PATENTS AND DESIGNS BILL. (Hansard, 19 March 1907)

§ THE PEESIDENT OF THE BOARD OF TRADE (Mr. LLOYD-GEORGE,) Carnarvon Boroughs

in asking leave to bring in a Bill to amend the law relating to patents and designs, said: This Bill introduces a good many improvements which have been found necessary in the working of the patent laws in this country. The main object is to simplify and cheapen procedure. The Bill will make provision for the grant of patents of addition, there will be additional checks against invalid patents, and a cheaper procedure for the revocation of patents. These will be introduced in the interest of the poor inventor, for, although it often suits a rich and powerful company to have complicated and expensive machinery, it very often involves ruin for a poor inventor. I propose, therefore, to introduce a series of conditions which, I hope, will effect a considerable cheapening of procedure. I do not know that we can ever make the patent laws cheap as long as the fees of counsel and experts are high, but something can be done in order to meet the difficulty. I also propose to introduce later on a Consolidation Bill, and if that Bill goes through the Grand Committee on Trade I think it will be possible to amalgamate it with the present Bill. But the main object of this Bill, after all, is to prevent the patent laws from being used for the 684 hindrance and suppression of British industrial development. The object of the patent laws is to reward ingenuity, and by so doing to encourage invention and to promote British industry. Unfortunately, however, they have been used in many respects to discourage the British inventor and to destroy many British industries. What is happening at the present moment? Out of 14,700 patents issued last year, 6,500 are foreign. I do not object to that, but a good many of these patents have been taken out not for the purpose of working the patents in this country but for the purpose of preventing their being worked. That I consider to be an abuse of a privilege conceded by British laws. There is a still worse abuse, on the whole I think it is the worst. The British inventor who takes out a patent is very often a poor man who has been able to get his patent financed up to a certain point. After he has started and set up works and purchased machinery, there comes a powerful foreign syndicate which has found there is something in his patent which they imagine is covered by an invention they have already patented—for these patents are very often in exceedingly vague terms. This syndicate then brings to bear the whole machinery of their powerful organisation to crush the inventor. He is brought before the Court of first instance, and if he wins there he is taken to the Court of Appeal, and then dragged up to the House of Lords, by which time all the capital he has been able to raise for the purpose of working his patent is expended in law costs, and the patent which ought to have been an encouragement to his ingenuity has simply become a trap for his ruin. That I consider to be a thoroughly flagrant abuse of the privileges conferred by British institutions upon foreigners on equal terms with Britons, and I think it ought to be put an end to. The mere fact that it has not been put an end to is in itself a proof of the long-suffering of the average Briton. An attempt was, I think, made by the late Government to deal with this problem. I am not criticising their method—for, after all, in these things we must proceed experimentally—when I say that the attempt was a failure, because of the very expensive character of patent litigation. Mr. Levin stein, who took a great interest in this question, brought 685 an action under the Act in order to expose the futility of the machinery. It cost him about £4,000, and that naturally discouraged further experiment in the same line. Therefore, there is very little use trusting to that Act. It is much too expensive. The suitor has to go before the Judicial Committee of the Privy Council, a very costly proceeding. It is clear, therefore, that some other means must be found for putting an end to the abuse. I propose to apply three or four methods. In the first place, I propose to simplify the procedure of compulsory licence; and instead of the applicant having to go before the Judicial Committee of the Privy Council, as at present, he will go, first of all, before the Controller and afterwards before a Judge specially selected by the Lord Chancellor, who will be habitually dealing with patent cases. This method will tend very considerably to shorten the hearing of cases, because they will be dealt with by an export Judge. A second method is that any applicant can go to the Controller three years after the granting of any patent and apply for the revocation of the patent on the ground that it has not been adequately worked within the United Kingdom. There is another point of great importance. Big foreign syndicates have one very effective way of destroying British industries. They first of all apply for patents on a very considerable scale. They suggest every possible combination—for instance in chemicals—which human ingenuity can possibly think of. These combinations the syndicates have not tried themselves. They are not in operation, say, in Germany or elsewhere. But the syndicates put them in their patents in obscure and vague terms so as to cover any possible invention that may be discovered afterwards in this country. What happens? A British inventor makes a bona fide discovery. He attempts to patent it. He probably secures a patent. But the moment he does so this powerful foreign sydicate brings an action against him for infringement of patent. They include, possibly, as many as fifteen or sixteen counts in their indictment; they employ the ablest and consequently the most expensive counsel at the British Bar, and the best scientific experts. The result is that the poor British inventor, before there is time for his invention to take root, or to become a 686 success, is simply overwhelmed by this tremendous combination. In that way many British industries have been wiped out. There are two ways in which the Bill proposes to meet that state of things. One is by compulsory working, and the second by forcing powerful syndicates—home, of course, as well as foreign—to deposit samples, where the Patent Office demand them, or else their application will be refused. There is another way in which foreign patents work in restraint of British trade. Before a manufacturer, say in the boot trade—a trade in which this grievance has been particularly felt—can use the patent he is obliged to sign a kind of lease for twenty years, during which period he is prohibited from using any other machinery. There may be a considerable improvement in machinery discovered meanwhile by a British inventor, or by some other foreign inventor, but the manufacturer, under the conditions of his lease, will not be allowed to put the improved machinery into his works. It was thought that such conditions, acting in restraint of trade, could be set aside; but according to the decision of Mr. Justice Wills, the patentee has the right to impose any conditions, however unreasonable, he pleases. There are many people in this country working under these impossible conditions, which at any time may have the most serious consequences to the industries of this country. I propose that in future these conditions shall be nugatory. I have not time now to deal with the objection that this is a protective measure. I think it is in the interest of free trade. I am not afraid of foreign competition as long as British trade is free to fight it. I would free British trade from impossible conditions abroad and from equally stupid tariff systems at home. At the present moment many British industries are bound hand and foot by the working of the patent system. Many British industries have been completely wiped out by privileges conceded by British institutions to foreigners. I propose that these bonds shall be cut; and that the British industry shall be made perfectly free to engage on equal terms in the severe struggle with its competitors.