§ Order for Second Reading read.
§ MR. BOWLES (Lambeth, Norwood)
said that early that morning, about 12.15, the Patronage Secretary put down certain Bills for discussion for "to-morrow." Amongst those Bills was the Patents Bill, which appeared in the Orders of the Day. What he desired to ask was whether when those Bills were put down by order of the House for one day it was competent for the Government after the House had adjourned to secure their advance by one day.
§ *MR. SPEAKER
I must take the responsibility for having made the alteration. The truth is that it escaped the Patronage Secretary and myself that it was past midnight, and consequently "to-morrow" became "today." I think the House generally understood that we should take this Bill on Wednesday.
§ Motion made, and Question proposed, "That the Bill be now read a second time."
§ SIR F. CAWLEY (Lancashire, Prestwich),
in supporting the Second Reading, said the first patent, as far as he could discover, was granted in 1626 and recited that—Because much time and labour and money has been spent by Walter Drummond, and because the invention may be of use and advantage to the State the King grants a monopoly, but should the said Walter Drummond fail to reduce to practice within three years his scheme of patent, the said patent shall then lapse.From that it was perfectly clear that the patent had not been granted to the inventor for his ingenuity alone, but also for his services to the State in introducing a new manufacture to the realm. It appeared to him that those conditions were just, and ought to govern our present practice, and that no patent should be granted without a patentee's being required to work his invention in this country. If, however, all countries did as we did, that was, grant a patent to anybody and everybody who applied, there would be nothing to object to; but when all other countries took a different view, he thought there 1013 was not much to be said for our present practice. In Germany, if a patent was not worked within three years, it could be revoked and declared void. In France, if a patent was not worked within two years it could be revoked. In fact, in practically every industrial country, including Japan, patentees had to work their patents, or to get them worked within a certain time of their being granted, or their grant might be revoked. We were the only country in Europe that allowed a patentee to take his grant away and work it where he liked, or sell it to whom he liked. The result of this careless liberality was that foreigners came here and got patents granted them without ever having the slightest intention of working them in this country. They not only did this, but, aided by powerful associations and syndicates, particularly in Germany, they used these patents to filch our trade away, and in this, he was sorry to have to say, they had often been successful. In 1903 we had granted nearly 8,000 patents or monopolies to persons residing outside this country, in fact, more than half the patents taken out here, and the most important ones had been taken out by foreigners. We granted a larger number of patents (about 5,000 more) than Germany did every year, although the population of Germany was one-third greater than our own. Some of these patents were only taken out for blocking purposes, and were unscrupulously used when our manufacturers wished to make any article which would compete with a German production. Others which were of importance were taken abroad and were used to start industries there by new and improved processes, and so superseded industries carried on in this country. Thus our manufacturers suffered great injury and our workpeople lost their employment. Although a patent lasted only fourteen years it was long enough to establish the industry abroad, and once established there, with trained labour, experience, and an organised system of distribution, it was no easy matter to get it back again. What they said was that the granting of a patent, which was really a monopoly, was in the nature of protection, and that for every monopoly granted there should be a quid pro quo to the State granting it. We got no quid pro quo 1014 for the monopolies we gave, but we allowed the person to whom the monopoly was granted to produce his patented articles solely abroad; in other words we ran contrary to the doctrine of free trade, not for our own benefit, but for the benefit of the foreigner. Most patents that were granted to Englishmen were probably worked in this country, but they had to remember that we had no monopoly of genius in this country, and that as the population of America and other European countries was 440,000,000 and that of the United Kingdom was only 40,000,000, we could not expect to produce the same number of inventions as they did; and when we considered also that they were advancing in their manufacturing capacity by leaps and bounds, it followed that the number of patents granted to foreigners would greatly increase, and that if the present state of affairs was allowed to continue we should not only lose our share of the new industries which were so rapidly springing up, but we stood a very great chance of losing the supremacy we still held in old ones. The great industrial progress of Germany had recently figured very largely in discussions on our fiscal system. That Germany had made enormous strides could not be denied, and in his opinion the advantages that she had enjoyed through our absurd leniency in regard to patents had been one great factor in the success which she had attained, in some degree at our expense. The chemical industry of Germany had increased rapidly, and now amounted, with allied industries, to something like 70,000,000 per annum, and part of that trade had been taken away from this country. Was it not quite time there should be some close investigation to see the cause? When it was considered that the process of manufacturing aniline colours from coal tar was discovered in this country, that the industry was commenced and flourished in this country, that we were the greatest producers of the raw material from which the colours were made, that we had cheap fuel and a favourable geographical position, and that we were also the greatest consumers of the finished article, and that we had allowed this enormous trade to be taken way from us, it was, he thought, humiliaing. There were in Germany engaged 1015 in this manufacture five firms, who employed something like 26,000 hands, and had an aggregate capital whose market value was something like £16,000,000 sterling. Most of the labour employed in these works was unskilled labour, and was the very kind of work which would absorb our unemployed if we only insisted that there should be a quid fro quo for the monopolies we granted and that they should not be taken away and used to find work for foreign labour in foreign countries at the expense of our fellow-countrymen. It was a well-known fact that the foundation of the aniline colour industry in Germany had been laid by the manufacture of alizarine, for which a number of patents for working it commercially had been obtained in this country, with the result that everyone was able to make and sell in that country, whilst in this country it was a close monopoly, and our dyers were charged an enormous price for an article which could be just as well made by us as by Germans. The patent for this article had now lapsed, but the business had been so firmly established in Germany both by the scientific process of manufacturing and by the organisations for distribution, that we had not been able to wrest the trade from them. But he would like to call the special attention of the House to the question of artificial indigo. We employed something like 200,000 people in India on the indigo plantations. The Germans had discovered an artificial indigo which, on account of its much lower price, was superseding the vegetable product. The capital employed would, he supposed, be lost, and German labour and German capital employed in its stead. In this case it would be seen that we were losing an industry, which had found employment for thousands of our Indian fellow-subjects, through granting the Germans a British patent or monopoly without imposing upon them any obligation to work it in this country. Had we said to them as they said to us: "If we grant you a patent or monopoly for the sale of this article, you must, in return, manufacture the article here," we would by now have had large works in this country giving employment to numbers of labourers. By our patent laws, as they were at present, we were 1016 benevolently fostering great industries in Germany, to the detriment of the manufacturers, consumers, and working-classes of this country. The supporters of this measure wanted no interference with free trade. All they asked was just and equitable treatment. They held that monopolies should not be granted to foreigners to be used to handicap us in that competition which was every day becoming more acute. Hon. Members opposite seemed to think that this was a question of protection. It was not a question of protection. We had been granting thousands of patents to foreigners and getting nothing in exchange. What was now proposed to be done was to say to the inventor: "We are going to grant you a monopoly of the strictest kind possible, but if we do that, the country at least ought to have some recompense for having done it." The patent ought not merely to be a prize to the inventor who applied for it. The country where the man was granted protection ought at least to have some share in the benefit. If a man obtained a patent in this country he ought to manufacture the goods here. He thought this Bill would go some distance towards stopping foreigners from obtaining an advantage in our markets and giving nothing in exchange.
§ *MR. CAVE (Surrey, Kingston)
said that when the Second Reading of the Bill was moved many hon. Members waited to see whether the senior Member for Merthyr Tydvil would move the Amendment of which he had given notice. Clause 10 of the Bill, against which the Amendment was obviously directed, appeared to most Members of the House to do nothing but justice to British inventors. But hon. Members opposite seemed to think that there might be found in it some trace of that fiscal reform or fair trade, of which they were so much afraid. However, it seemed that the hon. Member who had given notice of the Amendment was not bold enough to move it, and he therefore proposed to put before the House some general criticisms of the measure. Under the new Rules just passed the Bill would probably be sent to a Standing Committee, so that he and many others might have no chance of criticising the 1017 details. They must, therefore, call attention to the defects of the Bill on the Second Reading. He recognised that the intention of the Bill was to improve the patent laws, and also that there were many clauses which would be of real use to inventors in this country. He did not intend to vote against the Second Reading. But he was a little bit afraid that, in attempting to improve the patent laws and the position of the inventor, the Bill might make that position worse in some respects than it was now. There were clauses in the Bill which would cast on the inventor, and especially the inventor of moderate means, a heavy burden which he would not be very well able to bear. The effect of these clauses would be to discourage the taking out of patents, and thus many small inventors would be deprived of the benefits of their ingenuity. He instanced Clause 2 with respect to the "deposit of samples in the case of chemical inventions," as a serious matter. There were inventions in chemistry which related to intermediate processes and which could not be exemplified by samples; and there were other inventions of which samples could not be provided without considerable expense. Unless great care was taken that cause would be found impossible to work. Having taken the opinion of others on the question, he did not think that particular provision was necessary, and he was inclined to say that on the whole it would be better not to have it in the Bill. A matter of more importance was Clause 6 "Grounds of opposition." It provided that the grant of a patent might be opposed on the ground—That the invention has been described or claimed in any complete specification for a British patent which is or will be of prior date to the patent the grant of which is opposed, or that the invention has been published in this country prior to the date which the patent would bear if granted, or on the ground that the nature of the invention or the manner in which it is to be performed is not sufficiently or fairly described and ascertained in the complete specification.If this provision were passed, almost any application for a patent might be opposed, there being thouands of old specifications lumbering up the patent office which might be cited in opposition to new applications. He was afraid that the 1018 clause might lead to many useful patents meeting with serious and formidable opposition. That would cause very serious expense which many small investors would not be able to bear. It would be found that an application for a patent, instead of being, as now, a simple and not very expensive matter, would become, in many cases, very expensive indeed, with the result that inventors would be discouraged from taking out patents. The same observation applied to Clause 9 with reference to "Power of comptroller to revoke patents on certain grounds." They knew what the competition in trade was—the competition of large firms against small ones, and of foreign against British firms. These firms would pay almost any sum in order to get rid of a patent which interfered with their operations. There would be a temptation to large firms to use Clause 9 as an engine of oppression against men who could not afford the cost of defending their inventions. If so, Clauses 6 and 9 would throw on inventors a very serious burden indeed. He knew that was not intended, but he thought that would be their effect, and they ought, therefore, to be carefully considered in Committee. Another important point was as to the tribunal which was to have the decision of these matters. Under the Bill, as it stood, questions as to the grant of patents, questions of revocation, and others, which involved a very careful consideration of facts and of law, and very often of scientific questions which could only be determined by a skilled Judge, or arbitrator, were to be decided by the Comptroller. He had not a single word to say against the Comptroller or against the way in which he exercised his functions at the present time, but he was an official with administrative duties. He had charge of a very important department in which he was certainly engaged in work mainly of an administrative character. He was appointed for that purpose, and no doubt he found the work heavy enough. Now it was proposed to throw on that official, who was not a Judge, the duty of deciding the difficult and intricate questions which arose on applications for, and revocations of patents. Only recently there was an application for revocation of a patent 1019 which occupied seven or eight, days in hearing before a learned Judge. Similar cases would arise under the clauses of this Bill, and was it really intended that cases of that kind should come before the Comptroller, who, though a very competent official, could not properly undertake the work? He did not think that inventors and others interested would be satisfied with that proposal. There was to be an appeal to one Judge, whose decision was to be final. He thought every case of importance would be appealed. There was no branch of the law where appeals were more frequent, or so certain to occur, as in patent cases. If in every important case there would be an appeal, why did not the Government take their courage in both hands and provide at once that those cases should come before a Judge? Half the expense would be saved, a hearing would be had once for all, and a decision would be obtained satisfactory to the litigants. Another point, was that it was not very satisfactory to have appeals taken from the Comptroller to a law officer. He did not think it was right to give judicial powers to the law officers of the Crown; only a Judge should exercise them. If a Patent Court, such as he had suggested, were set up, those appeals from the Comptroller's decision which now went to the law officers would also go direct to the Court. Again, let them take the question of actions for infringements of patents. As many Members knew, a person could bring an action for infringement and choose his Court—usually the Chancery Division. But the result was that those patent cases which were foreign to the ordinary work of the Chancery Division came now before one Judge and now before another; and although the cases were disposed of with great ability, still, that was not the best way of securing consistent decisions. These cases also should go to a Patent Court for which there would then be ample work. There were also the interlocutory applications in patent cases, which also ought to go before the Patent Judge. He did not say that the patent Court must necessarily be always presided over by the same Judge, who might in that case get into a groove; but the Judge might be appointed for a year, and another Judge for another year. He hoped that the Government would 1020 consider, before the Committee stage, the suggestions he had made, and discover a method by which they could be given effect to. It was true that Clause 17 provided that all appeals from a decision of the Comptroller should be made to such Judge of the High Court as the Lord Chancellor might select for the purpose, and that the decision of that Judge should be final. But that did not meet the matter at all, because that provision was confined to appeals under this Bill and would not apply to the existing patent litigation which was very heavy indeed. The views which he had expressed were, he knew, held by many men of experience in the legal profession and by commerical men who had a real interest in the matter.
§ MR. PICKERSGILL (Bethnal Green, S.W.)
said he desired briefly to call the attention of the President of the Board of Trade to an aspect of the Bill which seemed to him been overlooked by the Board. Clause 16 made void conditions or contracts which extended far beyond use of a patented article and would in many cases most seriously hamper the licensee in his trade. He was not sure that Clause 16, as drawn, covered the whole ground, and he thought it should be amplified in Committee. His main point, however, was that Clause 16 was not retrospective. He wanted to point out how very serious would be the position in which those persons would be who were bound by existing contracts and by conditions similar to those which this Bill would make void in the case of future contracts. If the Bill became law those persons would be left in a much worse position than they were now in; that was to say, they would be bound by onerous and oppressive conditions and yet have to compete with men, who coming after the passing of this Bill, would not be hampered in a similar manner. Something ought to be done in the interests of those persons. Possibly a remedy might be found by extending Clause 11 which related to petitions for the revocation of patents. He suggested that upon a petition for the revocation of a patent the Court should take into account the conditions of existing contracts similar to those which this Bill would make void in the case of future contracts. That might 1021 be one of the grounds on which a patent might be revoked. Of course he was aware that the mere revocation of a patent would not, of itself, put an end to the existing contract, or relieve the party to the contract from the onerous conditions. But in the case he was supposing it would work out in this way. If Clause 11 were altered in the direction he had indicated the effect would be that, through fear of the patent being revoked, such pressure might be brought to bear on the owner of the patent that he would be willing to come to reasonable terms with the persons bound by these contracts. He hoped that, if not in this way in some other way, means would be found in Committee to meet the cases of many persons in the country, especially in the boot and shoe manufacturing industry, who at the present time were bound by the most onerous and oppressive conditions.
§ *SIR F. CHANNING (Northamptonshire, E.)
said that he approved of some of the suggestions which had been made by the hon. and learned Member for Kingston in regard to Clauses 10 and 17, and as to the constitution of a Patent Court; and he hoped that the latter suggestion would, be embodied in the Bill at a later stage or in subsequent legislation. As to the general scope and character of the Bill he was convinced that the President of the Board of Trade had endeavoured in a comprehensive way to cover many of the difficulties that had arisen in regard to Patent Law and to adjust in an equitable manner conflicting interests. They were all anxious to give the greatest possible encouragement to invention. It was part of the life-blood of a free trade country to encourage invention, and there was no taint of protection in giving an inventor a guarantee that he would be protected in the use of his idea and his property rights in it during a reasonable period. The points which had been referred to by the hon. Member for Bethnal Green were of grave importance in framing a law dealing with patents in a free trade country. The manufacturers of a free trade country ought to, and he believed did, welcome every invention to which they could obtain access from abroad 1022 which would help to develop their industry, earn them larger profits, and help the community in which they lived. We in this country welcomed ideas and improvements from abroad, but the position of the boot and shoe industry at the present moment was of singular interest and vividly illustrated what might indeed happen in a free trade country in regard to other trades. They were all aware that the old-fashioned methods of hand-sewn work of twenty or thirty years ago had begun to disappear for some years past, and it became a matter of life and death to that industry to avail itself of all new inventions in machinery, and especially those produced in America. In the Eastern States of America, where this was the leading trade, the application of machinery to it had been carried to the highest possible point. It had become almost imperative that the manufacturers should acquire that machinery for use in this country at any cost and risk to themselves. In consequence of this necessity they had placed themselves, it might be said unwisely and without sufficient regard to their own interests or to the interest of the community, under the most onerous conditions to acquire the right to use this machinery. So restrictive and so prejudicial to the great industries of this country, and to the highest interests of trade and commerce generally were these conditions that he contended that there ought to be in a Bill like this some machinery for dealing with conditions which were wholly prejudicial to our trade. What had happened was this. These American manufacturers of machinery required for the purposes of the boot and shoe industry had bound themselves together and had accumulated a large amount of capital. They had brought their capital and their ideas to this country. Nobody grudged them that. He welcomed the access of American capital and manufactures to this country. But whilst we welcomed new ideas and fresh stores of raw material from every part of the world and the influx of capital and the products of industry, and whilst we wished to guarantee the fullest patent rights which the law granted the inventor for the use of his inventions, there was another 1023 side to the question. It was one thing to do that, but it was quite another for an American company or syndicate to come over here and patent not only its ideas but all the ideas of the American Protectionist trusts, and to introduce the most tyrannical form of monopoly, restricting the commercial and industrial enterprise and freedom of our manufacturers, and reducing them to the position of having sold all their liberties as industrial men. Our manufacturers would not grudge these men payment for the use of their ideas, or their full reward for that use. That would be wholly inconsistent with the law and traditions upon which the whole edifice of British trade had been founded. But the conditions which had been imposed in this coercive fashion, when it was almost a matter of life and death for the British manufacturer to accept anything which was in the nature of an improvement of the machinery imported, were most oppressive. Our manufacturers entered into agreements which were to last for twenty years, six years beyond the length of the life of a patent in this country, and they agreed to continue to pay the royalty on any improvement or new attachment whether it was patented or not, which might be added to that machinery solely at the will of the manufacturing company. Without the consent and without the leave of the manufacturer, the American syndicate might come and attach to the machinery any alleged improvement and they obtained a fresh lease of their royalty upon the machinery. Under their contract they not only took the right to have the royalty during the period of the patent, but they could prolong the life of their royalty and levy a toll upon the industry for an indefinite number of years. Another group of covenants was also very serious and gave the syndicates and companies far more extended privileges than those which the Patent Laws of this country had ever given to any inventor. The Patent Law debarred no one from any access to a new invention, but these companies not only provided that their machines should be used in a fair way, but the users of them were debarred from using any other machines in connection with the machines which had been leased by the company, and that again 1024 was extended by this process of adding improvements and attachments. If the business of a manufacturer was successful and some work came in he had no option. He could not go to a British maker of machinery or to one in Belgium, Germany, or elsewhere, but was bound for ever, or at least during the period of the lease or the prolongation which the syndicates obtained under these covenants, to go on obtaining machinery from and dealing with these companies. That seemed to him a tremendous and improper expansion of any right which it was intended to give to any invention by the Patent Laws of this country. Not only that, but if a firm of manufacturers under good advice had expended a large sum in obtaining machinery from Germany, that had to be stopped and machines used which came under the conditions of the hiring company. Furthermore, if one of these manufacturers had taken a machine from the company which only carried out one of the many operations of the industry he was bound to use no machinery from any other source for any of the other operations, but to obtain every detail of the machinery used from the syndicate, and any other machinery was agreed to be scrapped. Reference had been made to the revoking of patents and there were many processes for declaring them to be invalid, but under these contracts it was provided that a man should continue to pay fees and royalties in cases in which patents relating to the machine which he had hired had been revoked or otherwise declared to be invalid. It seemed to him that this was a monstrous and intolerable state of things which should be dealt with in a decisive manner by legislation. He had seen several leases of machinery containing these provisions, and he was assured that some of the leases actually contained covenants and provisions requiring the lessee to assent to any subsequent condition which the company might impose. He contended that these conditions which had been pressed on a great industry amounted to duress. There ought to be a full and entire remedy for this state of things, and his hon. friend the Member for Bethnal Green had said that Clause 16 ought to 1025 be made retrospective. They who were old Members of the House of Commons were well aware how very difficult it would be to get the House of Commons, not to say another place, to assent to a proposal cancelling existing contracts. Of course, such a course presented great difficulty. In Clause 11 of this Bill some attempt, however, seemed to be made to move in that direction. If they had the power to revoke a patent, not only because the owner of it was not using it and affording proper advantages and facilities to the public who might use it, it seemed to him that they ought to have a clear and effective provision in this clause, and he hoped that in the course of the Bill through Committee such additions might be made to Clause 16, which seemed very good, as far as it went, to prevent as regarded future contracts all the injuries to which he had alluded. In regard to syndicates holding such a powerful position, they ought definitely and in terms to bar out such provisions as had been imported into these contracts. It was in the interest of the industry of the whole community that such a state of things should not exist. If the Bill were to pass in its present form there were points which some of his friends and himself thought were not covered by Clause 16, and if some of the other clauses were not amended the position would be intolerable. He appealed to his right hon. friend to exercise all the ingenuity in his power to defeat what seemed to be a protectionist conspiracy to utilise the open door and the generous hearts of a free trade country, and to endeavour to secure equal opportunity for the development of a great industry so far as it depended on the free use of inventions, whether of this country or abroad, to all men who carried on their business in this country.
§ VISCOUNT TURNOUR (Sussex, Horsham)
hoped he would not disturb the harmony which had been the feature of the discussion of the Bill that afternoon, by commenting on one or two remarks that had fallen from the hon. Member who opened the discussion. The hon. Member had assured them that many goods were sold more cheaply in Germany than in this country. His only comment 1026 on that was that it was a remarkable admission for a free trader and a member of the Free Trade Party to make in the House of Commons. He understood that one of the great planks of the free trade platform was that everything was sold more dearly in a protectionist than in a free trade country. Apparently however the hon. Member did not share the views of the great majority of his Party. The hon. Member went on to say that the House in passing this Bill would be saying in effect to the inventor, "We are giving you protection and we expect the country to obtain some advantage thereby." He quite agreed with the hon. Member, and he only hoped that at some future date the House in passing a fuller measure of protection would say the same thing to the manufacturers of this country. He thought the hon. Gentleman, if it was not impertinent to say so, had spoilt an otherwise excellent speech by the remarks he had made use of at the end in which he said this Bill had nothing whatever to do with fiscal reform, and he could not help thinking of the words used by the present Secretary of State for India in 1900 when he said—In this era of militarism which they promise us, domestic reform, constitutional, fiscal, or any other reform, will be very slow in coming, but real and deep danger is the loss of our industrial supremacy. Great rivals are springing up against us in all the markets of the world.He did not treat any kind of fiscal reform as one would treat the plague, as the hon. Member who opened this discussion appeared to treat it. Then he thought they on that side of the House had listened with great interest to the remarks which had fallen from the hon. Member for Northamptonshire, and although he did not intend to follow him into all his arguments about the state of the boot trade in Northamptonshire, he could not help thinking that that was rather a doleful afternoon for the free importer's, because first they had the Member for Prestwich telling them that goods were sold more cheaply in Germany than in this country, and then they had the hon. Member for East Northants giving a doleful picture of the state of the boot trade in Northamptonshire and the way in which our American rivals 1027 had got the better of us. He did not wish to turn the debate into a free trade and protectionist discussion; he only desired to make a suggestion with regard to Clause 2 to the right hon. Gentleman in charge of the Bill. His hon. friend the Member for the Kingston Division of Surrey objected to Clause 2 on the ground that it might inflict hardship on the poor inventor. He was not sure that he agreed with his hon. friend. It appeared to him that there could be no objection to Clause 2 if the right hon. Gentleman gave to the Comptroller full discretion in the matter.
§ *VISCOUNT TURNOUR
said he had not seen it. If the Comptroller had discretion, it was discretion of a very limited character. His suggestion was that the Comptroller should be given an unfettered discretion in these matters, because he thought that would get over the difficulty which hon. Members on both sides of the House felt. The only other point he wished to refer to was on Clause 10. It was with diffidence that he made the remark, but it seemed to him that the effect of the clause would be to throw on the Comptroller the onus of defining the moaning of a treaty, with, of course, an appeal to the Judge. He believed that in previous Bills introduced into the House to amend the patent laws the promoters had been very careful to avoid putting that onus upon cither the Comptroller or the Judge. In his opinion it made it rather dangerous if it was intended to give this power to the Comptroller or the Judge, but no doubt the right hon. Member had good reason for putting what he had into the Bill. He hoped the Bill would pass through all its stages very quickly and become, law, and that it would remove one of the many unfair restrictions from which inventors and manufacturers in this country suffered at the present moment. If it was not impertinent to do so he would like to congratulate the right hon. Gentleman on, he would not say the first, but one of the first steps which he had taken in the direction of protection.
§ MR. MOND (Chester)
said the Bill made inroads on the rights of patentees 1028 in a manner which, he thought, was scarcely realised. He did not think there was any necessity to reply to the noble Lord opposite. The fact that certain goods might be produced more cheaply in a protectionist country, the general fiscal system of the country not being the only consideration in the case, was too elementary to be discussed. To his mind the Bill was in no way a step in the direction of protection. He wished to draw attention to Clause 9, which, as at present drafted, would lead to the curious result that part of the procedure under it would have to take place before the Comptroller and part before a Judge; that was to say, if it was desired to revoke a patent on some grounds, application would have to be made to the High Court, while, if certain other grounds were taken, the application would have to be made to the Comptroller, so that there would have to be two petitions floating at the same time. It was admitted that inventors were the most poorly-paid people in the country. What was really the grievance of members of the boot trade? They seemed to have entered into some imprudent arrangement, and now came and asked the House for a Bill to cancel that arrangement and to alter the law in a very important particular in order that they might get out of an unprofitable contract. Clause 16 referred to the avoidance of certain conditions attached to the sale of patented articles. A patented article in this Bill was defined as an article made by a patent process. A man made a bleaching powder with a patent, and another made it without a patent. Supposing the latter made a contract with a customer to sell to him for ten years, that contract was not included in the provision. But supposing the man who manufactured by a patented process made a similar contract, it could at any moment be cancelled as being void in law. He submitted with very great diffidence whether that was not the right interpretation of the very complicated language of Clause 16. It was a point to which he seriously drew the attention of his right hon. friend. Under the clause an article made under a process which happened to be patented thereby became a patented article. That might not be the intention of Clause 16, but the clause as it now stood was very dangerous 1029 indeed. An industry should not have more hardships placed upon it without very serious deliberation, and they ought not to interfere with the right of contract between business people exercised in a business way. Another important point was as to the compulsory working clauses. A great many people were very enthusiastic about the compulsory working clauses. He had some experience of similar clauses abroad, and he did not flatter himself that they would be any more effective here than they had teen elsewhere. Their effect abroad had been absolutely nil. He had taken the trouble to look up both the French and the German compulsory working clauses, which provided that where the inventor did not make efforts for the working of his invention in two years, or did not work it for two consecutive years, he lost the right to his patent. Surely, it ought to be that somebody should be allowed to continue the monopoly and right to the patent, if the patentee did not exercise it in his country, or refused to grant reasonable licences to somebody else. If he exercised the right in some other country that seemed to him to be a point quite apart, and one which seriously conflicted with Section 5 of the Convention of 1883. As far as he could see, the clause as now drafted seriously contravened that Convention; and it appeared to him that the Patent Office, already overworked, in making an order would have to study every Convention to find out whether the order affected anyone of the Conventions. He was an English patentee, and he carried on his manufacture in Sweden because of the water power obtained there; consequently he would be robbed of the benefit of his invention as far as England was concerned. The Bill took away the right of the patentee to go to the House of Lords on a question of the revocation of a patent. After all, patents were very valuable property, and why should the patentee, less than any other subject in England who had the right to go to the highest Court of Appeal, be under the control of one Judge, and debarred from taking his appeal to the House of Lords in order to get a decision on a point which might involve millions of money? He could understand its being done with the idea of saving expense, but 1030 patents which were worth anything were, as a rule, worth spending money upon. He thought that the powers of the Comptroller would really have to be altered, and if his right hon. friend the President of the Board of Trade could see his way to constitute, once and for all, a competent Court to deal with patent cases, he would confer one of the greatest books on inventors, patentees, and commercial men, and he was sure it would save an enormous amount of money. At that stage of the Bill he would not go into further technical points. He thought the Bill could very well be referred to a Committee; but he hoped that the points he had raised would be very carefully considered, and that they would have, when the Bill was passed, something which would approach finality. They all knew that people connected with patents found it very difficult to understand the patent laws of the country, which were very expensive and discouraging. He hoped that some of the suggestions thrown out by the hon. and learned Member opposite would be carried out, and that on the Committee stage of the Bill the Government would carefully consider, as he had no doubt they would, the Amendments which would be placed before them by experts who had devoted the best part of their lives to the subject.
§ *MR. J. D. WHITE (Dumbartonshire)
said that anyone familiar with the working of the patent system had recognised the necessity of legislation along the lines of this Bill. In any legislation dealing with the relation of home and foreign patents it was necessary to bear in mind that we could not differentiate as against foreigners, because, by the International Convention of 1883, the subjects of States which were parties to that Convention, were to be treated on the same basis as our own people. With reference to the actual proposals of the Bill, he thought that a great deal was to be said in favour of the requirement, as regards certain chemical patents, that the Board of Trade should have power to require samples to be deposited. This would do a very considerable amount towards lessening the evils which arose from what were commonly called "paper anticipations." There was a difficulty 1031 which he was bound to point out, and it was that the Bill proposed that samples might be required to be deposited not merely with a complete specification, but also with a provisional specification. The object of the provisional specification system was to enable the inventor to obtain priority of time and to develop his invention, which he described subsequently at length in his complete specification, and until he had developed his invention he might be seriously hampered if he had to deposit a sample with his provisional specification. The clause relating to restrictive conditions in the use of patented articles was of great importance. It had been all along the case that the patentee had been regarded as having the field entirely to himself, and that if people used his patent he could impose upon them any conditions he liked. The hardship of that was that where restrictive conditions were imposed, and there was a breach of those conditions, it was treated by the Court not as a breach of contract, but as an infringement of the patent, and the whole system of injunction was brought to bear to strengthen the patentee in his position, which was a far stronger and more exclusive one than it was intended by the law to give him. He was glad that this Clause 16, which had been so much discussed, had been put into the Bill. He would suggest one Amendment for the consideration of the right hon. Gentleman. The clause dealt only with the restrictions as regarded the use of an article by persons engaged in a trade or industry. It seemed to him that this was a highly undesirable limitation, and that there should be an end once and for all of these restrictive conditions as regards the use of patented articles, whether they were used in the case of a trade or industry, or in the ordinary course of daily life. He suggested that these words of limitation which limited the effect of the clause to articles used in trade or industry should be struck out. Clause 10 seemed to be one of the most important in the Bill, but he doubted whether he could support it as it stood. It referred to the revocation of patents worked outside the United Kingdom. He did not put his objection to the clause on the ground of free trade or protect- 1032 tion, because that question did not really come in, as patents were certainly not questions of free trade or protection but monopolies, which were necessary to protect inventors and experimenters in the result of their labours. Therefore as it was not a matter of free trade or protection he proposed to discuss it on other lines. In the first place, he would like to consider what would be the effect in this country. A large number of foreign inventions were brought over to this country. He instanced the case of typewriting machines from the United States. Those machines were sold here at about the same prices as in the United States. Had they any quarrel with that? If this clause were put into operation it might lead to certain parts of these American typewriting machines being made in this country, but it would increase the cost of production and the price of these articles to the general public. He ventured to think that very grave difficulties would arise under this clause in regard to articles manufactured exclusively or mainly outside the United Kingdom. He did not know what "mainly outside" meant, and probably they would require a long series of legal decisions to find out. The great difficulty which the inventor had to face was obtaining capital to work his invention. He was very much afraid that if this clause became law they would find powerful syndicates attempting to freeze out poor inventors by threatening that unless they sold their patents at breaking up prices they would take steps for an action for revocation. Those considerations weakened the argument in favour of Clause 10. He thought the object of that clause could be met sufficiently by a satisfactory system of compulsory licences. He wished to congratulate the President of the Board of Trade on the changes he proposed to introduce in regard to compulsory licences in giving those who sought them an easier, cheaper, and more rapid tribunal than the Privy Council. That would in itself almost be enough. There was another thing which would do a great deal in the same direction, and he would commend it to his right hon. friend. As all those familiar with patent law actions knew, anyone bringing an action for infringement generally went for 1033 an injunction, and if an infringement was established an injunction was granted as a matter of course. In almost all other patent cases an injunction was looked upon as an exceptional remedy, and it was never granted unless the ordinary remedies would be inadequate. The Judges several centuries ago, in the reign of James I., treated the infringement of a patent as a contempt of the Royal prerogative upon which the patent was founded, and it was dealt with by the Star Chamber. The Star Chamber had long disappeared, but the injunction was still wielded by the Courts in the same wholesale fashion. He suggested to the right hon. Gentleman that the law should be altered in such a manner that an injunction should not be granted unless, for one thing, it could be shown that ordinary remedies would not meet the case. If this question of injunction were dealt with it would be an important contribution towards what they all desired. Supplemented by that, he thought the system of compulsory licences which was now proposed would effect the desired end. He was glad to see that the Government were dealing with several matters with reference to designs and were laying it down that no designs were to be marked as registered except where there was a subsisting copyright. He would like to go a step further. At present an article might be marked as registered just before the copyright expired. It seemed to him highly desirable that when any person marked a design as registered he should in addition give the year and the number of the registration. That would enable the public to verify the claim and to find out in a simple manner how long a design had still to run. The same arguments applied to the case of patents. He thought it was a rather serious oversight in the Government Bill that the provision which applied to designs did not apply to patents. Section 105 of the Act of 1883 applied to both patents and designs. As the law stood, people could not mark an article as patented unless the patent had been granted; but once granted, they could go on marking it patented, after the patent had expired. It would be a very good thing if this were so amended as to restrict the marking of 1034 any article as patented to an article which was covered by a subsisting patent, and when the patent expired, the right to mark an article as patented ought to cease. In all patents the date and number ought to be given as part of the marking, because without that information it was often impossible to find what particular patent was referred to. A typewriting machine might be marked as patented, although the only thing covered by the patent might be some simple adjustment for the ribbon. There was a patent case in the House of Lords not long ago concerning a bottle containing mineral water, ginger ale, which had been marked as patented. The patent did not refer to the bottle, which was of a common type, or to the liquid which, he might add, was well known to a large number of Members of the House. What was referred to was a part of the machinery used in aerating the liquid. How was it possible to find out under the present system what the patent really was? Therefore he thought anyone who marked an article as patented should be required to give the date and number in order that the public might be able without much trouble to ascertain its duration and scope. For many years we had treated the term "true and first inventor" as covering a person who imported an invention from a foreign country. The importation of inventions which the importer had come across abroad was a thing of the past, and the effect of that arrangement now was that a person abroad, instead of acting as a British applicant and making the required declaration as to his being the true and first inventor, had the alternative of communicating it to an agent in this country, who could then obtain a patent in his own name for the invention as a "communicated" one, and it had been held repeatedly that in the case of a "communicated," invention no inquiry could be made as to the circumstances under which the communicated invention had been obtained. In the result, if anyone stole an invention, and tried to patent it in the ordinary way, he would very rightly be defeated. But if he crossed the Channel and posted it to an agent, the agent could obtain in his own name a patent for it which could not be challenged on the ground of theft. He hoped that 1035 his hon. friends would not think that he was showing people how to steal patents. What was contrary to public morals was not calling the attention of the House to the evil, but the fact that the evil existed. He hoped that when the Bill went into Committee that evil might be removed, and that they might put applications from abroad on precisely the same level in respect of the requirements as to good faith and originality as applications from people in this country. He considered that a patent should not be granted unless the applicant, or one of the applicants, made the ordinary declaration that he believed himself to be the true and first inventor, and that the patent should be upset if a false declaration had been made. He had risen to commend the Bill, and hoped that his right hon. friend would not look upon him as a sort of inverted Balaam because he had tried to temper his commendation with suggestions for improvement. He congratulated his right hon. friend on the way in which he had undertaken the important and difficult task of reforming the patent laws and hoped that the measure would have the happy result of promoting the industrial development of the country.
§ *MR. JESSE COLLINGS (Birmingham, Bordesley)
said that as this question was regarded as one of the greatest importance in the large manufacturing city which he represented, he would like to say a few words upon it. He congratulated the President of the Board of Trade upon dealing by an amending Bill with the present unsatisfactory state of the patent laws. He rejoiced that the right hon. Gentleman had not been frightened by the absurd cry of protection. The debate upon this and other Bills would be simplified if Liberal Members would; cease to describe themselves as free traders. They were nothing of the kind. They were simply free importers. He had always been for free trade, but we had not got it. It mystified the question when undue and misleading terms were used. The Bill was designed to secure, not protection but fair play for British traders against the unfair competition of foreigners. The hon. Member for East Northamptonshire seemed to have protect- 1036 tion on the brain. The hon. Gentleman's speech satisfied the Opposition completely in the direction of protection as they understood it. Nothing could be more satisfactory to them than the principles the hon. Member had laid down. The hon. Member for Kingston had made an important speech, and he hoped the President of the Board of Trade would give careful attention to the suggestions which he had made. He was sure the right hon. Gentleman was alive to the importance of sparing the inventor, and especially the poor inventor, unnecessary expense in connection with legal proceedings. The poor inventor, when opposed by a rich rival, or by a syndicate, often had not only his purse but his heart broken. He hoped the Government would adhere to Clause 10 of the Bill, which required that articles patented should be manufactured largely, if not exclusively, in this country. If the British Government gave a man a monopoly to supply 42,000,000 of people in this country with a particular article, that man should be compelled to manufacture a large proportion, if not all of them here, so as to employ British labour in their production. That was absolutely fair. If that was protection, all who supported the Bill were protectionists. It would be advantageous if the Government would define more clearly than was done in the Bill what proportion of patented goods should be made in this country, so as to insure that the proportion was substantial. From the point of view of the British inventor and the British workman the arguments of the hon. Member for Chester were unsound, and he hoped the President of the Board of Trade would resist any blandishments as to alleged protection or anything else, and keep in view what would be fair to British inventors, traders, and workmen. He congratulated the right hon. Gentleman upon taking this long-delayed amendment of the law in hand, and was confident that the ramifications of its benefits would extend to inventors, commercial men, and workmen. The inventor too often had the advantages which would reward his genius and inventive capacity filched from him by the power of gold. He hoped Parliament would protect the individual against that power.
§ *MR. ASTBURY (Lancashire, Southport)
said that the hon. Member for the Kingston Division had raised a number of points which were deserving of consideration. The main object of the Bill so far as policy was concerned was contained substantially in the two clauses which provided for compulsory working and compulsory licenses; and so far as those two clauses were concerned, with the exception of some possible criticism as to the Court before which these matters were to come, he was of opinion that they supplied a long-needed want in connection with the great industries of the country. It was an extraordinary thing that from a land where Perkins' Mauve was invented, the colour industry should have passed to a foreign country, and that the country which produced the electro-magnet and the induction coil should have been passed by other countries in the race for the discovery, application, and completion of electrical inventions. He believed that very largely the reason for his was to be found in our patent system and its administration. Surely the object of our patent laws ought to be in the first place to encourage invention as far as possible, in order that scientific research and people who were acquainted with science should be more encouraged in the country and be induced to take move part in developing our industries. The next object, however, was that the monopoly given by a patent should be a monopoly which should be confined to carrying out the intention of the original framers of the Statute of Monopolies, that it should be subservient to the purpose of introducing and working these patented inventions in this country. At present the industries of this country were largely handicapped by the fact that patents could be obtained with great facility by foreign firms and rich corporations, and many minor patents could be taken out subsequent to the main invention, with the result that, having regard to the great expense of patent litigation, be the; patents good or bad, 99 out of 100 of the small traders of the country could not suffer the expense of fighting these great foreign corporations and the inventions remained for years unworked here. He wished to add his testimony to 1038 the courage and ability of the right hon. Gentleman in charge of the Bill in taking up a subject which not only bristled with difficulty but on which there was an enormous difference of opinion. The question of compulsory working had two sides, and there were a large number of people in the country, many of them well qualified to speak, who were bitterly opposed to the notion that we should improve our position by putting the compulsory clause into operation. He was not one of those. He believed that the monopoly which the Crown granted to an inventor ought prima facie to be a monopoly which should be given to and utilised for the benefit of our own industries and our own land. It was said that if that were done it would be a hardship upon the English patentee. He had heard from the hon. Member for Chester and others outside the House that if patents could be revoked because they were only worked outside the country many English inventors who had facilities for working abroad and not at home would be deprived of their patents. The first answer to that was that they were absolutely negligible in number; and, secondly, that if that was the case they ought to be deprived of their grants on the same grounds as a foreigner, if the main object was that the industries of this country should benefit from the monopoly granted. He was far from saying that the Bill entirely carried out the object which the right hon. Gentleman had, but he knew from the way in which the right hon. Gentleman had met the views of many who had seen him that he was only too anxious in Committee that any further improvements that could be suggested in this respect should be adopted. With regard to compulsory licences, there was a class of people who believed that the right way to effect what they desired was by way of compulsory licences rather than by way of compulsory working. His own view was that that was wrong. The right view, as it seemed to him, was that the best results would be obtained by a combination of the two remedies, because there was a vast difference between enforcing compulsory licences—after litigation and after difficulties which must arise in 1039 the case of a complicated invention—and the simple expedient which said that if the monopoly was granted and it turned out that at the end of three years this country had not benefited from it as it should that monopoly should cease. With regard to compulsory licences, a question had been raised with regard to the so-called unreasonable contracts which were said to have become a practice chiefly in the boot trade. He did not think the House ought to be asked to say that Clause 16 should be made retrospective. It was hardly in accordance with sound administration that the House should lay down that a large number of existing contracts should be made void. But so far as he could judge from the provisions of Clause 11, any person who was unable to obtain a licence except on terms which were unreasonable or injurious to trade could apply for and obtain a compulsory licence, and if the terms suggested in the contracts mentioned were of the character described the remedy for those who were bound by such existing contracts was to be found under Clause 11. With regard to the machinery of the Bill, under the Designs part of it there was a matter he desired to refer to which was of very great moment to Lancashire, and in which he believed most Lancashire Members took a great interest. More than 50 per cent. of the total designs registered in this country every year were textile designs under the last two classes in the Designs Act; in 1905 the House, in the Trade Marks Amendment Act, established a separate system of cotton marks with a keeper or registrar of those marks in Lancashire who was conversant with the requirements of the firms interested in these matters. The proportion that cotton marks bore to the total trade marks of the country was nothing like so large as the proportion which textile designs bore to designs as a whole. Textile designs were of two classes, either printed or woven, and every year there were registered 10,000 textile designs, of which 7,000 were printed designs. Of these 7,000, more than 6,000 were registered from Manchester, and more than half of the woven designs were from 1040 that centre. The universal desire in the textile industries was that there should be a branch registry for textile designs established in Manchester, on the same lines as was done in the case of cotton marks. He trusted that the right hon. Gentleman in charge of the Bill in Committee would allow a clause to be added to the Bill with that object. There was also another matter which he regarded as very important in the administration of the law and the clauses of this Bill in relation to patents. The hon. Member for Kingston had suggested with great force that this very difficult and constantly increasing matter of scientific litigation should now be placed in the hands of a tribunal which was especially conversant with the matters it would have to deal with, and designed for that purpose. The Bill as drawn provided that certain matters on appeal from the Comptroller of Patents should be taken to a Judge nominated by the Lord Chancellor, rather than to the law officers of the Crown. Their duties with regard to patents were really almost intolerable at the present time, and if the Bill passed in its present form the number of appeals would be quadrupled or more, making it quite impossible for the law officers to attempt to deal with them. He suggested that there should be established a scientific or patent and trade marks division of the High Court in the same way as there was established an Admiralty Division. Cases in the Admiralty Division were tried with great facility and dispatch, because of the constant practice there and the continuity in the administration of the law and in its interpretation. Some similar Court for scientific industrial matters would be a great step forward and a necessary step, if full advantage was to be obtained from the objects and provisions of this Bill. But he did not think that it would be desirable that one permanent Judge should be appointed to that Court. He agreed entirely with the hon. and learned Member for Kingston, and for this reason, that it was undesirable in these scientific matters that the law and its administration should get stereotyped and cramped. They wanted the elasticity of different minds coming to these matters from 1041 time to time, and if a Division could be established and a Judge nominated to sit in it annually by the Lord Chancellor, it would mark a very great step forward in the administration of our patent laws. If that were done, that Judge, sitting in Chambers, could take all the matters that the law officers at present took, and the same people would have the same right of audience before him when exercising this jurisdiction. It was considered very undesirable by many who were acquainted with the administration of the patent law that the Comptroller should have extended powers, such as were suggested in Clause 6, of refusing the original grant of a patent. He suggested that there the law should remain as it was, and that under Clause 9 the Comptroller should not have power to revoke any patent except on the grounds on which at the present time he could refuse the original grant. He would suggest further that the questions under Clause 10 should go before a Judge of the High Court, and not before the Comptroller. It would be a most delicate and difficult jurisdiction to administer, and he believed it would be cheaper and much more efficient in the long run that these matters should go, in the first instance, before a Judge of the High Court instead of before the Comptroller.
§ MR. MEYSEY-THOMPSON (Staffordshire, Handsworth)
said he rose in no spirit of opposition to the Bill. There was so much that he thought good in it that he desired not to obstruct it but to help it forward and make it as effective as possible. He saw, in looking through the Bill, that there was no provision for extending the period of protection to the patentee, and he urged that something should be done in that direction. He was quite aware that a patentee could apply to the Court for such an extension, but he had no guarantee that he would get it. That bore very hardly, especially on the poor patentee with no great weight of capital with which to bring his invention forward. It took some time to perfect his invention, and a considerable time to bring it before the public, and just about the time when it began to pay, his patent lapsed and somebody else got the benefit of his brains, energy, and 1042 enterprise. The benefits accruing from the inventor's brains, energy and enterprise should, however, be secured to him, and he asked the President of the Board of Trade to consider whether it would be possible to introduce a clause increasing the facilities for, and reducing the cost of, obtaining an extended period of protection.
§ THE PRESIDENT OF THE BOARD OF TRADE (Mr. LLOYD-GEORGE,) Carnarvon Boroughs
thought the Government had every reason to be satisfied with the reception accorded to the Bill in the course of the discussion. There had been substantially no criticism of any leading principle of the Bill. The criticism had been directed against points of detail—very important points, no doubt, but all points which, he thought, could be successfully attended to without in any way destroying the general structure of the measure. He might say, for his part, that he would welcome any suggestions in Committee, and no pride of paternity would prevent him from giving them favourable consideration so long as the leading principle of the Bill was not altogether exterminated. He would refer to only two or three leading points that had been raised in the course of the debate. As to the suggestion of the hon. and learned Member for Handsworth, it seemed to be fair, under the circumstances he had mentioned, that they should have, at any rate, the power to apply to some tribunal to grant an extension of the patentee's monopoly and privilege. The patentee could now, under Section 25 of the Consolidating Act, apply to the Privy Council. The only criticism that might be passed on that process was that it was a very expensive tribunal, and he was prepared to consider whether it was possible to simplify and cheapen the method of applying for an extension under these circumstances. They wanted, if it were possible, to cheapen the whole process. At the present moment it was almost prohibitive, and it was certainly prohibitive for the poor inventor, who was either denied justice altogether or compelled to part with his patent to the first capitalist that came along. That was a very unfortunate state of things. He was glad to observe that legal gentlemen inside and outside the 1043 House showed for the poor inventor a keen anxiety which was very creditable, and he was very glad to see that the hon. Member for Chester had also joined them. He desired to say, before he proceeded to any of the other criticisms, how much he thanked his hon. and learned friend the Member for Southport, than whom there was no higher authority, either inside the House or out of it, on these matters, not only for the suggestions he had made that afternoon, but also for the very great assistance he rendered to him before he introduced the Bill. The noble Lord the Member for Horsham had suggested that they should not make the deposit of samples under Clause 2 compulsory in all cases. As a matter of fact, that was provided for already. It was never intended that every patentee of a chemical invention should be compelled to deposit samples. It was left entirely in the discretion of the Registrar, and the provision was much more elastic than the German regulations in that respect. Clause 6, which had been criticised, was entirely in the interests of the inventor. It was intended to cover a case of this kind. They might have an application for a patent which had not been covered by any previous grant. It was, however, thoroughly well known that it was a process in respect of which a patent had been issued in another country and full particulars of which had been published in this country. But, although that was known to all the parties, it could not be referred to in the hearing before the Comptroller, and the result was that the Comptroller was obliged to grant a patent which was in itself an invalid patent, and when they came to the subsequent hearing before the Court, the whole grant had to be revoked. It would be better if, in the first instance, a patent of that kind could be alluded to, and that the Comptroller should have discretion, in a clear case of that sort, to refuse a patent. The present system was simply a premium on litigation.
§ SIR E. CARSON (Dublin University)
asked whether the appeal in that case would go to the law officers or to the Judge.
§ MR. LLOYD-GEORGE
said his own interpretation was that it would go before 1044 the law officers; but he was prepared favourably to consider the suggestion which had been thrown out that it would be far better if the whole of the appeals were taken before the special Judge who was to be allocated to this purpose. He might say that it was rather his intention, even before the debate of that afternoon, to introduce an Amendment to that effect in the Bill. He thought it would be an improvement. With regard to Clause 10, there again the criticism had not been directed against the principle. The hon. Member for Merthyr had put down an Amendment, and then, very characteristically, if he might say so, having seen it well advertised in the Press, ran away from it. He was not at all surprised, because he knew his hon. friend pretty well. But apart from this firing at a long distance there had been no hostile criticism. The hon. Member for Chester brushed aside at once very effectively the suggestion that this had anything whatever to do with the merits of the great fiscal controversy. Therefore he would not go into that, as he had not been challenged. All the criticisms against Section 10 had been criticisms upon points of detail. Those would be threshed out in Committee, and he did not think it would serve any useful purpose for him now to give a final answer to suggestions which had been thrown out, and which he had to consider very carefully, because he agreed with the hon. Member for Southport that this was a very difficult problem altogether. Then he came to the point with regard to the allocation of a special Judge. He was not at all surprised that the hon. Member for Richmond did not agree altogether upon that, because it would be a very serious thing if they had a Judge who was not quite adapted to the work—and accidents of that kind had happened—a Judge who would be set up in a kind of special statutory Court, and who could not well be moved. The point would be considered very carefully; but they had felt that on the whole the best plan was to proceed experimentally, and to get a special Judge assigned for the purpose. Of course he could see the advantage of it. If they went to different Judges to try patent cases, they had to waste an enormous amount of time in explaining to 1045 them the very elements which a Judge trying these things constantly would take for granted. Having a special Judge they would save time, and that meant saving expense. He was sure they would save at least two-thirds of the time spent on these cases if they had a Judge specially versed in them. They proposed, therefore, to start by allocating a Judge especically for the purpose, and he was not sure that something might not be done during the Committee stage in the way of altering the rules and things of that kind, which would in effect set up a special Court, without doing it in so many words. Now he came to the important question which had been raised with regard to Clause 16—the avoidance of certain conditions attached to the sale, etc., of patented articles. It was no secret that that was put in very largely owing to the remarkable character of the contract which was forced upon the boot and shoe industry by an American firm. Nine-tenths of the boot and shoe manufacturers of this country were practically bound hand and foot by that contract. It would be a very serious matter if another invention was to come in, effecting a great saving of time and expense, and they could not take advantage of it, for they might be beaten out of the market altogether. That was a state of things which they could not possibly contemplate, and it made no difference at all whether the firm was British or American. After all, a patent was a privilege granted by the Crown, and Parliament had a right to declare the conditions under which the monopoly should be granted. He had been pressed to make the clause retrospective, but it was a very serious thing to introduce into an Act of Parliament a provision which would invalidate contracts, and nothing but a great public necessity would justify it. In this case he did not think it ought to be done, except wilder conditions which would protect the inventor as well. The possessor of these patents had entered into a large number of contracts with manufacturers, and no doubt when he came to settle the terms upon which he let his machines be made he would take into account the security which that contract gave him for a good many years to come. It was an asset. He might have raised a 1046 considerable amount of capital, and if he knew that the contract he was entering into was void, he probably would have asked for a bigger royalty, and at any rate he was entitled to reconsider his position with those who entered into the contract with him. After all, they must be fair to all parties. He was not sure that, if they said that certain clauses in a contract should be void, it would be quite fair to future purchasers of that machine. When the syndicate owning the patent knew that they could not enter into a similar contract they might say that in future they would demand a higher royalty. It would be unfair to those who entered into contracts in future if they had to pay more for the machine than those who had entered into the contract already and had been liberated by Act of Parliament. He agreed that something ought to be done. His hon. and learned friend thought that Clause 11 met the case, but he was not sure that it met the whole case, and he was prepared to consider any Amendments that might be moved to meet it so long as those contracts were invalidated under conditions which would be perfectly fair to both parties. In regard to a special office in Manchester, though he could not at present give a pledge, he rather thought they would be able to meet the case. It would be a great convenience to the Manchester manufacturers to be able on the spot to examine the designs instead of coming up to London. He would consider it very fully, and he thought it could be accomplished. He had now dealt with nearly all the criticisms passed on the Bill, including those of the hon. Member for Bordesley. He agreed with the right hon. Member that what they wanted was fair play and justice to British industries. [Sir HOWARD VINCENT: Hear, hear.] He thought that would appeal to the hon. and gallant Gentleman. At present some of the powerful foreign trusts were able to bring pressure to bear, by their great financial resources, to prevent bona fide inventions taking root in this country to begin with. They crushed them in their infancy by legal action. It was a case where they practically drove some branches of British industry out of the field altogether, as it were, because they were never allowed 1047 to start at all. He trusted that when this Bill was passed they would be able to put an end to that practice for ever.
§ MR. BONAR LAW (Camberwell, Dulwich)
said that, as the only Member on the Opposition side of the House who had been connected with the Board of Trade, he naturally followed closely measures which came from that Department. On personal grounds he had legitimate cause of grievance against the President of the Board of Trade. It was the duty of the Opposition to oppose, and his colleagues had no reason to complain that their activity in that respect had been interfered with by the members of the Government. His colleagues had opposed, and had enjoyed their opposition. He also would have enjoyed opposing, but he had not had the opportunity, for hitherto he had only been able to play the very uninteresting rôle of supporting the measures brought forward by the right hon. Gentleman. That really pointed to what was a recognised fact, that trade questions were not in any sense Party questions; and he was sure the right hon. Gentleman would admit that from the Opposition he had received not only no factious obstruction on trade questions, but a measure of support which was not usual. In regard to this Bill, he entirely approved of the objects which the right hon. Gentleman aimed at, and to a very large extent of the methods by which he intended to carry them out. In regard to the Court before which these patent cases were to be tried there was a good deal to be said for the view of the hon. Member for Chester. The issues involved in these cases were often enormously large, they could be taken from one Court to another, and it seemed unfit that a question that involved millions should be finally settled by one Judge. But in all these cases there was a balance of advantage and disadvantage, and personally he thought the balance of advantage on the whole distinctly was that the cost of securing patents should be made as low as possible. Therefore, it was at least worth while trying to have such cases tried before one Judge, who, as the right hon. Gentleman had promised, would be specially devoted to the work and specially competent 1048 to develop it. The second point to which he wished to refer was that mentioned in Clause 2 of the Bill, which had relation to the conditions on which patents for chemicals were to be granted in future. He did not think the right hon. Gentleman was perfectly just to his noble friend on this point. He did not think the Bill, as it at present stood, gave the protection which the right hon. Gentleman thought it gave. What ought to be done was to give the Comptroller power, provisionally at least, to grant protection long enough to enable the inventor to secure sufficient financial support from capitalists. As the right hon. Gentleman had pointed out in introducing the Bill, Germany had practically a monopoly in many branches of the chemical industry. Where that monopoly was due to superior methods, there was no ground for complaint. It was the fair spoil of Germany's bow and spear. But, however obtained, that monopoly had been confirmed and strengthened by this country's patent laws. They had this effect—that a syndicate or large capitalist would take out a patent to cover much ground without working it at all. Therefore, inventors were prevented from going in that direction at all. In Germany the patentee was not allowed to cover the same amount of ground, and, therefore, the field was left much more open to competition. We should adopt the same system in this country. As to the clause preventing contracts similar to those which now prevailed in the boot trade in this country, he admitted that it was a strong measure to interfere with contracts deliberately entered into by business men who knew what they were doing. But these contracts were in a special position. The man who made these conditions was only able to make them by means of the special privilege given by our laws; and, therefore, it was reasonable to take care that that especial privilege was not used detrimentally to the interests of this country. But he agreed that it would be unfair to make the clause retrospective, and it seemed to go further than was necessary to meet such cases. If that were true, and if he was right in his view, the industries affected would certainly make representations to the Board of Trade, 1049 and he was sure that the Department would give them every consideration. The only other point in the Bill was as to compulsory working. The right hon. Gentleman showed that he was disappointed that the hon. Member for Merthyr had not brought forward his Amendment, but if the President of the Board of Trade was disappointed, he himself was much more disappointed. If the President of the Board of Trade had not made an epoch-making invention, he had certainly become the apostle of a new faith on the other side of the House. He had looked forward in this debate to something in the nature of a heresy-hunt; and it would have been very interesting if the hon. Member for Merthyr had persisted, for a heresy, to be effective, must come from one's own household. With the best will in the world towards the right hon. Gentleman, he was bound to say that he could not see his way to defend him against the hon. Member for Merthyr, for in this matter the right hon. Gentleman was undoubtedly a heretic. This was essentially a Bill that sapped the whole theory on which our present fiscal system rested. What was the root theory of our present fiscal system? That it was our interest to get any products consumed in this country from any quarter of the world where they were produced to the best advantage, without regard to whether or not they were produced in this country. The right hon. Gentleman said that a patent was entirely different; that it was a monopoly, and that we had a right in granting the monopoly to see that it was used to the advantage of this country. That was true. But the question was not one of right. We had a right to put on an import duty if we thought it to our advantage. It was merely a question of interest. Apply that principle to a patented article. Leave it to the free play of economic forces, and what happened? The foreign patentee produced in this country if it paid him, and he produced abroad if it paid him. Let him produce abroad, and let us pay for it by those goods which we could produce with advantage here—since goods must always be paid for with goods. If that were sound theory, why compel the foreign patentee to produce here? There could be only one answer—that, in the opinion 1050 of the right hon. Gentleman, it was in the interest of this country that these things should be produced at home. If that were so as regarded the question of principle, there was no difference whatever whether the result were produced in one way or another. If it were right to produce the result by patent laws, it was equally right to produce it by import duties. The right hon. Gentleman had pointed out that America alone had not insisted upon patents being worked in America. He felt sure that everyone in the House knew the reason for that, because it was perfectly obvious. When he was at the Board of Trade he happened to see a document which came from a member of the American Government dealing with the compulsory working of patents. This was the substance of what the writer said—"What is your object," asked the writer, "in having things compulsorily made? It is to get them made in the United States. What is the most effective way of securing that end? Why fool about with patent laws? If you want them made in the United States put on a duty, and the things will be made in the United States." The right hon. Gentleman's system, then, was more protective than the system of the United States, for he made the production in this country universal. The right hon. Gentleman really adopted the principle which insisted that the system should be applied not only to the articles which we were adapted to produce, but that the articles which we were not able to produce should be made in this country provided they were the objects of a patent. ["No."] For the views which he personally held on this question he had received the greatest possible encouragement from the present Government. That encouragement had come from two quarters. First, from the Secretary of State for War, who was supposed to represent high thinking in the Cabinet, although he did not know whether his colleagues in the Cabinet took that view. A few weeks ago the right hon. Gentleman made the curious statement that the law of free trade depended on circumstances; it was not applied at all times; it was a question of the conditions of the country that imposed it and the conditions of the country which wished 1051 to trade. That was an important admission. Let hon. Members cast their minds back to their election speeches at the general election. [Cries of "Order."] Was that too great an effort? Then let them try to imagine what those speeches would be like if subject to the condition laid down by the Secretary for War. They could not talk about the consumer paying the duty, nor about the universal advantages of free trade; and then he would like to hear a speech from the right hon. Gentleman and to enjoy the privilege of answering him. Secondly, the Opposition had received another encouragement from the President of the Board of Trade, who represented the practical spirit in the Government. The right hon. Gentleman had lived up to the precept of the Secretary for War. He had treated every Question in his department as being one of expediency; he had looked at every question and had dealt with it from its own point of view, and nothing else. What was the result? Last session the right hon. Gentleman passed a Bill, a beautiful Bill, which had the effect, and it was intended to have the effect, of protecting the shipping industry, not against foreign competition, but against unfair foreign competition, which was the only kind of protection the opponents of the Government had any sympathy with. Now in this Bill which the right hon. Gentleman was piloting through the House he had gone a long step further, for it undoubtedly, in principle, sapped the foundation on which the whole of our fiscal system was based. [MINISTERIAL Cries of "No, no."]
§ THE SOLICITOR-GENERAL (Sir W. ROBSON,) South Shields
said that in this Bill the Government were concerned about the general trade of the country, and they were dealing with the patent law, which was essentially a protectionist law, with sufficient and excellent excuse. It was necessary to give a particular kind of protection here in order to stimulate invention; and the fact was that the patent law was protectionist in a more severe degree than any tariff could possibly be, because it was practically prohibitive against the manufacture of certain things except under certain conditions. That being so, this Bill proposed to restrict the rights of monopolists 1052 whom the patent law had created; yet because the Government proposed to restrict the rights of monopoly they were told that they were deserting the cause of free trade.
§ SIR W. ROBSON
said the hon. Gentleman asked for an application of the free, play of economic forces to patent articles; but patent articles were wholly withdrawn from the free play of such forces. That was one of the reasons why the Government had introduced these clauses. Under the existing law proprietors of foreign patents had attached as conditions in the exercise and use of inventions in this country certain very onerous terms, such as—If you use our machine you can use no other for creating this particular commodity;and—You shall not avail yourself of any other invention.There might be a new device invented which would revolutionise the trade of the country, but many manufacturers were incapacitated from availing themselves of that invention. There was not only this prohibition of the free play of economic forces, but there was also a serious impediment to trade and invention, by the use to which a particular class of foreign monopolist had put his patent. It could not be said, therefore, that the Government were deserting the cause of free trade when they restricted the power of such a monopolist as that, and asked for a fairer latitude to be given to the trader who was obliged by law to go to that particular vendor for the machinery that he wanted. On one occasion he had seen an agreement which imposed restrictions on the British users of a particular class of machine. The contract was made for twenty years, though the period of the patent was for fourteen years only, so that the American inventor by that device had in effect secured a prolongation of his patent. It was clear, therefore, that this legislation of the Government made for more freedom and less protection.
§ SIR HOWARD VINCENT (Sheffield, Central)
said that he did not care what the Party supporting the Government called themselves as long as they brought in Bills like this, designed to assist the manufacturing industry of the country. He thought that the whole-hearted support of the Opposition should go out to the Government in their present effort, and he thanked the President of the Board of Trade for the great pains he had taken to master a difficult subject and to protect our inventors. Nothing could be more unfortunate in our manufacturing industry than to see how impossible it was for our inventors to derive profit from their inventions, especially in the case of men with restricted means. Any measure which simplified the patent law and secured to a man the product of his own invention was one to be approved. He was quite sure that the great mass of the people of Sheffield would be grateful to the President of the Board of Trade for the pains he had taken in regard to this matter.
§ *MR. RADFORD (Islington, E.)
said that as nearly all the things he had intended to say had been already said he had very little to trouble the House with. He did not propose to discuss whether Clause 10 was free trade or protection, but he wished to point out one or two important results of it. For the first time in this country there was going to be introduced what was known as compulsory working. That system had been tried in many countries abroad, but it had been abandoned as a failure where tried. There was no compulsory working in the United States nor in the Commonwealth of Australia. If manufacture or compulsory working of the patent was to be enforced in this country, he thought it would be a serious matter for the poor inventor. He would like to remind the House how far they had advanced since 1902. In that year a Conservative Government passed a Patents Act under which it was provided that if a manufactured article was manufactured mainly or exclusively outside the United Kingdom the patent might be revoked, but only in cases where the reasonable requirements of the public had not been satisfied. It was left for a Liberal Government in 1054 1907 to bring forward a proposal, with the support of the right hon. Gentleman the Member for the Bordesley division, that a patent should be revoked, although the demands of the public were satisfied, simply because the patented article was manufactured abroad, and he thought that was an advance which ought to be noted by the House. It was the habit of our Colonies periodically to go through our Statute-book and adopt those measures which they thought advantageous to themselves, and it was extremely likely, if this Bill became law, that in the course of a few years nearly all our Colonies would adopt it. Then in our Colonies a condition of the validity of a patent would be that the patented article should be manufactured in the Colony where it was granted. He did not know whether manufacturers here were prepared to face that contingency. It appeared to him to be a heavy responsibility to take. Further than that, foreign countries would retaliate by having an equivalent of Clause 10 in their patent laws. The result would be that every manufacturer who set out with the intention of supplying the world would have to be prepared to establish a factory in every British Colony and in every foreign country. That would involve a great addition to the cost of manufacture, and, of course, an enhancement of the price to the consumer. He doubted whether Clause 10 was well advised, and he hoped that it would receive further consideration. Clauses 6 and 9 afforded grounds for litigation which made him shudder, and he appealed to the right hon. Gentleman in the interest of the poor inventor to reconsider that matter. He had known poor inventors who had become rich as the result of their ingenuity and prudence, but he was satisfied that if Clauses 6 and 9 remained in the Bill in their present form, the fortunes which inventors had hitherto made would in future be transferred to rich corporations.
§ Question put, and agreed to.
§ Bill read a second time, and committed to a Standing Committee.
§ Referring to the following instruction of which the hon. Member for Kingston 1055 had given notice, "That it be an Instruction to the Committee that they have power to insert in the Bill provisions for establishing a special tribunal for the hearing of all actions and proceedings relating to patents "—
*MR. SPEAKER said
If by that the hon. Member intends the allocation of all patent matters to one particular Judge, that can be done under the Bill as it stands now, but if he goes beyond that, and intends to constitute a special division of the High Court of Justice to deal with patent matters, that would be beyond the scope of the Bill.
In reference to the following notices—
§ MR. WATSON RUTHERFORD
After Second Reading of Patents and Designs Bill, to move, That it be an Instruction to the Committee to insert provisions that the patent granted in the United Kingdom to or on trust for any foreigner as a communication from abroad shall be ipso facto determined on the determination of the patent in the foreigner's own country from any cause whatever.
§ LORD BALCARRES
After Second Reading of Patents and Designs Bill, to move, That it be an Instruction to the Committee that they consider the desirability of hearing counsel and examining witnesses with regard to Part II. of the Bill—
*MR. SPEAKER said
These instructions being mandatory are both out of order. No mandatory instructions can be given to a Committee of the Whole House, or to a Standing Committee.
§ MR. RAWLINSON (Cambridge University)
said he understood that the Bill did not give power to relegate all patent matters to a Judge. The present state of the law was that every application for a revocation was bound to go before a Judge. This Bill proposed to abolish that system and invest the Comptroller with power to deal with such cases. The instruction of which his hon. and learned friend had given notice was that there should be a Judge to whom all matters under this Bill should be referred. At present the Bill only gave the Judge power to deal with certain cases under the Bill.
§ *MR. SPEAKER
An Amendment can be moved in the Committee Stage to 1056 transfer to a Judge those matters proposed to be sent to the Comptroller.
§ MR. CAVE
said that what he desired was that the Committee should have power to consider the question of referring to a Judge, or a Division of the High Court, not only arising matters under this Bill, but all patent matters. While that was no doubt outside the clauses of the Bill, he thought it was within the general scope and intention of the Bill.
§ MR. SPEAKER
I think that is beyond the scope of the Bill which is to "amend the law relating to patents and designs." The hon. Member proposes to go beyond that.