the proceeds of any pecuniary remedy on behalf of such users.").

On Question, amendment agreed to.

Clause 47 [Meaning of "Community trade mark" and other EEC expressions]:

Lord Strathclyde: moved Amendments Nos.30 to 32: Page 21, line 23, at end insert ("and"). Page 21, line 24, leave out ("the Council Regulation (EEC)") and insert ("Council Regulation (EC) No.40/94 of 20th December 1993"). Page 21, leave out lines 26 to 31.

The noble Lord said: My Lords, I beg to move these amendments en bloc.

On Question, amendments agreed to.

[Clause 52 [Protection of well-known trade marks: Article 6bis):

Lord Strathclyde moved Amendment No.33: Page 23, line 44, at end insert: ("(3) Nothing in subsection (2) affects the continuation of any bona fide use of a trade mark begun before the commencement of this section.").

The noble Lord said: My Lords, this amendment provides relief for any mark which is currently being used in a bona fide manner but might otherwise be subject to action from the owner of a well known mark under the provisions of the clause as it stands.

The Bill will fully honour our obligations under Article 6bis of the Paris Convention but it is only fair and sensible to safeguard the interests of proprietors of marks which are in use now, but which would have been at risk once the Bill is enacted. I beg to move.

On Question, amendment agreed to.

Lord Reay moved Amendment No.34: After Clause 56, insert the following new clause:

("Unfair competition: Article 10 bis. .—(1) Where any goods of the proprietor of a trade mark bearing the trade mark are associated in the course of trade with any label, packaging or container having an overall appearance of a distinctive character it shall be an act of unfair competition actionable as such for any person in the course of trade to supply or offer to supply any such goods with or in any label packaging or container which is similar in overall appearance, whether by reason of name, shape, colour, design or any combination thereof or otherwise, to the overall appearance of that of the proprietor's goods if the use of the label, packaging or container either

1. (a) is likely to cause confusion, which includes a likelihood of association with the proprietor or the proprietor's goods; or
2. (b) without due cause takes unfair advantage of, or detrimental to, the distinctive character or repute of the appearance of the proprietor's goods or trade mark.

(2) In an action for unfair competition under this section all such relief by way of damages, injunctions, accounts or otherwise is available to the plaintiff (in Scotland, pursuer) as is available in respect of infringement of a registered trade mark or other property right.").

The noble Lord said: My Lords, I must declare one interest and disclaim another. The interest that I must declare, as I did in Committee, is that I am a consultant to a major British food and drinks manufacturer, which, in company with a large number of other consumer product manufacturers, would like to see an amendment along these lines adopted in the Bill.

The interest that I must disclaim is that, although I am a consultant also to the CBI, the CBI in fact has no single view on this subject. For reasons which noble Lords will be able to understand, the amendment is opposed by other commercial interests represented in the CBI.

The amendment addresses the growing problem of product look-alikes; that is to say, the practice of major retailers offering for sale their own-brand products in packaging that is deliberately designed to resemble that of well known brand leaders thereby taking unfair advantage of those brands' reputations, reputations which have been acquired and maintained at great expense by the manufacturers.

I seek to take account in the amendment of objections raised in Committee to my previous amendment on this subject. It was argued forcefully, particularly by my noble friend the Minister, that the practice to which I refer was not or should not be trade mark infringement, where our room for manoeuvre is strictly circumscribed by the EC directive, but unfair competition, and that any remedy lay in a new law in that area.

A little further research has shown that the Bill gives us that opportunity. The Long Title of the Bill indicates that one of the purposes of the Bill is to give effect to certain provisions of the Paris Convention for the Protection of Industrial Property, as revised and amended. Indeed, Clauses 52 to 56 of the Bill do exactly that, the articles of the convention on which those clauses of the Bill are based appearing again in the margins of the Bill.

Amendment No.34 is based on Article 10 bis of the Paris Convention, the opening paragraphs of which read, The countries of the Union are bound to assure the nationals of such countries effective protection against unfair competition. Any act of competition, contrary to honest practices in industrial or commercial matters, constitutes an act of unfair competition". And paragraph 3 reads, The following in particular shall be prohibited: (1) All acts of such a nature as to create confusion by any means whatever with the establishment, the goods or the industrial or commercial activities of a competitor". It seems to me quite clear from that, first, that we in this country are bound by the Convention to have effective laws against unfair competition; and, secondly, all such laws should cover the problem of look-alikes, to which the amendment is directed. Many would argue— indeed many have argued— that we in this country have long been in breach of that article of the Treaty. We have no competition law as such in this country. Actions in common law for passing off, about which I shall say more in a moment, are notoriously difficult to bring and do not provide an effective remedy.

By adopting the amendment we would be further fulfilling our obligations under the Paris Convention, as the Government have properly sought to do in other areas. There is nothing in the EC directive on trade marks which should prevent or discourage us from taking action in that way. The EC directive states that it, itself, must conform with the Paris Convention. It also expressly recognises the right of member states to provide protection against unfair competition. So I hope that my noble friend the Minister will concede at least that an amendment along these lines is not out of place in the Bill.

I am sure that many noble Lords will be familiar with the practices which I have in mind. Over a wide range of products— from toothpaste to deodorant, from instant coffee to bars of chocolate, from shampoos to wines to baked beans— supermarkets have developed the practice of putting on their shelves their own products packaged in a way that is designed to resemble the overall appearance of leading brands which, as a result of the reputation built up and maintained for them by their manufacturers, are familiar to every shopper. They do that by combining in one way or another features of the packaging of the leading brands; combinations of colours; shape of container; the position or the shape of the label or the logo. In any or all of those or similar ways the retailers aim to give a general impression of a leading brand. They mislead not by using a trade mark, but by association. The shopper is likely to think that he is buying a leading brand specially packaged for the retailer by the manufacturer. In fact, that is rarely the case. No one is objecting to retailers marketing their own products. But what I suggest they should not do is mark et them in the guise of some other brand.

Currently there is no adequate remedy in British law for that kind of unfair trading. A leading firm of trade mark lawyers to whom I spoke estimates that in many cases the chances of a manufacturer securing an injunction to prevent the sale of a look-alike product may be no higher than 40 to 50 per cent.—not much of an encouragement to launch what may be an expensive action. From the way that judges have tended to interpret the law of passing off, manufacturers are required to prove misrepresentation. And the best, if not the only way, to prove misrepresentation is to prove that shoppers have in fact been misled. Not surprisingly, manufacturers have found the necessary evidence hard to collect. Supermarkets will commonly evict from their premises those who are discovered attempting to collect such evidence. Consumer surveys, when shoppers are stopped in the street as part of a general survey and presented with look-alikes and asked whether they would be misled by them, have not proved satisfactory as evidence. They are hypothetical and can be depicted as being unrepresentative. In addition, the commercial power of supermarkets is such that manufacturers are loath to seek injunctions and risk incurring retaliation against their products.

It was argued that the Bill will provide a remedy; that manufacturers in future will be able to register their packaging as a trade mark. But that is highly questionable. To be registrable a trade mark must be distinctive and we cannot be sure how much of the packaging the registrar will accept as distinctive. In any case, manufacturers change the packaging of their products frequently, perhaps every six months, as fashions change. According to the registrar, it typically takes 12 to 18 months to register a trade mark. So it seems most unlikely that manufacturers will be able to register packaging fast enough to keep up with the changing requirements of the market place.

Beyond that, one only needs to contemplate the vast quantity of trade mark registration that would be required, if all possible forms of packaging that a manufacturer might wish to use were to be registered, to realise that in terms of cost or the bureaucracy involved, such a course is neither possible nor desirable. So we cannot expect the Bill, as it is, to provide a remedy for the problem.

In other member states of the European Union there are today legal remedies. In France an action can be brought for parasitic trading in a situation like this;

British manufacturers have successfully done so in French courts against French manufacturers. Benelux countries and Germany also have strong laws against unfair competition which are used regularly in such cases. Last year Proctor & Gamble, through action in a Belgian court, managed to secure, within one week, the withdrawal from the market of a product packaged similarly to one of their own.

Only in this country is there no effective remedy. One of the purposes of the Bill is to harmonise the trade mark laws of Europe. It would be strange, surely, if we failed to take this opportunity to bring our laws closer to those of Germany and the Benelux countries where strong laws against unfair competition are to be found. My noble friend the Minister said in Committee that the Government, are sympathetic to the problems that this amendment seeks to remedy".—[Official Report, Public Bill Committee,18/1/94; col.32.] I hope that that sympathy will extend to accepting the amendment that we are now debating. I beg to move.

4.45 p.m.

Baroness Hamwee

My Lords, the noble Lord, Lord Reay, fully explained the reasoning behind the amendment so I shall not take up the time of the House by repeating points which he made, but which I should like to record as heartily endorsing.

I feel quite strongly about this issue because I realise how, in the real world, when faced with a choice of products, one can be so affected by the packaging. Decisions made by shoppers are made within split seconds and the thought processes are probably quite complex— perhaps more complex than any of us realise at the time. It has been after the event, on more than one occasion, that I realised that I myself, faced with a choice of product, made assumptions in relation to the contents of the packaging which were quite unjustified. I assumed that because one package looked like another, the contents must be the same, perhaps made by the same manufacturer. I doubt that I am the only shopper who reacts in that way.

It is therefore a serious issue which needs properly addressing. I believe that a way has been found in the amendment to address it. I hope that it will receive understanding and support.

Baroness Hooper

My Lords, at the Committee stage of the Bill I was concerned that consumers' choice should not be restricted or affected as a result of provisions such as those contained in the amendment. On considering the matter further I realised that there was considerable anxiety among manufacturers who are affected by this type of unfair competition. As my noble friend Lord Reay said, the tort of passing off does not adequately meet the problem which is compounded by the virtual impossibility of obtaining evidence of confusion between products. Understandably, retailers do not permit surveys of this kind in or close to their premises. One can ascertain the views of manufacturers, but it is a little difficult to know exactly where consumers stand on the matter.

On balance, I feel that I can support my noble friend's amendment as it will make it easier to tackle the problem. In spite of that support in principle some details of the amendment could be tidied up. The words in subsection (1) (b) "without due cause" should be removed because they would in my view make it rather a dead letter. Having said that, I hope also that my noble friend will listen to what my noble friend the Minister has to say today, that he will not press the amendment to a Division and that the issue will be considered at future stages either here in your Lordships' House or indeed in another place.

Lord Jenkin of Roding

My Lords, I did not take part in the Committee stage of the Bill or indeed in any of the earlier stages, but I read the debate on the similar amendment moved by my noble friend Lord Reay in Committee. Like the noble Baroness, Lady Hamwee, I do not want to repeat all the arguments that he put, to my mind, so forcefully and compellingly today.

My noble friend advanced an argument in Committee which struck me as having some substance. He said that this is not part of trade marks law; it is effectively unfair competition. His argument was that the Bill is about trade marks and is not about unfair competition. Many years ago, when I was a pupil at the Bar, I was involved in one or two passing off cases and so I am not totally unfamiliar with the nature of that form of unfair competition. Indeed, after that, I worked for the Distillers Company, and some of the imitation bottles which the company's competitors produced— mainly, I have to say, overseas and not in this country— formed a remarkable museum in the trade marks department cupboard.

I well remember a bottle with a label that looked exactly like White Horse whisky until one looked at it very closely. It was in fact a white elephant. It will be said,"No one would mistake a horse for an elephant", but imagine it upside down on a bracket at the back of a bar and it might be quite difficult to see that it was an elephant and not a horse. There were many other examples; huge labels "Made in Scotland". It turned out that what was made in Scotland was the label, not the whisky. One is aware of the extent to which people will sometimes go in order to cash in on the reputation of a product.

The look-alike is a very good example. I have been shown a number of products. Like the noble Baroness, Lady Hamwee, I occasionally have to do the shopping in the supermarket. I find the speed with which one has to go to avoid being run over a very alarming process. One example I have been given is of Nescafe and a virtually identical jar of Sainsbury's full roast. I cannot believe for a moment that if my eye was caught by the Sainsbury's full roast when I had been sent out to buy a jar of instant coffee I would not immediately pick it off the shelf and assume that it was the same thing. Indeed, I have heard my wife complain that when she has got home from the supermarket she has found that what she has taken off the shelf was not what she thought she was buying because it was a look-alike.

There is another example; Mr. Kipling cakes, eight French Fancies; underneath there is Safeway's eight Fondant Fancies. Why does Safeway choose to market them in a box of identical colour? It does so because it hopes that it may be able to cash in on the benefit of Mr. Kipling's advertisements. Another example is of le Piat D'Or and an almost identical bottle Cuvee Prestige. I am all for competition— I agree entirely with what has been said about that— but I do not agree with unfair competition. I think that this is unfair competition.

It has been argued that this is not a trade mark matter, but is essentially one of unfair competition. My noble friend Lord Reay, in referring to Article 10 of the Paris Convention, has blown that argument out of the water. It is within the Long Title. It is open to this country to introduce a provision to protect against unfair competition. There is nothing to prevent it being done in this Bill. It may well be that my noble friend will require time to look at the matter again. It may well be that the question of my noble friend Lady Hooper about subsection (1) (b) should be looked at. It may well be that we shall come back to this on another occasion. However, I think it would be very sad if the House did not now take advantage of the initiative of my noble friend Lord Reay and others who have been pursuing the matter and insert into the Bill a provision to protect manufacturers against the unfair competition of the look-alike product. It has become something of a menace in the supermarkets. I am all for them having their own brands but they should not make them look like the competition brands in order to try to fool the customer.

Lord Monson

My Lords, I think it is time that a discordant note was struck. What is interesting about the illustrated examples submitted by those who back the amendment, cited just now by the noble Lord, Lord Jenkin, is that in my judgment in only five out of the nine examples is there a genuinely close resemblance between the packaging and overall design of the original brand and the packaging and overall design of the competitor brand. Of those five, in only two cases are the resemblances so close as to risk deceiving a purchaser. I have to agree with the noble Lord, Lord Jenkin of Roding, about Mr. Kipling cakes. The resemblance is very close indeed.

Moreover, the sponsors have to some extent shot themselves in the foot in their zeal for what they purport to be fair play by citing as one of their examples the wine called le Piat D'Or. Those who market that wine in Britain do so under the slogan,"Les Francais adorent le Piat D'Or". Nothing more economical with the truth could be imagined. Very few self-respecting French men or French women would touch the stuff with a barge pole; so that was not the best of choices.

Finally, as the briefing reminds us, the noble Baroness, Lady Hamwee, posed the question in Committee: when one looks at the similarity of the packaging, one asks oneself was it really necessary to choose the same colour cap, the same shape bottle or the same handle for a container. While I would agree that if taken to extremes she has a very good point where the resemblance is almost total, I would argue that if, for example, a convention were to grow up whereby all brands of ordinary instant coffee had a green cap, all brands of premium instant coffee had a gold cap and all brands of decaffeinated coffee had a red cap, it would be of positive benefit to consumers who at the moment are far more worried about accidentally picking up a jar of coffee packed with caffeine in place of a decaffeinated brand or the other way around, instead of the actual brand which they purchase.

Viscount Caldecote

My Lords, I support the amendment. There is no doubt that there is a real problem of look-alikes. I had some small personal experience of it, first, in making and marketing simple electrical equipment where very often competitors came along and dressed up their equipment to look like the equipment that my firm was making. I have also had the unfortunate experience, as suggested by my noble friend Lord Jenkin, of being sent out by my wife to buy some instant coffee and coming home to make it only to find that I had bought the other kind of coffee simply because the two jars looked very alike. So this problem applies not only to consumer goods but to any product where the potential purchaser does not have any detailed knowledge of the product.

I submit that the practice of look-alikes is widespread. If the amendment is opposed on the ground that no misunderstandings occur, the question must be asked why competitors go to so much trouble to produce look-alikes. It is clearly unfair competition and its effect nullifies any registered trade mark which has been attained. As my noble friend Lord Reay said, the present law is inadequate provide proper protection. I support the amendment and if, as I very much hope, it is carried, perhaps my noble friend will be able to say whether the effect will also apply to look-alike imports.

5 p.m.

Lord Cawley

My Lords, when I practised in this branch of the law (although I ceased to do so 20 years ago) we always found that the action for "passing off" in the case of blatant look-alikes was quite satisfactory. You issued a writ and moved for an interlocutory injunction. You supported that by affidavits, which did not need to be very extensive, and the judge then took a prima facie view whether it was "passing off". Only on very rare occasions did I find the defendant or the plaintiff challenge the judge's interlocutory decision. Certainly in the cases of elephants and white horses, the judge would certainly find a prima facie case. The procedure was very satisfactory, so I do not feel that this amendment is necessary.

Lord Vivian

My Lords, I rise to support this amendment, as I believe it could redress the unfair practice of marketing look-alike products, with packaging and labelling deliberately designed to resemble the overall appearance of existing branded products. The deliberate marketing of look-alike brands takes unfair advantage of consumers and manufacturers of well-known branded products. For instance, when I have been in a hurry, I have been confused and have bought a look-alike product, as have many of your Lordships, in mistake for the branded product it resembles. On occasions I have believed, and I think many consumers also believe, that the overall appearance of a look-alike product implies that the product inside the package, albeit sold under a different name, is actually made by the manufacturer of the branded product.

I believe it to be utterly wrong, and I would go so far as to say that it is very sharp practice, that retailers should save themselves considerable investment of time, expertise, and large sums of money which have been expended by the manufacturing firm in developing a package design which is successful in the market-place. I consider that another company which benefits from this investment by marketing a look-alike obtains an unfair advantage, and that represents unfair competition. Surely this is parasitic behaviour, unacceptable to all of us and morally wrong; and it should be prevented. I strongly support this proposed amendment, as I believe it will prevent this parasitic behaviour and it will prevent the consumer being deceived. It may also accord with regulations that already exist in Europe.

Lord Lyell

My Lords, I should like to add my support to the amendment of my noble friend Lord Reay. Like the noble Lord, Lord Jenkin, and others, I try to do my own shopping in a supermarket but I do read what is on the label as well as checking the price. However, sometimes it is only when one consumes the contents that one discovers the proof one way or the other. Examples have been quoted by my noble friend Lord Jenkin— perhaps I have had more luck than he has, whether with jars of coffee or not— but colour is among many of the similarities that I have found. For those of your Lordships who may be colour blind— I am not myself, and so colour might affect me in a different way from someone who may be entirely colour blind— colour might be one aspect. But where there is a clearly distinct design for a particular package, then my noble friend's amendment should have particular force.

In packaging, advertising and marketing, there is one other aspect which is relevant to the Bill and this amendment: that is the use of distinctive logos on packaging. If I may digress for 30 seconds, it will not have escaped your Lordships' notice that during these past three or four days we have seen on our televisions a great deal of sport from the Olympics slopes. I think it was my noble friend Lord Reay who mentioned that various designs, trade marks and signs can be changed once every six months. But when one looks at the types of skis, both cross-country and alpine, used by various sportsmen, one finds that those logos appear on particular brands of skis. They are quite identifiable in black and white or whatever image, and they have been identifiable for 30 years. That gives a degree of distinctiveness such as is mentioned in my noble friend's amendment. It is in that respect that the amendment has considerable force. It has merit and I support my noble friend's amendment.

Lord Finsberg

My Lords, I also support this amendment, not merely as someone who occasionally helps with the shopping but because it is perfectly true that one goes rushing through a supermarket and picks things up quickly so that, as has already been said, one is in danger of having an errant trolley damage one's ankles. However, if you stop and look at the products, then there is less chance of being misled. Most people do not have the time to do that. Many people, like me, would have to put their glasses on to look at the very small print, and that is not why people go into shops. Therefore I strongly support this amendment.

I take issue with the noble Lord, Lord Cawley, who made the point about interlocutory injunctions and said that he thought the amendment was not necessary. He cannot guarantee that in every case the judge would take the right decision. Therefore I would rather have belt and braces and have this clause in the Bill so as to be safe. I wonder whether I am right in suspecting that the Minister has in his brief an instruction saying,"resist this amendment". If there is some pressure and new ideas are put forward by noble Lords, as my noble friend Lord Reay has done, I hope he will say that he will look at the matter again. His brief might say that the language is wrong and the parliamentary draftsmen do not approve of it; but I hope he will not use that excuse merely to say that we must not accept this amendment. I do not think he would; but that is occasionally the refuge of many ministers. Indeed, I have used it myself. I hope that on this occasion my noble friend will not do SO.

The Earl of Harrowby

My Lords, I too should like very briefly to give my support to my noble friend Lord Reay. I shall not give a whole lot of reasons because they have all been mentioned, and I have my own axes to grind later, but I have just one point to make about the remark of the noble Lord, Lord Cawley. The law may be adequate at the moment; the fact remains that the abuse is there and I therefore suggest that the amendment of the noble Lord, Lord Reay, deserves support.

Lord Strathclyde

My Lords, I am very glad that we have spent a certain amount of time discussing this issue. It comes as no surprise to me that we have done so because we also did that in Committee. I am not sure that we are much further down the road towards finding a solution to the problem; but I must say I am incredibly impressed by the number of my noble friends who go shopping on a regular basis. I am rather depressed that quite so many of them find themselves so confused and often find that they have returned home with the wrong product. In the Strathclyde household, if I return with the wrong product, I am sent back to get it changed.

My noble friend Lord Reay makes a very good case for what he is trying to do. In Committee my noble friend sought to demonstrate that the problem was one of trade mark infringement— which it plainly was not. I note the change of approach here. I also note that the ultimate objective is the same: to enable trade mark owners to take action against those who, while not using their trade mark, are using labels, and so on, which are similar in colour and design to those which they use on their own products. Despite the fact that it came up in Committee, this is basically an entirely new issue. It was never raised during the extensive consultation which took place over a period of five years on the White Paper and the draft Bill. It was not in fact mentioned to us at all until last December. The Government would find it difficult to support the introduction of a new cause of action of unfair competition unless there was a clear majority in favour of it.

My noble friend Lord Reay started by considering the directive and the Paris Convention. It is true that the directive does not exclude the application to trade marks of the application of law of the Member States other than trade mark law, such as the provisions relating to unfair competition". That is in the sixth recital. But tying the right to sue to the existence of a trade mark runs into problems vis à vis the directive, which aims to ensure (under the ninth recital) that registered trade marks have the same protection under the legal systems of all member states. However, even if the directive does not prevent us from introducing unfair competition as a general cause of action (should there be a groundswell of opinion in favour of it) I do not think that we should necessarily do this under this Bill since it is all about trade marks. Therefore, I have difficulty in conceding the point to my noble friend.

Although we do not have an unfair competition law, we do have a number of remedies which deal with specific instances of unfair trading practices. Some have been mentioned, particularly by my noble friend Lord Jenkin of Roding. Passing off, for instance, deals with the selling of goods which cause confusion with those of another manufacturer. Consumer protection laws, such as the Trade Descriptions Act, also play a part as does the action for trade libel when someone disparages another's product. The Government therefore believe that they meet their obligations under the Paris Convention in a number of different ways rather than by dealing with this in the same way as other countries.

I turn now to the more practical aspects of the amendment itself. It aims to prevent someone from using packaging, or a label, or a container with an overall appearance which resembles packaging which is associated with a trade mark belonging to a competitor. Under this amendment, the trade mark does not even have to be registered; it could in fact be an unregistered mark of which the trader caught by this new offence is totally unaware. It means that if I, as a trader, want to put shampoo in a square bottle with a green and yellow dotted label, either using my own trade mark or with no trade mark on it at all, I can only do so if I am sure that someone else is not already selling shampoo in just such a bottle, but under their own trade mark. That certainly seems draconian.

Although I do not want to use the defence of saying that this is a badly drafted amendment— my noble friend Lord Finsberg accused me of possibly using this defence— (it is badly drafted but that is an entirely different matter), I notice that the new clause would permit the look-alike to sue the brand leader. I wonder whether that was really my noble friend's intention.

My noble friend referred to using current remedies under the law, and said that "passing off", for instance, is a difficult remedy to work in practice. That may well be true. My noble friend also said that manufacturers change their packaging on a very regular basis— sometimes every six months— in which case I am not sure that the problem exists. I thought that the words of the noble Lord, Lord Monson, speaking from the Cross Benches, were compelling: that it is a positive aid to the consumer to know that certain types of product are packaged in certain general types of packaging.

Perhaps the most compelling speech— and one of the shortest— was that of my noble friend Lord Cawley who has a great deal of experience in these matters. He said that he did not think that the new clause was necessary.

In Committee, the new clause received relatively little support. I notice that today it has received rather more support in e House. There are two sides to this issue and before taking any action, the Government must seek the view of industry generally, and carefully consider what is being proposed. Even then, if there is general support from industry, I cannot promise that we shall be able to solve the problem in this Bill.

My noble friend has made a case that needs to be answered by the Government. I have sought to do so during this short debate. I am happy to consider his point further. I have grave difficulties and some concerns about his amendment, but I hope that, in the light of what I have said, he will not press his amendment. Perhaps it is something to which we can return at a later stage.

5.15 p.m.

Lord Reay

My Lords, we have had a lively debate and 1 am extremely grateful for the strong support that I have received— almost exclusively from these Conservative Benches. We have also heard some interesting evidence about shopper confusion, which is hard to come by. Some noble Lords may find themselves being approached by firms which are considering collecting evidence when they need to press for an injunction.

I listened carefully to my noble friend's reply and it seems that he has left the door open. He used the phrase,"before taking any action". I take that to mean that he does not consider that action has yet been taken. He said that he is happy to consider the matter further. In those circumstances, I think that it would be wrong for me to press the matter to a Division this afternoon. Therefore, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 74 [Fees]:

The Earl of Harrowby moved Amendment No.35: Page 30, line 40, at end insert ("in the recognised form").

The noble Earl said: My Lords, your Lordships will see some perfectly clear English in the first two lines—that is, subsection (1)— of Clause 74. Referring to fees, the second line states: other matters under this Act such fees as may be prescribed". That, to me, is perfectly clear. It is perfectly clear that we are providing an open cheque. The wording authorises somebody to charge fees, but does not put any limitation upon those fees.

I am aware that there is a custom in legal circles, in the Civil Service and probably among politicians whereby the word "prescribed" has a meaning which is quite different from its ordinary meaning. It means "prescribed in accordance with this, that or the other". I submit that an Act of Parliament must be readable and understandable by people such as me, by the general public, by anybody. It must be interpretable and its wording must mean what those words mean ordinarily in English. The word "prescribed" is a perfectly understandable word.

I do not believe that it is reasonable or adequate to leave in an Act of Parliament an open-ended cheque for somebody— and the clause does not define who although, in effect, it undoubtedly means the head of the Patent Office at the moment, but that may not always be the case because one can easily envisage the trade marks section being made into a quango. The word "prescribed" contains no limitation as to the person to whom that authority is given. Whatever the conventions in the law or within the Civil Service, I do not believe that it is acceptable to leave the provisions open to an interpretation which none of us may want.

Lord Strathclyde

My Lords, my noble friend is concerned that the Bill appears to give the Patent Office licence to charge fees without restriction, or supervision as to their level.

As an executive agency of the Department of Trade and Industry, the level of fees is set by Ministers based on recommendations from the Patent Office and after consultation with bodies representing users of the system and with the Patent Office Steering 13oard. As an executive agency, it is required to set its fees at a level both to cover the costs of the operation and to make a return on capital employed. The rate of return is set by the Treasury and the DTI and is currently 6 per cent. per annum.

Against that background, Clause 74(1) requires that the fees to be charged be "prescribed". Under Clause 73(l) (b), anything to be prescribed by the Bill is to be in rules made by the Secretary of State. Clause 73(3) requires that these rules will be in the form of a statutory instrument and subject to a negative resolution by either House. I believe, therefore, that the fees charged by the Patent Office are subject to a satisfactory framework of controls and that public interests are fully safeguarded without the need for any further qualification to the clause.

I hope that I have clarified the point and that my noble friend is reassured not only by what the word "prescribed" means but what our intention is and what the Bill lays out in Clause 73.

The Earl of Harrowby

My Lords, in the light of what my noble friend said, I beg leave to withdraw the amendment. I believe that that is wrong, but nevertheless I withdraw it.

Amendment, by leave, withdrawn.

Clause 77 [Recognition of agents]:

Lord Strathclyde moved Amendment No.36: Page 31, line 18, at beginning insert ("Except as otherwise provided by rules,").

The noble Lord said: My Lords, in moving Amendment No.36 I shall speak also the Amendment No.37. They concern Clause 77, which relates to the recognition of agents.

The present practice is that the Patent Office assumes that any agent filing and signing papers on behalf of an applicant is authorised to act and will process those papers without further ado. If, however, the applicant changes his agent during the processing of an application the new agent files a form to say that he has taken over the handling of the case. Again, this is a very simple matter and the form in question is signed by the agent. These amendments will ensure that applicants can continue to benefit from the existing simple procedure when authorising agents to act for them. I beg to move.

On Question, amendment agreed to.

Lord Strathclyde moved Amendment No.37: Page 31, line 20, leave out from ("done") to end of line 21 and insert ("by or to an agent authorised by that person orally or in writing.").

On Question, amendment agreed to.

Clause 83 [Infringing goods, material or articles may be treated as prohibited goods]:

Lord Strathclyde moved Amendment No.38: Page 34, line 13, leave out from beginning to (", and") in line 14 and insert:

1. ("(i) from outside the European Economic Area, or
2. (ii) from within that Area but not having been entered for free circulation,").

On Question, amendment agreed to.

Clause 85 [Power of Commissioners of Customs and Excise to disclose information]:

Lord Strathclyde moved Amendment No.39: Page 35, line 14, leave out from ("below") to second ("or") and insert ("(unauthorised use of trade mark, & c. in relation to goods)").

On Question, amendment agreed to.

Clause 86 [Fraudulent use of trade mark, & c. in relation to goods]:

The Deputy Chairman of Committees (Lord Aberdare)

My Lords, I must point out that if Amendment No.43 is agreed to I cannot call Amendment No.44.

Lord Strathclyde moved Amendments Nos.40 to 43: Page 35, line 17, leave out ("fraudulently") and insert ("with a view to gain for himself or another, or with intent to cause loss to another, and without the consent of the proprietor"). Page 35, line 25, leave out ("fraudulently") and insert ("with a view to gain for himself or another, or with intent to cause loss to another, and without the consent of the proprietor"). Page 35, line 37, leave out ("fraudulently") and insert ("with a view to gain for himself or another, or with intent to cause loss to another, and without the consent of the proprietor"). Page 36, line 1, leave out subsection (4).

On Question, amendments agreed to.

[Amendment No.44. not moved.]

Lord Monson moved Amendment No.45: Page 36, line 19, leave out ("ten") and insert ("five").

The noble Lord said: My Lords, the purpose of the amendment is to reduce the maximum sentence of imprisonment upon conviction on indictment from 10 to five years. I should have preferred an even lower maximum but calculated that that would have no chance of acceptance.

It is common knowledge that Britain has the highest prison population in Europe. Do we really want to make things worse? The offence in question, though not necessarily trivial, causes no physical injury to any individual, causes no mental anguish, does not undermine the security of the state and, I should guess, causes no serious financial harm to any corporate body. It causes pinpricks, yes, but serious harm, no.

Although technically it is a criminal offence, I suggest that in essence it is almost a civil offence and should be punished accordingly by a fine coupled with damages; in serious cases, a massive fine coupled with massive damages. If thought necessary, that could be backed up by a couple of hundred hours community service in serious cases or a short, sharp shock of six months or so imprisonment. I submit that a sentence of three, five, seven or 10 years is totally inappropriate and unnecessary, apart from it being so very expensive to taxpayers. Although it is not entirely relevant, I wonder how many of our European Community partners provide such a high maximum sentence for this offence. Perhaps in reply the Minister will be able to tell us. I beg to move.

Lord Strathclyde

My Lords, the 10 year maximum term of imprisonment for counterfeiting offences is what is prescribed under the present law. It is, of course, a heavy penalty and I would expect sentences approaching it to be imposed only very rarely; for example, where the counterfeit goods are actually dangerous or there are other aggravating circumstances. It is evidence of the seriousness with which the Government regard counterfeiting. Reducing this penalty in the way suggested by the noble Lord could send the wrong signals not just to counterfeiters but also to the enforcement authorities and the courts.

I listened carefully to the noble Lord, Lord Monson, and recognise his anxieties. However, I believe that as regards counterfeiting, which is so prevalent and such a problem in this country, we should not seek to lessen the offence in the way which the noble Lord described. I feel strongly about the matter and therefore I ask the noble Lord to withdraw the amendment, having heard what I have said.

Lord Monson

My Lords, I am grateful to the Minister. I confess that I had not realised that the 10 year maximum sentence was already in existence for similar offences. I was glad to hear him say that that term would be imposed only if there were other aggravating features. It would be deplorable if that sentence were imposed in any other circumstances. With that assurance, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 87 [Delivery up of offending goods, material or articles]:

Lord Strathclyde moved Amendment No.46: Page 36, line 21, leave out ("fraudulent use of trade mark, & c.") and insert ("unauthorised use of trade mark, & c. in relation to goods").

On Question, amendment agreed to.

Lord Strathclyde moved Amendment No.47: Page 36, line 23, leave out ("infringing").

The noble Lord said: My Lords, in moving Amendment No.47 I shall speak also to Amendment No.48. These amendments follow from the changes that were made in Committee to Clause 86.

As introduced, Clause 86 made the scope of the criminal offence of trade mark counterfeiting as broad as the civil wrong of trade mark infringement. Clause 86 was criticised as being too broad in scope. Accordingly, the clause was amended in Committee so that it catches the unauthorised use of a trade mark only where the mark used is identical to or likely to be mistaken for a registered trade mark and is either used in connection with goods for which the mark is registered or, where it is used on other goods, takes unfair advantage of the mark's reputation. This is narrower than the definition of (civil) infringement.

Clause 87, however, still provides for the delivery up of "infringing" goads, material or articles. This would allow a court to order delivery up of goods in respect of which a criminal conviction under Clause 86 could not have been obtained. That cannot be right. Amendment No.47 therefore changes paragraph (a) of subsection (1) of Clause 87 so that it bites only on goods, material or articles that are identical to those in respect of which a charge was actually brought.

Amendment No.48 replaces paragraph (b) of subsection (1) of Clause 87. In order to be caught by it, goods, material or articles must be similar to, or of the same description a;, those in respect of which the charge was brought. I beg to move.

On Question, amendment agreed to.

Lord Strathclyde moved Amendment No.48: Page 36, line 25, leave out paragraph (b) and insert: ("(b) goods, material or articles of the same description as or similar to those in respect of which the offence was committed, and bearing a sign identical to, or likely to be mistaken for, the registered trade mark in relation to which the offence was committed,").

On Question, amendment agreed to.

Clause 88 [Enforcement function of local weights and measures authority]:

Lord Strathclyde moved Amendment No.49: Page 37, line 13, leave out ("fraudulent use of trade mark, & c.") and insert ("unauthorised use of trade mark, & c. in relation to goods").

On Question, amendment agreed to.

Clause 89 [Falsification of register, & c.]:

Lord Strathclyde moved Amendment No.50: Page 37, line 38, leave out second ("an") and insert ("a false").

The noble Lord said: My Lords, in moving Amendment No.50 I shall speak also to Amendments Nos 51 to 54. Amendments Nos.50 to 53 concern Clause 89, which makes it an offence knowingly to make a false entry in the register of trade mark, to make anything which falsely purports to be a copy of an entry in the register, or to produce such a copy in evidence. The amendments have the effect that it is not necessary for the prosecution to demonstrate actual knowledge; it is sufficient to show that the person had reason to believe that the entry was false.

Amendment No.54 reflects one which was tabled in Committee by the noble and learned Lord, Lord Oliver of Aylmerton. Although the noble and learned Lord's Amendment No.57R was not moved in Committee, we have taken the opportunity to consider his point.

Clause 90 deals with the offence of falsely representing a trade mark as registered. Subsection (1) re-enacts the same provision in the current law and I am advised that, in considering cases of false representation of a trade mark, the courts have always required proof of knowledge and intent; they have never considered it as an absolute offence.

In order to put the position beyond doubt however, Amendment No.54 inserts the condition that, where someone represents falsely that goods or services sold or supplied under a trade mark are covered by a registration, it must be shown that they knew or had reason to believe that the representation was false, in order for guilt to be established. I beg to move.

On Question, amendment agreed to.

5.30 p.m.

Lord Strathclyde moved Amendments Nos.51 to 53: Page 37, line 39, leave out ("which he knows to be") and insert (", knowing or having reason to believe that it is"). Page 37, line 41, after ("anything") insert ("falsely"). Page 37, line 45, after ("knowing") insert ("Or having reason to believe").

On Question, amendments agreed to.

Clause 90 [Falsely representing trade mark as registered]:

Lord Strathclyde moved Amendment No.54: Page 38, line 9, at end insert ("knowing or having reason to believe that the representation is false").

On Question, amendment agreed to.

Clause 97 [Offences committed by partnerships and bodies corporate]:

The Earl of Harrowby moved Amendment No.55: Page 41, line 5, leave out subsection (3).

The noble Earl said: My Lords, this is almost a drafting amendment, and is not of great importance. However, I submit that subsection (3) is superfluous. It follows automatically that if a partnership is found guilty, the penalty, financial or otherwise, is imposed on the partnership's assets. Therefore, I suggest that subsection (3) serves no purpose whatever. I beg to move.

Lord Strathclyde

My Lords, I believe that my noble friend would find it helpful if I were to explain the practical purpose of Clause 97(3).

The Earl of Harrowby

My Lords, I should have mentioned that I have asked whether we may take Amendment No.55 separately from the other amendments.

Lord Strathclyde

My Lords, I received that message and I am happy to comply with my noble friend's request.

As regards Amendment No.55, it is necessary to deal with the question of how or out of what funds a fine is to be paid where a court finds that an offence has been committed by a partnership— for example, pursuant to Clause 80— rather than how it is to be paid by a partner who will be liable personally for a fine imposed upon him. That subsection states exactly the position. It is supposed to be helpful to those seeking to discover exactly what the position is. I hope that that meets with my noble friend's agreement.

The Earl of Harrowby

My Lords, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Speaker (Baroness Serota)

My Lords, in calling Amendment No.56, I should point out that if it is agreed to, I cannot call Amendment No.57.

Lord Airedale moved Amendment No.56: Page 41, line 10, leave out from ("offence") to end of line.

The noble Lord said: My Lords, it may be for the convenience of the House to discuss Amendments Nos.56,57 and 58 together. The amendment arises from a matter which occurred to me in Committee. The Minister was kind enough to write to me about it, but I am sorry to say that I remain unrepentant.

It is no doubt essential to point out in subsection (4) that if people do certain things, they commit an offence. But is it necessary to say: and liable to be proceeded against and punished accordingly"? To begin with, the subsection does not set out the position in full. One is not punished after being proceeded against; one is punished only if one is convicted. Therefore, for this matter to be correct the subsection should say: and liable to be proceeded against, convicted and punished". Are those words really necessary? We complain bitterly that the statute book is already too fat. I hope that this is not setting a precedent for future Acts. It is not necessary to insert every time that people who commit offences are liable to be prosecuted, convicted and punished. We all know that.

I have consulted several lawyers about those two subsections. So far, none has explained to me that he can see any reason at all for the necessity of telling people in a clause of a Bill that those who commit offences are liable to be prosecuted and convicted. It is unnecessary. Let us leave it out. I beg to move.

The Earl of Harrowby

My Lords, I believe that subsection (4) is a mess. I am aware that the wording of subsection (4) follows that contained in other legislation. However, under no circumstances can one be guilty and then be liable to be proceeded against. It does not make sense.

I am told that if a partnership is found guilty, it means ipso facto that the partners are guilty. Therefore, we start with that premise. Therefore, they cannot be proceeded against. They are guilty and they may be punished. I suggest to your Lordships that if the Minister were to think about the wording of the amendment, upon which he may be able to improve, he would solve the dilemma in which he finds himself because he has copied other legislation. Just because the provision is contained in other legislation does not mean that it is right. As the noble Lord, Lord Airedale, pointed out, the whole subsection has become totally twisted. It is not logical and it does not make sense in English.

Lord Strathclyde

My Lords, I thank the noble Lord, Lord Airedale, and my noble friend Lord Harrowby for their words. We should recognise immediately, as was recognised by both noble Lords, that we are not setting a precedent. The provision appears in several existing statutes dealing with the liability of partnerships.

This clause makes it clear that where a partnership is guilty of an offence every partner is also guilty of that offence, unless he can prove his ignorance or that he sought to prevent the commission of the offence.

In the case of a body corporate where the directors or an officer of the company have consented to or connived in the commission of an offence they, too, are guilty. In each case the clause makes it clear that such individuals as are identified cannot escape liability for such offences merely because the partnership or body corporate has been convicted of such an offence, which argues for the retention of "liable" in this clause. Those individuals are therefore expressly made liable to be prosecuted for exactly the same offence as that in respect of which the partnership or body corporate is convicted.

It should be noted that the provisions make the partners or directors guilty of the offence, but a conviction will only follow upon a prosecution, and in these unusual circumstances of "double liability" for the same offence, it is important that the provision creating such criminal liability should be expressly and clearly set out at length.

Both noble Lords obviously feel extremely strongly about this matter. I am happy to look again at the cause of the problem. I shall not commit myself to bringing forward an amendment at a later stage because I am not entirely convinced that there is a problem. Perhaps in the light of my explanation, the noble Lord, Lord Airedale, will feel relieved and will withdraw the amendment.

Lord Peston

My Lords, will the noble Lord explain what it is that he is going to look at. I am advised— and noble Lords agree— that this is standard wording and there is nothing new about it. Does the noble Lord intend to look at all legislation dealing with partnerships with a view to changing it? I congratulate the noble Lord on being sympathetic to the wishes of noble Lords. I have looked at the amendment and see the logic of what the noble Earl said. Despite that, I am advised that the wording is standard, and I am not clear what the noble Lord, Lord Strathclyde, intends to do.

Lord Strathclyde

My Lords, with the leave of the House, perhaps I may clarify the matter. I believe that I outlined the correct position. However, I do not pretend to be an expert in that area of the law. It is possible that my noble friend and the noble Lord, Lord Airedale, may have found a specialist point. I am happy to consider what they said. However, I stand by the words that I used in explaining my rejection of the amendment with which I believe the noble Lord, Lord Peston, agreed.

Lord Airedale

My Lords, I am much obliged to the Minister for his answer. There are numerous examples of unnecessary words being repeated in successive statutes ad nauseam. Eventually, someone is bold enough to say,"It is really not necessary to go on repeating such words in similar statutes for the rest of time". I hope that the Minister is bold enough to consider whether he can agree that the words in the subsection are really unnecessary. I always urge that we should do our best to keep the statute book as concise as we can. However, with those words, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.6

[Amendments Nos.57 and 58 not moved.]

5.45 p.m.

Clause 99 [Minor definitions]:

Baroness Hooper moved Amendment No.59: Page 41, line 40, at end insert: (" "services" includes retail services").

The noble Baroness said: My Lords, I move the amendment in the unavoidable absence of my noble friend Lord Lucas of Chilworth. I wish to raise again the issue of having an express reference to "retail services" in the Bill. I do riot believe that they are unnecessary words in the sense put forward by the noble Lord, Lord Airedale. It is a matter that we discussed in Committee. Moreover, it has also been the subject of further consideration and correspondence with my noble friend the Minister. I wish to make clear that certainly both I arid my noble friend Lord Lucas fully recognise that a genuine attempt to find a solution to accommodate the wishes of retailers has been made, although, so far, it has been unsuccessful.

I should make clear that I do not intend to press the amendment today. However, as it is an important issue for many people, I believe it helpful to raise the matter now and to seek further clarification with a view, at the very least, to leaving the door open rather than to allow a signal to be given that there is no scope for any registration of such services.

At present there is no specific provision or definition of "retail services". That means that retailers are disadvantaged because they have no easily accessible legal right to protect the name of their shops and services from being copied. Of course, retailers are at liberty to take action against anyone who, they believe, is copying their style or services by taking a passing-off action in common law. However, that can be both expensive and fraught with difficulties mainly because the claimant must prove conclusively that the consumer has been confused, as we discussed earlier in relation to the unfair competition amendment.

I understood that the intention of the Bill was to reduce costs wherever possible by providing clearer procedures and more streamlined services to enable owners of trade marks to enforce their rights. Indeed, my noble friend the Minister has indicated that that was very much the intention. I believe that retailers would register more of their services but for current costs. It would certainly be of considerable assistance to retailers if they were able to register only once in order to protect their goods and services. In view of the Government's wider deregulation initiative, it would certainly seem to be a suitable opportunity further to assist retailers in that way.

In discussions that have taken place, my noble friend the Minister indicated that such a definition cannot be included in the Bill because it moves away from the harmonious effects of the European Community directive which seeks to harmonise the national provisions of all the member countries. However, I know that my noble friend is aware— and, again, the matter was raised in Committee— that such definitions are in existence in at least two other Community countries; namely, Spain and France. I am sure that my noble friend is also aware that, for example, Mothercare has registered its retail and mail order services in Spain under Class 35 and that it has also apparently applied for registration under Class 42. The company has also registered Mothercare retail and mail order services in France.

Apart from other European Community members, I have already referred to the fact that in other parts of the world— such as Australia, New Zealand, Hong Kong and the United States— the registration of retail marks is permitted. Therefore, the suggestion that any difficulties may arise in arriving at a suitable definition seems discredited. I understand also that there are moves to revise the Nice classification system to include a registrable retail section. If that is the case, we may well be asked to consider the issue. Therefore, why should we not take the opportunity presented by the Bill to make the clarification now? I beg to move.

Lord Strathclyde

My Lords, I congratulate and thank my noble friend Lady Hooper for her speech on the amendment. However, I regret that I am unable to accept it as, in the Government's view, it is incompatible with the directive. In saying that, I should emphasise that I have taken careful note of the views expressed either in this House or in letters to my department by those who support the principle behind the amendment.

Defining services as including retail services, as does the amendment, would be placing a gloss on the directive's words and as such is unacceptable. We cannot define the words used in the directive unless by so doing we are merely "translating" them into wording which is used in United Kingdom law in order to make an obscure meaning clear. However, in doing that we have to be careful that such "translation" only translates and does not interpret. What my noble friend proposes here is in fact an interpretation of the word "services" as it appears in Article 1 of the directive. Interpreting the directive's wording is undoubtedly something which will take place in the member states once it is in force and cases come before the courts. Such interpretation is not, however, a matter for us when implementing the directive in the Bill: it is for the courts and, ultimately, the European Court of Justice.

Although the directive simply provides for a trade mark to be registered for goods or services, the third recital states that one of its aims is to harmonise those provisions of national law which most directly affect the functioning of the internal market. If we were to define services as including retail services— and we understand that that is not the view taken in Europe generally and that it is not expected to be the view taken by the Community Trade Marks Office— there would thus be a serious risk of our moving away from harmonisation.

It has been argued that, as it stands, the Bill allows registration for "retail services" because it does not contain the requirement that they be supplied, for money or money's worth which is in present law. That is something on which I find it difficult to comment. Any obligation to register such a mark once the Bill becomes law will be considered on its merits; and the law would be applied in the first instance by the registrar of trade marks, and ultimately by the courts. As I have said, in view of the Community dimension, this may include the Court of Justice.

I have not lost sight of the fact that some Community countries and non-Community countries register marks for retail services. They are however in a different position. For instance in Spain, so far as we understand it, shop names are registered as trade or business names and not trade marks. These do not carry the same rights as trade marks. The fact that they are put on the same register as the trade marks does not, as I understand it, make any difference. My noble friend has said that she would probably not seek to press the amendment to a Division. I have explained that the Government have considered long and hard the points that she and her noble friend Lord Lucas of Chilworth have made. However, we are unable to accept the amendment.

Baroness Hooper

My Lords, I am grateful to my noble friend for his further clarification. However, I still find it strange that it should be incompatible for us to make a further definition when that is not the case in Spain or France, even taking into account the explanation that my noble friend gave vis-á-vis Spain. Nevertheless, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Strathclyde moved Amendments Nos.60 and 61: Page 41, line 43, at end insert: ("() References in this Act to a Community instrument include references to any instrument amending or replacing that instrument."). Page 41, line 43, at end insert: ("(2) References in this Act to use (or any particular description of use) of a trade mark, or of a sign identical with, similar to, or likely to be mistaken for a trade mark, include use (or that description of use) otherwise than by means of a graphic representation.").

The noble Lord said: My Lords, I beg to move Amendments Nos.60 and 61 en bloc.

On Question, amendments agreed to.

Clause 100 [Index of defined expressions]:

Lord Strathclyde moved Amendments Nos.62 to 67: Page 42, leave out line 10. Page 42, line 12, column 2, leave out ("and (2)"). Page 42, leave out line 24. Page 42, line 25, column 2, leave out ("24(1)") and insert ("(Exclusive licences) (1)"). Page 42, leave out line 37 Page 43, line 7, at end insert: ("use (of trade mark or sign) section 99(2)")

The noble Lord said: My Lords, I beg to move

Amendments Nos.62 to 67 en bloc.

On Question, amendments agreed to.

Schedule 3 [Transitional provisions]:

Lord Strathclyde moved Amendment No.68: Page 51, leave out lines 31 to 33 and insert: ("(2) It is not an infringement of—

1. (a) an existing registered mark, or
2. (b) a registered trade mark of which the distinctive elements are the same or substantially the same as those of an existing registered mark and which is registered for the same goods or services,

to continue after commencement any use which did not amount to infringement of the existing registered mark under the old law.").

The noble Lord said: My Lords, this amendment aims to close a loophole in the transitional provisions. Paragraph 4(2) provides for any use of a mark which would not have been an infringement under the 1938 Trade Marks Act to continue after commencement of the Bill. This is important because infringement rights under the Bill go wider than under the 1938 Act. However, by seeking re-registration of an existing registered trade mark it may have been possible for the owner of a registration to frustrate the intention of the original provision. The proposed new subparagraph (2) in paragraph 4 closes that loophole by making it clear that anything which did not amount to infringement currently would not be so under the Bill in relation to a registered trade mark which is the same or substantially the same as an existing registration. I beg to move.

On Question, amendment agreed to.

Lord Strathclyde moved Amendments Nos.69 to 71: Page 51, leave out lines 34 to 36. Page 51, line 42, leave out from ("(1)") to ("to") in line 43 and insert ("Section (General provisions as to rights of licensees in case of infringement) (general provisions as to rights of licensees in case of infringement) of this Act applies"). Page 52, line 39, leave out ("23 and 24(2)") and insert ("(Licensing of registered trade mark) and (Exclusive licences) (2)").

On Question, amendments agreed to.

Schedule 4 [Consequential amendments]:

Lord Strathclyde moved Amendment No.72: Page 57, line 10, at end insert: ("Law Reform (Miscellaneous Section 15(5)") Provisions) (Scotland) Act 1985

The noble Lord said: My Lords, this amendment puts right an omission from the list of provisions in Schedule 4. I beg to move.

On Question, amendment agreed to.

In the Title:

Lord Strathclyde moved Amendment No.73: Line 4, leave out ("the Council Regulation (EEC)") and insert ("Council Regulation (EC) No.40/94 of 20th December 1993").

On Question, amendment agreed to.